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 Fee Schedule To Add Meet-Me-Room Connectivity Services Available at the Mahwah Data Center, 37356-37361 [2021-15038]
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37356
Federal Register / Vol. 86, No. 133 / Thursday, July 15, 2021 / Notices
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–PEARL–2021–33 and
should be submitted on or before
August 5, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.41
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–15035 Filed 7–14–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92368; File Nos. SR–NYSE–
2021–25, SR–NYSEAMER–2021–21, SR–
NYSEArca–2021–24, SR–NYSECHX–2021–
07, SR–NYSENAT–2021–09]
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 Fee Schedule To Add
Meet-Me-Room Connectivity Services
Available at the Mahwah Data Center
khammond on DSKJM1Z7X2PROD with NOTICES
July 9, 2021.
I. Introduction
On April 9, 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
a proposed rule change to amend the
schedule (‘‘Fee Schedule’’) to set forth
several ‘‘Meet-Me-Room’’ connectivity
services available at the data center in
Mahwah, New Jersey (‘‘Mahwah Data
41 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Center’’) for associated fees, and
establish procedures for the allocation
of cabinets and power to such customers
should availability become limited. The
proposed rule changes were published
for comment in the Federal Register on
April 22, 2021.3 On June 2, 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
The Commission has received no
comment letters on the proposed rule
changes. 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.
II. Description of the Proposed Rule
Changes
The Exchanges propose to amend the
Fee Schedule to set forth several ‘‘MeetMe-Room’’ (or ‘‘MMR’’) connectivity
services available at the data center in
Mahwah, New Jersey (‘‘Mahwah Data
Center’’), and associated fees, and
establish procedures for the allocation
of cabinets and power to MMR
customers should availability become
limited.7
The Exchanges state that
Intercontinental Exchange, Inc. (‘‘ICE’’),
through its ICE Data Services (‘‘IDS’’)
business, operates the Mahwah Data
Center.8 From the Mahwah Data Center,
the Exchanges provide co-location
services to any market participant that
requests to receive co-location services
directly from the Exchange (‘‘Users’’).9
Services are also available to customers
that are not co-location Users (‘‘NCL
Customers’’) 10 (Users and NCL
3 See Securities Exchange Act Release Nos. 91598
(April 16, 2021), 86 FR 21373 (April 22, 2021) (SR–
NYSE–2021–25); 91599 (April 16, 2021), 86 FR
21365 (April 22, 2021) (SR–NYSEAMER–2021–21);
91600 (April 16, 2021), 86 FR 21384 (April 22,
2021) (SR–NYSEArca–2021–24); 91601 (April 16,
2021), 86 FR 21410 (April 22, 2021) (SR–
NYSECHX–2021–07); and 91602 (April 16, 2021),
86 FR 21393 (April 22, 2021) (SR–NYSENAT–2021–
09) (collectively, the ‘‘Notices’’). For ease of
reference, citations to the Notice(s) are to the Notice
for SR–NYSE–2021–25.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 92089
(June 2, 2021), 86 FR 30510 (June 8, 2021). The
Commission designated July 21, 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 21373.
8 See id. The Exchanges themselves are indirect
subsidiaries of ICE. See id. at 21373 n.6.
9 See id. at 21373.
10 See id. The Exchanges recently filed proposed
rule changes regarding the IDS circuits and certain
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Customers, together the ‘‘Mahwah
Customers’’).11
The Exchanges state that Mahwah
Customers require circuits connecting
into and out of the Mahwah Data Center
in order to connect their equipment
outside of the Mahwah Data Center to
their equipment or port within the
Mahwah Data Center.12 They state that
IDS and numerous third-party
telecommunications service providers
(‘‘Telecoms’’) provide these connections
to Mahwah Customers in the form of
wired circuits into and out of the
Mahwah Data Center.13 The Exchanges
explain that a Telecom completes a
wired circuit by placing equipment in
an MMR and installing carrier circuits
between the Telecom’s MMR equipment
and one or more points outside the
Mahwah Data Center.14 Mahwah
Customers that contract with a Telecom
to use its circuit connection connect to
the Telecom’s MMR equipment using a
cross connect.15 Once connected to the
Telecom’s equipment, the Mahwah
Customers can then use the Telecom’s
circuit to transport data into and out of
the Mahwah Data Center.16
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
other services offered to NCL Customers. See, e.g.,
Securities Exchange Act Release No. 91217
(February 26, 2021), 86 FR 12715 (March 4, 2021)
(SR–NYSE–2021–14).
11 See Notice, supra note 3, at 21373.
12 See id.
13 See id. Mahwah Customers may also use a third
party wireless connection, including a proprietary
wireless connection, to the Mahwah Data Center, in
which case the portion of the connection closest to
the Mahwah Data Center is wired. See id. at 21373
n.8. Regarding services offered by Telecoms, the
Exchanges state that Telecoms are licensed by the
Federal Communications Commission and are not
required to be, or be affiliated with, a member of
the Exchanges. See id. at 21373 n.9.
14 See id. at 21373–74. The Exchanges state that
a Telecom elects which MMR it will use, or if it
will use both, and that neither IDS nor the
Exchange knows the termination point of a
Telecom’s circuit or the content of any data sent on
a circuit. See id. at 21374 n.10.
15 See id. at 21374.
16 In addition, the Exchanges state that a Telecom
may sell access to its circuits to a second Telecom,
which allows the second Telecom to use the first
Telecom’s circuit to access the Mahwah Data
Center. The second Telecom thereby gains access to
the Mahwah Data Center, where it installs its
equipment in an MMR, without incurring the cost
of installing its own proprietary circuits to the
Mahwah Data Center. According to the Exchanges,
IDS does not consent to, and need not be informed
of, a Telecom’s sale of a circuit to another Telecom.
See id. at 21374.
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‘‘exchange’’ 17 and ‘‘facility’’ 18 apply to
connectivity services described herein
that are offered by entities other than
the Exchanges.19 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.20
A. Meet-Me-Room (MMR) Services
The Exchanges propose to change the
title of the Fee Schedule to ‘‘Wireless
and Meet-Me-Room Connectivity Fees
and Charges,’’ and add under the
heading ‘‘C. Meet-Me-Room (‘MMR’)
Services’’ the following services
available to customers in the two MMRs
on the north and south sides of the
Mahwah Data Center.21
khammond on DSKJM1Z7X2PROD with NOTICES
1. Cabinet-Related Services
The Exchanges propose to add to the
Fee Schedule services and fees relating
to the dedicated cabinets in the MMRs
that IDS provides to Telecoms to house
their equipment (collectively, ‘‘Cabinet17 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.’’).
18 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.’’).
19 See Notice, supra note 3, at 21373; 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’’).
20 See Notice, supra note 3, at 21373; see also
Intercontinental Exchange, Inc. v. SEC, No. 20–1470
(D.C. Cir. 2020).
21 See Notice, supra note 3, at 21374. The
Exchanges state that they recently filed proposed
rule changes regarding the IDS circuits and services
offered to NCL Customers, and that if such
proposals are approved by the Commission, then
the Exchanges expect to file amendments to the
present proposals to conform to the relevant
changes. See id. at 21374 n.11 (citing Securities
Exchange Act Release No. 91217 (February 26,
2021), 86 FR 12715 (March 4, 2021) (SR–NYSE–
2021–14)).
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Related Services’’).22 According to the
Exchanges, these cabinets are available
in sizes based on the number of
kilowatts (‘‘kW’’) allocated, subject to a
maximum of 8 kW per cabinet.23
Telecoms pay an initial fee for each
cabinet and a monthly fee based on the
number of kW allocated to all of the
Telecom’s cabinets.24 The Exchanges
propose an initial fee of $5,000 per
dedicated MMR cabinet, and a monthly
fee for power allocated to all of a
Telecom’s dedicated cabinets as follows:
4–8 kWs ($1,200); 9–20 kWs ($1,050);
21–40 kWs ($950); and 41+ kWs ($900)
(each fee, per kW).25
2. Access and Service Fees
The Exchanges propose to add to the
Fee Schedule the following services and
fees relating to access and services that
IDS provides to Telecoms (collectively,
‘‘Access and Service Fees’’).26
a. Data Center Fiber Cross Connect
According to the Exchanges, IDS
offers fiber cross connects for an initial
and monthly charge.27 Cross connects
may run between a Telecom’s cabinets,
between its cabinet and the cabinet of
another Telecom, or between its cabinet
and its customer’s cabinet or port.28
Cross connects may be bundled (i.e.,
multiple cross connects within a single
sheath) such that a single sheath can
hold either one cross connect or six
cross connects.29 The Exchanges
propose to amend the Fee Schedule to
describe these services and set forth
corresponding fees as follows: Furnish
and install 1 cross connect ($500 initial
charge plus $600 monthly charge); and
furnish and install bundle of 6 cross
connects ($500 initial charge plus
$1,800 monthly charge).30
22 The Exchanges state that the Cabinet-Related
Services are substantially similar to co-location
services and related fees that the Exchanges offer to
Users, as set forth in their price lists and fee
schedules. See id. at 21374.
23 See id.
24 See id.
25 The Exchanges also propose to add a note to
the Fee Schedule stating that the monthly fee is
based on total kWs allocated to all of a Telecom’s
cabinets. See id.
26 The Exchanges state that most of the Access
and Service Fees are substantially similar to
services and related fees that the Exchanges offer to
Users, as set forth in their price lists and fee
schedules. See id.
27 See id.
28 See id. The Exchanges state that a cross connect
to MMR cabinets may be purchased by the Telecom
or the Telecom’s customer. The same fee applies
irrespective of which entity purchases the cross
connect. See id. at 21374 n.15.
29 See id. at 21374.
30 See id. at 21375.
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37357
b. Conduit Sleeve Fee
According to the Exchanges, a
Telecom’s circuits into and out of the
Mahwah Data Center run through IDS
conduits.31 Telecoms are assessed an
initial charge for the installation of
circuits in the IDS conduit, which
covers up to five hours of work, and a
monthly fee per conduit sleeve for using
the IDS conduit.32 The Exchanges
propose to amend the Fee Schedule to
describe these services and set forth
corresponding fees as follows: Install (5
hrs) and maintain conduit sleeve
supporting Telecom circuit into data
center ($1,000 initial charge plus $2,000
monthly charge per conduit sleeve).33
c. Carrier Connection Fee
As noted above,34 Telecoms contract
with their customers for circuits into
and out of the Mahwah Data Center.35
According to the Exchanges, Telecoms
are charged a monthly fee for providing
such circuits to Mahwah Customers, on
a per connection basis.36 The Exchanges
propose to amend the Fee Schedule to
describe this service and set forth the
corresponding fee as follows: Maintain
Telecom’s connections to its nonTelecom data center customers ($1,150
monthly charge per connection).37
d. Connection to Time Protocol Feed
According to the Exchanges, IDS
offers Telecoms the option to purchase
connectivity to the Precision Time
Protocol, with monthly and initial
charges.38 Telecoms may make use of
time feeds to receive time and to
synchronize clocks between computer
systems or throughout a computer
network, and time feeds may assist
Telecoms in other functions, including
record keeping or measuring response
times.39 The Exchanges propose to
amend the Fee Schedule to describe this
service and set forth corresponding fees
as follows: Precision Time Protocol
31 The Exchanges state that there are currently
three IDS conduit paths leading into the Mahwah
Data Center, and a Telecom determines which
conduit or conduits it will use to carry its circuits,
which are carried in individual conduit sleeves. See
id. at 21374. According to the Exchanges, the
number of conduit sleeves a Telecom uses is
dependent on the equipment and technology it uses
and the size of the circuits it sells to Mahwah
Customers, and that most Telecoms that use them
have one conduit sleeve. See id. at 21374 n.16.
32 See id. at 21374.
33 See id. at 21375.
34 See supra notes 12–13 and accompanying text.
35 See Notice, supra note 3, at 21374.
36 See id.
37 See id. at 21375.
38 See id. at 21374.
39 See id.
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Federal Register / Vol. 86, No. 133 / Thursday, July 15, 2021 / Notices
($1,000 initial charge plus $250 monthly
charge).40
power recycling, and install and
document cable ($100 per half hour).49
e. Expedite Fee
According to the Exchanges, IDS
offers Telecoms the option to expedite
the completion of MMR services
purchased or ordered by the
Telecoms.41 The Exchanges propose to
amend the Fee Schedule to describe this
service and set forth the corresponding
fee as follows: Expedited installation/
completion of MMR service ($4,000 per
request).42
c. Shipping and Receiving
According to the Exchanges, IDS
offers shipping and receiving services to
Telecoms, with a per shipment fee for
the receipt of one shipment of goods at
the Mahwah Data Center from the
Telecom or supplier.50 The Exchanges
propose to amend the Fee Schedule to
describe this service and set forth the
corresponding fee as follows: Receipt of
one shipment of goods at data center on
behalf of Telecom (includes
coordination of shipping and receiving)
($100 per shipment).51
3. Service-Related Fees
The Exchanges propose to add to the
Fee Schedule the following services and
fees relating to services IDS provides to
Telecoms (collectively, ‘‘Service-Related
Fees’’).43
a. Change Fee
According to the Exchanges, IDS
charges a Telecom a ‘‘Change Fee’’ if the
Telecom requests a change to one or
more existing MMR services that IDS
has already established or completed for
the Telecom.44 The Change Fee is
charged per order.45 The Exchanges
propose to amend the Fee Schedule to
describe this service and set forth the
corresponding fee as follows: Change to
a service that has already been installed/
completed for a Telecom ($950 per
request).46
b. Hot Hands Service
According to the Exchanges, IDS
offers Telecoms a ‘‘Hot Hands Service,’’
which allows Telecoms to use on-site
data center personnel to maintain
Telecom equipment, support network
troubleshooting, rack and stack a server
in a Telecom’s cabinet, power recycling,
and install and document the fitting of
cable in a Telecom’s cabinet(s).47 A Hot
Hands Service fee is charged per half
hour.48 The Exchanges propose to
amend the Fee Schedule to describe this
service and set forth the corresponding
fee as follows: Allows Telecom to use
on-site data center personnel to
maintain Telecom equipment, support
network troubleshooting, rack and stack,
40 See
id. at 21375.
id. at 21374.
42 See id. at 21375.
43 The Exchange state that the Service-Related
Fees are substantially similar to services and related
fees that the Exchanges offer to Users, as set forth
in their price lists and fee schedules. See id.
44 See id.
45 If a Telecom orders two or more services at one
time, the Exchanges state that the Telecom is
charged a one-time Change Fee, which would cover
the multiple services. See id.
46 See id.
47 See id.
48 See id.
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41 See
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d. Visitor Security Escort
According to the Exchanges, Telecom
representatives are required to be
accompanied by a visitor security escort
during visits to the Mahwah Data
Center, for which a fee per visit is
charged.52 The Exchanges propose to
amend the Fee Schedule to describe this
service and set forth the corresponding
fee as follows: All Telecom
representatives are required to be
accompanied by a visitor security escort
during visits to the data center ($75 per
visit).53
B. Allocation of Cabinets and Power
The Exchanges propose to establish
procedures for the allocation of cabinets
and power to Telecoms (‘‘Proposed
Allocation Procedures’’).54 As noted
above,55 IDS offers dedicated cabinets in
the MMRs to Telecoms to house their
equipment.56 According to the
Exchanges, the Exchanges allocate
cabinets on a first-come/first-serve
basis.57 When a cabinet is first set up or
later, a Telecom may request power
upgrades (‘‘Additional Power’’) to a
dedicated cabinet in addition to the
power allocated to such cabinet (the
‘‘Standard Cabinet Power’’), subject to a
maximum of 8 kW per cabinet.58 The
Exchanges maintain that it would be
prudent to have procedures in place for
the allocation of cabinets and power to
Telecoms should such allocation be
necessary.59
The Exchanges propose to add the
Proposed Allocation Procedures to the
Fee Schedule under the heading ‘‘MMR
PO 00000
49 See
id.
id.
51 See id.
52 See id.
53 See id.
54 See id.
55 See supra note 22 and accompanying text.
56 See Notice, supra note 3, at 21375.
57 See id.
58 See id.
59 See id.
50 See
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Notes,’’ setting forth the procedures
under proposed Notes 1 and 2.60
Proposed Note 1 would provide that, if
the amount of power or cabinets
available fell below specified
thresholds, Telecoms would be subject
to purchasing limits.61 Note 1 would
also specify when the purchasing limits
would cease to apply and would
provide that if a Telecom requests a
number of cabinets and/or amount of
Additional Power that would cause the
unallocated capacity to be below the
specified power and cabinet thresholds,
the purchasing limits would apply only
to the portion of the Telecom’s order
below the relevant threshold.62
Note 2 would provide that, if the
amount of power or cabinets available
fell to zero, Telecoms seeking to
purchase power or cabinets would be
put on a ‘‘Cabinet Waitlist’’ 63 or a
60 See
id.
id. Specifically, the Exchanges propose to
provide under the heading ‘‘Note 1: Cabinet and
Power Purchasing Limits’’ that if (i) unallocated
cabinet inventory is at or below 3 cabinets
(‘‘Cabinet Threshold’’), or (ii) the unallocated power
capacity in the MMRs is at or below 8 kW (the
‘‘Power Threshold’’), then the following limits on
the purchase of new cabinets (‘‘Purchasing Limits’’)
will apply: If only the Cabinet Threshold is reached,
then under the following measures (the ‘‘Cabinet
Limits’’), the Exchanges will limit each Telecom’s
purchase of new cabinets to a maximum of one
dedicated cabinet. A Telecom will have to wait 30
days from the date of its signed order form before
purchasing a new cabinet again. If only the Power
Threshold is reached or both the Cabinet Threshold
and the Power Threshold are reached, then under
the following measures (the ‘‘Combined Limits’’), a
Telecom may purchase either or both of a one new
cabinet, subject to a maximum standard power
allocation of 4 kW (‘‘Standard Cabinets’’), or
additional power for new or existing cabinet, so
long as the combined power usage of such
purchases is no more than a maximum of 4 kW. A
Telecom will have to wait 30 days from the date
of its signed order form before purchasing a new
Standard Cabinet or additional power again. If the
Cabinet Threshold is reached before the Power
Threshold, the Cabinet Limits will be in effect until
the Power Threshold is reached, after which the
Combined Limits will apply. See id. at 21376.
62 See id. at 21375. Specifically, the Exchanges
propose to provide that if a Telecom requests, in
writing, a number of cabinets that, if provided,
would cause the available cabinet inventory to be
below 3 cabinets, the Cabinet Limits will only apply
to the portion of the Telecom’s order below the
Cabinet Threshold. When unallocated cabinet
inventory for the MMRs is more than 3 cabinets, the
Exchanges will discontinue the Cabinet Limits. If a
Telecom requests, in writing, a number of Standard
Cabinets and/or an amount of additional power
that, if provided, would cause the unallocated
power capacity to be below the Power Threshold or
Cabinet Threshold, the Combined Limits would
apply only to the portion of the Telecom’s order
below the relevant threshold. When unallocated
power capacity is above the Power Threshold, the
Exchanges will discontinue the Combined Limits. If
at that time the unallocated cabinet inventory is 3
or fewer cabinets, the Cabinet Limits would enter
into effect. See id. at 21376.
63 Specifically, the Exchanges propose to provide
under the heading ‘‘Note 2: Cabinet and Combined
Waitlists’’ that the Exchanges will create a cabinet
61 See
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‘‘Combined Waitlist.’’ 64 In both
waitlist (‘‘Cabinet Waitlist’’) if the available cabinet
inventory is zero, or a Telecom requests, in writing,
a number of cabinets that, if provided, would cause
the available inventory to be zero. The Exchanges
will place Telecoms seeking cabinets on a Cabinet
Waitlist as follows: A Telecom will be placed on the
Cabinet Waitlist based on the date its signed order
is received. A Telecom may only have one order for
a new cabinet on the Cabinet Waitlist at a time, and
the order is subject to the Cabinet Limits. If a
Telecom changes the size of its order while it is on
the Cabinet Waitlist, it will maintain its place on
the Cabinet Waitlist, provided that the Telecom
may not increase the size of its order such that it
would exceed the Cabinet Limits. As cabinets
become available, the Exchanges will offer a cabinet
to the Telecom at the top of the Cabinet Waitlist.
If the Telecom’s order is completed, it will be
removed from the Cabinet Waitlist. A Telecom will
be removed from the Cabinet Waitlist (a) at the
Telecom’s request or (b) if the Telecom turns down
an offer of a cabinet of the same size it requested
in its order. If the Exchange offer the Telecom a
cabinet of a different size than the Telecom
requested in its order, the Telecom may turn down
the offer and remain at the top of the Cabinet
Waitlist until its order is completed. A Telecom that
is removed from the Cabinet Waitlist but
subsequently submits a new written order for a
cabinet will be added back to the bottom of the
Cabinet Waitlist. When unallocated cabinet
inventory is more than 3 cabinets, the Exchange
will cease use of the Cabinet Waitlist. See id.
64 See id. at 21375. Specifically, the Exchanges
propose to create a power and cabinet waitlist
(‘‘Combined Waitlist’’) if the unallocated power
capacity is zero, or if a Telecom requests, in writing,
an amount of power (whether power allocated to a
Standard Cabinet or additional power) that, if
provided, would cause the unallocated power
capacity to be below zero. The Exchanges will place
Telecoms seeking cabinets or power on the
Combined Waitlist, as follows: If a Cabinet Waitlist
exists when the requirements to create a Combined
Waitlist are met, the Cabinet Waitlist will
automatically convert to the Combined Waitlist. If
a Combined Waitlist exists when the requirements
to create a Cabinet Waitlist are met, no new waitlist
will be created, and the Combined Waitlist will
continue in effect. A Telecom will be placed on the
Combined Waitlist based on the date its signed
order for a cabinet and/or additional power is
received. A Telecom may only have one order for
a new cabinet and/or additional power on the
Combined Waitlist at a time, and the order would
be subject to the Combined Limits. If a Telecom
changes the size of its order while it is on the
Combined Waitlist, it will maintain its place on the
Combined Waitlist, provided that the Telecom may
not increase the size of its order such that it would
exceed the Combined Limits. As additional power
and/or cabinets become available, the Exchanges
will offer them to the Telecom at the top of the
Combined Waitlist. If the Telecom’s order is
completed, the order will be removed from the
Combined Waitlist. If the Telecom’s order is not
completed, it will remain at the top of the
Combined Waitlist. A Telecom will be removed
from the Combined Waitlist (a) at the Telecom’s
request; or (b) if the Telecom turns down an offer
that is the same as its order (e.g., the offer includes
a cabinet of the same size and/or the amount of
additional power that the Telecom requested in its
order). If the Exchanges offer the Telecom an offer
that is different than its order, the Telecom may
turn down the offer and remain at the top of the
Combined Waitlist until its order is completed. A
Telecom that is removed from the Combined
Waitlist but subsequently submits a new written
order for a cabinet and/or additional power will be
added back to the bottom of the waitlist. If the
Combined Waitlist is in effect, when unallocated
power capacity in co-location is at 8 kW or more,
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proposed Notes 1 and 2, the Proposed
Allocation Procedures would state how
the procedures regarding cabinets and
the procedures regarding power would
relate to each other, and in each case
would state what the threshold amount
of power and cabinets would be to
discontinue the limits.65
III. Exchanges’ Justification
With respect to the MMR services and
fees, the Exchanges generally argue that
the proposals are reasonable, equitable,
not unfairly discriminatory, and would
not impose a burden on competition
that it not necessary or appropriate, as
required by Sections 6(b)(4), (5) and (8)
of the Exchange Act, because use of the
proposed services is completely
voluntary and their use enables
Telecoms to compete with IDS in
providing connectivity services to
Mahwah Customers.66 According to the
Exchanges, IDS operates in a highly
competitive market in which exchanges,
third party telecommunications
providers, Hosting Users,67 and other
third-party vendors offer connectivity
services as a means to facilitate the
trading and other market activities of
market participants.68 By making it
possible for Telecoms to offer their
customers circuits into and out of the
Mahwah Data Center, the Exchanges
state that the proposed MMR services
allow Telecoms to compete with IDS,
and that the continued availability of
choices for Mahwah Customers is
beneficial to both the Telecoms and the
Mahwah Customers.69 The Exchanges
state that if these MMR services were
not available, all Mahwah Customers
and third-party telecommunications
service providers would be required to
use IDS circuits to access the Mahwah
Data Center, thereby reducing
competition.70 The Exchanges also state
that the described services and fees are
offered to and subscribed to by existing
Telecoms, and thus expect that the
the Exchanges will cease use of the Combined
Waitlist. If at that time the unallocated cabinet
inventory is 3 or fewer cabinets, the Cabinet
Waitlist would enter into effect. See id. at 21376–
77.
65 See id. at 21375–36.
66 See id. at 21377–79.
67 ‘‘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.
at 21377 n.21 (citing Securities Exchange Act
Release No. 76008 (September 29, 2015), 80 FR
60190 (October 5, 2015) (SR–NYSE–2015–40)).
68 In this regard, the Exchanges maintain that
most of the Telecoms that provide circuits do so at
fees lower than those of IDS, and that most Mahwah
Customers use Telecom circuits into and out of the
Mahwah Data Center. See id. at 21377.
69 See id.
70 See id.
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37359
impact of the proposals would be
minimal.71
In addition, the Exchanges argue that
the proposals are reasonable because
use of any MMR service is completely
voluntary and available to purchasers
on an equal basis, with each Telecom
able to determine whether to use MMR
services based on the requirements of its
business operations, and each Telecom
being charged only for the services that
it selects and for the same amount as all
other Telecoms purchasing such
services.72 The Exchanges also argue
that the fees proposed for the MMR fees
are reasonable because, to the extent the
services IDS offers to Telecoms are
substantially the same as the services
offered by the Exchange to Users, the
fees are the same.73 With respect to the
two services not offered to Users (the
Conduit Sleeve Fee and Carrier
Connection Fee), the Exchanges state
that the fees IDS charges Telecoms are
reasonable because the services
correspond to the Telecoms’ usage of
the IDS conduits and the Telecoms’
ability to offer their circuits to their
customers.74 In addition, the Exchanges
provide some cost-based justifications
for why the proposals are reasonable,
claiming that IDS must provide,
maintain, and operate the Mahwah Data
Center technology infrastructure,
expand the network infrastructure to
keep pace with the services available to
Telecoms, and handle the installation,
administration, monitoring, support,
and maintenance of the MMR services.75
The Exchanges contend that the
proposals provide for an equitable
allocation of fees and are not unfairly
discriminatory, again arguing generally
that the proposed services would allow
Telecoms to continue to compete with
IDS, in addition to being voluntary and
available to all market participants on
an equal basis.76 The Exchanges claim
that the proposed rule changes would
apply to all market participants and
would not apply differently to distinct
types or sizes of licensed
telecommunications service providers,
but rather would apply to all equally.77
The Exchanges argue that the
proposed rule changes do not impose an
unnecessary or inappropriate burden on
competition because the proposals
would preserve the ability of IDS to
offer the services described herein,
71 The Exchanges further state that they do not
expect that IDS would attract any new customers
as a result of the proposals. See id.
72 See id.
73 See id.
74 See id.
75 See id.
76 See id. at 21378–79.
77 See id. at 21379.
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Federal Register / Vol. 86, No. 133 / Thursday, July 15, 2021 / Notices
allowing the Telecoms to compete with
IDS in providing connectivity services
into and out of the Mahwah Data
Center.78 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.79
Regarding the Proposed Allocation
Procedures, the Exchanges argue
principally that it would be reasonable
to put in place procedures to establish
the allocation of power and cabinets to
Telecoms on an equitable basis should
the need arise, and that the Proposed
Allocation Procedures are consistent
with those of another exchange and
those recently approved for allocating
cabinets and power in the context of the
Exchanges’ co-location service
offerings.80
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.81 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,82 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
78 See
id.
id. at 21379–80.
80 See id. at 21378, 21378 n.26.
81 15 U.S.C. 78s(b)(2)(B).
82 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.
khammond on DSKJM1Z7X2PROD with NOTICES
79 See
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for the equitable allocation of reasonable
dues, fees, and other charges among its
members and issuers and other persons
using its facilities;’’ 83
• 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;’’ 84 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].’’ 85
As discussed in Section III above, the
Exchanges make various arguments in
support of the proposals. The
Commission believes that there are
questions as to whether the Exchanges
have provided sufficient information to
demonstrate that the proposals,
including the proposed fees for MMR
services, are consistent with the Act.
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.’’ 86 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.87 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.88
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
PO 00000
83 15
U.S.C. 78f(b)(4).
U.S.C. 78f(b)(5).
85 15 U.S.C. 78f(b)(8).
86 17 CFR 201.700(b)(3).
87 See id.
88 See id.
84 15
Frm 00087
Fmt 4703
Sfmt 4703
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; 89 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
August 5, 2021. Rebuttal comments
should be submitted by August 19,
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.90
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–2021–25, SR–NYSEAMER–2021–
21, SR–NYSEArca–2021–24, SR–
NYSECHX–2021–07, SR–NYSENAT–
2021–09 on the subject line.
89 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).
90 15
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Federal Register / Vol. 86, No. 133 / Thursday, July 15, 2021 / Notices
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
khammond on DSKJM1Z7X2PROD with NOTICES
All submissions should refer to File
Nos. SR–NYSE–2021–25, SR–
NYSEAMER–2021–21, SR–NYSEArca–
2021–24, SR–NYSECHX–2021–07, and
SR–NYSENAT–2021–09. 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–2021–25, SR–NYSEAMER–
2021–21, SR–NYSEArca–2021–24, SR–
NYSECHX–2021–07, and SR–
NYSENAT–2021–09 and should be
submitted on or before August 5, 2021.
Rebuttal comments should be submitted
by August 19, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.91
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–15038 Filed 7–14–21; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92358; File No. SR–
EMERALD–2021–21]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Establish Fees for the
cToM Market Data Product
July 9, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 30,
2021, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the Exchange’s Fee Schedule
(‘‘Fee Schedule’’) to establish fees for
the market data product known as
MIAX Emerald Complex Top of Market
(‘‘cToM’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
BILLING CODE 8011–01–P
1
91 17
CFR 200.30–3(a)(57).
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PO 00000
15 U.S.C. 78s(b)(1).
17 CFR 240.19b–4.
Frm 00088
Fmt 4703
Sfmt 4703
37361
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Section 6(a) of the Fee Schedule to
establish fees for the cToM market data
product.
The Exchange previously adopted
rules governing the trading of Complex
Orders 3 on the Emerald System 4 in
2018.5 Shortly thereafter, the Exchange
also adopted the market data product
cToM and expressly waived fees for
cToM to provide an incentive to
prospective market participants to
subscribe to that market data feed.6 The
Exchange has not charged fees to cToM
subscribers in the over two years since
it was first available for subscription.
In summary, cToM provides
subscribers with the same information
as the MIAX Emerald Top of Market
(‘‘ToM’’) data product as it relates to the
Strategy Book 7, i.e., the Exchange’s best
bid and offer for a complex strategy,
with aggregate size, based on
displayable order and quoting interest
in the complex strategy on the
Exchange. However, cToM provides
subscribers with the following
additional information that is not
included in ToM: (i) The identification
of the complex strategies currently
trading on the Exchange; (ii) complex
strategy last sale information; and (iii)
the status of securities underlying the
complex strategy (e.g., halted, open, or
resumed). cToM is a distinct market
data product from ToM. ToM
subscribers are not required to subscribe
to cToM, and cToM subscribers are not
required to subscribe to ToM.8
The Exchange now proposes to amend
Section 6(a) of the Fee Schedule to
3 See Exchange Rule 518(a)(5) for the definition
of Complex Orders.
4 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
5 See Securities Exchange Act Release Nos. 84891
(December 20, 2018), 83 FR 67421 (December 28,
2018) (In the Matter of the Application of MIAX
EMERALD, LLC for Registration as a National
Securities Exchange; Findings, Opinion, and Order
of the Commission); and 85345 (March 18, 2019),
84 FR 10848 (March 22, 2019) (SR–EMERALD–
2019–13) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 518, Complex Orders).
6 See Securities Exchange Act Release No. 85207
(February 27, 2019), 84 FR 7963 (March 5, 2019)
(SR–EMERALD–2019–09) (providing a complete
description of the cToM data feed).
7 The ‘‘Strategy Book’’ is the Exchange’s
electronic book of complex orders and complex
quotes. See Exchange Rule 518(a)(17).
8 See supra note 6.
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]]>Agencies
[Federal Register Volume 86, Number 133 (Thursday, July 15, 2021)]
[Notices]
[Pages 37356-37361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15038]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92368; File Nos. SR-NYSE-2021-25, SR-NYSEAMER-2021-21,
SR-NYSEArca-2021-24, SR-NYSECHX-2021-07, SR-NYSENAT-2021-09]
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 Fee Schedule To Add Meet-
Me-Room Connectivity Services Available at the Mahwah Data Center
July 9, 2021.
I. Introduction
On April 9, 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\ a proposed rule
change to amend the schedule (``Fee Schedule'') to set forth several
``Meet-Me-Room'' connectivity services available at the data center in
Mahwah, New Jersey (``Mahwah Data Center'') for associated fees, and
establish procedures for the allocation of cabinets and power to such
customers should availability become limited. The proposed rule changes
were published for comment in the Federal Register on April 22,
2021.\3\ On June 2, 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\ The Commission has received no comment
letters on the proposed rule changes. 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. 91598 (April 16,
2021), 86 FR 21373 (April 22, 2021) (SR-NYSE-2021-25); 91599 (April
16, 2021), 86 FR 21365 (April 22, 2021) (SR-NYSEAMER-2021-21); 91600
(April 16, 2021), 86 FR 21384 (April 22, 2021) (SR-NYSEArca-2021-
24); 91601 (April 16, 2021), 86 FR 21410 (April 22, 2021) (SR-
NYSECHX-2021-07); and 91602 (April 16, 2021), 86 FR 21393 (April 22,
2021) (SR-NYSENAT-2021-09) (collectively, the ``Notices''). For ease
of reference, citations to the Notice(s) are to the Notice for SR-
NYSE-2021-25.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 92089 (June 2,
2021), 86 FR 30510 (June 8, 2021). The Commission designated July
21, 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).
---------------------------------------------------------------------------
II. Description of the Proposed Rule Changes
The Exchanges propose to amend the Fee Schedule to set forth
several ``Meet-Me-Room'' (or ``MMR'') connectivity services available
at the data center in Mahwah, New Jersey (``Mahwah Data Center''), and
associated fees, and establish procedures for the allocation of
cabinets and power to MMR customers should availability become
limited.\7\
---------------------------------------------------------------------------
\7\ See Notice, supra note 3, at 21373.
---------------------------------------------------------------------------
The Exchanges state that Intercontinental Exchange, Inc. (``ICE''),
through its ICE Data Services (``IDS'') business, operates the Mahwah
Data Center.\8\ From the Mahwah Data Center, the Exchanges provide co-
location services to any market participant that requests to receive
co-location services directly from the Exchange (``Users'').\9\
Services are also available to customers that are not co-location Users
(``NCL Customers'') \10\ (Users and NCL Customers, together the
``Mahwah Customers'').\11\
---------------------------------------------------------------------------
\8\ See id. The Exchanges themselves are indirect subsidiaries
of ICE. See id. at 21373 n.6.
\9\ See id. at 21373.
\10\ See id. The Exchanges recently filed proposed rule changes
regarding the IDS circuits and certain other services offered to NCL
Customers. See, e.g., Securities Exchange Act Release No. 91217
(February 26, 2021), 86 FR 12715 (March 4, 2021) (SR-NYSE-2021-14).
\11\ See Notice, supra note 3, at 21373.
---------------------------------------------------------------------------
The Exchanges state that Mahwah Customers require circuits
connecting into and out of the Mahwah Data Center in order to connect
their equipment outside of the Mahwah Data Center to their equipment or
port within the Mahwah Data Center.\12\ They state that IDS and
numerous third-party telecommunications service providers
(``Telecoms'') provide these connections to Mahwah Customers in the
form of wired circuits into and out of the Mahwah Data Center.\13\ The
Exchanges explain that a Telecom completes a wired circuit by placing
equipment in an MMR and installing carrier circuits between the
Telecom's MMR equipment and one or more points outside the Mahwah Data
Center.\14\ Mahwah Customers that contract with a Telecom to use its
circuit connection connect to the Telecom's MMR equipment using a cross
connect.\15\ Once connected to the Telecom's equipment, the Mahwah
Customers can then use the Telecom's circuit to transport data into and
out of the Mahwah Data Center.\16\
---------------------------------------------------------------------------
\12\ See id.
\13\ See id. Mahwah Customers may also use a third party
wireless connection, including a proprietary wireless connection, to
the Mahwah Data Center, in which case the portion of the connection
closest to the Mahwah Data Center is wired. See id. at 21373 n.8.
Regarding services offered by Telecoms, the Exchanges state that
Telecoms are licensed by the Federal Communications Commission and
are not required to be, or be affiliated with, a member of the
Exchanges. See id. at 21373 n.9.
\14\ See id. at 21373-74. The Exchanges state that a Telecom
elects which MMR it will use, or if it will use both, and that
neither IDS nor the Exchange knows the termination point of a
Telecom's circuit or the content of any data sent on a circuit. See
id. at 21374 n.10.
\15\ See id. at 21374.
\16\ In addition, the Exchanges state that a Telecom may sell
access to its circuits to a second Telecom, which allows the second
Telecom to use the first Telecom's circuit to access the Mahwah Data
Center. The second Telecom thereby gains access to the Mahwah Data
Center, where it installs its equipment in an MMR, without incurring
the cost of installing its own proprietary circuits to the Mahwah
Data Center. According to the Exchanges, IDS does not consent to,
and need not be informed of, a Telecom's sale of a circuit to
another Telecom. See id. at 21374.
---------------------------------------------------------------------------
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
[[Page 37357]]
``exchange'' \17\ and ``facility'' \18\ apply to connectivity services
described herein that are offered by entities other than the
Exchanges.\19\ 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.\20\
---------------------------------------------------------------------------
\17\ 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.'').
\18\ 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.'').
\19\ See Notice, supra note 3, at 21373; 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'').
\20\ See Notice, supra note 3, at 21373; see also
Intercontinental Exchange, Inc. v. SEC, No. 20-1470 (D.C. Cir.
2020).
---------------------------------------------------------------------------
A. Meet-Me-Room (MMR) Services
The Exchanges propose to change the title of the Fee Schedule to
``Wireless and Meet-Me-Room Connectivity Fees and Charges,'' and add
under the heading ``C. Meet-Me-Room (`MMR') Services'' the following
services available to customers in the two MMRs on the north and south
sides of the Mahwah Data Center.\21\
---------------------------------------------------------------------------
\21\ See Notice, supra note 3, at 21374. The Exchanges state
that they recently filed proposed rule changes regarding the IDS
circuits and services offered to NCL Customers, and that if such
proposals are approved by the Commission, then the Exchanges expect
to file amendments to the present proposals to conform to the
relevant changes. See id. at 21374 n.11 (citing Securities Exchange
Act Release No. 91217 (February 26, 2021), 86 FR 12715 (March 4,
2021) (SR-NYSE-2021-14)).
---------------------------------------------------------------------------
1. Cabinet-Related Services
The Exchanges propose to add to the Fee Schedule services and fees
relating to the dedicated cabinets in the MMRs that IDS provides to
Telecoms to house their equipment (collectively, ``Cabinet-Related
Services'').\22\ According to the Exchanges, these cabinets are
available in sizes based on the number of kilowatts (``kW'') allocated,
subject to a maximum of 8 kW per cabinet.\23\ Telecoms pay an initial
fee for each cabinet and a monthly fee based on the number of kW
allocated to all of the Telecom's cabinets.\24\ The Exchanges propose
an initial fee of $5,000 per dedicated MMR cabinet, and a monthly fee
for power allocated to all of a Telecom's dedicated cabinets as
follows: 4-8 kWs ($1,200); 9-20 kWs ($1,050); 21-40 kWs ($950); and 41+
kWs ($900) (each fee, per kW).\25\
---------------------------------------------------------------------------
\22\ The Exchanges state that the Cabinet-Related Services are
substantially similar to co-location services and related fees that
the Exchanges offer to Users, as set forth in their price lists and
fee schedules. See id. at 21374.
\23\ See id.
\24\ See id.
\25\ The Exchanges also propose to add a note to the Fee
Schedule stating that the monthly fee is based on total kWs
allocated to all of a Telecom's cabinets. See id.
---------------------------------------------------------------------------
2. Access and Service Fees
The Exchanges propose to add to the Fee Schedule the following
services and fees relating to access and services that IDS provides to
Telecoms (collectively, ``Access and Service Fees'').\26\
---------------------------------------------------------------------------
\26\ The Exchanges state that most of the Access and Service
Fees are substantially similar to services and related fees that the
Exchanges offer to Users, as set forth in their price lists and fee
schedules. See id.
---------------------------------------------------------------------------
a. Data Center Fiber Cross Connect
According to the Exchanges, IDS offers fiber cross connects for an
initial and monthly charge.\27\ Cross connects may run between a
Telecom's cabinets, between its cabinet and the cabinet of another
Telecom, or between its cabinet and its customer's cabinet or port.\28\
Cross connects may be bundled (i.e., multiple cross connects within a
single sheath) such that a single sheath can hold either one cross
connect or six cross connects.\29\ The Exchanges propose to amend the
Fee Schedule to describe these services and set forth corresponding
fees as follows: Furnish and install 1 cross connect ($500 initial
charge plus $600 monthly charge); and furnish and install bundle of 6
cross connects ($500 initial charge plus $1,800 monthly charge).\30\
---------------------------------------------------------------------------
\27\ See id.
\28\ See id. The Exchanges state that a cross connect to MMR
cabinets may be purchased by the Telecom or the Telecom's customer.
The same fee applies irrespective of which entity purchases the
cross connect. See id. at 21374 n.15.
\29\ See id. at 21374.
\30\ See id. at 21375.
---------------------------------------------------------------------------
b. Conduit Sleeve Fee
According to the Exchanges, a Telecom's circuits into and out of
the Mahwah Data Center run through IDS conduits.\31\ Telecoms are
assessed an initial charge for the installation of circuits in the IDS
conduit, which covers up to five hours of work, and a monthly fee per
conduit sleeve for using the IDS conduit.\32\ The Exchanges propose to
amend the Fee Schedule to describe these services and set forth
corresponding fees as follows: Install (5 hrs) and maintain conduit
sleeve supporting Telecom circuit into data center ($1,000 initial
charge plus $2,000 monthly charge per conduit sleeve).\33\
---------------------------------------------------------------------------
\31\ The Exchanges state that there are currently three IDS
conduit paths leading into the Mahwah Data Center, and a Telecom
determines which conduit or conduits it will use to carry its
circuits, which are carried in individual conduit sleeves. See id.
at 21374. According to the Exchanges, the number of conduit sleeves
a Telecom uses is dependent on the equipment and technology it uses
and the size of the circuits it sells to Mahwah Customers, and that
most Telecoms that use them have one conduit sleeve. See id. at
21374 n.16.
\32\ See id. at 21374.
\33\ See id. at 21375.
---------------------------------------------------------------------------
c. Carrier Connection Fee
As noted above,\34\ Telecoms contract with their customers for
circuits into and out of the Mahwah Data Center.\35\ According to the
Exchanges, Telecoms are charged a monthly fee for providing such
circuits to Mahwah Customers, on a per connection basis.\36\ The
Exchanges propose to amend the Fee Schedule to describe this service
and set forth the corresponding fee as follows: Maintain Telecom's
connections to its non-Telecom data center customers ($1,150 monthly
charge per connection).\37\
---------------------------------------------------------------------------
\34\ See supra notes 12-13 and accompanying text.
\35\ See Notice, supra note 3, at 21374.
\36\ See id.
\37\ See id. at 21375.
---------------------------------------------------------------------------
d. Connection to Time Protocol Feed
According to the Exchanges, IDS offers Telecoms the option to
purchase connectivity to the Precision Time Protocol, with monthly and
initial charges.\38\ Telecoms may make use of time feeds to receive
time and to synchronize clocks between computer systems or throughout a
computer network, and time feeds may assist Telecoms in other
functions, including record keeping or measuring response times.\39\
The Exchanges propose to amend the Fee Schedule to describe this
service and set forth corresponding fees as follows: Precision Time
Protocol
[[Page 37358]]
($1,000 initial charge plus $250 monthly charge).\40\
---------------------------------------------------------------------------
\38\ See id. at 21374.
\39\ See id.
\40\ See id. at 21375.
---------------------------------------------------------------------------
e. Expedite Fee
According to the Exchanges, IDS offers Telecoms the option to
expedite the completion of MMR services purchased or ordered by the
Telecoms.\41\ The Exchanges propose to amend the Fee Schedule to
describe this service and set forth the corresponding fee as follows:
Expedited installation/completion of MMR service ($4,000 per
request).\42\
---------------------------------------------------------------------------
\41\ See id. at 21374.
\42\ See id. at 21375.
---------------------------------------------------------------------------
3. Service-Related Fees
The Exchanges propose to add to the Fee Schedule the following
services and fees relating to services IDS provides to Telecoms
(collectively, ``Service-Related Fees'').\43\
---------------------------------------------------------------------------
\43\ The Exchange state that the Service-Related Fees are
substantially similar to services and related fees that the
Exchanges offer to Users, as set forth in their price lists and fee
schedules. See id.
---------------------------------------------------------------------------
a. Change Fee
According to the Exchanges, IDS charges a Telecom a ``Change Fee''
if the Telecom requests a change to one or more existing MMR services
that IDS has already established or completed for the Telecom.\44\ The
Change Fee is charged per order.\45\ The Exchanges propose to amend the
Fee Schedule to describe this service and set forth the corresponding
fee as follows: Change to a service that has already been installed/
completed for a Telecom ($950 per request).\46\
---------------------------------------------------------------------------
\44\ See id.
\45\ If a Telecom orders two or more services at one time, the
Exchanges state that the Telecom is charged a one-time Change Fee,
which would cover the multiple services. See id.
\46\ See id.
---------------------------------------------------------------------------
b. Hot Hands Service
According to the Exchanges, IDS offers Telecoms a ``Hot Hands
Service,'' which allows Telecoms to use on-site data center personnel
to maintain Telecom equipment, support network troubleshooting, rack
and stack a server in a Telecom's cabinet, power recycling, and install
and document the fitting of cable in a Telecom's cabinet(s).\47\ A Hot
Hands Service fee is charged per half hour.\48\ The Exchanges propose
to amend the Fee Schedule to describe this service and set forth the
corresponding fee as follows: Allows Telecom to use on-site data center
personnel to maintain Telecom equipment, support network
troubleshooting, rack and stack, power recycling, and install and
document cable ($100 per half hour).\49\
---------------------------------------------------------------------------
\47\ See id.
\48\ See id.
\49\ See id.
---------------------------------------------------------------------------
c. Shipping and Receiving
According to the Exchanges, IDS offers shipping and receiving
services to Telecoms, with a per shipment fee for the receipt of one
shipment of goods at the Mahwah Data Center from the Telecom or
supplier.\50\ The Exchanges propose to amend the Fee Schedule to
describe this service and set forth the corresponding fee as follows:
Receipt of one shipment of goods at data center on behalf of Telecom
(includes coordination of shipping and receiving) ($100 per
shipment).\51\
---------------------------------------------------------------------------
\50\ See id.
\51\ See id.
---------------------------------------------------------------------------
d. Visitor Security Escort
According to the Exchanges, Telecom representatives are required to
be accompanied by a visitor security escort during visits to the Mahwah
Data Center, for which a fee per visit is charged.\52\ The Exchanges
propose to amend the Fee Schedule to describe this service and set
forth the corresponding fee as follows: All Telecom representatives are
required to be accompanied by a visitor security escort during visits
to the data center ($75 per visit).\53\
---------------------------------------------------------------------------
\52\ See id.
\53\ See id.
---------------------------------------------------------------------------
B. Allocation of Cabinets and Power
The Exchanges propose to establish procedures for the allocation of
cabinets and power to Telecoms (``Proposed Allocation
Procedures'').\54\ As noted above,\55\ IDS offers dedicated cabinets in
the MMRs to Telecoms to house their equipment.\56\ According to the
Exchanges, the Exchanges allocate cabinets on a first-come/first-serve
basis.\57\ When a cabinet is first set up or later, a Telecom may
request power upgrades (``Additional Power'') to a dedicated cabinet in
addition to the power allocated to such cabinet (the ``Standard Cabinet
Power''), subject to a maximum of 8 kW per cabinet.\58\ The Exchanges
maintain that it would be prudent to have procedures in place for the
allocation of cabinets and power to Telecoms should such allocation be
necessary.\59\
---------------------------------------------------------------------------
\54\ See id.
\55\ See supra note 22 and accompanying text.
\56\ See Notice, supra note 3, at 21375.
\57\ See id.
\58\ See id.
\59\ See id.
---------------------------------------------------------------------------
The Exchanges propose to add the Proposed Allocation Procedures to
the Fee Schedule under the heading ``MMR Notes,'' setting forth the
procedures under proposed Notes 1 and 2.\60\ Proposed Note 1 would
provide that, if the amount of power or cabinets available fell below
specified thresholds, Telecoms would be subject to purchasing
limits.\61\ Note 1 would also specify when the purchasing limits would
cease to apply and would provide that if a Telecom requests a number of
cabinets and/or amount of Additional Power that would cause the
unallocated capacity to be below the specified power and cabinet
thresholds, the purchasing limits would apply only to the portion of
the Telecom's order below the relevant threshold.\62\
---------------------------------------------------------------------------
\60\ See id.
\61\ See id. Specifically, the Exchanges propose to provide
under the heading ``Note 1: Cabinet and Power Purchasing Limits''
that if (i) unallocated cabinet inventory is at or below 3 cabinets
(``Cabinet Threshold''), or (ii) the unallocated power capacity in
the MMRs is at or below 8 kW (the ``Power Threshold''), then the
following limits on the purchase of new cabinets (``Purchasing
Limits'') will apply: If only the Cabinet Threshold is reached, then
under the following measures (the ``Cabinet Limits''), the Exchanges
will limit each Telecom's purchase of new cabinets to a maximum of
one dedicated cabinet. A Telecom will have to wait 30 days from the
date of its signed order form before purchasing a new cabinet again.
If only the Power Threshold is reached or both the Cabinet Threshold
and the Power Threshold are reached, then under the following
measures (the ``Combined Limits''), a Telecom may purchase either or
both of a one new cabinet, subject to a maximum standard power
allocation of 4 kW (``Standard Cabinets''), or additional power for
new or existing cabinet, so long as the combined power usage of such
purchases is no more than a maximum of 4 kW. A Telecom will have to
wait 30 days from the date of its signed order form before
purchasing a new Standard Cabinet or additional power again. If the
Cabinet Threshold is reached before the Power Threshold, the Cabinet
Limits will be in effect until the Power Threshold is reached, after
which the Combined Limits will apply. See id. at 21376.
\62\ See id. at 21375. Specifically, the Exchanges propose to
provide that if a Telecom requests, in writing, a number of cabinets
that, if provided, would cause the available cabinet inventory to be
below 3 cabinets, the Cabinet Limits will only apply to the portion
of the Telecom's order below the Cabinet Threshold. When unallocated
cabinet inventory for the MMRs is more than 3 cabinets, the
Exchanges will discontinue the Cabinet Limits. If a Telecom
requests, in writing, a number of Standard Cabinets and/or an amount
of additional power that, if provided, would cause the unallocated
power capacity to be below the Power Threshold or Cabinet Threshold,
the Combined Limits would apply only to the portion of the Telecom's
order below the relevant threshold. When unallocated power capacity
is above the Power Threshold, the Exchanges will discontinue the
Combined Limits. If at that time the unallocated cabinet inventory
is 3 or fewer cabinets, the Cabinet Limits would enter into effect.
See id. at 21376.
---------------------------------------------------------------------------
Note 2 would provide that, if the amount of power or cabinets
available fell to zero, Telecoms seeking to purchase power or cabinets
would be put on a ``Cabinet Waitlist'' \63\ or a
[[Page 37359]]
``Combined Waitlist.'' \64\ In both proposed Notes 1 and 2, the
Proposed Allocation Procedures would state how the procedures regarding
cabinets and the procedures regarding power would relate to each other,
and in each case would state what the threshold amount of power and
cabinets would be to discontinue the limits.\65\
---------------------------------------------------------------------------
\63\ Specifically, the Exchanges propose to provide under the
heading ``Note 2: Cabinet and Combined Waitlists'' that the
Exchanges will create a cabinet waitlist (``Cabinet Waitlist'') if
the available cabinet inventory is zero, or a Telecom requests, in
writing, a number of cabinets that, if provided, would cause the
available inventory to be zero. The Exchanges will place Telecoms
seeking cabinets on a Cabinet Waitlist as follows: A Telecom will be
placed on the Cabinet Waitlist based on the date its signed order is
received. A Telecom may only have one order for a new cabinet on the
Cabinet Waitlist at a time, and the order is subject to the Cabinet
Limits. If a Telecom changes the size of its order while it is on
the Cabinet Waitlist, it will maintain its place on the Cabinet
Waitlist, provided that the Telecom may not increase the size of its
order such that it would exceed the Cabinet Limits. As cabinets
become available, the Exchanges will offer a cabinet to the Telecom
at the top of the Cabinet Waitlist. If the Telecom's order is
completed, it will be removed from the Cabinet Waitlist. A Telecom
will be removed from the Cabinet Waitlist (a) at the Telecom's
request or (b) if the Telecom turns down an offer of a cabinet of
the same size it requested in its order. If the Exchange offer the
Telecom a cabinet of a different size than the Telecom requested in
its order, the Telecom may turn down the offer and remain at the top
of the Cabinet Waitlist until its order is completed. A Telecom that
is removed from the Cabinet Waitlist but subsequently submits a new
written order for a cabinet will be added back to the bottom of the
Cabinet Waitlist. When unallocated cabinet inventory is more than 3
cabinets, the Exchange will cease use of the Cabinet Waitlist. See
id.
\64\ See id. at 21375. Specifically, the Exchanges propose to
create a power and cabinet waitlist (``Combined Waitlist'') if the
unallocated power capacity is zero, or if a Telecom requests, in
writing, an amount of power (whether power allocated to a Standard
Cabinet or additional power) that, if provided, would cause the
unallocated power capacity to be below zero. The Exchanges will
place Telecoms seeking cabinets or power on the Combined Waitlist,
as follows: If a Cabinet Waitlist exists when the requirements to
create a Combined Waitlist are met, the Cabinet Waitlist will
automatically convert to the Combined Waitlist. If a Combined
Waitlist exists when the requirements to create a Cabinet Waitlist
are met, no new waitlist will be created, and the Combined Waitlist
will continue in effect. A Telecom will be placed on the Combined
Waitlist based on the date its signed order for a cabinet and/or
additional power is received. A Telecom may only have one order for
a new cabinet and/or additional power on the Combined Waitlist at a
time, and the order would be subject to the Combined Limits. If a
Telecom changes the size of its order while it is on the Combined
Waitlist, it will maintain its place on the Combined Waitlist,
provided that the Telecom may not increase the size of its order
such that it would exceed the Combined Limits. As additional power
and/or cabinets become available, the Exchanges will offer them to
the Telecom at the top of the Combined Waitlist. If the Telecom's
order is completed, the order will be removed from the Combined
Waitlist. If the Telecom's order is not completed, it will remain at
the top of the Combined Waitlist. A Telecom will be removed from the
Combined Waitlist (a) at the Telecom's request; or (b) if the
Telecom turns down an offer that is the same as its order (e.g., the
offer includes a cabinet of the same size and/or the amount of
additional power that the Telecom requested in its order). If the
Exchanges offer the Telecom an offer that is different than its
order, the Telecom may turn down the offer and remain at the top of
the Combined Waitlist until its order is completed. A Telecom that
is removed from the Combined Waitlist but subsequently submits a new
written order for a cabinet and/or additional power will be added
back to the bottom of the waitlist. If the Combined Waitlist is in
effect, when unallocated power capacity in co-location is at 8 kW or
more, the Exchanges will cease use of the Combined Waitlist. If at
that time the unallocated cabinet inventory is 3 or fewer cabinets,
the Cabinet Waitlist would enter into effect. See id. at 21376-77.
\65\ See id. at 21375-36.
---------------------------------------------------------------------------
III. Exchanges' Justification
With respect to the MMR services and fees, the Exchanges generally
argue that the proposals are reasonable, equitable, not unfairly
discriminatory, and would not impose a burden on competition that it
not necessary or appropriate, as required by Sections 6(b)(4), (5) and
(8) of the Exchange Act, because use of the proposed services is
completely voluntary and their use enables Telecoms to compete with IDS
in providing connectivity services to Mahwah Customers.\66\ According
to the Exchanges, IDS operates in a highly competitive market in which
exchanges, third party telecommunications providers, Hosting Users,\67\
and other third-party vendors offer connectivity services as a means to
facilitate the trading and other market activities of market
participants.\68\ By making it possible for Telecoms to offer their
customers circuits into and out of the Mahwah Data Center, the
Exchanges state that the proposed MMR services allow Telecoms to
compete with IDS, and that the continued availability of choices for
Mahwah Customers is beneficial to both the Telecoms and the Mahwah
Customers.\69\ The Exchanges state that if these MMR services were not
available, all Mahwah Customers and third-party telecommunications
service providers would be required to use IDS circuits to access the
Mahwah Data Center, thereby reducing competition.\70\ The Exchanges
also state that the described services and fees are offered to and
subscribed to by existing Telecoms, and thus expect that the impact of
the proposals would be minimal.\71\
---------------------------------------------------------------------------
\66\ See id. at 21377-79.
\67\ ``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. at 21377 n.21 (citing Securities Exchange Act Release No. 76008
(September 29, 2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-2015-
40)).
\68\ In this regard, the Exchanges maintain that most of the
Telecoms that provide circuits do so at fees lower than those of
IDS, and that most Mahwah Customers use Telecom circuits into and
out of the Mahwah Data Center. See id. at 21377.
\69\ See id.
\70\ See id.
\71\ The Exchanges further state that they do not expect that
IDS would attract any new customers as a result of the proposals.
See id.
---------------------------------------------------------------------------
In addition, the Exchanges argue that the proposals are reasonable
because use of any MMR service is completely voluntary and available to
purchasers on an equal basis, with each Telecom able to determine
whether to use MMR services based on the requirements of its business
operations, and each Telecom being charged only for the services that
it selects and for the same amount as all other Telecoms purchasing
such services.\72\ The Exchanges also argue that the fees proposed for
the MMR fees are reasonable because, to the extent the services IDS
offers to Telecoms are substantially the same as the services offered
by the Exchange to Users, the fees are the same.\73\ With respect to
the two services not offered to Users (the Conduit Sleeve Fee and
Carrier Connection Fee), the Exchanges state that the fees IDS charges
Telecoms are reasonable because the services correspond to the
Telecoms' usage of the IDS conduits and the Telecoms' ability to offer
their circuits to their customers.\74\ In addition, the Exchanges
provide some cost-based justifications for why the proposals are
reasonable, claiming that IDS must provide, maintain, and operate the
Mahwah Data Center technology infrastructure, expand the network
infrastructure to keep pace with the services available to Telecoms,
and handle the installation, administration, monitoring, support, and
maintenance of the MMR services.\75\
---------------------------------------------------------------------------
\72\ See id.
\73\ See id.
\74\ See id.
\75\ See id.
---------------------------------------------------------------------------
The Exchanges contend that the proposals provide for an equitable
allocation of fees and are not unfairly discriminatory, again arguing
generally that the proposed services would allow Telecoms to continue
to compete with IDS, in addition to being voluntary and available to
all market participants on an equal basis.\76\ The Exchanges claim that
the proposed rule changes would apply to all market participants and
would not apply differently to distinct types or sizes of licensed
telecommunications service providers, but rather would apply to all
equally.\77\
---------------------------------------------------------------------------
\76\ See id. at 21378-79.
\77\ See id. at 21379.
---------------------------------------------------------------------------
The Exchanges argue that the proposed rule changes do not impose an
unnecessary or inappropriate burden on competition because the
proposals would preserve the ability of IDS to offer the services
described herein,
[[Page 37360]]
allowing the Telecoms to compete with IDS in providing connectivity
services into and out of the Mahwah Data Center.\78\ 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.\79\
---------------------------------------------------------------------------
\78\ See id.
\79\ See id. at 21379-80.
---------------------------------------------------------------------------
Regarding the Proposed Allocation Procedures, the Exchanges argue
principally that it would be reasonable to put in place procedures to
establish the allocation of power and cabinets to Telecoms on an
equitable basis should the need arise, and that the Proposed Allocation
Procedures are consistent with those of another exchange and those
recently approved for allocating cabinets and power in the context of
the Exchanges' co-location service offerings.\80\
---------------------------------------------------------------------------
\80\ See id. at 21378, 21378 n.26.
---------------------------------------------------------------------------
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.\81\ 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.
---------------------------------------------------------------------------
\81\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
Pursuant to Section 19(b)(2)(B) of the Act,\82\ the Commission is
providing notice of the grounds for possible disapproval under
consideration:
---------------------------------------------------------------------------
\82\ 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;'' \83\
---------------------------------------------------------------------------
\83\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
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;'' \84\ and
---------------------------------------------------------------------------
\84\ 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].'' \85\
---------------------------------------------------------------------------
\85\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
As discussed in Section III above, the Exchanges make various
arguments in support of the proposals. The Commission believes that
there are questions as to whether the Exchanges have provided
sufficient information to demonstrate that the proposals, including the
proposed fees for MMR services, are consistent with the Act.
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.''
\86\ 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.\87\ 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.\88\
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\86\ 17 CFR 201.700(b)(3).
\87\ See id.
\88\ See id.
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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; \89\ as well as any other
provision of the Act, or the rules and regulations thereunder.
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\89\ See 15 U.S.C. 78f(b)(4), (5), and (8).
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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 August 5, 2021. Rebuttal
comments should be submitted by August 19, 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.\90\
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\90\ 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).
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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-2021-25, SR-NYSEAMER-2021-21, SR-NYSEArca-2021-24,
SR-NYSECHX-2021-07, SR-NYSENAT-2021-09 on the subject line.
[[Page 37361]]
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-2021-25, SR-NYSEAMER-
2021-21, SR-NYSEArca-2021-24, SR-NYSECHX-2021-07, and SR-NYSENAT-2021-
09. 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-2021-25, SR-NYSEAMER-
2021-21, SR-NYSEArca-2021-24, SR-NYSECHX-2021-07, and SR-NYSENAT-2021-
09 and should be submitted on or before August 5, 2021. Rebuttal
comments should be submitted by August 19, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\91\
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\91\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15038 Filed 7-14-21; 8:45 am]
BILLING CODE 8011-01-P
