Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Equities Price List and Fee Schedule and the NYSE American Options Fee Schedule Regarding Colocation Services, 64580-64585 [2021-25127]
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Federal Register / Vol. 86, No. 220 / Thursday, November 18, 2021 / Notices
create a proprietary wireless connection
or connect through another User in
order to connect to CME Group market
data. The Exchange believes that at least
two market participants already provide
wireless connectivity to CME Group
market data to other data centers in New
Jersey.
The Exchange notes that the proposed
wireless connection would compete not
just with other wireless connections to
CME Group market data, but also with
fiber network connections, which may
be more attractive to some market
participants as they are more reliable
and less susceptible to weather
conditions. Market participants’
considerations in determining what
connectivity to purchase may include
latency; the amount of network uptime;
the equipment that the network uses;
the cost of the connection; and the
applicable contractual provisions. As
noted above, a User may purchase a
fiber connection to CME Group market
data from at least three providers,
including IDS.
The Exchange operates in a highly
competitive market in which exchanges
and other vendors (e.g., Hosting Users)
offer co-location services as a means to
facilitate the trading and other market
activities of those market participants
who believe that co-location enhances
the efficiency of their operations. The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Specifically, in
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 21
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
21 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
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operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 22 and Rule 19b–
4(f)(6) thereunder.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSENAT–2021–23 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSENAT–2021–23. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
22 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
23 17
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Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSENAT–2021–23, and
should be submitted on or before
December 9, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25122 Filed 11–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93561; File No. SR–
NYSEAMER–2021–43]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE
American Equities Price List and Fee
Schedule and the NYSE American
Options Fee Schedule Regarding
Colocation Services
November 12, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
3, 2021, NYSE American LLC (‘‘NYSE
American’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 86, No. 220 / Thursday, November 18, 2021 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE American Equities Price List and
Fee Schedule and the NYSE American
Options Fee Schedule (together, the
‘‘Price List and Fee Schedule’’)
regarding colocation services and fees to
provide Users with wireless
connectivity to CME Group market data.
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
The Exchange proposes to amend the
Price List and Fee Schedule regarding
colocation services and fees to provide
Users 4 with wireless connectivity to
CME Group market data.5
The Exchange currently provides
Users with wireless connections to eight
4 For purposes of the Exchange’s co-location
services, a ‘‘User’’ means any market participant
that requests to receive co-location services directly
from the Exchange. Securities Exchange Act Release
No. 76009 (September 29, 2015), 80 FR 60213
(October 5, 2015) (SR–NYSEMKT–2015–67). As
specified in the Price List and Fee Schedule, a User
that incurs co-location fees for a particular colocation service pursuant thereto would not be
subject to co-location fees for the same co-location
service charged by the Exchange’s affiliates New
York Stock Exchange LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc. (together,
the ‘‘Affiliate SROs’’). Each Affiliate SRO has
submitted substantially the same proposed rule
change to propose the changes described herein.
See SR–NYSE–2021–67, SR–NYSEArca–2021–97,
SR–NYSECHX–2021–17, and SR–NYSENAT–2021–
23.
5 The Exchange initially filed rule changes
relating to its co-location services with the
Securities and Exchange Commission
(‘‘Commission’’) in 2010. See Securities Exchange
Act Release No. 62961 (September 21, 2010), 75 FR
59299 (September 27, 2010) (SR–NYSEAmex–2010–
80).
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market data feeds or combinations of
feeds from third party markets (the
‘‘Existing Third Party Data’’),6 and
wired connections to 43 market data
feeds.7 The Exchange now proposes to
add to its Price List and Fee Schedule
wireless connections to CME Group,
Inc. (‘‘CME Group’’) market data (such
data, ‘‘CME Group Data’’ and, together
with the Existing Third Party Data, the
‘‘Third Party Data’’). Users would be
offered the proposed wireless
connection to the CME Group Data
through connections into the colocation
center in the Mahwah, New Jersey data
center (‘‘Data Center’’).8
The Exchange expects that the
proposed rule change would become
operative no later than March 31, 2022.
The Exchange will announce the date
that the wireless connection to the CME
Group Data will be available through a
customer notice.
To receive CME Group Data, the User
would enter into an agreement with a
non-Exchange affiliated party for
permission to receive the data, if
required. The User would pay this third
party any fees for the data content.
For each wireless connection to CME
Group Data, a User would be charged a
$5,000 non-recurring initial charge and
a monthly recurring charge of $6,000.
The Exchange proposes to revise its
Price List and Fee Schedule to reflect
fees related to the wireless connection
to CME Group Data.
The CME Group Data would not
include all possible CME Group data
feeds. There is limited bandwidth
available on the wireless network to colocation, and there are currently dozens
of CME Group data feeds. To provide
connectivity to all of them would use a
large amount of bandwidth.
Accordingly, rather than provide
connectivity to all possible symbols
included in the CME Group data feeds,
the wireless connection would only
provide connectivity to a selection of
CME Group market data for which IDS
determines there is User demand. IDS
similarly provides connectivity to a
selection of data, rather than entire
6 See Securities Exchange Act Release Nos. 76748
(December 23, 2015), 80 FR 81648 (December 30,
2015) (SR–NYSEMKT–2015–85); 78376 (July 21,
2016), 81 FR 49311 (July 27, 2016) (SR–NYSEMKT–
2016–17); and 80117 (February 28, 2017), 82 FR
12646 (March 6, 2017) (SR–NYSEMKT–2017–09).
7 See Securities Exchange Act Release No. 80309
(March 24, 2017), 82 FR 15725 (March 30, 2017)
(SR–NYSEMKT–2016–63).
8 Through its ICE Data Services (‘‘IDS’’) business,
Intercontinental Exchange, Inc. (‘‘ICE’’) operates the
Data Center in Mahwah, New Jersey. The Exchange
and the Affiliate SROs are indirect subsidiaries of
ICE. The proposed service would be provided by
IDS pursuant to an agreement with a non-ICE entity.
IDS does not own the wireless network that would
be used to provide the service.
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64581
feeds, over a wireless connection to the
Markham, Canada third party data
center.9 The User would then determine
the symbols for which it would receive
data, which could include data
regarding some or all of the symbols for
which IDS provides connectivity.10 The
Exchange would not have visibility into
which portion of the CME Group Data
a given User receives.
As with the Existing Third Party Data,
if a User purchased two wireless
connections, it would pay two nonrecurring initial charges. Each wireless
connection would include the use of
one port for connectivity to CME Group
Data. A User would not pay a fee for the
use of such port. If a User also connects
to Existing Third Party Data, it would
not be able to use the same port that it
uses for connectivity to CME Group
Data to connect to such Existing Third
Party Data. Accordingly, a User that
connects to both CME Group Data and
Existing Third Party Data would have at
least two ports, and would not be
separately charged for two ports.11
Application and Impact of the Proposed
Changes
The proposed changes would not
apply differently to distinct types or
sizes of market participants. Rather,
they would apply to all Users equally.
As is currently the case, the purchase
of any co-location service, including
connectivity to Third Party Data, is
completely voluntary and the Price List
and Fee Schedule are applied uniformly
to all Users.
Competitive Environment
Users that do not opt to utilize the
Exchange’s proposed wireless
connection would still be able to obtain
CME Group market data using other
methods: From another User, a third
9 See Securities Exchange Act Release No. 88238
(February 19, 2020), 85 FR 10776 (February 25,
2020) (SR–NYSEAMER–2020–10). 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).
10 The Exchange understands that the third
parties that provide wireless connectivity to CME
Group market data to the Data Center and other data
centers in New Jersey follow a substantially similar
model, offering connectivity to a selection of market
data rather than entire feeds.
11 If a User purchased a wireless connection to
CME Group Data, that connection would include
the use of one port for connectivity to CME Group
Data. If the same User connected to Existing Third
Party Data, it would receive the use of one port for
connectivity to the Existing Third Party Data. It
would not be separately charged for such ports. A
User may purchase additional ports. See 80 FR
81648, supra note 6, at 81649.
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party wireless connection, or through an
IDS or third party fiber connection.
Based on the information available to
it, the Exchange believes that at least
one market participant provides
wireless connectivity to CME Group
market data in the Data Center. The
Exchange believes that the wireless
connection offered by this third party
entity provides connectivity at the same
or similar speed as the proposed
connection to CME Group Data, and at
the same or similar cost.12 The proposed
connection to CME Group Data and the
existing third party wireless connection
to CME Group Data would follow the
same route within the Data Center: They
would both enter through a meet-meroom, connect to equipment in colocation, and then connect to any Users
that are customers. Because of this, the
Exchange does not believe that IDS has
an advantage over the third party in
providing the connectivity. The
proposed wireless connection would
lead to a pole, from where a fiber
connection would lead into the Data
Center. The pole is owned by a third
party and is not on the grounds of the
Data Center.
IDS already offers fiber connections to
CME Group market data to Users.13 The
Exchange also believes that at least two
third party market participants offer
such fiber connections to CME Group
market data. In addition to these
options, a User may create a proprietary
wireless connection or connect through
another User in order to connect to CME
Group market data. The Exchange
believes that at least two market
participants already provide wireless
connectivity to CME Group market data
to other data centers in New Jersey.
Wireless connections involve beaming
signals through the air between
antennas that are within line of sight of
one another. Because the signals travel
a straight, unimpeded line, and because
light waves travel faster through air than
through glass (fiber optics), wireless
messages have lower latency than
messages travelling through fiber optics.
At the same time, as a general rule
wireless networks have less uptime than
fiber networks. Wireless networks are
directly and immediately affected by
adverse weather conditions, which can
cause message loss and outage periods.
Wireless networks cannot be configured
with redundancy in the same way that
fiber networks can. As a result, an
equipment or weather issue at any one
12 Because
the third party is not a regulated
entity, it is not obligated to make its latency figures
or fees publicly available or the same for all entities.
13 See Securities Exchange Act Release No. 81015
(June 23, 2017), 82 FR 29610 (June 29, 2017) (SR–
NYSEMKT–2017–32).
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location on the network will cause the
entire network to have an outage. In
addition, maintenance can take longer
than it would with a fiber based
network, as the relevant tower may be
in a hard to reach location, or weather
conditions may present safety issues,
delaying technicians servicing
equipment. Even under normal
conditions, a wireless network will have
a higher error rate than a fiber network
of the same length.
The latency of a wireless network
depends on several factors. Variables
include the wireless equipment utilized;
the route of, and number of towers or
buildings in, the network; their
proximity to the data centers on either
end; and the fiber equipment used at
either end of the connection. Moreover,
latency is not the only consideration
that a customer may have in selecting a
wireless network to connect to CME
Group market data. Other
considerations may include the amount
of network uptime; the equipment that
the network uses; the cost of the
connection; and the applicable
contractual provisions. Indeed, fiber
network connections may be more
attractive to some market participants as
they are more reliable and less
susceptible to weather conditions.
The Exchange operates in a highly
competitive market in which exchanges
and other vendors (e.g., Hosting Users)
offer co-location services as a means to
facilitate the trading and other market
activities of those market participants
who believe that co-location enhances
the efficiency of their operations. The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Specifically, in
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 14
The proposed change is not otherwise
intended to address any other issues
relating to co-location services and/or
related fees, and the Exchange is not
aware of any problems that Users would
have in complying with the proposed
change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,15 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,16 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and because it is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Exchange further believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act,17 because it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers, or dealers.
The Proposed Change Is Reasonable
The Exchange believes that the
proposed rule change is reasonable.
The wireless connection would
provide Users with an alternative means
of connectivity to CME Group Data. The
proposed change would provide Users
with an additional choice with respect
to the form and optimal latency of the
connectivity they use to receive CME
Group market data, allowing a User to
select the connectivity that better suits
its needs, helping it tailor its colocation
operations to the requirements of its
business operations. Users that do not
opt to utilize the Exchange’s proposed
wireless connection would still be able
to obtain CME Group market data using
other methods: From another User, a
third party wireless connection, or
through an IDS or third party fiber
connection.
Based on the information available to
it, the Exchange believes that at least
one market participant provides
wireless connectivity to CME Group
market data in the Data Center. The
Exchange believes that the wireless
connection offered by this third party
entity provides connectivity at the same
or similar speed as the proposed
connection to CME Group Data, and at
the same or similar cost. The proposed
connection to CME Group Data and the
existing third party wireless connection
to CME Group Data would follow the
15 15
14 See
Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
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Fmt 4703
Sfmt 4703
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
17 15 U.S.C. 78f(b)(4).
16 15
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same route within the Data Center: They
would both enter through a meet-meroom, connect to equipment in colocation, and then connect to any Users
that are customers. Because of this, the
Exchange does not believe that IDS has
an advantage over the third party in
providing the connectivity. The
proposed wireless connection would
lead to a pole, from where a fiber
connection would lead into the Data
Center. The pole is owned by a third
party and is not on the grounds of the
Data Center.
IDS already offers fiber connections to
CME Group market data to Users.18 The
Exchange also believes that at least two
third party market participants offer
such fiber connections to CME Group.
In addition to these options, a User may
create a proprietary wireless connection
or connect through another User in
order to connect to CME Group market
data. The Exchange believes that at least
two market participants already provide
wireless connectivity to CME Group
market data to other data centers in New
Jersey.
Market participants’ considerations in
determining what connectivity to
purchase may include latency; the
amount of network uptime; the
equipment that the network uses; the
cost of the connection; and the
applicable contractual provisions.
Indeed, fiber network connections may
be more attractive to some market
participants as they are more reliable
and less susceptible to weather
conditions.
The Exchange believes that it is
reasonable to not transport information
for all of the symbols included in CME
Group data feeds to the Data Center, but
rather to transport a subset of that data.
There is limited bandwidth available on
the wireless network to co-location, and
there are a number of CME Group data
feeds. Limiting the feeds to the selection
of CME Group market data regarding
securities for which IDS determines
there is demand would allow Users to
receive the relevant CME Group Data
over a wireless network, which could
include data regarding some or all of the
symbols for which IDS provides
connectivity. The User would then
determine those symbols for which it
will receive data.
The Exchange believes that it is
reasonable that a User that has already
purchased wireless connections to other
Third Party Data would be charged a
non-recurring charge when it purchases
a wireless connection to the CME Group
Data, because it would allow the
Exchange to defray or cover certain
18 See
82 FR 29610, supra note 12.
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costs it incurs in installing the wireless
connection to the CME Group Data,
which costs it incurs irrespective of
whether the User has existing wireless
connections to Third Party Data, while
providing the User the benefit of the
installation, which would allow it to
receive CME Group Data within colocation and with a lower latency over
the fiber optics option. To do the initial
installation, the Exchange must provide
the personnel required for initial
installation and testing. The costs
associated with installing wireless
connections are incrementally higher
than those associated with installing
fiber optics-based solutions.
The Exchange believes that it is
reasonable that a User that connects to
both CME Group Data and Existing
Third Party Data may not use the same
port for connectivity to both, and so
would have at least two ports, because
the proposed wireless connection would
include the use of one port for
connectivity to CME Group Data and
connectivity to the Existing Third Party
Data includes the use of one port for
connectivity to Existing Third Party
Data. A User would not pay a separate
fee for using such ports.
The Exchange believes the proposed
pricing for the wireless connection to
CME Group Data is reasonable because
it would allow the Exchange to defray
or cover the costs associated with
offering Users a wireless connection to
CME Group Data while providing Users
the benefit of receiving CME Group Data
within co-location and with a lower
latency over the fiber optics option. The
wireless connection for CME Group
Data would allow Users to select the
CME Group Data connectivity option
that better suits their needs.
The Exchange believes that the
proposed pricing is reasonable because
the Exchange proposes to offer the
wireless connection to CME Group Data
described herein as a convenience to
Users, but in order to do so must
provide, maintain and operate the Data
Center facility hardware and technology
infrastructure. The Exchange must
handle the installation, administration,
monitoring, support and maintenance of
such services, including by responding
to any production issues. Since the
inception of co-location, the Exchange
has made numerous improvements to
the network hardware and technology
infrastructure and has established
additional administrative controls. The
Exchange has expanded the network
infrastructure to keep pace with the
increased number of services available
to Users. Specifically, in order to offer
wireless connections, the Exchange
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64583
must install, test, maintain and operate
the wireless equipment.
The Proposed Change Is Not Unfairly
Discriminatory
The Exchange believes that the
proposed rule change is not unfairly
discriminatory for the following
reasons.
Without this proposed rule change,
Users would have fewer options for
connectivity to CME Group Data. The
proposed change would provide Users
with an additional choice with respect
to the form and optimal latency of the
connectivity they use to receive CME
Group market data, allowing a User to
select the connectivity that better suits
its needs, helping it tailor its colocation
operations to the requirements of its
business operations. Users that do not
opt to utilize the Exchange’s proposed
wireless connection would still be able
to obtain CME Group market data using
other methods: From another User, a
third party wireless connection, or
through an IDS or third party fiber
connection.
The Exchange believes that it is not
unfairly discriminatory to not transport
information for all of the symbols
included in CME Group data feeds to
the Data Center, but rather to transport
a subset of that data. There is limited
bandwidth available on the wireless
network to co-location, and there are a
number of CME Group data feeds.
Limiting the feeds to the selection of
CME Group market data regarding
securities for which IDS determines
there is demand would allow Users to
receive the relevant CME Group Data
over a wireless network. The User
would then determine those symbols for
which it will receive data, which could
include data regarding some or all of the
symbols for which IDS provides
connectivity.
The Exchange believes that the
proposed pricing is not unfairly
discriminatory because the Exchange
proposes to offer the wireless
connection to CME Group Data
described herein as a convenience to
Users, but in order to do so must
provide, maintain and operate the Data
Center facility hardware and technology
infrastructure. The Exchange must
handle the installation, administration,
monitoring, support and maintenance of
such services, including by responding
to any production issues. Since the
inception of co-location, the Exchange
has made numerous improvements to
the network hardware and technology
infrastructure and has established
additional administrative controls. The
Exchange has expanded the network
infrastructure to keep pace with the
E:\FR\FM\18NON1.SGM
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khammond on DSKJM1Z7X2PROD with NOTICES
increased number of services available
to Users. Specifically, in order to offer
wireless connections, the Exchange
must install, test, maintain and operate
the wireless equipment.
The Exchange believes that the
proposed change is not unfairly
discriminatory because it will result in
fees being charged only to Users that
voluntarily select to receive the
corresponding services and because
those services will be available to all
Users. Furthermore, the Exchange
believes that the services and fees
proposed herein are not unfairly
discriminatory because, in addition to
the services being completely voluntary,
they are available to all Users on an
equal basis (i.e., the same products and
services are available to all Users). All
Users that voluntarily select wireless
connections to CME Group Data would
be charged the same amount for the
same services.
Users that opt to use wireless
connections to CME Group Data would
receive the CME Group Data that is
available to all Users, as all market
participants that contract with CME
Group or its affiliate for CME Group
Data, as required, may receive it.
The Proposed Change Is an Equitable
Allocation of Fees and Credits
The Exchange believes that its
proposal equitably allocates its fees
among Users.
Without this proposed rule change,
Users would have fewer options for
connectivity to CME Group Data. The
proposed change would provide Users
with an additional choice with respect
to the form and optimal latency of the
connectivity they use to receive CME
Group market data, allowing a User to
select the connectivity that better suits
its needs, helping it tailor its colocation
operations to the requirements of its
business operations. Users that do not
opt to utilize the Exchange’s proposed
wireless connection would still be able
to obtain CME Group market data using
other methods: From another User, a
third party wireless connection, or
through an IDS or third party fiber
connection.
The Exchange believes that the
proposed change is equitable because it
will result in fees being charged only to
Users that voluntarily select to receive
the corresponding services and because
those services will be available to all
Users. Furthermore, the Exchange
believes that the services and fees
proposed herein are equitably allocated
because, in addition to the services
being completely voluntary, they are
available to all Users on an equal basis
(i.e., the same products and services are
VerDate Sep<11>2014
17:11 Nov 17, 2021
Jkt 256001
available to all Users). All Users that
voluntarily select wireless connections
to CME Group Data would be charged
the same amount for the same services.
The Exchange operates in a highly
competitive market in which exchanges
offer co-location services as a means to
facilitate the trading and other market
activities of those market participants
who believe that co-location enhances
the efficiency of their operations.
Accordingly, fees charged for colocation services are constrained by the
active competition for the order flow of,
and other business from, such market
participants. If a particular exchange
charges excessive fees for co-location
services, affected market participants
will opt to terminate their co-location
arrangements with that exchange, and
adopt a possible range of alternative
strategies, including placing their
servers in a physically proximate
location outside the exchange’s data
center (which could be a competing
exchange), or pursuing strategies less
dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange
charging excessive fees would stand to
lose not only co-location revenues but
also the liquidity of the formerly colocated trading firms, which could have
additional follow-on effects on the
market share and revenue of the affected
exchange.
For the reasons above, the proposed
changes do not unfairly discriminate
between or among market participants
that are otherwise capable of satisfying
any applicable co-location fees,
requirements, terms and conditions
established from time to time by the
Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposal will not impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of Section 6(b)(8) of the Act.19
The proposed change does not affect
competition among national securities
exchanges or among members of the
Exchange, but rather between IDS and
its commercial competitors.
The wireless connection would
provide Users with an alternative means
of connectivity to CME Group Data. The
proposed change would provide Users
with an additional choice with respect
to the form and optimal latency of the
connectivity they use to receive CME
Group market data, allowing a User to
select the connectivity that better suits
its needs, helping it tailor its colocation
19 15
PO 00000
U.S.C. 78f(b)(8).
Frm 00140
Fmt 4703
operations to the requirements of its
business operations.
Users that do not opt to utilize the
Exchange’s proposed wireless
connection would still be able to obtain
CME Group market data using other
methods: From another User, a third
party wireless connection, or through an
IDS or third party fiber connection.
Based on the information available to it,
the Exchange believes that at least one
market participant provides wireless
connectivity to CME Group market data
in the Data Center. The Exchange
believes that the wireless connection
offered by this third party entity
provides connectivity at the same or
similar latency as the proposed
connection to CME Group Data, and at
the same or similar cost. The proposed
connection to CME Group Data and the
existing third party wireless connection
to CME Group Data would follow the
same route within the Data Center: They
would both enter through a meet-meroom, connect to equipment in colocation, and then connect to any Users
that are customers. Because of this, the
Exchange does not believe that IDS has
an advantage over the third party in
providing the connectivity. The
proposed wireless connection would
lead to a pole, from where a fiber
connection would lead into the Data
Center. The pole is owned by a third
party and is not on the grounds of the
Data Center.
IDS already offers fiber connections to
CME Group market data to Users.20 The
Exchange also believes that at least two
third party market participants offer
such fiber connections to CME Group.
In addition to these options, a User may
create a proprietary wireless connection
or connect through another User in
order to connect to CME Group market
data. The Exchange believes that at least
two market participants already provide
wireless connectivity to CME Group
market data to other data centers in New
Jersey.
The Exchange notes that the proposed
wireless connection would compete not
just with other wireless connections to
CME Group market data, but also with
fiber network connections, which may
be more attractive to some market
participants as they are more reliable
and less susceptible to weather
conditions. Market participants’
considerations in determining what
connectivity to purchase may include
latency; the amount of network uptime;
the equipment that the network uses;
the cost of the connection; and the
applicable contractual provisions. As
noted above, a User may purchase a
20 See
Sfmt 4703
E:\FR\FM\18NON1.SGM
82 FR 29610, supra note 12.
18NON1
Federal Register / Vol. 86, No. 220 / Thursday, November 18, 2021 / Notices
fiber connection to CME Group market
data from at least three providers,
including IDS.
The Exchange operates in a highly
competitive market in which exchanges
and other vendors (e.g., Hosting Users)
offer co-location services as a means to
facilitate the trading and other market
activities of those market participants
who believe that co-location enhances
the efficiency of their operations. The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Specifically, in
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 21
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
khammond on DSKJM1Z7X2PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 22 and Rule 19b–
4(f)(6) thereunder.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
21 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
22 15 U.S.C. 78s(b)(3)(A).
23 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
VerDate Sep<11>2014
17:11 Nov 17, 2021
Jkt 256001
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEAMER–2021–43 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEAMER–2021–43. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEAMER–2021–43, and
should be submitted on or before
December 9, 2021.
PO 00000
Frm 00141
Fmt 4703
Sfmt 4703
64585
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25127 Filed 11–17–21; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2021–0045]
Agency Information Collection
Activities: Comment Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes revisions
of OMB-approved information
collections.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
(OMB) Office of Management and
Budget, Attn: Desk Officer for SSA
Comments: https://www.reginfo.gov/
public/do/PRAMain. Submit your
comments online referencing Docket ID
Number [SSA–2021–0045].
(SSA) Social Security Administration,
OLCA, Attn: Reports Clearance
Director, 3100 West High Rise, 6401
Security Blvd., Baltimore, MD 21235,
Fax: 410–966–2830, Email address:
OR.Reports.Clearance@ssa.gov
Or you may submit your comments
online through https://www.reginfo.gov/
public/do/PRAMain, referencing Docket
ID Number [SSA–2021–0045].
SSA submitted the information
collections below to OMB for clearance.
Your comments regarding these
information collections would be most
useful if OMB and SSA receive them
within 30 days from the date of this
publication. To be sure we consider
your comments, we must receive them
no later than December 20, 2021.
Individuals can obtain copies of these
24 17
E:\FR\FM\18NON1.SGM
CFR 200.30–3(a)(12).
18NON1
]]>Agencies
[Federal Register Volume 86, Number 220 (Thursday, November 18, 2021)]
[Notices]
[Pages 64580-64585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25127]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93561; File No. SR-NYSEAMER-2021-43]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
NYSE American Equities Price List and Fee Schedule and the NYSE
American Options Fee Schedule Regarding Colocation Services
November 12, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on November 3, 2021, NYSE American LLC (``NYSE American'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 64581]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE American Equities Price
List and Fee Schedule and the NYSE American Options Fee Schedule
(together, the ``Price List and Fee Schedule'') regarding colocation
services and fees to provide Users with wireless connectivity to CME
Group market data. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Price List and Fee Schedule
regarding colocation services and fees to provide Users \4\ with
wireless connectivity to CME Group market data.\5\
---------------------------------------------------------------------------
\4\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. Securities Exchange
Act Release No. 76009 (September 29, 2015), 80 FR 60213 (October 5,
2015) (SR-NYSEMKT-2015-67). As specified in the Price List and Fee
Schedule, a User that incurs co-location fees for a particular co-
location service pursuant thereto would not be subject to co-
location fees for the same co-location service charged by the
Exchange's affiliates New York Stock Exchange LLC, NYSE Arca, Inc.,
NYSE Chicago, Inc., and NYSE National, Inc. (together, the
``Affiliate SROs''). Each Affiliate SRO has submitted substantially
the same proposed rule change to propose the changes described
herein. See SR-NYSE-2021-67, SR-NYSEArca-2021-97, SR-NYSECHX-2021-
17, and SR-NYSENAT-2021-23.
\5\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') in 2010. See Securities Exchange Act Release No.
62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR-
NYSEAmex-2010-80).
---------------------------------------------------------------------------
The Exchange currently provides Users with wireless connections to
eight market data feeds or combinations of feeds from third party
markets (the ``Existing Third Party Data''),\6\ and wired connections
to 43 market data feeds.\7\ The Exchange now proposes to add to its
Price List and Fee Schedule wireless connections to CME Group, Inc.
(``CME Group'') market data (such data, ``CME Group Data'' and,
together with the Existing Third Party Data, the ``Third Party Data'').
Users would be offered the proposed wireless connection to the CME
Group Data through connections into the colocation center in the
Mahwah, New Jersey data center (``Data Center'').\8\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 76748 (December 23,
2015), 80 FR 81648 (December 30, 2015) (SR-NYSEMKT-2015-85); 78376
(July 21, 2016), 81 FR 49311 (July 27, 2016) (SR-NYSEMKT-2016-17);
and 80117 (February 28, 2017), 82 FR 12646 (March 6, 2017) (SR-
NYSEMKT-2017-09).
\7\ See Securities Exchange Act Release No. 80309 (March 24,
2017), 82 FR 15725 (March 30, 2017) (SR-NYSEMKT-2016-63).
\8\ Through its ICE Data Services (``IDS'') business,
Intercontinental Exchange, Inc. (``ICE'') operates the Data Center
in Mahwah, New Jersey. The Exchange and the Affiliate SROs are
indirect subsidiaries of ICE. The proposed service would be provided
by IDS pursuant to an agreement with a non-ICE entity. IDS does not
own the wireless network that would be used to provide the service.
---------------------------------------------------------------------------
The Exchange expects that the proposed rule change would become
operative no later than March 31, 2022. The Exchange will announce the
date that the wireless connection to the CME Group Data will be
available through a customer notice.
To receive CME Group Data, the User would enter into an agreement
with a non-Exchange affiliated party for permission to receive the
data, if required. The User would pay this third party any fees for the
data content.
For each wireless connection to CME Group Data, a User would be
charged a $5,000 non-recurring initial charge and a monthly recurring
charge of $6,000. The Exchange proposes to revise its Price List and
Fee Schedule to reflect fees related to the wireless connection to CME
Group Data.
The CME Group Data would not include all possible CME Group data
feeds. There is limited bandwidth available on the wireless network to
co-location, and there are currently dozens of CME Group data feeds. To
provide connectivity to all of them would use a large amount of
bandwidth.
Accordingly, rather than provide connectivity to all possible
symbols included in the CME Group data feeds, the wireless connection
would only provide connectivity to a selection of CME Group market data
for which IDS determines there is User demand. IDS similarly provides
connectivity to a selection of data, rather than entire feeds, over a
wireless connection to the Markham, Canada third party data center.\9\
The User would then determine the symbols for which it would receive
data, which could include data regarding some or all of the symbols for
which IDS provides connectivity.\10\ The Exchange would not have
visibility into which portion of the CME Group Data a given User
receives.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 88238 (February 19,
2020), 85 FR 10776 (February 25, 2020) (SR-NYSEAMER-2020-10). 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).
\10\ The Exchange understands that the third parties that
provide wireless connectivity to CME Group market data to the Data
Center and other data centers in New Jersey follow a substantially
similar model, offering connectivity to a selection of market data
rather than entire feeds.
---------------------------------------------------------------------------
As with the Existing Third Party Data, if a User purchased two
wireless connections, it would pay two non-recurring initial charges.
Each wireless connection would include the use of one port for
connectivity to CME Group Data. A User would not pay a fee for the use
of such port. If a User also connects to Existing Third Party Data, it
would not be able to use the same port that it uses for connectivity to
CME Group Data to connect to such Existing Third Party Data.
Accordingly, a User that connects to both CME Group Data and Existing
Third Party Data would have at least two ports, and would not be
separately charged for two ports.\11\
---------------------------------------------------------------------------
\11\ If a User purchased a wireless connection to CME Group
Data, that connection would include the use of one port for
connectivity to CME Group Data. If the same User connected to
Existing Third Party Data, it would receive the use of one port for
connectivity to the Existing Third Party Data. It would not be
separately charged for such ports. A User may purchase additional
ports. See 80 FR 81648, supra note 6, at 81649.
---------------------------------------------------------------------------
Application and Impact of the Proposed Changes
The proposed changes would not apply differently to distinct types
or sizes of market participants. Rather, they would apply to all Users
equally.
As is currently the case, the purchase of any co-location service,
including connectivity to Third Party Data, is completely voluntary and
the Price List and Fee Schedule are applied uniformly to all Users.
Competitive Environment
Users that do not opt to utilize the Exchange's proposed wireless
connection would still be able to obtain CME Group market data using
other methods: From another User, a third
[[Page 64582]]
party wireless connection, or through an IDS or third party fiber
connection.
Based on the information available to it, the Exchange believes
that at least one market participant provides wireless connectivity to
CME Group market data in the Data Center. The Exchange believes that
the wireless connection offered by this third party entity provides
connectivity at the same or similar speed as the proposed connection to
CME Group Data, and at the same or similar cost.\12\ The proposed
connection to CME Group Data and the existing third party wireless
connection to CME Group Data would follow the same route within the
Data Center: They would both enter through a meet-me-room, connect to
equipment in co-location, and then connect to any Users that are
customers. Because of this, the Exchange does not believe that IDS has
an advantage over the third party in providing the connectivity. The
proposed wireless connection would lead to a pole, from where a fiber
connection would lead into the Data Center. The pole is owned by a
third party and is not on the grounds of the Data Center.
---------------------------------------------------------------------------
\12\ Because the third party is not a regulated entity, it is
not obligated to make its latency figures or fees publicly available
or the same for all entities.
---------------------------------------------------------------------------
IDS already offers fiber connections to CME Group market data to
Users.\13\ The Exchange also believes that at least two third party
market participants offer such fiber connections to CME Group market
data. In addition to these options, a User may create a proprietary
wireless connection or connect through another User in order to connect
to CME Group market data. The Exchange believes that at least two
market participants already provide wireless connectivity to CME Group
market data to other data centers in New Jersey.
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 81015 (June 23,
2017), 82 FR 29610 (June 29, 2017) (SR-NYSEMKT-2017-32).
---------------------------------------------------------------------------
Wireless connections involve beaming signals through the air
between antennas that are within line of sight of one another. Because
the signals travel a straight, unimpeded line, and because light waves
travel faster through air than through glass (fiber optics), wireless
messages have lower latency than messages travelling through fiber
optics. At the same time, as a general rule wireless networks have less
uptime than fiber networks. Wireless networks are directly and
immediately affected by adverse weather conditions, which can cause
message loss and outage periods. Wireless networks cannot be configured
with redundancy in the same way that fiber networks can. As a result,
an equipment or weather issue at any one location on the network will
cause the entire network to have an outage. In addition, maintenance
can take longer than it would with a fiber based network, as the
relevant tower may be in a hard to reach location, or weather
conditions may present safety issues, delaying technicians servicing
equipment. Even under normal conditions, a wireless network will have a
higher error rate than a fiber network of the same length.
The latency of a wireless network depends on several factors.
Variables include the wireless equipment utilized; the route of, and
number of towers or buildings in, the network; their proximity to the
data centers on either end; and the fiber equipment used at either end
of the connection. Moreover, latency is not the only consideration that
a customer may have in selecting a wireless network to connect to CME
Group market data. Other considerations may include the amount of
network uptime; the equipment that the network uses; the cost of the
connection; and the applicable contractual provisions. Indeed, fiber
network connections may be more attractive to some market participants
as they are more reliable and less susceptible to weather conditions.
The Exchange operates in a highly competitive market in which
exchanges and other vendors (e.g., Hosting Users) offer co-location
services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
enhances the efficiency of their operations. The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Specifically, in Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \14\
---------------------------------------------------------------------------
\14\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\15\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\16\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange further believes
that the proposed rule change is consistent with Section 6(b)(4) of the
Act,\17\ because it provides for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and other
persons using its facilities and does not unfairly discriminate between
customers, issuers, brokers, or dealers.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78f(b)(4).
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The Proposed Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable.
The wireless connection would provide Users with an alternative
means of connectivity to CME Group Data. The proposed change would
provide Users with an additional choice with respect to the form and
optimal latency of the connectivity they use to receive CME Group
market data, allowing a User to select the connectivity that better
suits its needs, helping it tailor its colocation operations to the
requirements of its business operations. Users that do not opt to
utilize the Exchange's proposed wireless connection would still be able
to obtain CME Group market data using other methods: From another User,
a third party wireless connection, or through an IDS or third party
fiber connection.
Based on the information available to it, the Exchange believes
that at least one market participant provides wireless connectivity to
CME Group market data in the Data Center. The Exchange believes that
the wireless connection offered by this third party entity provides
connectivity at the same or similar speed as the proposed connection to
CME Group Data, and at the same or similar cost. The proposed
connection to CME Group Data and the existing third party wireless
connection to CME Group Data would follow the
[[Page 64583]]
same route within the Data Center: They would both enter through a
meet-me-room, connect to equipment in co-location, and then connect to
any Users that are customers. Because of this, the Exchange does not
believe that IDS has an advantage over the third party in providing the
connectivity. The proposed wireless connection would lead to a pole,
from where a fiber connection would lead into the Data Center. The pole
is owned by a third party and is not on the grounds of the Data Center.
IDS already offers fiber connections to CME Group market data to
Users.\18\ The Exchange also believes that at least two third party
market participants offer such fiber connections to CME Group. In
addition to these options, a User may create a proprietary wireless
connection or connect through another User in order to connect to CME
Group market data. The Exchange believes that at least two market
participants already provide wireless connectivity to CME Group market
data to other data centers in New Jersey.
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\18\ See 82 FR 29610, supra note 12.
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Market participants' considerations in determining what
connectivity to purchase may include latency; the amount of network
uptime; the equipment that the network uses; the cost of the
connection; and the applicable contractual provisions. Indeed, fiber
network connections may be more attractive to some market participants
as they are more reliable and less susceptible to weather conditions.
The Exchange believes that it is reasonable to not transport
information for all of the symbols included in CME Group data feeds to
the Data Center, but rather to transport a subset of that data. There
is limited bandwidth available on the wireless network to co-location,
and there are a number of CME Group data feeds. Limiting the feeds to
the selection of CME Group market data regarding securities for which
IDS determines there is demand would allow Users to receive the
relevant CME Group Data over a wireless network, which could include
data regarding some or all of the symbols for which IDS provides
connectivity. The User would then determine those symbols for which it
will receive data.
The Exchange believes that it is reasonable that a User that has
already purchased wireless connections to other Third Party Data would
be charged a non-recurring charge when it purchases a wireless
connection to the CME Group Data, because it would allow the Exchange
to defray or cover certain costs it incurs in installing the wireless
connection to the CME Group Data, which costs it incurs irrespective of
whether the User has existing wireless connections to Third Party Data,
while providing the User the benefit of the installation, which would
allow it to receive CME Group Data within co-location and with a lower
latency over the fiber optics option. To do the initial installation,
the Exchange must provide the personnel required for initial
installation and testing. The costs associated with installing wireless
connections are incrementally higher than those associated with
installing fiber optics-based solutions.
The Exchange believes that it is reasonable that a User that
connects to both CME Group Data and Existing Third Party Data may not
use the same port for connectivity to both, and so would have at least
two ports, because the proposed wireless connection would include the
use of one port for connectivity to CME Group Data and connectivity to
the Existing Third Party Data includes the use of one port for
connectivity to Existing Third Party Data. A User would not pay a
separate fee for using such ports.
The Exchange believes the proposed pricing for the wireless
connection to CME Group Data is reasonable because it would allow the
Exchange to defray or cover the costs associated with offering Users a
wireless connection to CME Group Data while providing Users the benefit
of receiving CME Group Data within co-location and with a lower latency
over the fiber optics option. The wireless connection for CME Group
Data would allow Users to select the CME Group Data connectivity option
that better suits their needs.
The Exchange believes that the proposed pricing is reasonable
because the Exchange proposes to offer the wireless connection to CME
Group Data described herein as a convenience to Users, but in order to
do so must provide, maintain and operate the Data Center facility
hardware and technology infrastructure. The Exchange must handle the
installation, administration, monitoring, support and maintenance of
such services, including by responding to any production issues. Since
the inception of co-location, the Exchange has made numerous
improvements to the network hardware and technology infrastructure and
has established additional administrative controls. The Exchange has
expanded the network infrastructure to keep pace with the increased
number of services available to Users. Specifically, in order to offer
wireless connections, the Exchange must install, test, maintain and
operate the wireless equipment.
The Proposed Change Is Not Unfairly Discriminatory
The Exchange believes that the proposed rule change is not unfairly
discriminatory for the following reasons.
Without this proposed rule change, Users would have fewer options
for connectivity to CME Group Data. The proposed change would provide
Users with an additional choice with respect to the form and optimal
latency of the connectivity they use to receive CME Group market data,
allowing a User to select the connectivity that better suits its needs,
helping it tailor its colocation operations to the requirements of its
business operations. Users that do not opt to utilize the Exchange's
proposed wireless connection would still be able to obtain CME Group
market data using other methods: From another User, a third party
wireless connection, or through an IDS or third party fiber connection.
The Exchange believes that it is not unfairly discriminatory to not
transport information for all of the symbols included in CME Group data
feeds to the Data Center, but rather to transport a subset of that
data. There is limited bandwidth available on the wireless network to
co-location, and there are a number of CME Group data feeds. Limiting
the feeds to the selection of CME Group market data regarding
securities for which IDS determines there is demand would allow Users
to receive the relevant CME Group Data over a wireless network. The
User would then determine those symbols for which it will receive data,
which could include data regarding some or all of the symbols for which
IDS provides connectivity.
The Exchange believes that the proposed pricing is not unfairly
discriminatory because the Exchange proposes to offer the wireless
connection to CME Group Data described herein as a convenience to
Users, but in order to do so must provide, maintain and operate the
Data Center facility hardware and technology infrastructure. The
Exchange must handle the installation, administration, monitoring,
support and maintenance of such services, including by responding to
any production issues. Since the inception of co-location, the Exchange
has made numerous improvements to the network hardware and technology
infrastructure and has established additional administrative controls.
The Exchange has expanded the network infrastructure to keep pace with
the
[[Page 64584]]
increased number of services available to Users. Specifically, in order
to offer wireless connections, the Exchange must install, test,
maintain and operate the wireless equipment.
The Exchange believes that the proposed change is not unfairly
discriminatory because it will result in fees being charged only to
Users that voluntarily select to receive the corresponding services and
because those services will be available to all Users. Furthermore, the
Exchange believes that the services and fees proposed herein are not
unfairly discriminatory because, in addition to the services being
completely voluntary, they are available to all Users on an equal basis
(i.e., the same products and services are available to all Users). All
Users that voluntarily select wireless connections to CME Group Data
would be charged the same amount for the same services.
Users that opt to use wireless connections to CME Group Data would
receive the CME Group Data that is available to all Users, as all
market participants that contract with CME Group or its affiliate for
CME Group Data, as required, may receive it.
The Proposed Change Is an Equitable Allocation of Fees and Credits
The Exchange believes that its proposal equitably allocates its
fees among Users.
Without this proposed rule change, Users would have fewer options
for connectivity to CME Group Data. The proposed change would provide
Users with an additional choice with respect to the form and optimal
latency of the connectivity they use to receive CME Group market data,
allowing a User to select the connectivity that better suits its needs,
helping it tailor its colocation operations to the requirements of its
business operations. Users that do not opt to utilize the Exchange's
proposed wireless connection would still be able to obtain CME Group
market data using other methods: From another User, a third party
wireless connection, or through an IDS or third party fiber connection.
The Exchange believes that the proposed change is equitable because
it will result in fees being charged only to Users that voluntarily
select to receive the corresponding services and because those services
will be available to all Users. Furthermore, the Exchange believes that
the services and fees proposed herein are equitably allocated because,
in addition to the services being completely voluntary, they are
available to all Users on an equal basis (i.e., the same products and
services are available to all Users). All Users that voluntarily select
wireless connections to CME Group Data would be charged the same amount
for the same services.
The Exchange operates in a highly competitive market in which
exchanges offer co-location services as a means to facilitate the
trading and other market activities of those market participants who
believe that co-location enhances the efficiency of their operations.
Accordingly, fees charged for co-location services are constrained by
the active competition for the order flow of, and other business from,
such market participants. If a particular exchange charges excessive
fees for co-location services, affected market participants will opt to
terminate their co-location arrangements with that exchange, and adopt
a possible range of alternative strategies, including placing their
servers in a physically proximate location outside the exchange's data
center (which could be a competing exchange), or pursuing strategies
less dependent upon the lower exchange-to-participant latency
associated with co-location. Accordingly, the exchange charging
excessive fees would stand to lose not only co-location revenues but
also the liquidity of the formerly co-located trading firms, which
could have additional follow-on effects on the market share and revenue
of the affected exchange.
For the reasons above, the proposed changes do not unfairly
discriminate between or among market participants that are otherwise
capable of satisfying any applicable co-location fees, requirements,
terms and conditions established from time to time by the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposal will not impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of Section 6(b)(8) of the Act.\19\
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\19\ 15 U.S.C. 78f(b)(8).
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The proposed change does not affect competition among national
securities exchanges or among members of the Exchange, but rather
between IDS and its commercial competitors.
The wireless connection would provide Users with an alternative
means of connectivity to CME Group Data. The proposed change would
provide Users with an additional choice with respect to the form and
optimal latency of the connectivity they use to receive CME Group
market data, allowing a User to select the connectivity that better
suits its needs, helping it tailor its colocation operations to the
requirements of its business operations.
Users that do not opt to utilize the Exchange's proposed wireless
connection would still be able to obtain CME Group market data using
other methods: From another User, a third party wireless connection, or
through an IDS or third party fiber connection. Based on the
information available to it, the Exchange believes that at least one
market participant provides wireless connectivity to CME Group market
data in the Data Center. The Exchange believes that the wireless
connection offered by this third party entity provides connectivity at
the same or similar latency as the proposed connection to CME Group
Data, and at the same or similar cost. The proposed connection to CME
Group Data and the existing third party wireless connection to CME
Group Data would follow the same route within the Data Center: They
would both enter through a meet-me-room, connect to equipment in co-
location, and then connect to any Users that are customers. Because of
this, the Exchange does not believe that IDS has an advantage over the
third party in providing the connectivity. The proposed wireless
connection would lead to a pole, from where a fiber connection would
lead into the Data Center. The pole is owned by a third party and is
not on the grounds of the Data Center.
IDS already offers fiber connections to CME Group market data to
Users.\20\ The Exchange also believes that at least two third party
market participants offer such fiber connections to CME Group. In
addition to these options, a User may create a proprietary wireless
connection or connect through another User in order to connect to CME
Group market data. The Exchange believes that at least two market
participants already provide wireless connectivity to CME Group market
data to other data centers in New Jersey.
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\20\ See 82 FR 29610, supra note 12.
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The Exchange notes that the proposed wireless connection would
compete not just with other wireless connections to CME Group market
data, but also with fiber network connections, which may be more
attractive to some market participants as they are more reliable and
less susceptible to weather conditions. Market participants'
considerations in determining what connectivity to purchase may include
latency; the amount of network uptime; the equipment that the network
uses; the cost of the connection; and the applicable contractual
provisions. As noted above, a User may purchase a
[[Page 64585]]
fiber connection to CME Group market data from at least three
providers, including IDS.
The Exchange operates in a highly competitive market in which
exchanges and other vendors (e.g., Hosting Users) offer co-location
services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
enhances the efficiency of their operations. The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Specifically, in Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \21\
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\21\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \22\ and Rule 19b-
4(f)(6) thereunder.\23\
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\22\ 15 U.S.C. 78s(b)(3)(A).
\23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2021-43 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAMER-2021-43. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEAMER-2021-43, and should be
submitted on or before December 9, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25127 Filed 11-17-21; 8:45 am]
BILLING CODE 8011-01-P
