Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amend the Partial Cabinet Solution Bundles Offered as Part of Its Co-Location Services, 41138-41142 [2023-13339]
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41138
Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
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–2023–10 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.
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All submissions should refer to file
number SR–NYSENAT–2023–10. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection.
All submissions should refer to file
number SR–NYSENAT–2023–10 and
should be submitted on or before July
14, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Deputy Secretary.
[Release No. 34–97749; File No. SR–
NYSEArca–2023–42]
The Exchange proposes to amend the
Partial Cabinet Solution (‘‘PCS’’)
bundles offered to Users as part of its
co-location services.4 The description of
the PCS bundles in the Fee Schedule
would be updated accordingly.
June 16, 2023.
Background
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 June 5,
2023, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Partial Cabinet Solution bundles offered
as part of its co-location services. The
description of the Partial Cabinet
Solution bundles in the Connectivity
Fee Schedule (‘‘Fee Schedule’’) would
be updated accordingly. 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
27 17
CFR 200.30–3(a)(12).
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1. Purpose
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amend the Partial
Cabinet Solution Bundles Offered as
Part of Its Co-Location Services
[FR Doc. 2023–13342 Filed 6–22–23; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
PO 00000
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The Fee Schedule currently lists two
PCS bundles, Options C and D. As
originally formulated, each PCS bundle
option included a partial cabinet
powered to a maximum of 2 kilowatts
(‘‘kW’’); access to the Liquidity Center
Network (‘‘LCN’’) and internet protocol
(‘‘IP’’) networks, the local area networks
available in the data center; two fiber
cross connections; and connectivity to
one of two time feeds.5 Users are only
eligible to purchase PCS bundles if they
meet specified requirements.6
In May 2020, the Exchange amended
PCS bundle Options C and D to add two
10 Gb connections to the NMS Network
to each bundle. The NMS Network is an
alternate dedicated network connection
that Users use to access the NMS feeds
for which the Securities Industry
Automation Corporation is engaged as
the securities information processor.7
These two 10 Gb NMS Network
connections were added to the Option C
and D bundles at no additional cost.
The Exchange expects that the
proposed rule change would become
operative no later than September 1,
2023. The Exchange will announce the
date through a customer notice.
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. See Securities Exchange Act
Release No. 76010 (September 29, 2015), 80 FR
60197 (October 5, 2015) (SR–NYSEArca–2015–82).
As specified in the 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 American LLC, 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–2023–23, SR–NYSEAMER–2023–32, SR–
NYSECHX–2023–12, and SR–NYSENAT–2023–10.
5 See Securities Exchange Act Release No. 77070
(February 5, 2016), 81 FR 7401 (February 11, 2016)
(SR–NYSEArca–2015–102).
6 See id. The requirements are set forth in Note
1 under ‘‘Colocation Notes.’’
7 See Securities Exchange Act Release No. 88837
(May 7, 2020), 85 FR 28671 (May 13, 2020) (SR–
NYSE–2019–46, SR–NYSEAMER–2019–34, SR–
NYSEArca–2019–61, SR–NYSENAT–2019–19).
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Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices
41139
Proposed Changes to the Current PCS
Bundles
The Exchange proposes to amend
current Options C and D so that Users
may elect to include 40 Gb connections
to the LCN, IP network and NMS
network, rather than just 10 Gb
connections, in their PCS bundles.
There would be no change to the
existing fees for the PCS bundles.
The purpose of the proposed changes
to the PCS bundles is to allow a User to
connect to all or a large part of the
expanded Options Price Reporting
Authority (‘‘OPRA’’) feed. More
specifically, OPRA has announced that
it is expanding data dissemination from
a 48-line to a 96-line multicast data
distribution network.8 As a result of this
change, OPRA has estimated that an
increase in bandwidth will be needed to
consume the OPRA feed.9 This means
that a 10 Gb network connection will
not suffice for a User that wants to
connect to all or a large part of the
expanded OPRA feed.10 Current and
potential Users with PCS bundles have
requested the inclusion of 40 Gb
connections in the bundles.
The ability to connect with a larger
section of the OPRA feed is not the only
benefit that would occur. A User with
a revised PCS bundle would be able to
use it to connect to more of the Included
Data Products and Third Party Data
Feeds. The addition of 40 Gb
connections may allow a User to have
the same size connection in co-location
that it has elsewhere. As the Exchange
understands that 40 Gb connections are
increasingly considered the industry
standard for options trading, and
understands that smaller customers—
such as those who might qualify for a
PCS—often prefer to normalize all of
their equipment to one connection size,
this may be a benefit to some Users.
There would be no change to the
initial charge and monthly recurring
charge (‘‘MRC’’) for the PCS bundles. As
a result of the change a User would
receive an enhanced offering, with the
option of both 10 Gb and 40 Gb
connections, for the same price that the
Exchange currently charges for PCS
bundles with 10 Gb options only. Users
with a PCS bundle would not have to
pay a second initial charge to change the
content of their PCS bundles. As a
result, a User would be able to upgrade
its PCS bundle from 10 Gb to 40 Gb, in
whole or, if it opts to retain some 10 Gb
connections, in part.
To implement the proposed changes
as well as remove or update obsolete
text, the Exchange proposes to make the
following amendments to the
description of PCS bundles Options C
and D:
• Update the names to Options A and
B. Currently no PCS bundles use those
names,11 and the Exchange believes that
continuing to use Option C and Option
D as names could be confusing as a
result.
• Amend the description to state that
Users may elect to include 40 Gb
connections to the LCN, IP network and
NMS network, rather than just 10 Gb
connections, in their PCS bundles.
• Consistent with the requirements
for NMS Network connections,12 add
text stating that a purchaser of a Partial
Cabinet Solution must select NMS
Network connections of the same size
(i.e., 10 Gb or 40 Gb) as the related LCN
and IP network connections.
• Currently, the Fee Schedule
includes text regarding a reduced MRC
for PCS bundles for 24 months, which
applied so long as a User ordered its
PCS bundle on or before December 31,
2020. Since that time has expired, the
text has become obsolete, and the
Exchange proposes to delete it.
The amended portion of the Fee
Schedule would read as follows
(proposed deletions in brackets,
proposed additions italicized):
Type of service
Description
Amount of charge
*
*
Partial Cabinet Solution bundles ......................
Notes: A User and its Affiliates are limited to
one Partial Cabinet Solution bundle at a
time. A User and its Affiliates must have an
Aggregate Cabinet Footprint of 2 kW or less
to qualify for a Partial Cabinet Solution bundle. See Note 1 under ‘‘Colocation Notes.’’
*
*
*
Option A[C]:
1 kW partial cabinet, 1 LCN connection (10
Gb LX or 40 Gb), 1 IP network connection
(10 Gb or 40 Gb), 2 NMS Network connections (10 Gb or 40 Gb each), 2 fiber cross
connections and either the Network Time
Protocol Feed or Precision Timing Protocol.
A purchaser of a Partial Cabinet Solution must
select NMS Network connections of the
same size (i.e., 10 Gb or 40 Gb) as the related LCN and IP network connections.
Option B[D]:
2 kW partial cabinet, 1 LCN connection (10
Gb LX or 40 Gb), 1 IP network connection
(10 Gb or 40 Gb), 2 NMS Network connections (10 Gb or 40 Gb each), 2 fiber cross
connections and either the Network Time
Protocol Feed or Precision Timing Protocol.
*
*
$10,000 initial charge per bundle plus [monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2020: $7,000 monthly for
first 24 months of service, and $14,000
monthly thereafter
• For Users that order after December
31, 2020:] $14,000 monthly charge per
bundle.
$10,000 initial charge per bundle plus [monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2020: $7,500 monthly for
first 24 months of service, and $15,000
monthly thereafter
• For Users that order after December
31, 2020: ]$15,000 monthly charge per
bundle.
8 See Securities Industry Automation
Corporation, Memo to OPRA Multicast Subscribers,
August 31, 2022, at https://assets.website-files.com/
5ba40927ac854d8c97bc92d7/
6377e5e4114b88c77be5552c_
OPRA%20Migration%20to%2096%20
Multicast%20Line%20Network_
Q3%20Postponement.pdf. Connectivity to the
OPRA feed is an Included Data Product available
over the IP network and the NMS network.
9 See id., at 2 (providing estimated bandwidth
requirements).
10 The proposed change would be of utility even
if OPRA were not expanding its data distribution
network, as a User cannot connect to all of the
OPRA feed with the current 10 Gb connections in
the PCS bundles.
11 The previous Options A and B were deleted in
2022. See Securities Exchange Act Release No.
95969 (October 4, 2022), 87 FR 61423 (November
11, 2022) (SR–NYSEARCA–2022–64).
12 See 85 FR 28671, supra note 7, at 28674 (stating
that ‘‘if a User purchases a service that includes a
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10 Gb or 40 Gb IP or LCN network connection, that
purchase would include an NMS Network
connection of the same size’’). By way of example,
if a User with a PCS bundle selected one 10 Gb LX
LCN connection and one 40 Gb IP network
connection, it would receive one 10 Gb NMS
connection and one 40 Gb NMS connection. If the
User instead chose 10 Gb for both its LCN and IP
network connection, it would receive two 10 Gb
NMS connections.
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Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices
The PCS bundles would continue to
include a 1 kw or 2 kw partial cabinet
and either the Network Time Protocol
Feed or the Precision Timing Protocol.
The requirements set forth in Note 1
under ‘‘Colocation Notes’’ would
continue to apply.
General
The proposed changes would not
apply differently to distinct types or
sizes of market participants. Rather,
they would apply to all Users equally.
Users that require other sizes or
combinations of cabinets, network
connections, and cross connects could
still request them. As is currently the
case, the purchase of any co-location
service, including PCS bundles, is
completely voluntary and the Fee
Schedule is applied uniformly to all
Users.
The proposed changes are 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.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,13 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,14 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,15 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 it is
reasonable and would perfect the
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
15 15 U.S.C. 78f(b)(4).
16 See
supra note 8.
id., at 2 (providing estimated bandwidth
requirements).
14 15
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18:01 Jun 22, 2023
mechanisms of a free and open market
and a national market system and, in
general, protect investors and the public
interest to expand the connectivity
options in the PCS bundles because it
would allow Users to connect to all or
a large part of the expanded OPRA feed.
As noted above, OPRA has announced
that it is expanding data dissemination
from a 48-line to a 96-line multicast data
distribution network.16 As a result of the
change, OPRA has estimated that an
increase in bandwidth will be needed to
consume the OPRA feed.17 This means
that a 10 Gb network connection would
not suffice for a User that wanted to
connect to all or a large part of the
expanded OPRA feed. The proposed
revised PCS bundles allow the User to
connect to all or a large part of the
expanded feed, however.
The Exchange also believes that it is
reasonable and would perfect the
mechanisms of a free and open market
and a national market system and, in
general, protect investors and the public
interest to expand the connectivity
options in the PCS bundles because a
User with a revised PCS bundle would
be able to use it to connect to more of
the Included Data Products and Third
Party Data Feeds. Moreover, the
addition of 40 Gb connections may
allow a User to have the same size
connection in co-location that it has
elsewhere. That said, although the
Exchange proposes to expand the
connectivity options within the two PCS
bundles, a User that currently has a PCS
bundle would not be obligated to make
any changes.
The Exchange further believes that it
is reasonable and would perfect the
mechanisms of a free and open market
and a national market system and, in
general, protect investors and the public
interest to expand the connectivity
options in the PCS bundles because it
would be responsive to requests from
current and potential Users of PCS
bundles, who have asked for the
bundles to include 40 Gb connections.
The Exchange also believes that the
proposed change is reasonable and
would perfect the mechanisms of a free
and open market and a national market
system and, in general, protect investors
and the public interest because there
would be no change to the initial charge
and MRC for the PCS bundles.
Accordingly, the Exchange believes that
the proposed change is reasonable
because the change would mean that a
User would receive an enhanced
offering, with the option of both 10 Gb
17 See
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and 40 Gb connections, for the same
price that the Exchange currently
charges for PCS bundles with 10 Gb
options only. A User with a PCS bundle
would not have to pay a second initial
charge to upgrade its PCS bundle from
10 Gb to 40 Gb in whole or, if it opts
to retain some 10 Gb connections, in
part.
The Exchange believes that it is
reasonable and would perfect the
mechanisms of a free and open market
and a national market system and, in
general, protect investors and the public
interest to add text stating that a
purchaser of a Partial Cabinet Solution
must select NMS Network connections
of the same size (i.e., 10 Gb and 40 Gb)
as the related LCN or IP network
connection. The requirement would be
consistent with the current
requirements for NMS Network
connections 18 and so all Users would be
treated equally. The Exchange believes
that adding such text would alleviate
any possible customer confusion as to
whether the same requirements would
apply to the PCS bundles. In this way,
it would enhance the clarity and
transparency of the Fee Schedule.
The Exchange believes that updating
the names of the PCS bundles from
Option C and D to Option A and B and
removing obsolete text from the Fee
Schedule would be reasonable for the
same reasons. It would make the Fee
Schedule easier to read and understand,
alleviating possible customer confusion.
The Proposed Change Is Equitable and
Not Unfairly Discriminatory
The Exchange believes that the
proposed change 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 because,
even though the connectivity options
available in a PCS bundle would
increase, there would be no change to
the initial charge and MRC for a PCS
bundle. A User with a PCS bundle
would not have to pay a second initial
charge to upgrade its PCS bundle from
10 Gb to 40 Gb in whole or, if it opts
to retain some 10 Gb connections, in
part.
Further, the Exchange believes that
the proposed change is equitable and
not unfairly discriminatory since, as is
true now, only Users that purchased a
PCS bundle would be charged for it. The
18 See 85 FR 28671, supra note 7, at 28674 (stating
that ‘‘if a User purchases a service that includes a
10 Gb or 40 Gb IP or LCN network connection, that
purchase would include an NMS Network
connection of the same size’’).
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Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices
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proposed change would not apply
differently to distinct types or sizes of
market participants but would apply to
all Users equally. Moreover, although
the Exchange proposes to expand the
connectivity options within the two PCS
bundles, a User that currently has a PCS
bundle would not be obligated to make
any changes. Users that require other
sizes or combinations of cabinets,
network connections, and cross
connects could still request them. As is
currently the case, the purchase of any
co-location service, including PCS
bundles, would be completely
voluntary.
The Exchange believes that it is
equitable and not unfairly
discriminatory to add text stating that
purchaser of a Partial Cabinet Solution
must select NMS Network connections
of the same size (i.e., 10 Gb or 40 Gb)
as the related LCN and IP network
connections. The requirement would be
consistent with the current
requirements for NMS Network
connections,19 and so all Users with
NMS Network connections would be
treated equally. The Exchange believes
that adding such text would alleviate
any possible customer confusion as to
whether the same requirements would
apply to the PCS bundles.
The Exchange also believes that
updating the names of the PCS bundles
and removing obsolete text from the Fee
Schedule would be equitable and not
unfairly discriminatory, as it would
enhance the clarity and transparency of
the Fee Schedule. It would make the Fee
Schedule easier to read and understand,
alleviating possible customer confusion
for all market participants.
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.
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The 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.20
The proposed expansion of the existing
PCS bundles would allow Users to
connect to all or a large part of the
expanded OPRA feed, unlike the 10 Gb
network connections currently offered
in the PCS bundles. More specifically,
as noted above, OPRA has announced
that it is expanding data dissemination
from a 48-line to a 96-line multicast data
distribution network.21 As a result of the
change, OPRA has estimated that an
increase in bandwidth will be needed to
consume the OPRA feed.22 This means
that a 10 Gb network connection would
not suffice for a User that wanted to
connect to all or a large part of the
expanded OPRA feed. The proposed
revised PCS bundles allow the User to
connect to all or a large part of the
expanded feed, however.
A User with a revised PCS bundle
also would be able to use it to connect
to more of the Included Data Products
and Third Party Data Feeds, and the
addition of 40 Gb connections may
allow a User to have the same size
connection in co-location that it has
elsewhere.
The Exchange does not believe that
the proposed rule change would place
any User at a relative disadvantage
compared to other Users, but rather that
competition among Users would be
enhanced. By allowing PCS bundles to
include 40 Gb connections, the
proposed change would allow smaller
Users to not only take advantage of the
option for co-location services with a
PCS bundle but also compete with Users
that have 40 Gb connections. The
smaller Users include those with
minimal power or cabinet space
demands or those for which the costs
attendant with having a dedicated
cabinet or greater network connection
bandwidth are too burdensome. The
PCS bundles originally were designed to
make it more cost effective for such
Users to compete,23 and the Exchange
believes that the proposed change
would enhance their ability to do so.
The proposed change would be
responsive to requests from current and
potential Users of PCS bundles, who
have asked for the bundles to include 40
Gb connections.
The proposed rule change would not
impose a burden on competition
because it would expand the existing
PCS bundles without changing the
initial charge or MRC or otherwise
adding any fees. As a result of the
change a User would receive an
enhanced offering, with the option of
both 10 Gb and 40 Gb connections, for
the same price that the Exchange
currently charges for PCS bundles with
10 Gb options only. A User with a PCS
21 See
supra note 8.
id., at 2 (providing estimated bandwidth
requirements).
23 See 81 FR 7401, supra note 5, at 7404.
bundle would not have to pay a second
initial charge to upgrade its PCS bundle
from 10 Gb to 40 Gb in whole or, if it
opts to retain some 10 Gb connections,
in part. As is true now, only Users that
purchased a PCS bundle would be
charged for it.
All Users would be able to choose
what size connections they want, and
all Users, whether or not they had a PCS
bundle, would be subject to the same
requirements for connectivity to the
NMS network. Accordingly, the
Exchange does not believe that the
proposed rule change would place any
User at a relative disadvantage
compared to other Users.
Finally, the Exchange believes that
removing obsolete text from the Fee
Schedule would not place any burden
on competition that is not necessary or
appropriate. Rather, it would benefit
competition, as it would enhance the
clarity and transparency of the Fee
Schedule. It would make the Fee
Schedule easier to read and understand,
alleviating possible customer confusion.
For these reasons, the Exchange
believes that the proposed rule change
reflects this competitive environment
and does not impose any undue burden
on intermarket competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 24 and Rule
19b–4(f)(6) thereunder.25 Because the
proposed rule change does not: (i)
significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
22 See
19 See
20 15
id.
U.S.C. 78f(b)(8).
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24 15
25 17
E:\FR\FM\23JNN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
23JNN1
41142
Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 26 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
lotter on DSK11XQN23PROD with NOTICES1
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:
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSEArca–2023–42 and should be
submitted on or before July 14, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–13339 Filed 6–22–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97750; File No. 4–698]
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSEArca–2023–42 on the subject line.
Joint Industry Plan; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove an Amendment
to the National Market System Plan
Governing the Consolidated Audit Trail
Paper Comments
• Send paper comments in triplicate
to: Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–NYSEArca–2023–42. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
I. Introduction
On March 13, 2023, the Consolidated
Audit Trail, LLC (‘‘CAT LLC’’), on
behalf of the Participants 1 to the
National Market System Plan Governing
the Consolidated Audit Trail (‘‘CAT
NMS Plan’’ or ‘‘Plan’’),2 filed with the
26 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
18:01 Jun 22, 2023
Jkt 259001
June 16, 2023.
27 17
CFR 200.30–3(a)(12).
Participants are: BOX Exchange LLC, Cboe
BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe
C2 Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe
EDGX Exchange, Inc., Cboe Exchange, Inc., The
Financial Industry Regulatory Authority, Inc.
(‘‘FINRA’’), Investors Exchange LLC, Long-Term
Stock Exchange, Inc., MEMX LLC, Miami
International Securities Exchange, LLC, MIAX
Emerald, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc.,
Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq
MRX, LLC, Nasdaq PHLX LLC, The Nasdaq Stock
Market LLC, New York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., NYSE Chicago,
Inc., and NYSE National, Inc. (collectively, the
‘‘Participants,’’ ‘‘self-regulatory organizations,’’ or
‘‘SROs’’).
2 The CAT NMS Plan is a national market system
plan approved by the Commission pursuant to
Section 11A of the Securities Exchange Act of 1934
(‘‘Exchange Act’’) and the rules and regulations
thereunder. See Securities Exchange Act Release
No. 78318 (Nov. 15, 2016), 81 FR 84696 (Nov. 23,
2016) (‘‘CAT NMS Plan Approval Order’’). The CAT
NMS Plan is Exhibit A to the CAT NMS Plan
Approval Order. See CAT NMS Plan Approval
Order, 81 FR at 84943–85034. The CAT NMS Plan
functions as the limited liability company
agreement of the jointly owned limited liability
company formed under Delaware state law through
which the Participants conduct the activities of the
CAT (‘‘Company’’). Each Participant is a member of
the Company and jointly owns the Company on an
equal basis. The Participants submitted to the
Commission a proposed amendment to the CAT
NMS Plan on August 29, 2019, which they
designated as effective on filing. On August 29,
2019, the Participants replaced the CAT NMS Plan
in its entirety with the limited liability company
agreement of a new limited liability company, CAT
1 The
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
11A of the Exchange Act 3 and Rule 608
of Regulation National Market System
(‘‘Regulation NMS’’) thereunder,4 a
proposed amendment to the CAT NMS
Plan (‘‘Proposed Amendment’’) to
implement a revised funding model
(‘‘Executed Share Model’’) for the
consolidated audit trail (‘‘CAT’’) and to
establish a fee schedule for Participant
CAT fees in accordance with the
Executed Share Model (‘‘Proposed
Participant Fee Schedule’’).5 The
Proposed Amendment was published
for comment in the Federal Register on
March 21, 2023.6
This order institutes proceedings,
under Rule 608(b)(2)(i) of Regulation
NMS,7 to determine whether to
disapprove the Proposed Amendment or
to approve the Proposed Amendment
with any changes or subject to any
conditions the Commission deems
necessary or appropriate.8
II. Background
On July 11, 2012, the Commission
adopted Rule 613 of Regulation NMS,
which required the SROs to submit a
national market system (‘‘NMS’’) plan to
create, implement and maintain a
consolidated audit trail that would
capture customer and order event
information for orders in NMS
securities.9 On November 15, 2016, the
Commission approved the CAT NMS
Plan.10 Under the CAT NMS Plan, the
Operating Committee of the Company,
of which each Participant is a member,
LLC, which became the Company. See Securities
Exchange Act Release No. 87149 (Sept. 27, 2019),
84 FR 52905 (Oct. 3, 2019). The latest version of
the CAT NMS Plan is available at https://
catnmsplan.com/about-cat/cat-nms-plan.
3 15 U.S.C. 78k–1.
4 17 CFR 242.608.
5 See Letter from Brandon Becker, Chair, CAT
NMS Plan Operating Committee, to Vanessa
Countryman, Secretary, Commission (Mar. 13,
2023) (‘‘Transmittal Letter’’).
6 See Securities Exchange Act Release No. 97151
(Mar. 15, 2023), 88 FR 17086 (Mar. 21, 2023)
(‘‘Notice’’). Comments received in response to the
Notice can be found on the Commission’s website
at https://www.sec.gov/comments/4-698/4-698a.htm.
7 17 CFR 242.608(b)(2)(i).
8 On June 15, 2023, the Participants submitted a
letter consenting to a 30-day extension (until July
20, 2023) of the date by which the Commission
shall, by order, approve or disapprove the Proposed
Amendment, or institute proceedings to determine
whether the Proposed Amendment should be
disapproved. See Letter from Brandon Becker,
Chair, CAT NMS Plan Operating Committee, to
Vanessa Countryman, Secretary, Commission (Jun.
15, 2023). Nevertheless, the Commission believes it
is appropriate for the reasons stated herein to
institute proceedings under Rule 608(b)(2)(i) of
Regulation NMS and Rules 700 and 701 of the
Commission’s Rules of Practice.
9 17 CFR 242.613.
10 See CAT NMS Plan, supra note 2.
E:\FR\FM\23JNN1.SGM
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]]>Agencies
[Federal Register Volume 88, Number 120 (Friday, June 23, 2023)]
[Notices]
[Pages 41138-41142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13339]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97749; File No. SR-NYSEArca-2023-42]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amend the Partial
Cabinet Solution Bundles Offered as Part of Its Co-Location Services
June 16, 2023.
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 June 5, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Partial Cabinet Solution bundles
offered as part of its co-location services. The description of the
Partial Cabinet Solution bundles in the Connectivity Fee Schedule
(``Fee Schedule'') would be updated accordingly. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Partial Cabinet Solution
(``PCS'') bundles offered to Users as part of its co-location
services.\4\ The description of the PCS bundles in the Fee Schedule
would be updated accordingly.
---------------------------------------------------------------------------
\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. See Securities
Exchange Act Release No. 76010 (September 29, 2015), 80 FR 60197
(October 5, 2015) (SR-NYSEArca-2015-82). As specified in the 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 American
LLC, 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-2023-23, SR-NYSEAMER-2023-32, SR-NYSECHX-2023-
12, and SR-NYSENAT-2023-10.
---------------------------------------------------------------------------
Background
The Fee Schedule currently lists two PCS bundles, Options C and D.
As originally formulated, each PCS bundle option included a partial
cabinet powered to a maximum of 2 kilowatts (``kW''); access to the
Liquidity Center Network (``LCN'') and internet protocol (``IP'')
networks, the local area networks available in the data center; two
fiber cross connections; and connectivity to one of two time feeds.\5\
Users are only eligible to purchase PCS bundles if they meet specified
requirements.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 77070 (February 5,
2016), 81 FR 7401 (February 11, 2016) (SR-NYSEArca-2015-102).
\6\ See id. The requirements are set forth in Note 1 under
``Colocation Notes.''
---------------------------------------------------------------------------
In May 2020, the Exchange amended PCS bundle Options C and D to add
two 10 Gb connections to the NMS Network to each bundle. The NMS
Network is an alternate dedicated network connection that Users use to
access the NMS feeds for which the Securities Industry Automation
Corporation is engaged as the securities information processor.\7\
These two 10 Gb NMS Network connections were added to the Option C and
D bundles at no additional cost.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 88837 (May 7, 2020),
85 FR 28671 (May 13, 2020) (SR-NYSE-2019-46, SR-NYSEAMER-2019-34,
SR-NYSEArca-2019-61, SR-NYSENAT-2019-19).
---------------------------------------------------------------------------
The Exchange expects that the proposed rule change would become
operative no later than September 1, 2023. The Exchange will announce
the date through a customer notice.
[[Page 41139]]
Proposed Changes to the Current PCS Bundles
The Exchange proposes to amend current Options C and D so that
Users may elect to include 40 Gb connections to the LCN, IP network and
NMS network, rather than just 10 Gb connections, in their PCS bundles.
There would be no change to the existing fees for the PCS bundles.
The purpose of the proposed changes to the PCS bundles is to allow
a User to connect to all or a large part of the expanded Options Price
Reporting Authority (``OPRA'') feed. More specifically, OPRA has
announced that it is expanding data dissemination from a 48-line to a
96-line multicast data distribution network.\8\ As a result of this
change, OPRA has estimated that an increase in bandwidth will be needed
to consume the OPRA feed.\9\ This means that a 10 Gb network connection
will not suffice for a User that wants to connect to all or a large
part of the expanded OPRA feed.\10\ Current and potential Users with
PCS bundles have requested the inclusion of 40 Gb connections in the
bundles.
---------------------------------------------------------------------------
\8\ See Securities Industry Automation Corporation, Memo to OPRA
Multicast Subscribers, August 31, 2022, at https://assets.website-files.com/5ba40927ac854d8c97bc92d7/6377e5e4114b88c77be5552c_OPRA%20Migration%20to%2096%20Multicast%20Line%20Network_Q3%20Postponement.pdf. Connectivity to the OPRA feed is
an Included Data Product available over the IP network and the NMS
network.
\9\ See id., at 2 (providing estimated bandwidth requirements).
\10\ The proposed change would be of utility even if OPRA were
not expanding its data distribution network, as a User cannot
connect to all of the OPRA feed with the current 10 Gb connections
in the PCS bundles.
---------------------------------------------------------------------------
The ability to connect with a larger section of the OPRA feed is
not the only benefit that would occur. A User with a revised PCS bundle
would be able to use it to connect to more of the Included Data
Products and Third Party Data Feeds. The addition of 40 Gb connections
may allow a User to have the same size connection in co-location that
it has elsewhere. As the Exchange understands that 40 Gb connections
are increasingly considered the industry standard for options trading,
and understands that smaller customers--such as those who might qualify
for a PCS--often prefer to normalize all of their equipment to one
connection size, this may be a benefit to some Users.
There would be no change to the initial charge and monthly
recurring charge (``MRC'') for the PCS bundles. As a result of the
change a User would receive an enhanced offering, with the option of
both 10 Gb and 40 Gb connections, for the same price that the Exchange
currently charges for PCS bundles with 10 Gb options only. Users with a
PCS bundle would not have to pay a second initial charge to change the
content of their PCS bundles. As a result, a User would be able to
upgrade its PCS bundle from 10 Gb to 40 Gb, in whole or, if it opts to
retain some 10 Gb connections, in part.
To implement the proposed changes as well as remove or update
obsolete text, the Exchange proposes to make the following amendments
to the description of PCS bundles Options C and D:
Update the names to Options A and B. Currently no PCS
bundles use those names,\11\ and the Exchange believes that continuing
to use Option C and Option D as names could be confusing as a result.
---------------------------------------------------------------------------
\11\ The previous Options A and B were deleted in 2022. See
Securities Exchange Act Release No. 95969 (October 4, 2022), 87 FR
61423 (November 11, 2022) (SR-NYSEARCA-2022-64).
---------------------------------------------------------------------------
Amend the description to state that Users may elect to
include 40 Gb connections to the LCN, IP network and NMS network,
rather than just 10 Gb connections, in their PCS bundles.
Consistent with the requirements for NMS Network
connections,\12\ add text stating that a purchaser of a Partial Cabinet
Solution must select NMS Network connections of the same size (i.e., 10
Gb or 40 Gb) as the related LCN and IP network connections.
---------------------------------------------------------------------------
\12\ See 85 FR 28671, supra note 7, at 28674 (stating that ``if
a User purchases a service that includes a 10 Gb or 40 Gb IP or LCN
network connection, that purchase would include an NMS Network
connection of the same size''). By way of example, if a User with a
PCS bundle selected one 10 Gb LX LCN connection and one 40 Gb IP
network connection, it would receive one 10 Gb NMS connection and
one 40 Gb NMS connection. If the User instead chose 10 Gb for both
its LCN and IP network connection, it would receive two 10 Gb NMS
connections.
---------------------------------------------------------------------------
Currently, the Fee Schedule includes text regarding a
reduced MRC for PCS bundles for 24 months, which applied so long as a
User ordered its PCS bundle on or before December 31, 2020. Since that
time has expired, the text has become obsolete, and the Exchange
proposes to delete it.
The amended portion of the Fee Schedule would read as follows
(proposed deletions in brackets, proposed additions italicized):
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
* * * * * * *
Partial Cabinet Solution Option A[C]: $10,000 initial
bundles. 1 kW partial charge per bundle
Notes: A User and its cabinet, 1 LCN plus [monthly
Affiliates are limited to connection (10 Gb charge per bundle
one Partial Cabinet LX or 40 Gb), 1 IP as follows:
Solution bundle at a time. network connection For Users
A User and its Affiliates (10 Gb or 40 Gb), 2 that order on or
must have an Aggregate NMS Network before December 31,
Cabinet Footprint of 2 kW connections (10 Gb 2020: $7,000
or less to qualify for a or 40 Gb each), 2 monthly for first
Partial Cabinet Solution fiber cross 24 months of
bundle. See Note 1 under connections and service, and
``Colocation Notes.''. either the Network $14,000 monthly
Time Protocol Feed thereafter
or Precision Timing For Users
Protocol. that order after
December 31, 2020:]
$14,000 monthly
charge per bundle.
A purchaser of a Partial Option B[D]: $10,000 initial
Cabinet Solution must 2 kW partial charge per bundle
select NMS Network cabinet, 1 LCN plus [monthly
connections of the same connection (10 Gb charge per bundle
size (i.e., 10 Gb or 40 Gb) LX or 40 Gb), 1 IP as follows:
as the related LCN and IP network connection For Users
network connections. (10 Gb or 40 Gb), 2 that order on or
NMS Network before December 31,
connections (10 Gb 2020: $7,500
or 40 Gb each), 2 monthly for first
fiber cross 24 months of
connections and service, and
either the Network $15,000 monthly
Time Protocol Feed thereafter
or Precision Timing For Users
Protocol. that order after
December 31, 2020:
]$15,000 monthly
charge per bundle.
------------------------------------------------------------------------
[[Page 41140]]
The PCS bundles would continue to include a 1 kw or 2 kw partial
cabinet and either the Network Time Protocol Feed or the Precision
Timing Protocol. The requirements set forth in Note 1 under
``Colocation Notes'' would continue to apply.
General
The proposed changes would not apply differently to distinct types
or sizes of market participants. Rather, they would apply to all Users
equally.
Users that require other sizes or combinations of cabinets, network
connections, and cross connects could still request them. As is
currently the case, the purchase of any co-location service, including
PCS bundles, is completely voluntary and the Fee Schedule is applied
uniformly to all Users.
The proposed changes are 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,\13\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\14\ 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,\15\ 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.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Proposed Change Is Reasonable
The Exchange believes that it is reasonable and would perfect the
mechanisms of a free and open market and a national market system and,
in general, protect investors and the public interest to expand the
connectivity options in the PCS bundles because it would allow Users to
connect to all or a large part of the expanded OPRA feed. As noted
above, OPRA has announced that it is expanding data dissemination from
a 48-line to a 96-line multicast data distribution network.\16\ As a
result of the change, OPRA has estimated that an increase in bandwidth
will be needed to consume the OPRA feed.\17\ This means that a 10 Gb
network connection would not suffice for a User that wanted to connect
to all or a large part of the expanded OPRA feed. The proposed revised
PCS bundles allow the User to connect to all or a large part of the
expanded feed, however.
---------------------------------------------------------------------------
\16\ See supra note 8.
\17\ See id., at 2 (providing estimated bandwidth requirements).
---------------------------------------------------------------------------
The Exchange also believes that it is reasonable and would perfect
the mechanisms of a free and open market and a national market system
and, in general, protect investors and the public interest to expand
the connectivity options in the PCS bundles because a User with a
revised PCS bundle would be able to use it to connect to more of the
Included Data Products and Third Party Data Feeds. Moreover, the
addition of 40 Gb connections may allow a User to have the same size
connection in co-location that it has elsewhere. That said, although
the Exchange proposes to expand the connectivity options within the two
PCS bundles, a User that currently has a PCS bundle would not be
obligated to make any changes.
The Exchange further believes that it is reasonable and would
perfect the mechanisms of a free and open market and a national market
system and, in general, protect investors and the public interest to
expand the connectivity options in the PCS bundles because it would be
responsive to requests from current and potential Users of PCS bundles,
who have asked for the bundles to include 40 Gb connections.
The Exchange also believes that the proposed change is reasonable
and would perfect the mechanisms of a free and open market and a
national market system and, in general, protect investors and the
public interest because there would be no change to the initial charge
and MRC for the PCS bundles. Accordingly, the Exchange believes that
the proposed change is reasonable because the change would mean that a
User would receive an enhanced offering, with the option of both 10 Gb
and 40 Gb connections, for the same price that the Exchange currently
charges for PCS bundles with 10 Gb options only. A User with a PCS
bundle would not have to pay a second initial charge to upgrade its PCS
bundle from 10 Gb to 40 Gb in whole or, if it opts to retain some 10 Gb
connections, in part.
The Exchange believes that it is reasonable and would perfect the
mechanisms of a free and open market and a national market system and,
in general, protect investors and the public interest to add text
stating that a purchaser of a Partial Cabinet Solution must select NMS
Network connections of the same size (i.e., 10 Gb and 40 Gb) as the
related LCN or IP network connection. The requirement would be
consistent with the current requirements for NMS Network connections
\18\ and so all Users would be treated equally. The Exchange believes
that adding such text would alleviate any possible customer confusion
as to whether the same requirements would apply to the PCS bundles. In
this way, it would enhance the clarity and transparency of the Fee
Schedule.
---------------------------------------------------------------------------
\18\ See 85 FR 28671, supra note 7, at 28674 (stating that ``if
a User purchases a service that includes a 10 Gb or 40 Gb IP or LCN
network connection, that purchase would include an NMS Network
connection of the same size'').
---------------------------------------------------------------------------
The Exchange believes that updating the names of the PCS bundles
from Option C and D to Option A and B and removing obsolete text from
the Fee Schedule would be reasonable for the same reasons. It would
make the Fee Schedule easier to read and understand, alleviating
possible customer confusion.
The Proposed Change Is Equitable and Not Unfairly Discriminatory
The Exchange believes that the proposed change 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 because, even though the connectivity options available in a
PCS bundle would increase, there would be no change to the initial
charge and MRC for a PCS bundle. A User with a PCS bundle would not
have to pay a second initial charge to upgrade its PCS bundle from 10
Gb to 40 Gb in whole or, if it opts to retain some 10 Gb connections,
in part.
Further, the Exchange believes that the proposed change is
equitable and not unfairly discriminatory since, as is true now, only
Users that purchased a PCS bundle would be charged for it. The
[[Page 41141]]
proposed change would not apply differently to distinct types or sizes
of market participants but would apply to all Users equally. Moreover,
although the Exchange proposes to expand the connectivity options
within the two PCS bundles, a User that currently has a PCS bundle
would not be obligated to make any changes. Users that require other
sizes or combinations of cabinets, network connections, and cross
connects could still request them. As is currently the case, the
purchase of any co-location service, including PCS bundles, would be
completely voluntary.
The Exchange believes that it is equitable and not unfairly
discriminatory to add text stating that purchaser of a Partial Cabinet
Solution must select NMS Network connections of the same size (i.e., 10
Gb or 40 Gb) as the related LCN and IP network connections. The
requirement would be consistent with the current requirements for NMS
Network connections,\19\ and so all Users with NMS Network connections
would be treated equally. The Exchange believes that adding such text
would alleviate any possible customer confusion as to whether the same
requirements would apply to the PCS bundles.
---------------------------------------------------------------------------
\19\ See id.
---------------------------------------------------------------------------
The Exchange also believes that updating the names of the PCS
bundles and removing obsolete text from the Fee Schedule would be
equitable and not unfairly discriminatory, as it would enhance the
clarity and transparency of the Fee Schedule. It would make the Fee
Schedule easier to read and understand, alleviating possible customer
confusion for all market participants.
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.
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The 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.\20\ The proposed expansion
of the existing PCS bundles would allow Users to connect to all or a
large part of the expanded OPRA feed, unlike the 10 Gb network
connections currently offered in the PCS bundles. More specifically, as
noted above, OPRA has announced that it is expanding data dissemination
from a 48-line to a 96-line multicast data distribution network.\21\ As
a result of the change, OPRA has estimated that an increase in
bandwidth will be needed to consume the OPRA feed.\22\ This means that
a 10 Gb network connection would not suffice for a User that wanted to
connect to all or a large part of the expanded OPRA feed. The proposed
revised PCS bundles allow the User to connect to all or a large part of
the expanded feed, however.
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\20\ 15 U.S.C. 78f(b)(8).
\21\ See supra note 8.
\22\ See id., at 2 (providing estimated bandwidth requirements).
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A User with a revised PCS bundle also would be able to use it to
connect to more of the Included Data Products and Third Party Data
Feeds, and the addition of 40 Gb connections may allow a User to have
the same size connection in co-location that it has elsewhere.
The Exchange does not believe that the proposed rule change would
place any User at a relative disadvantage compared to other Users, but
rather that competition among Users would be enhanced. By allowing PCS
bundles to include 40 Gb connections, the proposed change would allow
smaller Users to not only take advantage of the option for co-location
services with a PCS bundle but also compete with Users that have 40 Gb
connections. The smaller Users include those with minimal power or
cabinet space demands or those for which the costs attendant with
having a dedicated cabinet or greater network connection bandwidth are
too burdensome. The PCS bundles originally were designed to make it
more cost effective for such Users to compete,\23\ and the Exchange
believes that the proposed change would enhance their ability to do so.
The proposed change would be responsive to requests from current and
potential Users of PCS bundles, who have asked for the bundles to
include 40 Gb connections.
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\23\ See 81 FR 7401, supra note 5, at 7404.
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The proposed rule change would not impose a burden on competition
because it would expand the existing PCS bundles without changing the
initial charge or MRC or otherwise adding any fees. As a result of the
change a User would receive an enhanced offering, with the option of
both 10 Gb and 40 Gb connections, for the same price that the Exchange
currently charges for PCS bundles with 10 Gb options only. A User with
a PCS bundle would not have to pay a second initial charge to upgrade
its PCS bundle from 10 Gb to 40 Gb in whole or, if it opts to retain
some 10 Gb connections, in part. As is true now, only Users that
purchased a PCS bundle would be charged for it.
All Users would be able to choose what size connections they want,
and all Users, whether or not they had a PCS bundle, would be subject
to the same requirements for connectivity to the NMS network.
Accordingly, the Exchange does not believe that the proposed rule
change would place any User at a relative disadvantage compared to
other Users.
Finally, the Exchange believes that removing obsolete text from the
Fee Schedule would not place any burden on competition that is not
necessary or appropriate. Rather, it would benefit competition, as it
would enhance the clarity and transparency of the Fee Schedule. It
would make the Fee Schedule easier to read and understand, alleviating
possible customer confusion.
For these reasons, the Exchange believes that the proposed rule
change reflects this competitive environment and does not impose any
undue burden on intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \24\ and Rule 19b-4(f)(6) thereunder.\25\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\24\ 15 U.S.C. 78s(b)(3)(A)(iii).
\25\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if
[[Page 41142]]
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \26\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\26\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSEArca-2023-42 on the subject line.
Paper Comments
Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to file number SR-NYSEArca-2023-42. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEArca-2023-42 and should
be submitted on or before July 14, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-13339 Filed 6-22-23; 8:45 am]
BILLING CODE 8011-01-P
