Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Cabinet Proximity Option Fee To Establish a Reservation Fee for Cabinets With Power Densities Greater Than 10kW, 21155-21158 [2024-06330]
Download as PDF
<![CDATA[
Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
advantage in terms of costs when
compared to third parties that enter the
MDC through the meet-me-rooms to
provide services to compete with the
Exchange’s services.
If anything, the Exchange is subject to
a competitive disadvantage vis-a`-vis
third party competitors offering wireless
connectivity to MEMX market data.
Third-party competitors are not subject
to the Commission’s filing requirements,
and therefore can freely change their
services and pricing in response to
competitive forces. In contrast, the
Exchange’s service and pricing would
be standardized as set out in this filing,
and the Exchange would be unable to
respond to pricing pressure from its
competitors without seeking a formal
fee change in a filing before the
Commission.
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.
ddrumheller on DSK120RN23PROD with NOTICES1
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 33 and Rule
19b–4(f)(6) thereunder.34 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.35
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
33 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
35 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange 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.
34 17
VerDate Sep<11>2014
18:10 Mar 25, 2024
Jkt 262001
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 36 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSEARCA–2024–26 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–2024–26. 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–2024–26 and should be
submitted on or before April 16, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–06343 Filed 3–25–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99794; File No. SR–BX–
2024–010]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Cabinet
Proximity Option Fee To Establish a
Reservation Fee for Cabinets With
Power Densities Greater Than 10kW
March 20, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 13,
2024, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Cabinet Proximity Option
Fee at General 8, Section 1, as described
further below.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, 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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
37 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
36 15
PO 00000
U.S.C. 78s(b)(2)(B).
Frm 00216
Fmt 4703
Sfmt 4703
21155
E:\FR\FM\26MRN1.SGM
26MRN1
21156
Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
ddrumheller on DSK120RN23PROD with NOTICES1
1. Purpose
The purpose of the proposed rule
change 3 is to amend the Exchange’s
Cabinet Proximity Option Fee at General
8, Section 1(d) by establishing a
reservation fee for cabinets with power
densities greater than 10 kilowatts
(‘‘kW’’).4
The Exchange currently offers a
Cabinet Proximity Option program
where, for a monthly fee, customers can
obtain an option for future use on
available, unused cabinet space in
proximity to their existing equipment.
Cabinets reserved under the Cabinet
Proximity Option program are unused
cabinets that customers reserve for
future use and can be converted to a
powered cabinet at the customer’s
request. Under the program, customers
can reserve up to maximum of 20
cabinets that the Exchange endeavors to
provide as close as reasonably possible
to the customer’s existing cabinet space,
taking into consideration power
availability within segments of the data
center and the overall efficiency of use
of data center resources as determined
by the Exchange. Should reserved data
center space be needed for use, the
reserving customer will have three
business days to formally contract with
the Exchange for full payment for the
reserved cabinet space or it will be
reassigned. In making determinations to
require exercise or relinquishment of
reserved space as among numerous
customers, the Exchange will take into
consideration several factors, including:
proximity between available reserved
cabinet space and the existing space of
a customer seeking additional space for
actual cabinet usage; a customer’s ratio
of cabinets in use to those reserved; the
length of time that a particular
reservation(s) has been in place; and any
other factor that the Exchange deems
3 The Exchange initially filed the proposed
pricing change on March 1, 2024 (SR–BX–2024–
009). The instant filing replaces SR–BX–2024–009,
which was withdrawn on March 13, 2024.
4 On February 26, 2024, the Exchange filed a
proposal to offer the Exchange’s Cabinet Proximity
Option program for cabinets with power densities
greater than 10 kW. See Securities Exchange Act
Release No. 34–99643 (February 29, 2024), 89 FR
16040 (March 6, 2024) (SR–BX–2024–007).
VerDate Sep<11>2014
18:10 Mar 25, 2024
Jkt 262001
relevant to ensure overall efficiency in
use of the data center space.5
The applicable monthly fees for the
Cabinet Proximity Option program are
in General 8, Section 1(d). The Cabinet
Proximity Option fee is $1,055/month 6
per medium or low density cabinets and
$1,583/month 7 per medium/high or
high density cabinets.8 The Exchange
proposes to establish a Cabinet
Proximity Option fee of $3,000 for
cabinets with power densities greater
than 10 kW.9 As such, the Exchange
proposes to amend its fee schedule at
General 8, Section 1(d) to reflect the
addition to the existing Cabinet
Proximity Option fees.
The proposed Cabinet Proximity
Option fee of $3,000 would only be
charged to those customers that
voluntarily choose to reserve cabinets
with power densities greater than 10
kW. Such option is available to all
customers. Similar to other fees related
to cabinet and power usage, the Cabinet
Proximity Option fee is incremental,
with higher fees being imposed based
on higher levels of cabinet and power
allocation. The proposed Cabinet
Proximity Option fee of $3,000 for
cabinets with power densities greater
than 10 kW is comparable to pricing for
‘‘PNU cabinets’’ 10 available to
5 See Securities Exchange Act Release No. 34–
62396 (June 28, 2010), 75 FR 38585 (July 2, 2010)
(SR–BX–2010–012).
6 On March 1, 2024, the Exchange increased the
fee from $1,000 to $1,055. See SR–BX–2024–008
(not yet published).
7 On March 1, 2024, the Exchange increased the
fee from $1,500 to $1,583. See SR–BX–2024–008
(not yet published).
8 Low density cabinets are cabinets with power
densities less than or equal to 2.88 kW. Medium
density cabinets are cabinets with power densities
greater than 2.88 kW and less than or equal to 5 kW.
Medium/High density cabinets are cabinets with
power densities greater than 5 kW and less than or
equal to 7 kW. High density cabinets are cabinets
with power densities greater than 7 kW and less
than 10 kW. See General 8, Section 1(a).
9 Currently, the Exchange offers Super High
Density Cabinets with power densities greater than
10 kW and less than or equal to 17.3 kW. See
General 8, Section 1(a). In addition, the Exchange
intends to offer cabinets with new power densities
in the future, including power densities greater than
17.3 kW.
10 Similar to the Exchange’s Cabinet Proximity
Option program, the New York Stock Exchange
offers ‘‘PNU cabinets,’’ which are reserved cabinets
that are not active and can be converted to powered,
dedicated cabinets when the user requests. Due to
heightened demand for power and cabinets, NYSE
established certain procedures related to PNU
cabinet conversion and restrictions on new PNU
cabinet offerings. NYSE adopted a policy that, if
unallocated cabinet inventory is at or below 40
cabinets, new PNU cabinets are not offered.
However, when the unallocated cabinet inventory
is more than 40 cabinets, NYSE may continue to
offer PNU cabinets. See Securities Exchange Act
Release No. 34–90732 (December 18, 2020), 85 FR
84443 (December 28, 2020). See also Securities
Exchange Act Release No. 34–91515 (April 8, 2021),
86 FR 19674 (April 14, 2021).
PO 00000
Frm 00217
Fmt 4703
Sfmt 4703
customers of co-location facilities of the
New York Stock Exchange LLC
(‘‘NYSE’’), which charges a monthly fee
of $360 per kW for PNU cabinets.11
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,12 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,13 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
First, the proposal is reasonable
because the proposed fee is comparable
to NYSE’s monthly fee of $360 per kW
for PNU cabinets.14 As noted above,
NYSE offers ‘‘PNU cabinets,’’ which are
reserved cabinets that are not active and
can be converted to powered, dedicated
cabinets when the user requests.15 The
Exchange’s proposal would establish a
flat $3,000 Cabinet Proximity Option fee
for cabinets with power densities greater
than 10 kW. Under NYSE’s fee
schedule, a reservation for a cabinet
with power density equal to 10 kW
would be $3,600 (e.g., 10 kW × $360).
Because NYSE’s PNU cabinet fees are
charged on a per kW basis, PNU cabinet
fees for cabinets with power densities
greater than 10 kW would be more than
$3,600 and increase as the power
density of the cabinet increases.
Therefore, the Exchange’s proposal
reflects a discounted price to reserve
such cabinets as compared to NYSE’s
fees for comparable PNU cabinets.
Furthermore, the Exchange offers the
Cabinet Proximity Option program as a
convenience to customers, providing an
option to reserve unused cabinet space
in proximity to their existing
equipment. No firms are required to
reserve cabinets via the Cabinet
Proximity Option program. Clients may
simply order cabinets without utilizing
reservations. The proposed Cabinet
Proximity Option fee of $3,000 would
only be charged to those customers that
voluntarily choose to reserve cabinets
with power densities greater than 10 kW
and such option is available to all
customers.
11 See NYSE Connectivity Fee Schedule, available
at https://www.nyse.com/publicdocs/Wireless_
Connectivity_Fees_and_Charges.pdf.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4) and (5).
14 See NYSE Connectivity Fee Schedule, available
at https://www.nyse.com/publicdocs/Wireless_
Connectivity_Fees_and_Charges.pdf.
15 Supra note 10.
E:\FR\FM\26MRN1.SGM
26MRN1
Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
The Exchange believes substitutable
products and services are available to
market participants, including, among
other things, other equities and options
exchanges that a market participant may
connect to in lieu of the Exchange,16
connectivity to the Exchange via a thirdparty reseller of connectivity, and/or
trading of equities or options products
within markets which do not require
connectivity to the Exchange, such as
the Over-the-Counter (OTC) markets.
Market participants that wish to connect
to the Exchange will continue to choose
the method of connectivity based on
their specific needs. Market participants
that wish to connect to the Exchange but
want to avoid or mitigate the effect of
this proposed fee can choose to connect
to the Exchange through a vendor (or
order cabinets without reservations, as
noted above).
In offering the Cabinet Proximity
Option the Exchange incurs certain
costs, including costs related to the data
center, including maintaining an
adequate level of power so that reserved
cabinets can be available and powered
on promptly at the request of customers.
If the Exchange is incorrect in its
determination that the proposed fee
reflects the value of the Cabinet
Proximity Option for cabinets with
power densities greater than 10 kW,
customers will not reserve such
cabinets.
In summary, the proposal represents
an equitable allocation of reasonable
dues, fees and other charges because the
proposed fee is less than NYSE’s fee for
a comparable service, customers have
choices in how they connect to the
Exchange, and reservations under the
Cabinet Proximity Option program are
optional and provided as a convenience
to customers.
The Exchange believes that the
proposed fee change is not unfairly
discriminatory because the Cabinet
Proximity Option fee is assessed
16 There are currently 16 registered equities
exchanges that trade equities and 17 exchanges
offering options trading services. No single equities
exchange has more than 15% of the market share.
See Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (Last updated
January 11, 2024), available at https://
www.cboe.com/us/equities/market_statistics/. No
single options exchange trades more than 14% of
the options market by volume and only one of the
17 options exchanges has a market share over 10
percent. See Nasdaq, Options Market Statistics (Last
updated January 11, 2024), available at https://
www.nasdaqtrader.com/Trader.aspx?id=Options
VolumeSummary. This broad dispersion of market
share demonstrates that market participants can and
do exercise choice in trading venues. Further, low
barriers to entry mean that new exchanges may
rapidly enter the market and offer additional
substitute platforms to further compete with the
Exchange and the products it offers.
VerDate Sep<11>2014
18:10 Mar 25, 2024
Jkt 262001
uniformly across all market participants
that voluntarily select the option, which
is available to all customers. All
customers have the choice of whether
and how to connect to the Exchange and
may order cabinets without utilizing
reservations.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
Nothing in the proposal burdens
inter-market competition because
approval of the proposal does not
impose any burden on the ability of
other exchanges to compete. The
Exchange operates in a highly
competitive market in which market
participants can determine whether or
not to connect to the Exchange based on
the value received compared to the cost
of doing so. Indeed, market participants
have numerous alternative exchanges
that they may participate on and direct
their order flow, as well as off-exchange
venues, where competitive products are
available for trading.
Nothing in the proposal burdens
intra-market competition because the
Cabinet Proximity Option program is
available to any customer under the
same fees as any other customer, and
any customer that wishes to reserve a
cabinet pursuant to the Cabinet
Proximity Option program can do so on
a non-discriminatory basis.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.17
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: (i) necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
17 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
Frm 00218
Fmt 4703
Sfmt 4703
21157
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–
BX–2024–010 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–BX–2024–010. 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–BX–2024–010 and should be
submitted on or before April 16, 2024.
E:\FR\FM\26MRN1.SGM
26MRN1
21158
Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.18
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
Sherry R. Haywood,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2024–06330 Filed 3–25–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99809; File No. SR–
NYSECHX–2024–11]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the
Connectivity Fee Schedule
March 20, 2024.
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 March 8,
2024, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
ddrumheller on DSK120RN23PROD with NOTICES1
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Connectivity Fee Schedule (‘‘Fee
Schedule’’) regarding colocation
services and fees to provide Users with
wireless connectivity to MEMX 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,
18 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
VerDate Sep<11>2014
18:10 Mar 25, 2024
Jkt 262001
1. Purpose
The Exchange proposes to amend the
Connectivity Fee Schedule (‘‘Fee
Schedule’’) regarding colocation
services and fees to provide Users 4 with
wireless connectivity to MEMX LLC
(‘‘MEMX’’) market data.
The Exchange currently provides
Users with wireless connections to nine
market data feeds or combinations of
feeds from third-party markets (the
‘‘Existing Third Party Data’’),5 and
wired connections to more than 45
market data feeds or combinations of
feeds.6 The Exchange proposes to add to
the Fee Schedule wireless connections
to the MEMX Memoir Depth market
data feed 7 (‘‘MEMX Data’’ and, together
with the Existing Third Party Data, the
‘‘Third Party Data’’). Users would be
offered the proposed wireless
connection to the MEMX Data through
connections into the colocation center
in the Mahwah, New Jersey data center
(‘‘MDC’’).8
The Exchange expects that the
proposed rule change would become
operative in the second quarter of 2024.
The Exchange will announce the date
that the wireless connection to the
MEMX Data will be available through a
customer notice.
As requested by Users, the Exchange’s
proposed wireless connectivity to
4 For purposes of the Exchange’s colocation
services, a ‘‘User’’ means any market participant
that requests to receive colocation services directly
from the Exchange. See Securities Exchange Act
Release No. 87408 (October 28, 2019), 84 FR 58778
at n.6 (November 1, 2019) (SR–NYSECHX–2019–
12). As specified in the Fee Schedule, a User that
incurs colocation fees for a particular colocation
service pursuant thereto would not be subject to
colocation fees for the same colocation service
charged by the Exchange’s affiliates the New York
Stock Exchange LLC, NYSE American LLC, NYSE
Arca, 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–2024–15, SR–NYSEAMER–2024–18, SR–
NYSEARCA–2024–26, and SR–NYSENAT–2024–
09.
5 See 84 FR 58778, supra note 4, at 58784–85.
6 See id. at 58787–88.
7 MEMX Data would also include the test feed for
MEMX Memoir market data.
8 Through its Fixed Income and Data Services
(‘‘FIDS’’) (previously ICE Data Services) business,
Intercontinental Exchange, Inc. (‘‘ICE’’) operates the
MDC. The Exchange and the Affiliate SROs are
indirect subsidiaries of ICE. The proposed service
would be provided by FIDS pursuant to an
agreement with a non-ICE entity. FIDS does not
own the wireless network that would be used to
provide the service.
PO 00000
Frm 00219
Fmt 4703
Sfmt 4703
MEMX Data would be to the MEMX
Memoir Depth market data feed. As
described by MEMX, ‘‘[t]he MEMOIR
Depth feed is a MEMX-only market data
feed that contains all displayed orders
for securities trading on the Exchange
(i.e., top and depth-of-book order data),
order executions (i.e., last sale data),
order cancellations, order modifications,
order identification numbers, and
administrative messages.’’ 9
To receive MEMX Data, the User
would enter into an agreement with a
third party for permission to receive the
data, if required. The User would pay
this third party any fees for the data
content.
The Exchange proposes to revise the
Fee Schedule to reflect fees related to
the wireless connection to MEMX Data.
For each wireless connection to MEMX
Data, a User would be charged a $5,000
non-recurring initial charge and a
monthly recurring charge of $6,000. If a
User were to purchase more than one
wireless connection to MEMX Data, it
would pay more than one non-recurring
initial charge.
Each proposed wireless connection to
MEMX Data would include the use of
one wireless connection port, and a
User would not pay a separate fee for
the use of such port, provided that if a
User already had a port for Existing
Third Party Data other than Toronto
Stock Exchange data or CME Group data
(‘‘Single Port Third Party Data’’), it
would not receive an additional port for
the MEMX Data, as one would not be
needed.10 Rather, the User would be
able to connect to MEMX Data using the
same port that it already had, as a User
would only require one port to connect
to MEMX Data and Single Port Third
Party Data, irrespective of how many of
the wireless connections it orders.
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 colocation service, including
connectivity to Third Party Data, is
9 Securities Exchange Act Release No. 97130
(March 13, 2023), 88 FR 16491, 16492 (March 17,
2023) (SR–MEMX–2023–04).
10 Similarly, if a User connected to MEMX Data
on a port for which it did not pay a separate fee
for its use, it would not receive a new port if it
subsequently connected to Single Port Third Party
Data. Connection to Toronto Stock Exchange data
and CME Group data are excepted because they
each require their own port. See Securities
Exchange Act Release Nos. 80215 (February 28,
2017), 82 FR 12658 (March 6, 2017) (SR–NYSE–
2017–05); and 98965 (November 16, 2023), 88 FR
81490 (November 22, 2023) (SR–NYSECHX–2023–
22).
E:\FR\FM\26MRN1.SGM
26MRN1
]]>Agencies
[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Notices]
[Pages 21155-21158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06330]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99794; File No. SR-BX-2024-010]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Cabinet Proximity Option Fee To Establish a Reservation Fee for
Cabinets With Power Densities Greater Than 10kW
March 20, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 13, 2024, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III, below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Cabinet Proximity
Option Fee at General 8, Section 1, as described further below.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the
[[Page 21156]]
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change \3\ is to amend the
Exchange's Cabinet Proximity Option Fee at General 8, Section 1(d) by
establishing a reservation fee for cabinets with power densities
greater than 10 kilowatts (``kW'').\4\
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed pricing change on
March 1, 2024 (SR-BX-2024-009). The instant filing replaces SR-BX-
2024-009, which was withdrawn on March 13, 2024.
\4\ On February 26, 2024, the Exchange filed a proposal to offer
the Exchange's Cabinet Proximity Option program for cabinets with
power densities greater than 10 kW. See Securities Exchange Act
Release No. 34-99643 (February 29, 2024), 89 FR 16040 (March 6,
2024) (SR-BX-2024-007).
---------------------------------------------------------------------------
The Exchange currently offers a Cabinet Proximity Option program
where, for a monthly fee, customers can obtain an option for future use
on available, unused cabinet space in proximity to their existing
equipment. Cabinets reserved under the Cabinet Proximity Option program
are unused cabinets that customers reserve for future use and can be
converted to a powered cabinet at the customer's request. Under the
program, customers can reserve up to maximum of 20 cabinets that the
Exchange endeavors to provide as close as reasonably possible to the
customer's existing cabinet space, taking into consideration power
availability within segments of the data center and the overall
efficiency of use of data center resources as determined by the
Exchange. Should reserved data center space be needed for use, the
reserving customer will have three business days to formally contract
with the Exchange for full payment for the reserved cabinet space or it
will be reassigned. In making determinations to require exercise or
relinquishment of reserved space as among numerous customers, the
Exchange will take into consideration several factors, including:
proximity between available reserved cabinet space and the existing
space of a customer seeking additional space for actual cabinet usage;
a customer's ratio of cabinets in use to those reserved; the length of
time that a particular reservation(s) has been in place; and any other
factor that the Exchange deems relevant to ensure overall efficiency in
use of the data center space.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 34-62396 (June 28,
2010), 75 FR 38585 (July 2, 2010) (SR-BX-2010-012).
---------------------------------------------------------------------------
The applicable monthly fees for the Cabinet Proximity Option
program are in General 8, Section 1(d). The Cabinet Proximity Option
fee is $1,055/month \6\ per medium or low density cabinets and $1,583/
month \7\ per medium/high or high density cabinets.\8\ The Exchange
proposes to establish a Cabinet Proximity Option fee of $3,000 for
cabinets with power densities greater than 10 kW.\9\ As such, the
Exchange proposes to amend its fee schedule at General 8, Section 1(d)
to reflect the addition to the existing Cabinet Proximity Option fees.
---------------------------------------------------------------------------
\6\ On March 1, 2024, the Exchange increased the fee from $1,000
to $1,055. See SR-BX-2024-008 (not yet published).
\7\ On March 1, 2024, the Exchange increased the fee from $1,500
to $1,583. See SR-BX-2024-008 (not yet published).
\8\ Low density cabinets are cabinets with power densities less
than or equal to 2.88 kW. Medium density cabinets are cabinets with
power densities greater than 2.88 kW and less than or equal to 5 kW.
Medium/High density cabinets are cabinets with power densities
greater than 5 kW and less than or equal to 7 kW. High density
cabinets are cabinets with power densities greater than 7 kW and
less than 10 kW. See General 8, Section 1(a).
\9\ Currently, the Exchange offers Super High Density Cabinets
with power densities greater than 10 kW and less than or equal to
17.3 kW. See General 8, Section 1(a). In addition, the Exchange
intends to offer cabinets with new power densities in the future,
including power densities greater than 17.3 kW.
---------------------------------------------------------------------------
The proposed Cabinet Proximity Option fee of $3,000 would only be
charged to those customers that voluntarily choose to reserve cabinets
with power densities greater than 10 kW. Such option is available to
all customers. Similar to other fees related to cabinet and power
usage, the Cabinet Proximity Option fee is incremental, with higher
fees being imposed based on higher levels of cabinet and power
allocation. The proposed Cabinet Proximity Option fee of $3,000 for
cabinets with power densities greater than 10 kW is comparable to
pricing for ``PNU cabinets'' \10\ available to customers of co-location
facilities of the New York Stock Exchange LLC (``NYSE''), which charges
a monthly fee of $360 per kW for PNU cabinets.\11\
---------------------------------------------------------------------------
\10\ Similar to the Exchange's Cabinet Proximity Option program,
the New York Stock Exchange offers ``PNU cabinets,'' which are
reserved cabinets that are not active and can be converted to
powered, dedicated cabinets when the user requests. Due to
heightened demand for power and cabinets, NYSE established certain
procedures related to PNU cabinet conversion and restrictions on new
PNU cabinet offerings. NYSE adopted a policy that, if unallocated
cabinet inventory is at or below 40 cabinets, new PNU cabinets are
not offered. However, when the unallocated cabinet inventory is more
than 40 cabinets, NYSE may continue to offer PNU cabinets. See
Securities Exchange Act Release No. 34-90732 (December 18, 2020), 85
FR 84443 (December 28, 2020). See also Securities Exchange Act
Release No. 34-91515 (April 8, 2021), 86 FR 19674 (April 14, 2021).
\11\ See NYSE Connectivity Fee Schedule, available at https://www.nyse.com/publicdocs/Wireless_Connectivity_Fees_and_Charges.pdf.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
First, the proposal is reasonable because the proposed fee is
comparable to NYSE's monthly fee of $360 per kW for PNU cabinets.\14\
As noted above, NYSE offers ``PNU cabinets,'' which are reserved
cabinets that are not active and can be converted to powered, dedicated
cabinets when the user requests.\15\ The Exchange's proposal would
establish a flat $3,000 Cabinet Proximity Option fee for cabinets with
power densities greater than 10 kW. Under NYSE's fee schedule, a
reservation for a cabinet with power density equal to 10 kW would be
$3,600 (e.g., 10 kW x $360). Because NYSE's PNU cabinet fees are
charged on a per kW basis, PNU cabinet fees for cabinets with power
densities greater than 10 kW would be more than $3,600 and increase as
the power density of the cabinet increases. Therefore, the Exchange's
proposal reflects a discounted price to reserve such cabinets as
compared to NYSE's fees for comparable PNU cabinets.
---------------------------------------------------------------------------
\14\ See NYSE Connectivity Fee Schedule, available at https://www.nyse.com/publicdocs/Wireless_Connectivity_Fees_and_Charges.pdf.
\15\ Supra note 10.
---------------------------------------------------------------------------
Furthermore, the Exchange offers the Cabinet Proximity Option
program as a convenience to customers, providing an option to reserve
unused cabinet space in proximity to their existing equipment. No firms
are required to reserve cabinets via the Cabinet Proximity Option
program. Clients may simply order cabinets without utilizing
reservations. The proposed Cabinet Proximity Option fee of $3,000 would
only be charged to those customers that voluntarily choose to reserve
cabinets with power densities greater than 10 kW and such option is
available to all customers.
[[Page 21157]]
The Exchange believes substitutable products and services are
available to market participants, including, among other things, other
equities and options exchanges that a market participant may connect to
in lieu of the Exchange,\16\ connectivity to the Exchange via a third-
party reseller of connectivity, and/or trading of equities or options
products within markets which do not require connectivity to the
Exchange, such as the Over-the-Counter (OTC) markets. Market
participants that wish to connect to the Exchange will continue to
choose the method of connectivity based on their specific needs. Market
participants that wish to connect to the Exchange but want to avoid or
mitigate the effect of this proposed fee can choose to connect to the
Exchange through a vendor (or order cabinets without reservations, as
noted above).
---------------------------------------------------------------------------
\16\ There are currently 16 registered equities exchanges that
trade equities and 17 exchanges offering options trading services.
No single equities exchange has more than 15% of the market share.
See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-
to-Date (Last updated January 11, 2024), available at https://www.cboe.com/us/equities/market_statistics/. No single options
exchange trades more than 14% of the options market by volume and
only one of the 17 options exchanges has a market share over 10
percent. See Nasdaq, Options Market Statistics (Last updated January
11, 2024), available at https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary. This broad dispersion of market
share demonstrates that market participants can and do exercise
choice in trading venues. Further, low barriers to entry mean that
new exchanges may rapidly enter the market and offer additional
substitute platforms to further compete with the Exchange and the
products it offers.
---------------------------------------------------------------------------
In offering the Cabinet Proximity Option the Exchange incurs
certain costs, including costs related to the data center, including
maintaining an adequate level of power so that reserved cabinets can be
available and powered on promptly at the request of customers.
If the Exchange is incorrect in its determination that the proposed
fee reflects the value of the Cabinet Proximity Option for cabinets
with power densities greater than 10 kW, customers will not reserve
such cabinets.
In summary, the proposal represents an equitable allocation of
reasonable dues, fees and other charges because the proposed fee is
less than NYSE's fee for a comparable service, customers have choices
in how they connect to the Exchange, and reservations under the Cabinet
Proximity Option program are optional and provided as a convenience to
customers.
The Exchange believes that the proposed fee change is not unfairly
discriminatory because the Cabinet Proximity Option fee is assessed
uniformly across all market participants that voluntarily select the
option, which is available to all customers. All customers have the
choice of whether and how to connect to the Exchange and may order
cabinets without utilizing reservations.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Nothing in the proposal burdens inter-market competition because
approval of the proposal does not impose any burden on the ability of
other exchanges to compete. The Exchange operates in a highly
competitive market in which market participants can determine whether
or not to connect to the Exchange based on the value received compared
to the cost of doing so. Indeed, market participants have numerous
alternative exchanges that they may participate on and direct their
order flow, as well as off-exchange venues, where competitive products
are available for trading.
Nothing in the proposal burdens intra-market competition because
the Cabinet Proximity Option program is available to any customer under
the same fees as any other customer, and any customer that wishes to
reserve a cabinet pursuant to the Cabinet Proximity Option program can
do so on a non-discriminatory basis.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\17\
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-BX-2024-010 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-BX-2024-010. 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-BX-2024-010 and should be
submitted on or before April 16, 2024.
[[Page 21158]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06330 Filed 3-25-24; 8:45 am]
BILLING CODE 8011-01-P
