Self-Regulatory Organizations; Nasdaq GEMX, LLC; 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, 21020-21023 [2024-06335]
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
for implementation on July 18, 2022, in
Docket No. PI2022–3.2 Accompanying
the Notice is a library reference, which
contains a copy of the Postal Service’s
SPM Plan, revised March 18, 2024 (both
redline and clean versions).3 The Postal
Service intends to implement its
proposed modifications ‘‘no earlier than
30 days after the filing of this Notice
with the Commission.’’ Notice at 2.
The Postal Service explains that the
two principal changes it is proposing
are related to the measurement of
Single-Piece First-Class Mail. Id. at 1.
Specifically, the Postal Service proposes
to: ‘‘(1) apply a data-driven approach to
collection box density and origin
proportion referential data; and (2)
enhance SPM to align First Mile
samples and retail pieces to their
relative service standard service
standard and apply these profiles to
corresponding census originating
volume.’’ Id. The Postal Service also
proposes ‘‘other minor revisions,
including word choice and grammar.’’
Id.
The Postal Service states that SPM
currently relies on ‘‘collection box
density referential data to determine
sampling targets and origin proportion
referential data to align collection
samples and retail pieces to Single-Piece
First-Class Mail originating volume.’’ Id.
at 3. Collection box density data are
based on the results of a Collection Box
Density Test performed by mail carriers
once a year, which, the Postal Service
contends, does not capture seasonal
variations in the data. Id. The data are
also currently input manually, which
the Postal Service maintains is ‘‘subject
to potential data input error.’’ Id. The
Postal Service states that ‘‘deficiencies
in the accuracy and representativeness
of this data were validated through
2 On July 18, 2022, the Commission approved the
Postal Service’s proposed modifications to the
Service Performance Measurement Plan, except for
the proposed change to the critical entry times
(CET) for Periodicals because the Postal Service was
first required to file a request for an advisory
opinion pursuant to 39 U.S.C. 3661(b) and in
accordance with 39 CFR part 3020. Docket No.
PI2022–3, Order Directing the Postal Service to
Request an Advisory Opinion Prior to
Implementing its Proposed Change to the Critical
Entry Times for Periodicals and Approving the
Other Proposed Revisions to Market Dominant
Service Performance Measurement Plan, July 18,
2022, at 26–27 (Order No. 6232). As directed on
September 2, 2022, the Postal Service filed the
request for an advisory opinion from the
Commission. Docket No. N2022–2, United States
Postal Service’s Request for an Advisory Opinion
on Changes in the Nature of Postal Services,
September 2, 2022. On November 30, 2022, the
Commission provided its written advisory opinion.
Docket No. N2022–2, Advisory Opinion on Changes
to the Critical Entry Times for Certain Categories of
Periodicals, November 30, 2022.
3 Library Reference USPS–LR–PI2024–1/1, March
18, 2024.
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sample randomized collection box
inspections conducted in 2024 that
showed large variations in the observed
collection box density relative to the
referential data.’’ Id. Therefore, the
Postal Service proposes using ‘‘return
address information as an alternative
data source to improve the accuracy of
density reference data in First Mile
measurement.’’ Id. at 4.
Similarly, the Postal Service states
that origin proportion referential data is
currently ‘‘determined by estimating the
origin volume proportion that a ZIP
Code represents of its district for a given
mail product by using USPS delivery
point data as a proxy for where volume
originates.’’ Id. The Postal Service states
that this ‘‘proxy approach does not
accurately reflect the decline in mail
volume and changes in customer
behavior in the past decade,’’ because it
‘‘gives weight equally to all delivery
points during volume proportioning,
which does not reflect the reality that
geographies where businesses are
located may have more volumes but less
delivery points.’’ Id. The Postal Service
therefore proposes replacing the existing
origin proportion referential data with
return address data captured by mail
processing equipment. Id. at 5. For both
collection box density and origin
proportion referential data, the Postal
Service states that it intends to automate
the generation and integration of return
address data into the SPM system each
quarter. Id.
With respect to aligning First Mile
samples and retail pieces to their
relative service standard, the Postal
Service states that ‘‘[c]urrently, there is
one combined First Mile profile across
all service standards, which is then
equally applied to the census
originating volume data for each service
standard.’’ Id. The Postal Service states
that ‘‘a more granular measurement and
reporting approach is needed to ensure
the accuracy and representativeness of
SPM First Mile calculations.’’ Id.
Therefore, the Postal Service proposes
to ‘‘update the SPM system to create
separate First Mile profiles by service
standard and align to corresponding
census originating volume for that
service standard.’’ Id. at 5–6.
Interested persons are invited to
comment on the Postal Service’s
proposed modifications to its SPM Plan
and related measurement changes.
Comments are due April 3, 2024. The
Commission does not anticipate the
need for reply comments at this time.
The Commission intends to evaluate the
comments received and use those
suggestions to help carry out its service
performance measurement
responsibilities under Title 39 of the
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United States Code. Material filed in
this docket will be available for review
on the Commission’s website, https://
www.prc.gov. The Commission appoints
Nikki Brendemuehl to represent the
interests of the general public (Public
Representative) in this docket.
It is ordered:
1. Docket No. PI2024–1 is established
for the purpose of considering the Postal
Service’s proposed revisions to its
Service Performance Measurement Plan
for Market Dominant products and
related measurement changes.
2. Interested persons may submit
written comments on any or all aspects
of the Postal Service’s proposals no later
than April 3, 2024.
3. Nikki Brendemuehl is designated to
represent the interests of the general
public (Public Representative) in this
docket.
4. The Secretary shall arrange for
publication of this Notice in the Federal
Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024–06269 Filed 3–25–24; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99800; File No. SR–GEMX–
2024–08]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; 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 GEMX, LLC (‘‘GEMX’’ 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
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
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/gemx/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
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
3 The Exchange initially filed the proposed
pricing change on March 1, 2024 (SR–GEMX–2024–
06). The instant filing replaces SR–GEMX–2024–06,
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. 34–99646 (February 29, 2024), 89 FR
16064 (March 6, 2024) (SR–GEMX–2024–04).
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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
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
5 See Securities Exchange Act Release No. 34–
62397 (June 28, 2010), 75 FR 38860 (July 6, 2010)
(SR–NASDAQ–2010–019). In 2017, the Exchange
synchronized its options for connecting to the
Exchange with that of its sister exchanges and
adopted uniform colocation services, including the
Cabinet Proximity Option program. See Securities
Exchange Act Release No. 34–81902 (October 19,
2017), 82 FR 49453 (October 25, 2017) (SR–GEMX–
2017–48).
6 On March 1, 2024, the Exchange increased the
fee from $1,000 to $1,055. See SR–GEMX–2024–05
(not yet published).
7 On March 1, 2024, the Exchange increased the
fee from $1,500 to $1,583. See SR–GEMX–2024–05
(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.
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21021
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
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 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
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.
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.
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
$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.
The Exchange believes substitutable
products and services are available to
market participants, including, among
other things, other 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
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
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.
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
to determine whether the proposed rule
should be approved or disapproved.
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.
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–
GEMX–2024–08 on the subject line.
16 There are currently 17 exchanges offering
options trading services. 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.nasdaq
trader.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.
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.
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18:10 Mar 25, 2024
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
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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:
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–GEMX–2024–08. 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
17 15
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U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
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–GEMX–2024–08 and should be
submitted on or before April 16, 2024.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–06335 Filed 3–25–24; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99790; File No. SR–
NYSEAMER–2024–17]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Amend Rule 7.31E
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 6,
2024, NYSE American LLC (‘‘NYSE
American’’ 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.
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
Rule 7.31E to provide for the use of Day
ISO Reserve Orders and make other
conforming changes. 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.
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
18:10 Mar 25, 2024
1. Purpose
The Exchange proposes to amend
Rule 7.31E to provide for the use of Day
ISO Reserve Orders and make
conforming changes in Rule 7.11E
(Limit Up-Limit Down Plan and Trading
Pauses in Individual Securities Due to
Extraordinary Market Volatility) and
Rule 7.37E (Order Execution and
Routing).
Day ISO Orders
Rule 7.31E(e)(3) defines an
Intermarket Sweep Order (‘‘ISO’’) as a
Limit Order that does not route and
meets the requirements of Rule
600(b)(38) of Regulation NMS. As
described in Rules 7.31E(e)(3)(A) and
subparagraphs (i) and (ii) thereunder, an
ISO may trade through a protected bid
or offer and will not be rejected or
cancelled if it would lock, cross, or be
marketable against an Away Market,
provided that (1) it is identified as an
ISO and (2) simultaneously with its
routing to the Exchange, the ETP Holder
that submits the ISO also routes one or
more additional Limit Orders, as
necessary, to trade against the full
displayed size of any protected bids (for
sell orders) or protected offers (for buy
orders) on Away Markets.
Rule 7.31E(e)(3)(C) provides that an
ISO designated Day (‘‘Day ISO’’), if
marketable on arrival, will immediately
trade with contra-side interest on the
Exchange Book up to its full size and
limit price. Any untraded quantity of a
Day ISO will be displayed at its limit
price and may lock or cross a protected
quotation that was displayed at the time
the order arrived.
Reserve Orders
Rule 7.31E(d)(1) provides for Reserve
Orders, which are Limit or Inside Limit
Orders with a quantity of the size
18 17
VerDate Sep<11>2014
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.
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21023
displayed and with a reserve quantity
(‘‘reserve interest’’) of the size that is not
displayed. The displayed quantity of a
Reserve Order is ranked Priority 2—
Display Orders, and the reserve interest
is ranked Priority 3—Non-Display
Orders. Both the display quantity and
the reserve interest of an arriving
marketable Reserve Order are eligible to
trade with resting interest in the
Exchange Book or to route to Away
Markets. The working price of the
reserve interest of a resting Reserve
Order will be adjusted in the same
manner as a Non-Displayed Limit Order,
as provided for in Rule 7.31E(d)(2)(A).
As described in Rule 7.31E(d)(1)(A),
the display quantity of a Reserve Order
must be entered in round lots, and the
displayed portion of a Reserve Order
will be replenished when the display
quantity is decremented to below a
round lot. The replenish quantity will
be the minimum display size of the
order or the remaining quantity of the
reserve interest if it is less than the
minimum display quantity.
Rule 7.31E(d)(1)(B) provides that each
time the display quantity of a Reserve
Order is replenished from reserve
interest, a new working time is assigned
to the replenished quantity (each
display quantity with a different
working time is referred to as a ‘‘child’’
order), while the reserve interest retains
the working time of the original order
entry. In addition, when a Reserve
Order is replenished from reserve
interest and already has two child
orders that equal less than a round lot,
the child order with the later working
time will rejoin the reserve interest and
be assigned the new working time
assigned to the next replenished
quantity. If a Reserve Order is not
routable, the replenish quantity will be
assigned a display and working price
consistent with the instructions for the
order.
Rule 7.31E(d)(1)(C) provides that a
Reserve Order must be designated Day
and may only be combined with a NonRoutable Limit Order.
Rule 7.31E(d)(1)(D) provides that
routable Reserve Orders will be
evaluated for routing both on arrival and
each time their display quantity is
replenished.
Rule 7.31E(d)(1)(E) provides that a
request to reduce the size of a Reserve
Order will cancel the reserve interest
before cancelling the display quantity,
and, if the Reserve Order has more than
one child order, the child order with the
latest working time will be cancelled
first.
Rule 7.31E(d)(1)(F) provides that, if
the PBBO is crossed and the display
quantity of a Reserve Order to buy (sell)
E:\FR\FM\26MRN1.SGM
26MRN1
]]>Agencies
[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Notices]
[Pages 21020-21023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06335]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99800; File No. SR-GEMX-2024-08]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; 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 GEMX, LLC (``GEMX'' 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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
[[Page 21021]]
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/gemx/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 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\
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\3\ The Exchange initially filed the proposed pricing change on
March 1, 2024 (SR-GEMX-2024-06). The instant filing replaces SR-
GEMX-2024-06, 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. 34-99646 (February 29, 2024), 89 FR 16064 (March 6,
2024) (SR-GEMX-2024-04).
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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\
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\5\ See Securities Exchange Act Release No. 34-62397 (June 28,
2010), 75 FR 38860 (July 6, 2010) (SR-NASDAQ-2010-019). In 2017, the
Exchange synchronized its options for connecting to the Exchange
with that of its sister exchanges and adopted uniform colocation
services, including the Cabinet Proximity Option program. See
Securities Exchange Act Release No. 34-81902 (October 19, 2017), 82
FR 49453 (October 25, 2017) (SR-GEMX-2017-48).
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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.
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\6\ On March 1, 2024, the Exchange increased the fee from $1,000
to $1,055. See SR-GEMX-2024-05 (not yet published).
\7\ On March 1, 2024, the Exchange increased the fee from $1,500
to $1,583. See SR-GEMX-2024-05 (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.
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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\
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\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.
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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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
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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
[[Page 21022]]
$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.
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\14\ See NYSE Connectivity Fee Schedule, available at https://www.nyse.com/publicdocs/Wireless_Connectivity_Fees_and_Charges.pdf.
\15\ Supra note 10.
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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.
The Exchange believes substitutable products and services are
available to market participants, including, among other things, other
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 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).
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\16\ There are currently 17 exchanges offering options trading
services. 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.
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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\ 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.
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\17\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-GEMX-2024-08 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-GEMX-2024-08. 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
[[Page 21023]]
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-GEMX-2024-08 and should be submitted on or
before April 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06335 Filed 3-25-24; 8:45 am]
BILLING CODE 8011-01-P
