Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Connectivity Fee Schedule, 54616-54621 [2024-14384]
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Federal Register / Vol. 89, No. 126 / Monday, July 1, 2024 / Notices
information that they wish to make
available publicly, including their
name, email address, and any other
identifying information.
All prospective commenters should
follow the Commission’s instructions on
how to submit comments, available at
www.sec.gov/regulatory-actions/how-tosubmit-comments. General questions
regarding the rule filing process or
logistical questions regarding this filing
should be directed to the Main Office of
the SEC’s Division of Trading and
Markets at tradingandmarkets@sec.gov
or 202–551–5777.
FICC reserves the right not to respond
to any comments received.
III. Date of Effectiveness of the
Proposed Rule Change, and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be 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:
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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–
FICC–2024–009 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to file
number SR–FICC–2024–009. 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
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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 FICC
and on DTCC’s website (dtcc.com/legal/
sec-rule-filings). 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–FICC–2024–009 and
should be submitted on or before July
22, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.66
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14378 Filed 6–28–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100425; File No. SR–
NYSENAT–2024–20]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the
Connectivity Fee Schedule
June 25, 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 June 12,
2024, NYSE National, Inc. (‘‘NYSE
National’’ 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
66 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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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
Connectivity Fee Schedule (‘‘Fee
Schedule’’) regarding colocation
services and fees to provide Users with
wireless connectivity to additional
market data feeds. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule regarding colocation
services and fees to provide Users 4 with
wireless connectivity to additional
market data feeds.
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’’), and wired
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. 83351 (May 31, 2018), 83 FR 26314 at
n.9 (June 6, 2018) (SR–NYSENAT–2018–07). 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 Chicago, 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–2024–37, SR–
NYSEAMER–2024–40, SR–NYSEARCA–2024–54,
and SR–NYSECHX–2024–24.
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connections to more than 45 market
data feeds or combinations of feeds.5
The Exchange proposes to add to the
Fee Schedule wireless connections
(‘‘Connectivity’’) to four additional
market data feeds (together, the
‘‘Proposed Third Party Data’’):
• MIAX Pearl Equities Depth of
Market Feed (‘‘MIAX DoM’’),6
• Nasdaq BX TotalView–ITCH
FPGA,7
• Nasdaq PSX TotalView, and
• Nasdaq PSX TotalView–ITCH
FPGA.8
As with most other Existing Third
Party Data,9 the monthly charge for
Connectivity to Proposed Third Party
Data would be subject to a 30-day
testing period, during which the
monthly charge per connection would
be waived. Consistent with that fact, the
Exchange proposes to amend the Fee
Schedule to clarify that this provision is
applicable to Connectivity to the
Proposed Third Party Data.
Users would be offered Connectivity
to Proposed Third Party Data through
connections into the colocation center
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in the Mahwah, New Jersey data center
(‘‘MDC’’).10
The Exchange expects that the
proposed Connectivity to Proposed
Third Party Data would become
operative during 2024. The Exchange
will announce the date or dates that
Connectivity to Proposed Third Party
Data will be available through a
customer notice.
The Exchange proposes to add the
following to the Fee Schedule to reflect
fees for Connectivity to Proposed Third
Party Data:
Type of service
Description
Amount of charge
Wireless Connection for Third Party
Data.
Wireless connection of MIAX Pearl
Equities Depth of Market Feed
(DoM) data.
Wireless Connection for Third Party
Data.
Wireless connection of Nasdaq BX
TotalView–ITCH FPGA data.
Wireless Connection for Third Party
Data.
Wireless connection of Nasdaq
PSX TotalView data.
Wireless Connection for Third Party
Data.
Wireless connection of Nasdaq
PSX TotalView–ITCH FPGA
data.
$5,000 per connection initial charge plus monthly charge per connection of $6,000.
Fees are subject to a 30-day testing period, during which the monthly
charge per connection is waived.
$5,000 per connection initial charge plus monthly charge per connection of $7,500.
Fees are subject to a 30-day testing period, during which the monthly
charge per connection is waived.
$5,000 per connection initial charge plus monthly charge per connection of $6,000.
Fees are subject to a 30-day testing period, during which the monthly
charge per connection is waived.
$5,000 per connection initial charge plus monthly charge per connection of $7,500.
Fees are subject to a 30-day testing period, during which the monthly
charge per connection is waived.
Each proposed Connectivity service
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 Proposed Third
Party Data, as one would not be
needed.11 Rather, the User would be
able to connect to Proposed Third Party
Data using the same port that it already
had, as a User would only require one
port to connect to the Proposed Third
Party Data and Single Port Third Party
Data, irrespective of how many of the
wireless connections it orders.
To receive a market data feed in the
Proposed Third Party 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. If a User were to purchase more
than one wireless connection to
Proposed Third Party Data, it would pay
more than one non-recurring initial
charge.
Application and Impact of the Proposed
Changes
5 See Securities Exchange Act Release No. 99810
(March 20, 2024), 89 FR 21050 (March 26, 2024)
(SR–NYSENAT–2024–09).
6 As described by MIAX PEARL, LCC, ‘‘[t]he
[MIAX] DoM feed is a data feed that contains the
displayed price and size of each order entered on
MIAX PEARL Equities, as well as order execution
information, order cancellations, order
modifications, order identification numbers, and
administrative messages.’’ Securities Exchange Act
Release No. 91073 (February 5, 2021), 86 FR 9096,
9100 (February 11, 2021) (SR–PEARL–2021–02).
7 The difference between the Nasdaq BX
TotalView feed and the Nasdaq BX TotalView–
ITCH feed, which is part of the Existing Third Party
Data, is the delivery mechanism: the data is the
same. As described by Nasdaq BX, Inc., ‘‘BX
TotalView is a real-time market data product that
provides full order depth using a series of order
messages to track the life of customer orders in the
BX market, as well as trade data for BX executions
and administrative messages such as Trading
Action messages, Symbol Directory, and Event
Control messages.’’ Securities Exchange Act Release
No. 98158 (August 17, 2023), 88 FR 57505 (August
23, 2023) (SR–BX–2023–020), at 57506.
8 According to Nasdaq PHLX LLC, ‘‘PSX
TotalView is a real-time market data product that
provides full order depth using a series of order
messages to track the life of customer orders in the
PSX market, as well as trade data for PSX
executions and administrative messages such as
Trading Action messages, Symbol Directory, and
Event Control messages.’’ Securities Exchange Act
Release No. 95195 (August 21, 2023), 88 FR 58324
(August 25, 2023) (SR–Phlx–2023–37), at 58325.
The difference between the two PSX TotalView
feeds is the delivery mechanism: the data is the
same. Id.
9 See 83 FR 26314, supra note 4, at 26319–20.
10 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 services
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 services.
11 Similarly, if a User connected to Proposed
Third Party 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 83
FR 26314, supra note 4, at 26319–20, and Securities
Act Release No. 98966 (November 16, 2023), 88 FR
81476 (November 22, 2023) (SR–NYSENAT–2023–
26).
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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 is completely
voluntary and the Fee Schedule is
applied uniformly to all Users.
The Connectivity to Proposed Third
Party Data was requested by Users, but
the Exchange believes that it would
obtain less than a handful of new
customers due to the proposed change.
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Competitive Environment
The Exchange operates in a highly
competitive market in which other
vendors offer colocation services as a
means to facilitate the trading and other
market activities of those market
participants who believe that colocation
enhances the efficiency of their
operations. The Commission has
repeatedly expressed its preference for
competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. Specifically, in Regulation
NMS, the Commission highlighted the
importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 12
As explained below in this filing, the
Exchange’s proposed Connectivity to
Proposed Third Party Data would
compete with the wireless connections
provided by at least two third parties.
Third-party vendors are not at any
competitive disadvantage created by the
Exchange.
The proposed change is not otherwise
intended to address any other issues
relating to colocation services or related
fees, and the Exchange is not aware of
any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,13 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,14 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and because it is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Exchange further believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act,15 because it
12 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
15 15 U.S.C. 78f(b)(4).
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provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers, or dealers.
The Proposed Change Is Reasonable
The Exchange believes that the
proposed rule change is reasonable. In
considering the reasonableness of
proposed services and fees, the
Commission’s market-based test
considers ‘‘whether the exchange was
subject to significant competitive forces
in setting the terms of its proposal
. . . , including the level of any
fees.’’ 16 If the Exchange meets that
burden, ‘‘the Commission will find that
its proposal is consistent with the Act
unless ‘there is a substantial
countervailing basis to find that the
terms’ of the proposal violate the Act or
the rules thereunder.’’ 17 Here, the
Exchange is subject to significant
competitive forces in setting the terms
on which it offers its proposal, in
particular because substantially similar
substitutes are available, and the
Exchange has not placed the third party
vendors at a competitive disadvantage
created by the Exchange.
Substantially Similar Substitutes Are
Available
The Exchange’s proposed
Connectivity to Proposed Third Party
Data would compete with other
methods by which both the Exchange
and various third parties already
provide, or could provide, Users with
connectivity to the Proposed Third
Party Data.
At least two telecoms provide
wireless connectivity in the MDC. A
User could use such connectivity to
connect to the Proposed Third Party
Data. The Exchange believes that these
wireless connections are at a same or
similar speed as the Exchange’s
16 See
Securities Exchange Act Release No. 90209
(October 15, 2020), 85 FR 67044, 67049 (October 21,
2020) (Order Granting Accelerated Approval to
Establish a Wireless Fee Schedule Setting Forth
Available Wireless Bandwidth Connections and
Wireless Market Data Connections) (SR–NYSE–
2020–05, SR–NYSEAMER–2020–05, SR–
NYSEARCA–2020–08, SR–NYSECHX–2020–02,
SR–NYSENAT–2020–03, SR–NYSE–2020–11, SR–
NYSEAMER–2020–10, SR–NYSEArca–2020–15,
SR–NYSECHX–2020–05, SR–NYSENAT–2020–08)
(‘‘Wireless Approval Order’’), citing Securities
Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74781 (December 9, 2008)
(‘‘2008 ArcaBook Approval Order’’). See
NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
17 See Wireless Approval Order, supra note 16, at
67049, citing 2008 ArcaBook Approval Order, supra
note 16, at 74781.
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proposed Connectivity, and at a similar
price.18
Accordingly, the wireless connections
would compete with the Exchange’s
proposed Connectivity and would exert
significant competitive forces on the
Exchange in setting the terms of its
proposal, including the level of the
Exchange’s proposed fees.19 If the
Exchange were to set its proposed fees
too high, Users could respond by
instead selecting the telecoms’
substantially similar wireless
connectivity.20
Third Party Competitors Are Not at a
Competitive Disadvantage Created by
the Exchange
The Exchange does not believe that
FIDS would have any competitive
advantage over either the existing thirdparty telecom connections or any future
providers of wireless connectivity to
Proposed Third Party Data. The
Exchange’s proposed service for
connectivity to Proposed Third Party
Data does not have any special access to
or advantage within the MDC. More
specifically, the Exchange’s proposed
wireless connection would lead to the
data center pole, from which a fiber
connection would lead into the MDC.
The data center pole is on the grounds
of the MDC, but pursuant to Exchange
rule, the distance from such pole to the
patch panel where fiber connections for
wireless services connect to the network
row in the space used for co-location in
the MDC (the ‘‘Patch Panel Point’’) is
normalized.21
Exchange rules also require that the
distance from the Patch Panel Point to
each User cabinet in colocation be the
same.22 Further, all distances in the
MDC are normalized. Every provider of
wireless connectivity to Users,
including FIDS, is connected to the
Patch Panel Point, and the length of the
fiber path from the Patch Panel Point to
18 Because the telecoms are not regulated entities,
they are not obligated to make its latency figures or
fees publicly available or the same for all entities.
19 See 2008 ArcaBook Approval Order, supra note
16, at 74789 and n.295 (recognizing that products
need not be identical to be substitutable).
20 In addition, the Exchange believes that at least
three third-party market participants, as well as
FIDS, offer fiber connections to the Proposed Third
Party Data in colocation. See 83 FR 26314, supra
note 4, at 26323.
21 See NYSE Rule 3.13, NYSE American Rule
3.13E, NYSE Arca Rule 3.13, NYSE Chicago Rule
3.13, and NYSE National Rule 3.13 (Data Center
Pole Restrictions—Connectivity to Co-Location
Space) (placing restrictions on use of the data center
pole designed to address any advantage that the
wireless connections have by virtue of a data center
pole).
22 See id.
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each User cabinet in colocation is the
same.
Nor does the Exchange have a
competitive advantage over any thirdparty competitors offering wireless
connectivity to the Proposed Third
Party Data by virtue of the fact that it
owns and operates the MDC’s meet-merooms. Users purchasing wireless
connectivity to the Proposed Third
Party Data—like Users of any other
colocation service—would require a
circuit connecting out of the MDC, and
in most cases, such circuits are provided
by third-party telecommunications
service providers that have installed
their equipment in the MDC’s two meetme-rooms (‘‘Telecoms’’).23 Currently, 16
Telecoms operate in the meet-me-rooms
and provide a variety of circuit choices.
It is in the Exchange’s best interest to set
the fees that Telecoms pay to operate in
the meet-me-rooms at a reasonable
level 24 so that market participants,
including Telecoms, will maximize
their use of the MDC. By setting the
meet-me-room fees at a reasonable level,
the Exchange encourages Telecoms to
participate in the meet-me-rooms and to
sell circuits to Users for connecting into
and out of the MDC. These Telecoms
then compete with each other by pricing
such circuits at competitive rates. These
competitive rates for circuits help draw
in more Users and Hosted Customers to
the MDC, which directly benefits the
Exchange by increasing the customer
base to whom the Exchange can sell its
colocation services, which include
cabinets, power, ports, and connectivity
to many third-party data feeds, and
because having more Users and Hosted
Customers leads, in many cases, to
greater participation on the Exchange. In
this way, by setting the meet-me-room
fees at a level attractive to
telecommunications firms, the Exchange
spurs demand for all of the services it
sells at the MDC, while setting the meetme-room fees too high would negatively
affect the Exchange’s ability to sell its
services at the MDC.25 Accordingly,
there are real constraints on the meetme-room fees the Exchange charges,
such that the Exchange does not have an
advantage in terms of costs when
compared to third parties that enter the
23 Note that in the case of wireless connectivity,
a User in colocation still requires a fiber circuit to
transport data. If a Telecom is used, the data is
transmitted wirelessly to the relevant pole, and then
from the pole to the meet-me-room using a fiber
circuit.
24 See Securities Exchange Act Release No. 98002
(July 26, 2023), 88 FR 50232 (August 1, 2023) (SR–
NYSENAT–2023–12) (‘‘MMR Notice’’).
25 See id. at 50235. Importantly, the Exchange is
prevented from making any alteration to its meetme-room services or fees without filing a proposal
for such changes with the Commission.
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MDC through the meet-me-rooms to
provide services to compete with the
Exchange’s services.
If anything, the Exchange would be
subject to a competitive disadvantage
vis-à-vis third-party competitors offering
wireless connectivity to the Proposed
Third Party 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.
In sum, because the Exchange is
subject to significant competitive forces
in setting the terms on which it offers
its proposal, in particular because a
substantially similar substitute is
available, and the Exchange has not
placed third-party vendors at a
competitive disadvantage created by the
Exchange, the proposed fees for the
Exchange’s Connectivity to Proposed
Third Party Data are reasonable.26 If the
Exchange were to set its prices for
Connectivity to Proposed Third Party
Data at a level that Users found to be too
high, Users could easily choose to
connect to Proposed Third Party Data in
colocation at the MDC through the
competing wireless connections, as
detailed above.
Additional Considerations
The Exchange believes that it is
reasonable to add text to the Fee
Schedule indicating that the monthly
charge for the proposed Connectivity is
subject to a 30-day testing period,
during which the monthly charge per
connection would be waived. The
change would clarify that the terms on
which the Connectivity to Proposed
Third Party Data is offered are the same
as those of most connections to Existing
Third Party Data.
The Exchange believes it is reasonable
that if a User already had a port for
Single Port Third Party Data, it would
not receive an additional port for the
Proposed Third Party Data. In such a
case, no additional port would be
needed, as the User would be able to
connect to Proposed Third Party Data
using the port it already had. Similarly,
the Exchange believes it is reasonable
that if a User connected to Proposed
Third Party 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
26 See
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54619
subsequently connected to Single Port
Third Party Data. This is because a User
would only require one port to connect
to Proposed Third Party Data and Single
Port Third Party Data, irrespective of
how many of the wireless connections
it orders.
The Proposed Change Is an Equitable
Allocation of Fees and Credits
The Exchange believes that its
proposal equitably allocates its fees
among Users. Without this proposed
rule change, Users would have fewer
options for connectivity to Proposed
Third Party Data. The proposed change
would provide Users with an additional
choice with respect to the form and
optimal latency of the connectivity they
use to receive Proposed Third Party
Data, allowing a User to select the
connectivity that better suits its needs,
helping it tailor its colocation
operations to the requirements of its
business operations. Users that do not
opt to utilize the Exchange’s proposed
wireless Connectivity would still be
able to connect to Proposed Third Party
Data wirelessly using third party
wireless connections.
The Exchange believes that the
proposed change is equitable because it
will result in fees being charged only to
Users that voluntarily select to receive
the corresponding services and because
those services will be available to all
Users. Furthermore, the Exchange
believes that the services and fees
proposed herein are equitably allocated
because, in addition to the services
being completely voluntary, they are
available to all Users on an equal basis
(i.e., the same products and services are
available to all Users). All Users that
voluntarily select the Exchange’s
proposed Connectivity to Proposed
Third Party Data would be charged the
same amount for the same services.
The Exchange believes it is equitable
that if a User already had a port for
Single Port Third Party Data, it would
not receive an additional port for the
Proposed Third Party Data. Similarly,
the Exchange believes it is equitable that
if a User connected to Proposed Third
Party 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. This is because a User would only
require one port to connect to Proposed
Third Party Data and Single Port Third
Party Data, irrespective of how many of
the wireless connections it orders.
The Proposed Change Is Not Unfairly
Discriminatory
The Exchange believes that the
proposed rule change is not unfairly
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ddrumheller on DSK120RN23PROD with NOTICES1
discriminatory, for the following
reasons.
Without this proposed rule change,
Users would have fewer options for
Connectivity to Proposed Third Party
Data. The proposed change would
provide Users with an additional choice
with respect to the form and optimal
latency of the connectivity they use to
receive Proposed Third Party Data,
allowing a User to select the
connectivity that better suits its needs,
helping it tailor its colocation
operations to the requirements of its
business operations. Users that do not
opt to utilize the Exchange’s proposed
wireless Connectivity would still be
able to connect to Proposed Third Party
Data wirelessly using third party
wireless connections.
The Exchange believes that the
proposed change is not unfairly
discriminatory because it will result in
fees being charged only to Users that
voluntarily select to receive the
corresponding services and because
those services will be available to all
Users. Furthermore, the Exchange
believes that the services and fees
proposed herein are not unfairly
discriminatory because, in addition to
the services being completely voluntary,
they are available to all Users on an
equal basis (i.e., the same products and
services are available to all Users). All
Users that voluntarily select the
Exchange’s proposed Connectivity to
Proposed Third Party Data would be
charged the same amount for the same
services.
The Exchange believes it is not
unfairly discriminatory that if a User
already had a port for Single Port Third
Party Data, it would not receive an
additional port for the Proposed Third
Party Data. Similarly, the Exchange
believes that it is not unfairly
discriminatory that if a User connected
to Proposed Third Party 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. This is
because a User would only require one
port to connect to Proposed Third Party
Data and Single Port Third Party Data,
irrespective of how many of the wireless
connections it orders.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposal will not impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of Section 6(b)(8) of the Act.27
The proposed change would not affect
competition among national securities
exchanges or among members of the
Exchange, but rather between FIDS and
its commercial competitors. The
proposed wireless Connectivity would
provide Users with an alternative means
of connectivity to Proposed Third Party
Data. The proposed change would
provide Users with an additional choice
with respect to the form and optimal
latency of the connectivity they use to
receive Proposed Third Party Data,
allowing a User to select the
connectivity that better suits its needs,
helping it tailor its colocation
operations to the requirements of its
business operations.
Users that do not opt to utilize the
Exchange’s proposed wireless
Connectivity would still be able to
connect to Proposed Third Party Data
wirelessly using third party wireless
connections.
The Exchange does not believe that
FIDS would have any competitive
advantage over either the existing thirdparty telecom connections or any future
providers of wireless connectivity to
Proposed Third Party Data. The
proposed Connectivity to Proposed
Third Party Data does not have any
special access to or advantage within
the MDC. More specifically, the
Exchange’s proposed wireless
connection would lead to the data
center pole, from which a fiber
connection would lead into the MDC.
The data center pole is on the grounds
of the MDC, but pursuant to Exchange
rule, the distance from such pole to the
Patch Panel Point is normalized.28
Exchange rules also require that the
distance from the Patch Panel Point to
each User cabinet in colocation be the
same.29 Further, all distances in the
MDC are normalized. Every provider of
wireless connectivity to Users,
including FIDS, is connected to the
Patch Panel Point, and the length of the
fiber path from the Patch Panel Point to
each User cabinet in colocation is the
same.
Adding text to the Fee Schedule
indicating that the monthly charge for
Connectivity to the Proposed Third
Party Data is subject to a 30-day testing
period, during which the monthly
charge per connection would be waived,
is not designed to address any
competitive issues, but rather to
enhance the clarity and transparency of
the Fee Schedule and alleviate possible
customer confusion that may arise. Nor
does the Exchange have a competitive
advantage over any third-party
30 See
supra note 23.
MMR Notice, supra note 24.
32 See id. at 50235.
28 See
27 15
supra note 21.
29 See id.
U.S.C. 78f(b)(8).
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competitors offering wireless
connectivity to the Proposed Third
Party Data by virtue of the fact that it
owns and operates the MDC’s meet-merooms. Users purchasing wireless
connectivity to the Proposed Third
Party Data—like Users of any other
colocation service—would require a
circuit connecting out of the MDC, and
in most cases, such circuits are provided
by third-party Telecoms.30 Currently, 16
Telecoms operate in the meet-me-rooms
and provide a variety of circuit choices.
It is in the Exchange’s best interest to set
the fees that Telecoms pay to operate in
the meet-me-rooms at a reasonable
level 31 so that market participants,
including Telecoms, will maximize
their use of the MDC. By setting the
meet-me-room fees at a reasonable level,
the Exchange encourages Telecoms to
participate in the meet-me-rooms and to
sell circuits to Users for connecting into
and out of the MDC. These Telecoms
then compete with each other by pricing
such circuits at competitive rates. These
competitive rates for circuits help draw
in more Users and Hosted Customers to
the MDC, which directly benefits the
Exchange by increasing the customer
base to whom the Exchange can sell its
colocation services, which include
cabinets, power, ports, and connectivity
to many third-party data feeds, and
because having more Users and Hosted
Customers leads, in many cases, to
greater participation on the Exchange. In
this way, by setting the meet-me-room
fees at a level attractive to
telecommunications firms, the Exchange
spurs demand for all of the services it
sells at the MDC, while setting the meetme-room fees too high would negatively
affect the Exchange’s ability to sell its
services at the MDC.32 Accordingly,
there are real constraints on the meetme-room fees the Exchange charges,
such that the Exchange does not have an
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 would be
subject to a competitive disadvantage
vis-à-vis third-party competitors offering
wireless connectivity to the Proposed
Third Party 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,
PO 00000
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Electronic Comments
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.
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
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.
ddrumheller on DSK120RN23PROD with NOTICES1
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
33 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
35 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file 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.
36 15 U.S.C. 78s(b)(2)(B).
34 17
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20:36 Jun 28, 2024
Jkt 262001
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSENAT–2024–20 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–NYSENAT–2024–20. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSENAT–2024–20 and should be
submitted on or before July 22, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
Vanessa A. Countryman,
Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100422; File No. SR–
NYSEAMER–2024–40]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Amend the Connectivity
Fee Schedule
June 25, 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 June 12,
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.
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 regarding
colocation services and fees to provide
Users with wireless connectivity to
additional market data feeds. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
[FR Doc. 2024–14384 Filed 6–28–24; 8:45 am]
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
37 17
PO 00000
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 89, Number 126 (Monday, July 1, 2024)]
[Notices]
[Pages 54616-54621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14384]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100425; File No. SR-NYSENAT-2024-20]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Connectivity Fee Schedule
June 25, 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 June 12, 2024, NYSE National, Inc. (``NYSE National'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Connectivity Fee Schedule (``Fee
Schedule'') regarding colocation services and fees to provide Users
with wireless connectivity to additional market data feeds. The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule regarding
colocation services and fees to provide Users \4\ with wireless
connectivity to additional market data feeds.
---------------------------------------------------------------------------
\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. 83351 (May 31, 2018), 83 FR 26314 at n.9
(June 6, 2018) (SR-NYSENAT-2018-07). 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 Chicago, 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-2024-37, SR-NYSEAMER-2024-40, SR-NYSEARCA-2024-
54, and SR-NYSECHX-2024-24.
---------------------------------------------------------------------------
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''), and wired
[[Page 54617]]
connections to more than 45 market data feeds or combinations of
feeds.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 99810 (March 20,
2024), 89 FR 21050 (March 26, 2024) (SR-NYSENAT-2024-09).
---------------------------------------------------------------------------
The Exchange proposes to add to the Fee Schedule wireless
connections (``Connectivity'') to four additional market data feeds
(together, the ``Proposed Third Party Data''):
MIAX Pearl Equities Depth of Market Feed (``MIAX
DoM''),\6\
---------------------------------------------------------------------------
\6\ As described by MIAX PEARL, LCC, ``[t]he [MIAX] DoM feed is
a data feed that contains the displayed price and size of each order
entered on MIAX PEARL Equities, as well as order execution
information, order cancellations, order modifications, order
identification numbers, and administrative messages.'' Securities
Exchange Act Release No. 91073 (February 5, 2021), 86 FR 9096, 9100
(February 11, 2021) (SR-PEARL-2021-02).
---------------------------------------------------------------------------
Nasdaq BX TotalView-ITCH FPGA,\7\
---------------------------------------------------------------------------
\7\ The difference between the Nasdaq BX TotalView feed and the
Nasdaq BX TotalView-ITCH feed, which is part of the Existing Third
Party Data, is the delivery mechanism: the data is the same. As
described by Nasdaq BX, Inc., ``BX TotalView is a real-time market
data product that provides full order depth using a series of order
messages to track the life of customer orders in the BX market, as
well as trade data for BX executions and administrative messages
such as Trading Action messages, Symbol Directory, and Event Control
messages.'' Securities Exchange Act Release No. 98158 (August 17,
2023), 88 FR 57505 (August 23, 2023) (SR-BX-2023-020), at 57506.
---------------------------------------------------------------------------
Nasdaq PSX TotalView, and
Nasdaq PSX TotalView-ITCH FPGA.\8\
---------------------------------------------------------------------------
\8\ According to Nasdaq PHLX LLC, ``PSX TotalView is a real-time
market data product that provides full order depth using a series of
order messages to track the life of customer orders in the PSX
market, as well as trade data for PSX executions and administrative
messages such as Trading Action messages, Symbol Directory, and
Event Control messages.'' Securities Exchange Act Release No. 95195
(August 21, 2023), 88 FR 58324 (August 25, 2023) (SR-Phlx-2023-37),
at 58325. The difference between the two PSX TotalView feeds is the
delivery mechanism: the data is the same. Id.
---------------------------------------------------------------------------
As with most other Existing Third Party Data,\9\ the monthly charge
for Connectivity to Proposed Third Party Data would be subject to a 30-
day testing period, during which the monthly charge per connection
would be waived. Consistent with that fact, the Exchange proposes to
amend the Fee Schedule to clarify that this provision is applicable to
Connectivity to the Proposed Third Party Data.
---------------------------------------------------------------------------
\9\ See 83 FR 26314, supra note 4, at 26319-20.
---------------------------------------------------------------------------
Users would be offered Connectivity to Proposed Third Party Data
through connections into the colocation center in the Mahwah, New
Jersey data center (``MDC'').\10\
---------------------------------------------------------------------------
\10\ 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 services 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 services.
---------------------------------------------------------------------------
The Exchange expects that the proposed Connectivity to Proposed
Third Party Data would become operative during 2024. The Exchange will
announce the date or dates that Connectivity to Proposed Third Party
Data will be available through a customer notice.
The Exchange proposes to add the following to the Fee Schedule to
reflect fees for Connectivity to Proposed Third Party Data:
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
Wireless Connection for Third Wireless $5,000 per connection
Party Data. connection of initial charge plus
MIAX Pearl monthly charge per
Equities Depth connection of
of Market Feed $6,000.
(DoM) data. Fees are subject to a
30-day testing
period, during which
the monthly charge
per connection is
waived.
Wireless Connection for Third Wireless $5,000 per connection
Party Data. connection of initial charge plus
Nasdaq BX monthly charge per
TotalView-ITCH connection of
FPGA data. $7,500.
Fees are subject to a
30-day testing
period, during which
the monthly charge
per connection is
waived.
Wireless Connection for Third Wireless $5,000 per connection
Party Data. connection of initial charge plus
Nasdaq PSX monthly charge per
TotalView data. connection of
$6,000.
Fees are subject to a
30-day testing
period, during which
the monthly charge
per connection is
waived.
Wireless Connection for Third Wireless $5,000 per connection
Party Data. connection of initial charge plus
Nasdaq PSX monthly charge per
TotalView-ITCH connection of
FPGA data. $7,500.
Fees are subject to a
30-day testing
period, during which
the monthly charge
per connection is
waived.
------------------------------------------------------------------------
Each proposed Connectivity service 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 Proposed Third Party Data, as one would not be
needed.\11\ Rather, the User would be able to connect to Proposed Third
Party Data using the same port that it already had, as a User would
only require one port to connect to the Proposed Third Party Data and
Single Port Third Party Data, irrespective of how many of the wireless
connections it orders.
---------------------------------------------------------------------------
\11\ Similarly, if a User connected to Proposed Third Party 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 83 FR 26314, supra note 4, at 26319-20, and Securities Act
Release No. 98966 (November 16, 2023), 88 FR 81476 (November 22,
2023) (SR-NYSENAT-2023-26).
---------------------------------------------------------------------------
To receive a market data feed in the Proposed Third Party 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. If a User were to purchase more than one
wireless connection to Proposed Third Party Data, it would pay more
than one non-recurring initial charge.
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 is completely voluntary and the Fee Schedule is applied
uniformly to all Users.
The Connectivity to Proposed Third Party Data was requested by
Users, but the Exchange believes that it would obtain less than a
handful of new customers due to the proposed change.
[[Page 54618]]
Competitive Environment
The Exchange operates in a highly competitive market in which other
vendors offer colocation services as a means to facilitate the trading
and other market activities of those market participants who believe
that colocation enhances the efficiency of their operations. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. Specifically, in Regulation NMS, the
Commission highlighted the importance of market forces in determining
prices and SRO revenues and, also, recognized that current regulation
of the market system ``has been remarkably successful in promoting
market competition in its broader forms that are most important to
investors and listed companies.'' \12\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
As explained below in this filing, the Exchange's proposed
Connectivity to Proposed Third Party Data would compete with the
wireless connections provided by at least two third parties. Third-
party vendors are not at any competitive disadvantage created by the
Exchange.
The proposed change is not otherwise intended to address any other
issues relating to colocation services or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\14\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange further believes
that the proposed rule change is consistent with Section 6(b)(4) of the
Act,\15\ because it provides for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and other
persons using its facilities and does not unfairly discriminate between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Proposed Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the
Commission's market-based test considers ``whether the exchange was
subject to significant competitive forces in setting the terms of its
proposal . . . , including the level of any fees.'' \16\ If the
Exchange meets that burden, ``the Commission will find that its
proposal is consistent with the Act unless `there is a substantial
countervailing basis to find that the terms' of the proposal violate
the Act or the rules thereunder.'' \17\ Here, the Exchange is subject
to significant competitive forces in setting the terms on which it
offers its proposal, in particular because substantially similar
substitutes are available, and the Exchange has not placed the third
party vendors at a competitive disadvantage created by the Exchange.
---------------------------------------------------------------------------
\16\ See Securities Exchange Act Release No. 90209 (October 15,
2020), 85 FR 67044, 67049 (October 21, 2020) (Order Granting
Accelerated Approval to Establish a Wireless Fee Schedule Setting
Forth Available Wireless Bandwidth Connections and Wireless Market
Data Connections) (SR-NYSE-2020-05, SR-NYSEAMER-2020-05, SR-
NYSEARCA-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-03, SR-NYSE-
2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-NYSECHX-2020-
05, SR-NYSENAT-2020-08) (``Wireless Approval Order''), citing
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR
74770, 74781 (December 9, 2008) (``2008 ArcaBook Approval Order'').
See NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\17\ See Wireless Approval Order, supra note 16, at 67049,
citing 2008 ArcaBook Approval Order, supra note 16, at 74781.
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Substantially Similar Substitutes Are Available
The Exchange's proposed Connectivity to Proposed Third Party Data
would compete with other methods by which both the Exchange and various
third parties already provide, or could provide, Users with
connectivity to the Proposed Third Party Data.
At least two telecoms provide wireless connectivity in the MDC. A
User could use such connectivity to connect to the Proposed Third Party
Data. The Exchange believes that these wireless connections are at a
same or similar speed as the Exchange's proposed Connectivity, and at a
similar price.\18\
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\18\ Because the telecoms are not regulated entities, they are
not obligated to make its latency figures or fees publicly available
or the same for all entities.
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Accordingly, the wireless connections would compete with the
Exchange's proposed Connectivity and would exert significant
competitive forces on the Exchange in setting the terms of its
proposal, including the level of the Exchange's proposed fees.\19\ If
the Exchange were to set its proposed fees too high, Users could
respond by instead selecting the telecoms' substantially similar
wireless connectivity.\20\
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\19\ See 2008 ArcaBook Approval Order, supra note 16, at 74789
and n.295 (recognizing that products need not be identical to be
substitutable).
\20\ In addition, the Exchange believes that at least three
third-party market participants, as well as FIDS, offer fiber
connections to the Proposed Third Party Data in colocation. See 83
FR 26314, supra note 4, at 26323.
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Third Party Competitors Are Not at a Competitive Disadvantage Created
by the Exchange
The Exchange does not believe that FIDS would have any competitive
advantage over either the existing third-party telecom connections or
any future providers of wireless connectivity to Proposed Third Party
Data. The Exchange's proposed service for connectivity to Proposed
Third Party Data does not have any special access to or advantage
within the MDC. More specifically, the Exchange's proposed wireless
connection would lead to the data center pole, from which a fiber
connection would lead into the MDC. The data center pole is on the
grounds of the MDC, but pursuant to Exchange rule, the distance from
such pole to the patch panel where fiber connections for wireless
services connect to the network row in the space used for co-location
in the MDC (the ``Patch Panel Point'') is normalized.\21\
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\21\ See NYSE Rule 3.13, NYSE American Rule 3.13E, NYSE Arca
Rule 3.13, NYSE Chicago Rule 3.13, and NYSE National Rule 3.13 (Data
Center Pole Restrictions--Connectivity to Co-Location Space)
(placing restrictions on use of the data center pole designed to
address any advantage that the wireless connections have by virtue
of a data center pole).
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Exchange rules also require that the distance from the Patch Panel
Point to each User cabinet in colocation be the same.\22\ Further, all
distances in the MDC are normalized. Every provider of wireless
connectivity to Users, including FIDS, is connected to the Patch Panel
Point, and the length of the fiber path from the Patch Panel Point to
[[Page 54619]]
each User cabinet in colocation is the same.
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\22\ See id.
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Nor does the Exchange have a competitive advantage over any third-
party competitors offering wireless connectivity to the Proposed Third
Party Data by virtue of the fact that it owns and operates the MDC's
meet-me-rooms. Users purchasing wireless connectivity to the Proposed
Third Party Data--like Users of any other colocation service--would
require a circuit connecting out of the MDC, and in most cases, such
circuits are provided by third-party telecommunications service
providers that have installed their equipment in the MDC's two meet-me-
rooms (``Telecoms'').\23\ Currently, 16 Telecoms operate in the meet-
me-rooms and provide a variety of circuit choices. It is in the
Exchange's best interest to set the fees that Telecoms pay to operate
in the meet-me-rooms at a reasonable level \24\ so that market
participants, including Telecoms, will maximize their use of the MDC.
By setting the meet-me-room fees at a reasonable level, the Exchange
encourages Telecoms to participate in the meet-me-rooms and to sell
circuits to Users for connecting into and out of the MDC. These
Telecoms then compete with each other by pricing such circuits at
competitive rates. These competitive rates for circuits help draw in
more Users and Hosted Customers to the MDC, which directly benefits the
Exchange by increasing the customer base to whom the Exchange can sell
its colocation services, which include cabinets, power, ports, and
connectivity to many third-party data feeds, and because having more
Users and Hosted Customers leads, in many cases, to greater
participation on the Exchange. In this way, by setting the meet-me-room
fees at a level attractive to telecommunications firms, the Exchange
spurs demand for all of the services it sells at the MDC, while setting
the meet-me-room fees too high would negatively affect the Exchange's
ability to sell its services at the MDC.\25\ Accordingly, there are
real constraints on the meet-me-room fees the Exchange charges, such
that the Exchange does not have an 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.
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\23\ Note that in the case of wireless connectivity, a User in
colocation still requires a fiber circuit to transport data. If a
Telecom is used, the data is transmitted wirelessly to the relevant
pole, and then from the pole to the meet-me-room using a fiber
circuit.
\24\ See Securities Exchange Act Release No. 98002 (July 26,
2023), 88 FR 50232 (August 1, 2023) (SR-NYSENAT-2023-12) (``MMR
Notice'').
\25\ See id. at 50235. Importantly, the Exchange is prevented
from making any alteration to its meet-me-room services or fees
without filing a proposal for such changes with the Commission.
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If anything, the Exchange would be subject to a competitive
disadvantage vis-[agrave]-vis third-party competitors offering wireless
connectivity to the Proposed Third Party 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.
In sum, because the Exchange is subject to significant competitive
forces in setting the terms on which it offers its proposal, in
particular because a substantially similar substitute is available, and
the Exchange has not placed third-party vendors at a competitive
disadvantage created by the Exchange, the proposed fees for the
Exchange's Connectivity to Proposed Third Party Data are
reasonable.\26\ If the Exchange were to set its prices for Connectivity
to Proposed Third Party Data at a level that Users found to be too
high, Users could easily choose to connect to Proposed Third Party Data
in colocation at the MDC through the competing wireless connections, as
detailed above.
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\26\ See Wireless Approval Order, supra note 16.
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Additional Considerations
The Exchange believes that it is reasonable to add text to the Fee
Schedule indicating that the monthly charge for the proposed
Connectivity is subject to a 30-day testing period, during which the
monthly charge per connection would be waived. The change would clarify
that the terms on which the Connectivity to Proposed Third Party Data
is offered are the same as those of most connections to Existing Third
Party Data.
The Exchange believes it is reasonable that if a User already had a
port for Single Port Third Party Data, it would not receive an
additional port for the Proposed Third Party Data. In such a case, no
additional port would be needed, as the User would be able to connect
to Proposed Third Party Data using the port it already had. Similarly,
the Exchange believes it is reasonable that if a User connected to
Proposed Third Party 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. This is because a User would
only require one port to connect to Proposed Third Party Data and
Single Port Third Party Data, irrespective of how many of the wireless
connections it orders.
The Proposed Change Is an Equitable Allocation of Fees and Credits
The Exchange believes that its proposal equitably allocates its
fees among Users. Without this proposed rule change, Users would have
fewer options for connectivity to Proposed Third Party Data. The
proposed change would provide Users with an additional choice with
respect to the form and optimal latency of the connectivity they use to
receive Proposed Third Party Data, allowing a User to select the
connectivity that better suits its needs, helping it tailor its
colocation operations to the requirements of its business operations.
Users that do not opt to utilize the Exchange's proposed wireless
Connectivity would still be able to connect to Proposed Third Party
Data wirelessly using third party wireless connections.
The Exchange believes that the proposed change is equitable because
it will result in fees being charged only to Users that voluntarily
select to receive the corresponding services and because those services
will be available to all Users. Furthermore, the Exchange believes that
the services and fees proposed herein are equitably allocated because,
in addition to the services being completely voluntary, they are
available to all Users on an equal basis (i.e., the same products and
services are available to all Users). All Users that voluntarily select
the Exchange's proposed Connectivity to Proposed Third Party Data would
be charged the same amount for the same services.
The Exchange believes it is equitable that if a User already had a
port for Single Port Third Party Data, it would not receive an
additional port for the Proposed Third Party Data. Similarly, the
Exchange believes it is equitable that if a User connected to Proposed
Third Party 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. This is because a User would only
require one port to connect to Proposed Third Party Data and Single
Port Third Party Data, irrespective of how many of the wireless
connections it orders.
The Proposed Change Is Not Unfairly Discriminatory
The Exchange believes that the proposed rule change is not unfairly
[[Page 54620]]
discriminatory, for the following reasons.
Without this proposed rule change, Users would have fewer options
for Connectivity to Proposed Third Party Data. The proposed change
would provide Users with an additional choice with respect to the form
and optimal latency of the connectivity they use to receive Proposed
Third Party Data, allowing a User to select the connectivity that
better suits its needs, helping it tailor its colocation operations to
the requirements of its business operations. Users that do not opt to
utilize the Exchange's proposed wireless Connectivity would still be
able to connect to Proposed Third Party Data wirelessly using third
party wireless connections.
The Exchange believes that the proposed change is not unfairly
discriminatory because it will result in fees being charged only to
Users that voluntarily select to receive the corresponding services and
because those services will be available to all Users. Furthermore, the
Exchange believes that the services and fees proposed herein are not
unfairly discriminatory because, in addition to the services being
completely voluntary, they are available to all Users on an equal basis
(i.e., the same products and services are available to all Users). All
Users that voluntarily select the Exchange's proposed Connectivity to
Proposed Third Party Data would be charged the same amount for the same
services.
The Exchange believes it is not unfairly discriminatory that if a
User already had a port for Single Port Third Party Data, it would not
receive an additional port for the Proposed Third Party Data.
Similarly, the Exchange believes that it is not unfairly discriminatory
that if a User connected to Proposed Third Party 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.
This is because a User would only require one port to connect to
Proposed Third Party Data and Single Port Third Party Data,
irrespective of how many of the wireless connections it orders.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposal will not impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of Section 6(b)(8) of the Act.\27\
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\27\ 15 U.S.C. 78f(b)(8).
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The proposed change would not affect competition among national
securities exchanges or among members of the Exchange, but rather
between FIDS and its commercial competitors. The proposed wireless
Connectivity would provide Users with an alternative means of
connectivity to Proposed Third Party Data. The proposed change would
provide Users with an additional choice with respect to the form and
optimal latency of the connectivity they use to receive Proposed Third
Party Data, allowing a User to select the connectivity that better
suits its needs, helping it tailor its colocation operations to the
requirements of its business operations.
Users that do not opt to utilize the Exchange's proposed wireless
Connectivity would still be able to connect to Proposed Third Party
Data wirelessly using third party wireless connections.
The Exchange does not believe that FIDS would have any competitive
advantage over either the existing third-party telecom connections or
any future providers of wireless connectivity to Proposed Third Party
Data. The proposed Connectivity to Proposed Third Party Data does not
have any special access to or advantage within the MDC. More
specifically, the Exchange's proposed wireless connection would lead to
the data center pole, from which a fiber connection would lead into the
MDC. The data center pole is on the grounds of the MDC, but pursuant to
Exchange rule, the distance from such pole to the Patch Panel Point is
normalized.\28\ Exchange rules also require that the distance from the
Patch Panel Point to each User cabinet in colocation be the same.\29\
Further, all distances in the MDC are normalized. Every provider of
wireless connectivity to Users, including FIDS, is connected to the
Patch Panel Point, and the length of the fiber path from the Patch
Panel Point to each User cabinet in colocation is the same.
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\28\ See supra note 21.
\29\ See id.
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Adding text to the Fee Schedule indicating that the monthly charge
for Connectivity to the Proposed Third Party Data is subject to a 30-
day testing period, during which the monthly charge per connection
would be waived, is not designed to address any competitive issues, but
rather to enhance the clarity and transparency of the Fee Schedule and
alleviate possible customer confusion that may arise. Nor does the
Exchange have a competitive advantage over any third-party competitors
offering wireless connectivity to the Proposed Third Party Data by
virtue of the fact that it owns and operates the MDC's meet-me-rooms.
Users purchasing wireless connectivity to the Proposed Third Party
Data--like Users of any other colocation service--would require a
circuit connecting out of the MDC, and in most cases, such circuits are
provided by third-party Telecoms.\30\ Currently, 16 Telecoms operate in
the meet-me-rooms and provide a variety of circuit choices. It is in
the Exchange's best interest to set the fees that Telecoms pay to
operate in the meet-me-rooms at a reasonable level \31\ so that market
participants, including Telecoms, will maximize their use of the MDC.
By setting the meet-me-room fees at a reasonable level, the Exchange
encourages Telecoms to participate in the meet-me-rooms and to sell
circuits to Users for connecting into and out of the MDC. These
Telecoms then compete with each other by pricing such circuits at
competitive rates. These competitive rates for circuits help draw in
more Users and Hosted Customers to the MDC, which directly benefits the
Exchange by increasing the customer base to whom the Exchange can sell
its colocation services, which include cabinets, power, ports, and
connectivity to many third-party data feeds, and because having more
Users and Hosted Customers leads, in many cases, to greater
participation on the Exchange. In this way, by setting the meet-me-room
fees at a level attractive to telecommunications firms, the Exchange
spurs demand for all of the services it sells at the MDC, while setting
the meet-me-room fees too high would negatively affect the Exchange's
ability to sell its services at the MDC.\32\ Accordingly, there are
real constraints on the meet-me-room fees the Exchange charges, such
that the Exchange does not have an 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.
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\30\ See supra note 23.
\31\ See MMR Notice, supra note 24.
\32\ See id. at 50235.
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If anything, the Exchange would be subject to a competitive
disadvantage vis-[agrave]-vis third-party competitors offering wireless
connectivity to the Proposed Third Party 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,
[[Page 54621]]
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.
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\
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\33\ 15 U.S.C. 78s(b)(3)(A)(iii).
\34\ 17 CFR 240.19b-4(f)(6).
\35\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of 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 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.
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\36\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSENAT-2024-20 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSENAT-2024-20. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSENAT-2024-20 and should
be submitted on or before July 22, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14384 Filed 6-28-24; 8:45 am]
BILLING CODE 8011-01-P
