Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for Its Expanded Co-Location Services, 82649-82652 [2024-23529]

Download as PDF Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices 10. Docket No(s).: MC2025–34 and K2025–33; Filing Title: Priority Mail Express, Priority Mail & USPS Ground Advantage Contract 442 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 4, 2024; Filing Authority: 39 U.S.C. 3642, 39 CFR 3035.105, and 39 CFR 3041.310; Public Representative: Jana Slovinska; Comments Due: October 15, 2024. 11. Docket No(s).: MC2025–35 and K2025–34; Filing Title: Priority Mail Express, Priority Mail & USPS Ground Advantage Contract 443 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 4, 2024; Filing Authority: 39 U.S.C. 3642, 39 CFR 3035.105, and 39 CFR 3041.310; Public Representative: Gregory S. Stanton; Comments Due: October 15, 2024. II. Summary of Proceeding(s) None. See Section II for public proceedings. This Notice will be published in the Federal Register. Erica A. Barker, Secretary. [FR Doc. 2024–23584 Filed 10–10–24; 8:45 am] BILLING CODE 7710–FW–P [Release No. 34–101262; File No. SR– GEMX–2024–36] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for Its Expanded Co-Location Services ddrumheller on DSK120RN23PROD with NOTICES1 October 7, 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 September 24, 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. 1. Purpose The Exchange filed a proposal to expand its co-location services by offering new cabinet, power, and power distribution unit options in the Exchange’s expanded data center.3 As described in that filing, the Exchange’s current data center (‘‘NY11’’) in Carteret, NJ is undergoing an expansion (‘‘NY11–4’’) in response to demand for power and cabinets. The purpose of this proposed rule change is to establish fees for the expanded co-location services. Specifically, the Exchange proposes to establish (i) a monthly fee for Ultra High Density Cabinets, (ii) an installation fee for cabinets in NY11–4, (iii) fees for power installation in NY11–4, and (iv) fees for power distribution unit options in NY11–4. Ultra High Density Cabinet Currently, co-location customers have the option of obtaining cabinets of various sizes and power densities. Colocation customers may obtain a Half 3 Securities Exchange Act Release No. 34–101074 (September 5, 2024), 89 FR 77920 (September 24, 2024) (SR–GEMX–2024–34). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 17:15 Oct 10, 2024 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 SECURITIES AND EXCHANGE COMMISSION VerDate Sep<11>2014 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to a proposal to establish fees for its expanded colocation services, as described further below. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on October 7, 2024. 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. Jkt 265001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 82649 Cabinet,4 a Low Density Cabinet with power density less than or equal to 2.88 kilowatts (‘‘kW’’), a Medium Density Cabinet with power density greater than 2.88 kW and less than or equal to 5 kW, a Medium-High Density Cabinet with power density greater than 5 kW and less than or equal to 7 kW, a High Density Cabinet with power density greater than 7 kW and less than 10 kW, and a Super High Density Cabinet with power density greater than 10 kW and less than or equal to 17.3 kW. The Exchange filed a proposal to introduce a new cabinet choice in NY11–4, an ‘‘Ultra High Density Cabinet,’’ with power density greater than 10 kW and less than or equal to 15 kW.5 The Ultra High Density Cabinet option will only be offered in NY11–4 because of the power configuration necessary for such cabinets, which is not possible or available in other portions of the data center due to different power distribution.6 In addition to the Ultra High Density Cabinet, the Exchange will offer the other, existing cabinet options in NY11– 4, with the exception of the Low Density Cabinet and Half Cabinet due to a lack of demand for such cabinets. The ongoing monthly fees for the Super High Density Cabinet, High Density Cabinet, Medium-High Density Cabinet, and Medium Density Cabinet are the same in NY11 and NY11–4 and the Exchange is not proposing to modify such fees. The Exchange proposes to establish an ongoing monthly fee of $7,230 for the Ultra High Density Cabinets. To effectuate this change, the Exchange proposes to add the $7,230 ongoing monthly fee for Ultra High Density Cabinets to its fee schedule in General 8, Section 1(a). The Exchange notes that the proposed fee amount falls between the $4,748 ongoing monthly fee charged for High Density Cabinets and the $8,440 ongoing monthly fee charged for Super High Density Cabinets. Furthermore, the proposed fee is consistent with the existing ongoing monthly cabinet fees on a per kW basis. The existing monthly cabinet fees range from approximately $475 per kW to $916 per kW, while the proposed ongoing monthly cabinet fee for the Ultra High Density Cabinet ranges from approximately $482 per kW (at the high end of the power density range for Ultra High Density Cabinets) to $723 per kW 4 Half cabinets are not available to new subscribers. See General 8, Section 1(a). 5 Supra note 3. 6 Because of the addition of the Ultra High Density Cabinet option in NY11–4, the Super High Density Cabinet in NY11–4 will have power density greater than 15 kW and less than or equal to 17.3 kW. E:\FR\FM\11OCN1.SGM 11OCN1 82650 Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices (at the low end of the power density range for Ultra High Density Cabinets). Installation Fee for Cabinets in NY11–4 The Exchange proposes to establish a cabinet installation fee of $5,940 for all cabinets in NY11–4. To effectuate this change, the Exchange proposes to add the proposed $5,940 installation fee to its fee schedule in General 8, Section 1(a) for Super High Density Cabinets, Ultra High Density Cabinets, High Density Cabinets, Medium-High Density Cabinets, and Medium Density Cabinets in NY11–4. In the existing data halls, customers may bring their own cabinets or use Exchange-provided cabinets. In NY11–4, because of the cooling system (hot aisle containment),7 all cabinets must be uniform and therefore, the Exchange will provide all cabinets, the cost of which is included in the $5,940 installation fee.8 The cabinets in NY11– 4 include certain features not included in cabinets provided by the Exchange in the existing data halls. Specifically, the cabinets in NY11–4 include uniform, wider cabinets (32″ W x 48″ D x 91″ H), cable management, and a rear split door and combo lock. In addition, the proposed installation fee of $5,940 is comparable to fees charged for similar products.9 ddrumheller on DSK120RN23PROD with NOTICES1 Installation Fee for Cabinet Power in NY11–4 The cabinet power options for NY11– 4 include: Phase 1 20 amp 240 volt, Phase 1 32 amp 240 volt, Phase 1 40 amp 240 volt, Phase 3 20 amp 415 volt, and Phase 3 32 amp 415 volt. These cabinet power options are specific to NY11–4 and one of these options must be selected for cabinets in NY11–4. The Exchange proposes to establish an installation fee of $3,600 for Phase 1 cabinet power options in NY11–4 and an installation fee of $4,560 for Phase 3 cabinet power options in NY11–4. To effectuate this change, the Exchange proposes to add the proposed fees to its fee schedule in General 8, Section 1(c). The Exchange also proposes not to charge an ongoing monthly fee for the cabinet power options in NY11–4 and update the fee schedule accordingly. For NY11–4, the data center operator is bringing in these higher voltage power options and is likely to experience 7 The existing data halls utilize cold aisle containment to manage temperatures. Hot aisle containment is a more effective way to manage heat in the data center. 8 In contrast, to the extent customers provide their own cabinets in NY11, there is an additional outof-pocket cost for such cabinets. 9 For example, NYSE charges an initial $5,000 fee for dedicated cabinets. See https://www.nyse.com/ publicdocs/Wireless_Connectivity_Fees_and_ Charges.pdf. VerDate Sep<11>2014 17:15 Oct 10, 2024 Jkt 265001 increased power distribution efficiencies across the data center. The proposed power installation fees are higher in NY11–4 as compared to the existing data halls as the installation of the higher voltage power options costs more to the Exchange and is considered a premium product due to anticipated operational efficiencies.10 As between the Phase 1 and Phase 3 power options, the Phase 3 options provide a more efficient power source. Fees for Power Distribution Unit Options The Exchange will offer power distribution units (‘‘PDUs’’) 11 in NY11– 4 as a convenience to customers. Rather than sourcing PDUs on a customer-bycustomer basis, as the Exchange does for customers in NY11, the Exchange will offer Phase 1 and Phase 3 12 power distribution units in NY11–4. The Exchange proposes to establish a fee of $4,100 for a Phase 1 PDU and $5,260 for a Phase 3 PDU. This service is optional and customers may choose to provide their own PDUs appropriate for their power installation choices. The Exchange notes that, as part of such proposed fees, the Exchange would provide a primary and redundant PDU. As such, the proposed PDU fees covers a pair of PDUs. In addition, customers utilizing a Phase 1 or Phase 3 PDU provided by the Exchange have the ability to upgrade or downgrade between amperage levels without replacing the PDU, by a simple upgrade of the facility cord and a receptacle update.13 A PDU replacement is required when switching between phases/voltage. The Exchange will also offer a switch monitored PDU add on in NY11–4, which would allow customers to connect remotely to their PDU and control the power sockets. With the switch monitored PDU option, customers would be able to power cycle 10 Benefits include future proofing the data hall to allow for increasing power density in the future, requiring less whips to deliver the same amount of amperage, less circuits need to be installed to reach the same power supply, and safety improvements. 11 PDUs are devices fitted with multiple outputs designed to distribute electric power. The standardized PDUs would only be offered for NY11–4. 12 Phase 1 PDUs are compatible with the following power options: Phase 1 20 amp 240 volt, Phase 1 32 amp 240 volt, and Phase 1 40 amp 240 volt. Phase 3 PDUs are compatible with the following power options: Phase 3 20 amp 415 volt and Phase 3 32 amp 415 volt. Phase 1 and Phase 3 are available in NY11 and NY11–4. Phase 3 PDUs provide greater power density than Phase 1 PDUs by delivering power over three wires as opposed to one wire. 13 This functionality may be available with customer-provided PDUs as well and depends on the PDU provided by the customer. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 or shut off power remotely. The Exchange proposes to establish a $2,000 fee for the switch monitored PDU option. This option is optional as well and customers may choose to provide their own switch monitored PDU, if desired. Implementation Although the timing is subject to change,14 the Exchange anticipates opening NY11–4 Exchange access on November 11, 2024 and providing customers access on October 7, 2024. Customer orders will not be fee liable until customers are provided access to the space.15 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,16 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,17 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. The Exchange believes that the proposal to establish a monthly fee for Ultra High Density Cabinets, an installation fee for cabinets in NY11–4, installation fees for power installation in NY11–4, and fees for power distribution unit options in NY11–4 is reasonable. First, the Exchange’s proposal to establish a $7,230 ongoing monthly fee for Ultra High Density Cabinets in NY11–4 is reasonable because it is comparable to the Exchange’s current ongoing monthly fees for cabinets. The proposed fee amount falls between the $4,748 ongoing monthly fee charged for High Density Cabinets and the $8,440 ongoing monthly fee charged for Super High Density Cabinets. Furthermore, the proposed fee is consistent with the existing ongoing monthly cabinet fees on a per kW basis. The existing monthly cabinet fees range from approximately $475 per kW to $916 per kW, while the proposed ongoing monthly cabinet fee for the Ultra High Density Cabinet ranges from approximately $482 per kW (at the high end of the power density 14 The Exchange will announce modifications to the proposed timing via the Nasdaq Customer Portal, which is the web portal used for order and inventory management of colocation services, and email communication to all colocation customers. 15 Charging customers once access is provided is consistent with current practice and allows customers to set up equipment and begin using power. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(4) and (5). E:\FR\FM\11OCN1.SGM 11OCN1 Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices range for Ultra High Density Cabinets) to $723 per kW (at the low end of the power density range for Ultra High Density Cabinets). Second, the Exchange believes that the proposed cabinet installation fee of $5,940 is reasonable as compared to the installation fees in NY11 (of $3,693–$4,748) because the proposed installation fee includes the cabinet itself, which includes certain enhanced features in NY11–4, including uniform, wider cabinets (32″ W x 48″ D x 91″ H), cable management, and a rear split door and combo lock. In contrast, in NY11, customers may choose to provide their own cabinets, incurring an additional cost. Furthermore, the proposed installation fee is comparable to the rate charged by NYSE for a similar product, as described above. Third, the Exchange believes that the power installation fees of $3,600 for Phase 1 power options and $4,560 for Phase 3 power options in NY11–4 are reasonable. As compared to power installation fees in NY11, the proposed rates for NY11–4 are higher because the Exchange will incur increased costs for installation of the higher voltage power options. In addition, the higher voltage power options will provide operational efficiencies for the data hall, as discussed above,18 warranting a higher fee. Finally, the Exchange believes that the proposed fees for PDUs and the PDU add on are reasonable because such fees are consistent with market rates. Furthermore, the Exchange is providing the PDU options as a convenience to customers. No customer is required to purchase any PDU options from the Exchange. Customers may choose to provide their own PDUs and PDU add ons. 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,19 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 18 Supra note 10. are currently 17 exchanges offering options trading services. No single options exchange trades more than 15% 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 July 3, 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. ddrumheller on DSK120RN23PROD with NOTICES1 19 There VerDate Sep<11>2014 17:15 Oct 10, 2024 Jkt 265001 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 these proposed fees can choose to connect to the Exchange through a vendor. In summary, the proposal represents an equitable allocation of reasonable dues, fees and other charges because customers have choices in how they connect to the Exchange, the proposed monthly fee for Ultra High Density Cabinets is comparable to current fees charged by the Exchange for other cabinets, the Exchange will provide uniform cabinets in NY11–4 with special features, the proposed cabinet installation fee is consistent with that of comparable products offered by other providers, the Exchange will incur increased costs for new power installation in NY11–4, higher voltage power options will provide operational efficiencies for the data hall, and PDU options are provided as a convenience to customers and customers may choose to provide their own PDUs. The Exchange believes that the proposed fee changes are not unfairly discriminatory because the cabinet, power, and PDU fees for NY11–4 are available to and assessed uniformly across all market participants. In addition, all customers have the choice of whether and how to connect to the Exchange. 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 Ultra High Density Cabinets, cabinet power options, and PDU optionality in NY11–4 are available to any customer PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 82651 under the same fees as any other customer, and any customer that wishes to order cabinets, power and PDUs in NY11–4 can do so on a nondiscriminatory 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.20 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– GEMX–2024–36 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–2024–36. 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 20 15 E:\FR\FM\11OCN1.SGM U.S.C. 78s(b)(3)(A)(ii). 11OCN1 82652 Federal Register / Vol. 89, No. 198 / Friday, October 11, 2024 / Notices 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–GEMX–2024–36 and should be submitted on or before November 1, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–23529 Filed 10–10–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–101271; File No. SR– NASDAQ–2024–029] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To Modify the Application of Bid Price Compliance Periods ddrumheller on DSK120RN23PROD with NOTICES1 October 7, 2024. I. Introduction On June 21, 2024, The Nasdaq Stock Market LLC (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to modify the application of the bid price compliance periods where a listed company takes an action to achieve compliance with the bid price requirement and that action causes non21 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:15 Oct 10, 2024 Jkt 265001 compliance with another listing requirement. The proposed rule change was published for comment in the Federal Register on July 9, 2024.3 On August 21, 2024, pursuant to Section 19(b)(2) of the Exchange Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On October 3, 2024, the Exchange filed Amendment No. 2 6 to the proposed rule change.7 This order approves the proposed rule change, as modified by Amendment No. 2. II. Description of the Proposed Rule Change, as Modified by Amendment No. 2 The Exchange is proposing to amend Rule 5810(c)(3)(A) to modify the application of the bid price compliance periods where a listed company takes an action to achieve compliance with the $1.00 minimum bid price continued listing requirement 8 (the ‘‘Bid Price Requirement’’) and that action causes non-compliance with another listing requirement.9 3 See Securities Exchange Act Release No. 100461 (July 3, 2024), 89 FR 56457 (‘‘Notice’’). Comments received on the Notice are available on the Commission’s website at: https://www.sec.gov/ comments/sr-nasdaq-2024-029/ srnasdaq2024029.htm. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 100791, 89 FR 68671 (Aug. 27, 2024) (designating October 7, 2024 as the date by which the Commission shall either approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change). 6 Amendment No. 1 to the proposed rule change was submitted on September 27, 2024, and it was subsequently withdrawn on October 3, 2024. 7 In Amendment No. 2, the Exchange (1) clarified the application of Rule 5810(c)(3)(H) in extending the ten consecutive day compliance period for regaining compliance with the minimum bid price requirement, (2) clarified that the failure to satisfy the requirements during the compliance period(s) applicable to the initial bid price deficiency will result in the issuance of a Staff Delisting Determination Letter, and (3) made other technical and non-substantive changes for readability. Because Amendment No. 2 does not materially alter the substance of the proposed rule change and makes clarifying modifications, Amendment No. 2 is not subject to notice and comment. The full text of Amendment No. 2 can be found on the Commission’s website at: https://www.sec.gov/ comments/sr-nasdaq-2024-029/srnasdaq2024029526675-1511382.pdf. 8 The Exchange states that each tier of Nasdaq listed securities includes a requirement that specified securities maintain a $1.00 minimum bid price. See Notice, supra note 3, at 56457, n.3 (citing to Rule 5550(a)(2) (Primary Equity Security listed on the Nasdaq Capital Market) and Rule 5450(a)(1) (Primary Equity Security listed on the Nasdaq Global or Global Select Markets). 9 Rule 5810(c)(3)(A) states: ‘‘A failure to meet the continued listing requirement for minimum bid price shall be determined to exist only if the PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 The Exchange states that listed companies may effect a reverse stock split 10 to regain compliance with the Bid Price Requirement. According to the Exchange, the reduction in the number of shares caused by the reverse stock split results in a proportional reduction in the number of Publicly Held Shares 11 and depending on how fractional shares are treated, may also reduce the number of holders of the company’s securities.12 As a result, the Exchange states that a reverse stock split used to regain compliance with the Bid Price Requirement may result in the company’s non-compliance with other Exchange listing rules that require a certain number of holders and Publicly Held Shares.13 Upon a company’s failure to satisfy the applicable holder or number of Publicly Held Shares requirement, Rule 5810(c)(2)(A) generally allows the company a 45calendar day period to provide a plan to regain compliance to Nasdaq staff and Rule 5810(c)(2)(B) generally provides that Nasdaq staff may grant an extension of up to 180 calendar days for the company to achieve compliance.14 Currently, a company that regains compliance with the Bid Price Requirement by taking a corporate action (e.g., a reverse stock split) that results in the company’s security falling below the numeric threshold for another Exchange listing requirement could be deficiency continues for a period of 30 consecutive business days. Upon such failure, the Company shall be notified promptly and shall have a period of 180 calendar days from such notification to achieve compliance. Compliance can be achieved during any compliance period by meeting the applicable standard for a minimum of 10 consecutive business days during the applicable compliance period, unless Staff exercises its discretion to extend this 10 day period as discussed in Rule 5810(c)(3)(H).’’ Rules 5810(c)(3)(A)(i) and (ii) also provide an additional 180 day compliance period for companies listed on Capital Markets, or Global Select or Global Market that transfer to Capital Markets, that are not in compliance with the bid price requirement prior to expiration of the first 180 day compliance period if certain requirements are met. 10 The Exchange states that reverse stock splits have the effect of increasing a company’s stock price by consolidating the outstanding shares. See Notice, supra note 3, at 56457. 11 Rule 5005(a)(35) defines ‘‘Publicly Held Shares’’ as: ‘‘shares not held directly or indirectly by an officer, director or any person who is the beneficial owner of more than 10 percent of the total shares outstanding.’’ See also e.g., Rules 5550(a)(3) and (4) (requiring 300 public holders and at least 500,000 Publicly Held Shares for Primary Equity Securities listed on the Nasdaq Capital Market) and Rules 5450(a)(2), 5450(b)(1)(B), 5450(b)(2)(B) and 5450(b)(3)(B) (requiring 400 total holders and, depending on other characteristics of the company, either 750,000 or 1.1 million Publicly Held Shares for Primary Equity Securities listed on the Nasdaq Global Market). 12 See Notice, supra note 3, at 56457. 13 See id. 14 See id. at 56457, n.5. E:\FR\FM\11OCN1.SGM 11OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 89, Number 198 (Friday, October 11, 2024)]
[Notices]
[Pages 82649-82652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23529]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101262; File No. SR-GEMX-2024-36]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Establish Fees 
for Its Expanded Co-Location Services

October 7, 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 September 24, 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 a proposal to establish fees for its 
expanded co-location services, as described further below.
    While these amendments are effective upon filing, the Exchange has 
designated the proposed amendments to be operative on October 7, 2024.
    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 Exchange filed a proposal to expand its co-location services by 
offering new cabinet, power, and power distribution unit options in the 
Exchange's expanded data center.\3\ As described in that filing, the 
Exchange's current data center (``NY11'') in Carteret, NJ is undergoing 
an expansion (``NY11-4'') in response to demand for power and cabinets. 
The purpose of this proposed rule change is to establish fees for the 
expanded co-location services. Specifically, the Exchange proposes to 
establish (i) a monthly fee for Ultra High Density Cabinets, (ii) an 
installation fee for cabinets in NY11-4, (iii) fees for power 
installation in NY11-4, and (iv) fees for power distribution unit 
options in NY11-4.
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    \3\ Securities Exchange Act Release No. 34-101074 (September 5, 
2024), 89 FR 77920 (September 24, 2024) (SR-GEMX-2024-34).
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Ultra High Density Cabinet
    Currently, co-location customers have the option of obtaining 
cabinets of various sizes and power densities. Co-location customers 
may obtain a Half Cabinet,\4\ a Low Density Cabinet with power density 
less than or equal to 2.88 kilowatts (``kW''), a Medium Density Cabinet 
with power density greater than 2.88 kW and less than or equal to 5 kW, 
a Medium-High Density Cabinet with power density greater than 5 kW and 
less than or equal to 7 kW, a High Density Cabinet with power density 
greater than 7 kW and less than 10 kW, and a Super High Density Cabinet 
with power density greater than 10 kW and less than or equal to 17.3 
kW.
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    \4\ Half cabinets are not available to new subscribers. See 
General 8, Section 1(a).
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    The Exchange filed a proposal to introduce a new cabinet choice in 
NY11-4, an ``Ultra High Density Cabinet,'' with power density greater 
than 10 kW and less than or equal to 15 kW.\5\ The Ultra High Density 
Cabinet option will only be offered in NY11-4 because of the power 
configuration necessary for such cabinets, which is not possible or 
available in other portions of the data center due to different power 
distribution.\6\ In addition to the Ultra High Density Cabinet, the 
Exchange will offer the other, existing cabinet options in NY11-4, with 
the exception of the Low Density Cabinet and Half Cabinet due to a lack 
of demand for such cabinets. The ongoing monthly fees for the Super 
High Density Cabinet, High Density Cabinet, Medium-High Density 
Cabinet, and Medium Density Cabinet are the same in NY11 and NY11-4 and 
the Exchange is not proposing to modify such fees.
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    \5\ Supra note 3.
    \6\ Because of the addition of the Ultra High Density Cabinet 
option in NY11-4, the Super High Density Cabinet in NY11-4 will have 
power density greater than 15 kW and less than or equal to 17.3 kW.
---------------------------------------------------------------------------

    The Exchange proposes to establish an ongoing monthly fee of $7,230 
for the Ultra High Density Cabinets. To effectuate this change, the 
Exchange proposes to add the $7,230 ongoing monthly fee for Ultra High 
Density Cabinets to its fee schedule in General 8, Section 1(a). The 
Exchange notes that the proposed fee amount falls between the $4,748 
ongoing monthly fee charged for High Density Cabinets and the $8,440 
ongoing monthly fee charged for Super High Density Cabinets. 
Furthermore, the proposed fee is consistent with the existing ongoing 
monthly cabinet fees on a per kW basis. The existing monthly cabinet 
fees range from approximately $475 per kW to $916 per kW, while the 
proposed ongoing monthly cabinet fee for the Ultra High Density Cabinet 
ranges from approximately $482 per kW (at the high end of the power 
density range for Ultra High Density Cabinets) to $723 per kW

[[Page 82650]]

(at the low end of the power density range for Ultra High Density 
Cabinets).
Installation Fee for Cabinets in NY11-4
    The Exchange proposes to establish a cabinet installation fee of 
$5,940 for all cabinets in NY11-4. To effectuate this change, the 
Exchange proposes to add the proposed $5,940 installation fee to its 
fee schedule in General 8, Section 1(a) for Super High Density 
Cabinets, Ultra High Density Cabinets, High Density Cabinets, Medium-
High Density Cabinets, and Medium Density Cabinets in NY11-4. In the 
existing data halls, customers may bring their own cabinets or use 
Exchange-provided cabinets. In NY11-4, because of the cooling system 
(hot aisle containment),\7\ all cabinets must be uniform and therefore, 
the Exchange will provide all cabinets, the cost of which is included 
in the $5,940 installation fee.\8\ The cabinets in NY11-4 include 
certain features not included in cabinets provided by the Exchange in 
the existing data halls. Specifically, the cabinets in NY11-4 include 
uniform, wider cabinets (32'' W x 48'' D x 91'' H), cable management, 
and a rear split door and combo lock. In addition, the proposed 
installation fee of $5,940 is comparable to fees charged for similar 
products.\9\
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    \7\ The existing data halls utilize cold aisle containment to 
manage temperatures. Hot aisle containment is a more effective way 
to manage heat in the data center.
    \8\ In contrast, to the extent customers provide their own 
cabinets in NY11, there is an additional out-of-pocket cost for such 
cabinets.
    \9\ For example, NYSE charges an initial $5,000 fee for 
dedicated cabinets. See https://www.nyse.com/publicdocs/Wireless_Connectivity_Fees_and_Charges.pdf.
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Installation Fee for Cabinet Power in NY11-4
    The cabinet power options for NY11-4 include: Phase 1 20 amp 240 
volt, Phase 1 32 amp 240 volt, Phase 1 40 amp 240 volt, Phase 3 20 amp 
415 volt, and Phase 3 32 amp 415 volt. These cabinet power options are 
specific to NY11-4 and one of these options must be selected for 
cabinets in NY11-4. The Exchange proposes to establish an installation 
fee of $3,600 for Phase 1 cabinet power options in NY11-4 and an 
installation fee of $4,560 for Phase 3 cabinet power options in NY11-4. 
To effectuate this change, the Exchange proposes to add the proposed 
fees to its fee schedule in General 8, Section 1(c). The Exchange also 
proposes not to charge an ongoing monthly fee for the cabinet power 
options in NY11-4 and update the fee schedule accordingly. For NY11-4, 
the data center operator is bringing in these higher voltage power 
options and is likely to experience increased power distribution 
efficiencies across the data center. The proposed power installation 
fees are higher in NY11-4 as compared to the existing data halls as the 
installation of the higher voltage power options costs more to the 
Exchange and is considered a premium product due to anticipated 
operational efficiencies.\10\ As between the Phase 1 and Phase 3 power 
options, the Phase 3 options provide a more efficient power source.
---------------------------------------------------------------------------

    \10\ Benefits include future proofing the data hall to allow for 
increasing power density in the future, requiring less whips to 
deliver the same amount of amperage, less circuits need to be 
installed to reach the same power supply, and safety improvements.
---------------------------------------------------------------------------

Fees for Power Distribution Unit Options
    The Exchange will offer power distribution units (``PDUs'') \11\ in 
NY11-4 as a convenience to customers. Rather than sourcing PDUs on a 
customer-by-customer basis, as the Exchange does for customers in NY11, 
the Exchange will offer Phase 1 and Phase 3 \12\ power distribution 
units in NY11-4. The Exchange proposes to establish a fee of $4,100 for 
a Phase 1 PDU and $5,260 for a Phase 3 PDU. This service is optional 
and customers may choose to provide their own PDUs appropriate for 
their power installation choices. The Exchange notes that, as part of 
such proposed fees, the Exchange would provide a primary and redundant 
PDU. As such, the proposed PDU fees covers a pair of PDUs. In addition, 
customers utilizing a Phase 1 or Phase 3 PDU provided by the Exchange 
have the ability to upgrade or downgrade between amperage levels 
without replacing the PDU, by a simple upgrade of the facility cord and 
a receptacle update.\13\ A PDU replacement is required when switching 
between phases/voltage.
---------------------------------------------------------------------------

    \11\ PDUs are devices fitted with multiple outputs designed to 
distribute electric power. The standardized PDUs would only be 
offered for NY11-4.
    \12\ Phase 1 PDUs are compatible with the following power 
options: Phase 1 20 amp 240 volt, Phase 1 32 amp 240 volt, and Phase 
1 40 amp 240 volt. Phase 3 PDUs are compatible with the following 
power options: Phase 3 20 amp 415 volt and Phase 3 32 amp 415 volt. 
Phase 1 and Phase 3 are available in NY11 and NY11-4. Phase 3 PDUs 
provide greater power density than Phase 1 PDUs by delivering power 
over three wires as opposed to one wire.
    \13\ This functionality may be available with customer-provided 
PDUs as well and depends on the PDU provided by the customer.
---------------------------------------------------------------------------

    The Exchange will also offer a switch monitored PDU add on in NY11-
4, which would allow customers to connect remotely to their PDU and 
control the power sockets. With the switch monitored PDU option, 
customers would be able to power cycle or shut off power remotely. The 
Exchange proposes to establish a $2,000 fee for the switch monitored 
PDU option. This option is optional as well and customers may choose to 
provide their own switch monitored PDU, if desired.
Implementation
    Although the timing is subject to change,\14\ the Exchange 
anticipates opening NY11-4 Exchange access on November 11, 2024 and 
providing customers access on October 7, 2024. Customer orders will not 
be fee liable until customers are provided access to the space.\15\
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    \14\ The Exchange will announce modifications to the proposed 
timing via the Nasdaq Customer Portal, which is the web portal used 
for order and inventory management of colocation services, and email 
communication to all colocation customers.
    \15\ Charging customers once access is provided is consistent 
with current practice and allows customers to set up equipment and 
begin using power.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\16\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\17\ 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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposal to establish a monthly fee 
for Ultra High Density Cabinets, an installation fee for cabinets in 
NY11-4, installation fees for power installation in NY11-4, and fees 
for power distribution unit options in NY11-4 is reasonable. First, the 
Exchange's proposal to establish a $7,230 ongoing monthly fee for Ultra 
High Density Cabinets in NY11-4 is reasonable because it is comparable 
to the Exchange's current ongoing monthly fees for cabinets. The 
proposed fee amount falls between the $4,748 ongoing monthly fee 
charged for High Density Cabinets and the $8,440 ongoing monthly fee 
charged for Super High Density Cabinets. Furthermore, the proposed fee 
is consistent with the existing ongoing monthly cabinet fees on a per 
kW basis. The existing monthly cabinet fees range from approximately 
$475 per kW to $916 per kW, while the proposed ongoing monthly cabinet 
fee for the Ultra High Density Cabinet ranges from approximately $482 
per kW (at the high end of the power density

[[Page 82651]]

range for Ultra High Density Cabinets) to $723 per kW (at the low end 
of the power density range for Ultra High Density Cabinets). Second, 
the Exchange believes that the proposed cabinet installation fee of 
$5,940 is reasonable as compared to the installation fees in NY11 (of 
$3,693-$4,748) because the proposed installation fee includes the 
cabinet itself, which includes certain enhanced features in NY11-4, 
including uniform, wider cabinets (32'' W x 48'' D x 91'' H), cable 
management, and a rear split door and combo lock. In contrast, in NY11, 
customers may choose to provide their own cabinets, incurring an 
additional cost. Furthermore, the proposed installation fee is 
comparable to the rate charged by NYSE for a similar product, as 
described above. Third, the Exchange believes that the power 
installation fees of $3,600 for Phase 1 power options and $4,560 for 
Phase 3 power options in NY11-4 are reasonable. As compared to power 
installation fees in NY11, the proposed rates for NY11-4 are higher 
because the Exchange will incur increased costs for installation of the 
higher voltage power options. In addition, the higher voltage power 
options will provide operational efficiencies for the data hall, as 
discussed above,\18\ warranting a higher fee. Finally, the Exchange 
believes that the proposed fees for PDUs and the PDU add on are 
reasonable because such fees are consistent with market rates. 
Furthermore, the Exchange is providing the PDU options as a convenience 
to customers. No customer is required to purchase any PDU options from 
the Exchange. Customers may choose to provide their own PDUs and PDU 
add ons.
---------------------------------------------------------------------------

    \18\ Supra note 10.
---------------------------------------------------------------------------

    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,\19\ 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 these proposed fees can choose to connect to the Exchange 
through a vendor.
---------------------------------------------------------------------------

    \19\ There are currently 17 exchanges offering options trading 
services. No single options exchange trades more than 15% 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 July 3, 2024), available at https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary. This broad 
dispersion of market share demonstrates that market participants can 
and do exercise choice in trading venues. Further, low barriers to 
entry mean that new exchanges may rapidly enter the market and offer 
additional substitute platforms to further compete with the Exchange 
and the products it offers.
---------------------------------------------------------------------------

    In summary, the proposal represents an equitable allocation of 
reasonable dues, fees and other charges because customers have choices 
in how they connect to the Exchange, the proposed monthly fee for Ultra 
High Density Cabinets is comparable to current fees charged by the 
Exchange for other cabinets, the Exchange will provide uniform cabinets 
in NY11-4 with special features, the proposed cabinet installation fee 
is consistent with that of comparable products offered by other 
providers, the Exchange will incur increased costs for new power 
installation in NY11-4, higher voltage power options will provide 
operational efficiencies for the data hall, and PDU options are 
provided as a convenience to customers and customers may choose to 
provide their own PDUs.
    The Exchange believes that the proposed fee changes are not 
unfairly discriminatory because the cabinet, power, and PDU fees for 
NY11-4 are available to and assessed uniformly across all market 
participants. In addition, all customers have the choice of whether and 
how to connect to the Exchange.

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 Ultra High Density Cabinets, cabinet power options, and PDU 
optionality in NY11-4 are available to any customer under the same fees 
as any other customer, and any customer that wishes to order cabinets, 
power and PDUs in NY11-4 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.\20\ 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.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-2024-36 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-2024-36. 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

[[Page 82652]]

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-GEMX-2024-36 and should be submitted on 
or before November 1, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-23529 Filed 10-10-24; 8:45 am]
BILLING CODE 8011-01-P

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