[Federal Register Volume 85, Number 36 (Monday, February 24, 2020)]
[Notices]
[Pages 10499-10502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03535]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88227; File No. SR-NYSE-2020-09]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the New York Stock Exchange Price List Related to Co-location
Services
February 18, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on February 4, 2020, New York Stock Exchange LLC (``NYSE''
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 New York Stock Exchange Price
List (the ``Price List'') related to co-location services to (a) update
the text of General Note 1 to include reference to NYSE Chicago, Inc.
(``NYSE Chicago'') and (b) make non-substantive changes to the text of
General Note 4. 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
Overview
The Exchange proposes to amend its Price List related to co-
location \4\ services to (a) update the text of General Note 1 to
include reference to NYSE Chicago, and (b) make non-substantive changes
to the text of General Note 4.
---------------------------------------------------------------------------
\4\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') in 2010. See Securities Exchange Act Release No.
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56). The Exchange operates a data center in Mahwah, New
Jersey (the ``data center'') from which it provides co-location
services to Users.
---------------------------------------------------------------------------
Proposed Change to General Note 1
General Note 1 currently provides that a User \5\ that incurs co-
location fees for a particular co-location service would not be subject
to co-location fees for the same co-location service charged by NYSE
American LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), and
NYSE National, Inc. (``NYSE National'' and together, the ``Affiliate
SROs'').\6\ General Note 1 currently does not include NYSE Chicago
among the Affiliate SROs.
---------------------------------------------------------------------------
\5\ For purposes of the Exchange's co-location services, a
``User'' shall mean any market participant that requests to receive
co-location services directly from the Exchange. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40).
\6\ See Securities Exchange Act Release No. 70206 (August 15,
2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59).
---------------------------------------------------------------------------
In late 2019, NYSE Chicago filed rule changes with the Commission
establishing its co-location services.\7\ The Exchange now proposes to
add NYSE Chicago to General Note 1, as follows (additions underlined):
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 87408 (October 28,
2019), 84 FR 58778 (November 1, 2019) (SR-NYSECHX-2019-12).
---------------------------------------------------------------------------
BILLING CODE 8011-01-P
[[Page 10500]]
[GRAPHIC] [TIFF OMITTED] TN24FE20.008
By including the proposed reference to NYSE Chicago, General Note 1
would provide that the fees a User pays for co-location services would
not depend on whether the User connects to none, one, some, or all of
the Exchange, the Affiliate SROs, and NYSE Chicago.
The proposed change would be consistent with General Note 1 under
``Co-location'' in the Fee Schedule of NYSE Chicago (the ``NYSE Chicago
Fee Schedule''), which similarly provides that a User that incurs fees
for co-location services under that fee schedule is not subject to fees
for the same co-location services charged by the Exchange, NYSE
American, NYSE Arca, or NYSE National.
Proposed Changes to General Note 4
General Note 4 currently provides that, when a User purchases
access to the Liquidity Center Network (``LCN'') or the internet
protocol (``IP'') network, the two local area networks available in the
data center,\8\ a User would receive (a) the ability to access the
trading and execution systems of the Exchange and Affiliate SROs
(``Exchange Systems'') as well as of Global OTC (the ``Global OTC
System'') and (b) connectivity to any of the listed data products
(``Included Data Products'') that it selects.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 79730 (January 4,
2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-2016-92).
---------------------------------------------------------------------------
The Exchange now proposes to make three non-substantive changes to
the text of the first sentence of General Note 4. First, the Exchange
proposes to delete the full name of ``NYSE Chicago, Inc.'' from General
Note 4, since that term would be defined earlier in proposed General
Note 1 as ``NYSE Chicago.'' Second, the Exchange proposes to delete the
quotation marks around the term ``Global OTC System,'' because the
other General Notes generally do not include quotation marks around
defined terms. Third, the Exchange proposes to add a serial comma after
the term ``NYSE National'' near the end of the first sentence of
General Note 4, as follows (additions underlined, deletions in
brackets):
[GRAPHIC] [TIFF OMITTED] TN24FE20.009
BILLING CODE 8011-01-C
These changes are typographical in nature and are not intended to
change the substance or meaning of the text of the Price List.
The proposed changes are not otherwise intended to address any
other issues relating to co-location services and/or related fees, and
the Exchange is not aware of any problems that Users would have in
complying with the proposed changes.\9\
---------------------------------------------------------------------------
\9\ Each Affiliate SRO has submitted substantially the same
proposed rule change to propose the changes described herein. See
SR-NYSEAmer-2020-08, SR-NYSEArca-2020-13, and SR-NYSENAT-2020-06.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\11\ 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 mechanisms 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed change would remove
impediments to, and perfect the mechanisms of, a free and open market
[[Page 10501]]
and a national market system and, in general, protect investors and the
public interest because the amendments would update General Note 1 to
reflect NYSE Chicago's provision of co-location services. By including
the proposed reference to NYSE Chicago, General Note 1 would clarify
that NYSE Chicago is included among the affiliates of the Exchange
referenced in the statement that a User paying for co-location services
will not be subject to co-location fees for the same co-location
services charged by any of the Exchange's affiliates. The proposed
change would make the Price List consistent with General Note 1 under
``Co-location'' in the Fee Schedule of NYSE Chicago, alleviating any
possible market participant confusion.
The Exchange believes that the non-substantive changes to General
Note 4 would remove impediments to, and perfect the mechanisms of, a
free and open market and a national market system and, in general,
protect investors and the public interest because the amendment would
clarify Exchange rules, making the Price List easier to read and
understand and alleviating any possible market participant confusion
caused by the current text of the note.
The Exchange also believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\12\ in particular, because
it provides for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers, and other persons using its
facilities and does not unfairly discriminate between customers,
issuers, brokers, or dealers. This is true because the proposed
amendments to General Note 1 would simply clarify that a User that
incurs co-location fees for a particular co-location service pursuant
to the Price List will not be subject to co-location fees for the same
co-location services charged by any of the Exchange's affiliates,
including NYSE Chicago. The Exchange also believes that the proposed
amendments to General Note 1 provide for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers,
and other persons using its facilities and does not unfairly
discriminate between customers, issuers, brokers, or dealers because
they clarify that the Exchange, NYSE Chicago, and the other Affiliate
SROs do not receive the proceeds from multiple fees despite providing a
service only once.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act because, in addition to the
use of co-location services being completely voluntary, they are
available to all Users on an equal basis (i.e., the same range of
products and services are available to all Users).
The Exchange believes that the proposed rule change would not
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act because the proposed rule
change would not change the services and fees to which market
participants already have access. Rather, it seeks simply to clarify
that a User that incurs co-location fees for a particular co-location
service pursuant to the Price List will not be subject to co-location
fees for the same co-location services charged by any of the Exchange's
affiliates, including NYSE Chicago.
In addition, the Exchange believes that the proposed non-
substantive changes to General Note 4 would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because it would have no impact on pricing or
existing services. Rather, the changes would clarify Exchange rules,
making the Price List easier to understand and alleviating any possible
market participant confusion caused by the current text of the note.
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 \13\ and Rule 19b-4(f)(6) thereunder.\14\
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.\15\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Exchange
believes that waiver of the operative delay is consistent with the
protection of investors and the public interest because NYSE Chicago
offers co-location services, and the waiver of the operative delay
would alleviate the possibility of confusion among members, the public,
and the Commission that could be caused by inconsistencies between the
Exchange's Price List and the NYSE Chicago Fee Schedule.
[[Page 10502]]
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change operative upon filing.\18\
---------------------------------------------------------------------------
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2020-09 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-NYSE-2020-09. 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 (http://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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2020-09 and should be submitted on
or before March 16, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2020-03535 Filed 2-21-20; 8:45 am]
BILLING CODE 8011-01-P