[Federal Register Volume 85, Number 109 (Friday, June 5, 2020)]
[Notices]
[Pages 34666-34669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12166]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88985; File No. SR-NYSE-2020-46]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange's Price List Related to Co-Location Services
June 1, 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 May 18, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Price List related to
co-location services with respect to connectivity to the ICE Data
Global Index and to waive any change fees that a User would otherwise
incur as a result of the proposed change. 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 Price List related to co-
location \4\ services offered by the Exchange with respect to
connectivity to the ICE Data Global Index (``GIF'') and to waive any
change fees that a User would otherwise incur as a result of the
proposed change.
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\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 is an indirect subsidiary of
Intercontinental Exchange, Inc. (``ICE''). Through its ICE Data
Services (``IDS'') business, ICE operates a data center in Mahwah,
New Jersey (the ``data center''), from which the Exchange provides
co-location services to Users.
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Proposed Change
The Exchange offers Users \5\ connectivity to data feeds from third
party markets and other content service providers (``Third Party Data
Feeds'').\6\ The list of Third Party Data Feeds is set
[[Page 34667]]
forth in the Price List, and includes connectivity to the GIF for a
monthly connectivity fee of $100.\7\
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\5\ For purposes of the Exchange's co-location services, a
``User'' means 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). As specified in the Price List,
a User that incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to co-location fees
for the same co-location service charged by the Exchange's
affiliates NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc.,
and NYSE National, Inc. (collectively, the ``Affiliate SROs''). Each
Affiliate SRO has submitted substantially the same proposed rule
change to propose the changes described herein. See SR-NYSEAmer-
2020-40, SR-NYSEArca-2020-49, SR-NYSECHX-2020-17, and SR-NYSENAT-
2020-19.
\6\ See Securities Exchange Act Release No. 80311 (March 24,
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45) (notice of
filing of Partial Amendment No. 4 and order granting accelerated
approval of a proposed rule change, as modified by Amendment Nos. 1
through 4, to amend the co-location services offered by the Exchange
to add certain access and connectivity fees).
\7\ The Exchange has an indirect interest in the GIF because ICE
is the Exchange's ultimate parent. See id., at 15749, and Securities
Exchange Act Release No. 79674 (December 22, 2016), 81 FR 96053
(December 29, 2016) (SR-NYSE-2016-45) (notice of filing of Amendment
No. 3 to proposed rule change to amend the co-location services
offered by the Exchange to add certain access and connectivity
fees).
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ICE, which publishes the GIF, announced to its customers that
connect to the GIF that it will no longer offer the GIF as a stand-
alone product. Accordingly, the Exchange proposes to cease offering
connectivity to the GIF once it is no longer available. The Exchange
has been informed by ICE that cessation is currently expected to occur
before the end of 2020. The Exchange will announce the operative date
through a customer notice.
Users are subject to a change fee if they request a change to one
or more existing co-location services.\8\ The Exchange proposes to
waive any change fees that a User would otherwise incur as a result of
the proposed change.
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\8\ See Securities Exchange Act Release No. 67666 (August 15,
2012), 77 FR 50742 (August 22, 2012) (SR-NYSE-2012-18) (order
approving a proposed rule change amending the New York Stock
Exchange Price List to provide for additional co-location services
and establish related fees).
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In order to implement the proposed change, the Exchange proposes to
make the following changes to the section entitled ``Connectivity to
Third Party Data Feeds'':
In the first paragraph and in the table of Third Party
Data Feeds, add an asterisk after ``ICE Data Global Index.''
Following the table of Third Party Data Feeds, add the
following text:
* ICE will cease to offer the GIF as a stand-alone product, which
the Exchange has been informed by ICE is currently expected to occur
before the end of 2020. The Exchange will announce the operative date
through a customer notice. Any change fees that a User would otherwise
incur as a result of the proposed change will be waived.
The GIF includes the values of various indices and exchange traded
product data.\9\ Based on information published by ICE Data Services,
all the data in the GIF was already available on the ICE Data Services
Consolidated Feed (``Consolidated Feed'').\10\ The Exchange offers
connectivity to the Consolidated Feed, and does not propose to change
the price for such connectivity. In addition, the Exchange's
connectivity to the GIF and the Consolidated Feed should have
approximately the same latency.
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\9\ The Exchange understands that some of the indices may
include Exchange or Affiliate SRO data as underlying components, but
the GIF does not include those underlying components or other
information directly from the Exchange and Affiliate SROs.
\10\ See ``Consolidated Data Feed Coverage List--Indices and
Indicators'' at https://www.theice.com/market-data/connectivity-and-feeds/consolidated-feed/coverage-list.
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Application and Impact of the Proposed Change
The proposed change would not apply differently to distinct types
or sizes of market participants. Rather, it would apply to all Users
equally. As is currently the case, the purchase of any colocation
service is completely voluntary and the Price List is applied uniformly
to all Users.
Currently, there are seven Users that have connectivity to the GIF,
and so would be affected by the change. If any of them wish to continue
having connectivity to the information in the GIF, they could connect
to the Consolidated Feed, which none of them do presently. The monthly
cost for connectivity to the Consolidated Feed depends on the size of
the bandwidth utilized. If a User opts to connect to the Consolidated
Feed to connect to the information in the GIF, the monthly connectivity
cost charged by the Exchange would be $200.
ICE has informed the Exchange that currently there are various
third parties that offer Users connectivity to the Consolidated Feed.
To use such third party connectivity to the Consolidated Feed, a User
may utilize the IDS network, a third party telecommunication network, a
cross connect, or a combination thereof to access the Consolidated Feed
through a connection to an access center outside the data center (which
could be an IDS access center, a third-party access center, or both),
another User, or a third party vendor.
Competitive Environment
The Exchange operates in a highly competitive market in which
exchanges and other vendors (e.g., Hosting Users) offer co-location
services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
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.'' \11\
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\11\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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The proposed change is 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 change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\13\ 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. In addition, it is designed 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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposed Rule Change is Reasonable and Equitable
The Exchange believes that the proposed rule change is reasonable
and equitable for the following reasons.
The Exchange believes that it is reasonable and an equitable
allocation of its fees and credits to add a note to its Price List
stating that ICE will cease to offer the GIF as a stand-alone product,
as the Exchange will no longer be able to offer the service once that
occurs.
If a User wishes connectivity to the information in the GIF, the
Users could connect to the Consolidated Feed through IDS or from a
third party provider. A User may utilize the IDS network, a third party
telecommunication network, a cross connect, or a combination thereof to
access the Consolidated Feed, through a connection to an access center
outside the data center (which could be an IDS access center, a third-
party access center, or both), another User, or a third party vendor.
[[Page 34668]]
The Exchange believes that it is reasonable and equitable that it
waive any change fees that a User would otherwise incur as a result of
the proposed change, as Users would have no choice but to terminate
connectivity to the GIF. The fee waiver would help to alleviate any
burden related to the change.
The Proposed Rule Change Would Protect Investors and the Public
Interest
The Exchange believes that the proposed rule change would perfect
the mechanisms of a free and open market and a national market system
and, in general, protect investors and the public interest for the
following reasons.
It would be against the protection of investors and the public
interest if the Exchange were to continue to offer something that it
cannot provide because the relevant feed has been discontinued. Adding
the proposed note to its Price List would reduce any potential
ambiguity and provide clarification concerning the availability and the
costs of connectivity to Third Party Data Feeds available to Users,
because it would highlight that the GIF will become obsolete, provide a
timeline for the change, and state that any change fees that a User
would otherwise incur as a result of the proposed change would be
waived.
The Proposed Change is Not Unfairly Discriminatory
The Exchange believes that the proposed change is not unfairly
discriminatory for the following reasons.
The proposed change would not apply differently to distinct types
or sizes of market participants. Rather, it would apply to all Users
equally. As a consequence of ICE's ceasing to offer the GIF as a stand-
alone product, the Exchange will not be able to provide any Users with
connectivity to the GIF.
If a User wishes connectivity to the information in the GIF, the
Users could connect to the Consolidated Feed through the Exchange. If
any of the seven Users that have connectivity to the GIF opt to connect
to the Consolidated Feed, the monthly connectivity cost charged by the
Exchange would be $200.
ICE has informed the Exchange that currently there are various
third parties that offer Users connectivity to the Consolidated Feed.
To use such third party connectivity to the Consolidated Feed, a User
may utilize the IDS network, a third party telecommunication network, a
cross connect, or a combination thereof to access the Consolidated
Feed, through a connection to an access center outside the data center
(which could be an IDS access center, a third-party access center, or
both), another User, or a third party vendor.
For the reasons above, the proposed changes do not unfairly
discriminate between or among market participants that are otherwise
capable of satisfying any applicable co-location fees, requirements,
terms and conditions established from time to time by the Exchange.
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\14\ the Exchange
believes that the proposed rule change will not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\14\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition
The Exchange does not believe that the proposed change would place
any burden on intramarket competition that is not necessary or
appropriate. The proposed change would not apply differently to
distinct types or sizes of market participants. Rather, it would apply
to all Users equally: As a consequence of ICE's ceasing to offer the
GIF as a stand-alone product, the Exchange will not be able to provide
any Users with connectivity to the GIF. The Exchange proposes to waive
any change fees that a User would otherwise incur as a result of the
proposed change.
Adding the proposed note to the Price List would reduce any
potential ambiguity and provide clarification concerning the
availability and the costs of connectivity to Third Party Data Feeds
available to Users, because it would highlight that the GIF will become
obsolete, provide a timeline for the change, and state that any change
fees that a User would otherwise incur as a result of the proposed
change would be waived.
If a User wishes connectivity to the information in the GIF, the
Users could connect to the Consolidated Feed through the Exchange. If
any of the seven Users that have connectivity to the GIF opt to connect
to the Consolidated Feed, the monthly connectivity cost charged by the
Exchange would be $200.
ICE has informed the Exchange that currently there are various
third parties that offer Users connectivity to the Consolidated Feed.
To use such third party connectivity to the Consolidated Feed, a User
may utilize the IDS network, a third party telecommunication network, a
cross connect, or a combination thereof to access the Consolidated
Feed, through a connection to an access center outside the data center
(which could be an IDS access center, a third-party access center, or
both), another User, or a third party vendor.
Use of any co-location service is completely voluntary, and each
market participant is able to determine whether to use co-location
services based on the requirements of its business operations.
Intermarket Competition
The Exchange does not believe that the proposed fee would impose
any burden on intermarket competition that is not necessary or
appropriate.
The Exchange operates in a highly competitive market in which
exchanges and other vendors (i.e., Hosting Users) offer co-location
services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
enhances the efficiency of their operations. Accordingly, fees charged
for co-location services are constrained by the active competition for
the order flow of, and other business from, such market participants.
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.'' \15\
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\15\ See 70 FR 37496, supra note 11.
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The Exchange believes that the proposed change is necessary and
appropriate. Adding the proposed note to the Price List would reduce
any potential ambiguity and provide clarification concerning the
availability and the costs of connectivity to Third Party Data Feeds
available to Users, because it would highlight that the GIF will become
obsolete and provide a timeline for the change.
For the reasons described above, the Exchange believes that the
proposed rule change reflects this competitive environment.
[[Page 34669]]
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 \16\ and Rule 19b-4(f)(6) thereunder.\17\
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.
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
believes that such waiver would be consistent with the protection of
investors and the public interest because it would allow the Exchange
to waive the change fee sooner. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest because it would permit the Exchange,
without undue delay, to cease offering the GIF when it becomes
unavailable, provide notice to customers and waive the change fee.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change operative upon filing.\20\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ 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).
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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) \21\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\21\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2020-46 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-2020-46. 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-2020-46 and should be submitted on
or before June 26, 2020.
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\22\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-12166 Filed 6-4-20; 8:45 am]
BILLING CODE 8011-01-P