Notice2022-21983
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Connectivity Fee Schedule
Primary source
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Published
October 11, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 195 (Tuesday, October 11, 2022)</title>
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[Federal Register Volume 87, Number 195 (Tuesday, October 11, 2022)]
[Notices]
[Pages 61423-61425]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-21983]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95969; File No. SR-NYSEArca-2022-64]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Connectivity Fee Schedule
October 4, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on September 21, 2022, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III 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 Connectivity Fee Schedule
related to colocation to remove obsolete text. The proposed rule change
is available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, 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 Connectivity Fee Schedule
related to colocation to remove Partial Cabinet Solution bundles
Options A and B as obsolete.\4\
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\4\ The Exchange is an indirect subsidiary of Intercontinental
Exchange, Inc. (``ICE''). Each of the Exchange's affiliates New York
Stock Exchange LLC, NYSE American LLC, NYSE Chicago, Inc., and NYSE
National, Inc. (the ``Affiliate SROs'') has submitted substantially
the same proposed rule change to propose the changes described
herein. See SR-NYSE-2022-45, SR-NYSEAMER-2022-43, SR-NYSECHX-2022-
22, and SR-NYSENAT-2022-22.
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The Exchange recently deleted the service ``LCN Access--1 Gb
Circuit'' from the list of types of services available in colocation,
due to the lack of User demand for 1 Gb LCN ports.\5\ In making that
change, the Exchange explained that the number of 1 Gb LCN ports
purchased by Users had steadily declined from 4 in 2017, to 2 in 2018,
to 1 in 2021, to zero in 2022. The Exchange understands that this fall-
off in demand for the 1 Gb LCN port is due to the fact that market data
feeds continue to increase in bandwidth, such that Users prefer to
purchase larger port sizes. Based on this trend, the Exchange explained
that it believes that there is no remaining User demand for the 1 Gb
LCN port, and discontinued the service as obsolete.
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\5\ See Securities Exchange Act Release No. 95360 (July 25,
2022), 87 FR 45831 (July 29, 2022) (SR-NYSEArca-2022-41).
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The same rationale applies equally to two of the Exchange's Partial
Cabinet Solution (``PCS'') bundles: Options A and B. Options A and B
each include various bundled services, including, among other things, a
1 Gb LCN connection. Although Options A and B have been offered by the
Exchange and its Affiliate SROs since 2016,\6\ no Users ever purchased
an Option B bundle, and only one User purchased an Option A bundle,
which it canceled in July 2021. There are currently no Users purchasing
either an Option A or B bundle. Accordingly, the Exchange believes that
there is no remaining User demand for Options A or B, and proposes to
discontinue them as obsolete.
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\6\ See, e.g., Securities Exchange Act Release No. 77072
(February 5, 2016), 81 FR 7394 (Feb. 11, 2016) (SR-NYSE-2015-53).
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Application and Impact of the Proposed Changes
The Exchange does not expect that the proposed changes would have
any impact. As noted above, there was only ever one User that purchased
either an Option A or B bundle, and that User canceled its bundled
service over a year ago, in July 2021. There are currently no
purchasers of either Option A or B bundles.
The proposed changes would not have any affect on the two remaining
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PCS bundles, Options C and D, which include 10 Gb ports.
In addition, the proposed changes would not apply differently to
distinct types or sizes of market participants. Rather, they would
apply to all Users \7\ equally. As is currently the case, the purchase
of any colocation service is completely voluntary and the Connectivity
Fee Schedule is applied uniformly to all Users.
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\7\ For purposes of the Exchange's colocation services, a
``User'' means any market participant that requests to receive
colocation services directly from the Exchange. See Securities
Exchange Act Release No. 76010 (September 29, 2015), 80 FR 60197
(October 5, 2015) (SR-NYSEArca-2015-82). As specified in the
Connectivity Fee Schedule, a User that incurs colocation fees for a
particular colocation service pursuant thereto would not be subject
to colocation fees for the same colocation service charged by the
Affiliate SROs.
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Competitive Environment
The proposed changes are not otherwise intended to address any
other issues relating to colocation 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,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that discontinuing offering the Option A and
B PCS bundles would perfect the mechanisms of a free and open market
and a national market system and, in general, protect investors and the
public interest. There was only ever one User that purchased either an
Option A or B bundle, and that User canceled its bundled service over a
year ago, in July 2021. There are currently no purchasers of either
Option A or B bundles. The Exchange does not expect demand for Options
A and B to rebound given Users' overall preference for larger port
sizes to accommodate larger market data feeds. Removing references to
the fees for these obsolete options from the Connectivity Fee Schedule
would make the Connectivity Fee Schedule easier to read, understand,
and administer.
The Exchange believes that the proposed rule change does not
significantly affect the protection of investors or the public
interest. The proposed rule change would delete obsolete services from
the Connectivity Fee Schedule in order to enhance transparency and
alleviate potential customer confusion.
The Exchange believes that deleting obsolete services from the
Connectivity Fee Schedule would not permit unfair discrimination
between customers, issuers, brokers, or dealers. The proposed changes
would apply equally to all Users.
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,\10\ 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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\10\ 15 U.S.C. 78f(b)(8).
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The Exchange believes that the proposed rule change would not place
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
designed to address any competitive issues but rather is designed to
enhance the clarity and transparency of the Connectivity Fee Schedule
and alleviate possible customer confusion that may arise from the
inclusion of obsolete services.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5b292e373e76383436363e352f281b283e38753c342d"><span class="__cf_email__" data-cfemail="ccbeb9a0a9e1afa3a1a1a9a2b8bf8cbfa9afe2aba3ba">[email protected]</span></a>. Please include
File Number SR-NYSEArca-2022-64 on the subject line.
Paper Comments
<bullet> 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-NYSEArca-2022-64. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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
[[Page 61425]]
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-
NYSEArca-2022-64 and should be submitted on or before November 1, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21983 Filed 10-7-22; 8:45 am]
BILLING CODE 8011-01-P
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