Notice2025-07702
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Connectivity Fee Schedule Related to Connectivity to Third Party Systems and Third Party Data Feeds
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 5, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 85 (Monday, May 5, 2025)</title>
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[Federal Register Volume 90, Number 85 (Monday, May 5, 2025)]
[Notices]
[Pages 19047-19054]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-07702]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102952; File No. SR-NYSE-2025-13]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Connectivity Fee Schedule Related to Connectivity to Third
Party Systems and Third Party Data Feeds
April 29, 2025.
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 April 16, 2025, 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 Connectivity Fee Schedule to
amend the list of third party systems and third party data feeds to
which Users can connect, related fees and a reference to who can charge
redistribution fees. 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 to
amend the list of third party systems and third party data feeds to
which Users \4\ can connect, related fees and a reference to who can
charge redistribution fees.
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\4\ For purposes of the Exchange's colocation services, a
``User'' means any market participant that requests to receive
colocation services directly from the Exchange. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Fee
Schedule, a User that incurs colocation fees for a particular
colocation service pursuant thereto would not be subject to
colocation fees for the same colocation service charged by NYSE
American LLC, NYSE Arca, Inc., NYSE National, Inc. and NYSE Texas,
Inc. (together, the ``Affiliate SROs''). Each Affiliate SRO has
submitted substantially the same proposed rule change to propose the
changes described herein. See SR-NYSEAMER-2025-22, SR-NYSEARCA-2025-
30, SR-NYSETEX-2025-04, and SR-NYSENAT-2025-08.
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Currently, Users are offered connectivity to the execution systems
of third party markets and other service providers (``Third Party
Systems'') and connectivity to data feeds from third party markets and
other content service providers (``Third Party Data Feeds'') at
[[Page 19048]]
the Mahwah, New Jersey data center (``MDC'').\5\ The Exchange proposes
to amend the two lists to add new items, combine existing items, and
amend related fees.
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\5\ Through its Fixed Income and Data Services (``FIDS'')
business, Intercontinental Exchange, Inc. (``ICE'') operates the
MDC. The Exchange and the Affiliate SROs are indirect subsidiaries
of ICE.
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Proposed Changes
Changes to the List of Third Party Systems
The Exchange proposes to make the following changes to the list of
Third Party Systems:
<bullet> Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of
Commerce (CIBC), Long Term Stock Exchange,\6\ MEMX,\7\ Pragma, and
Small Exchange (collectively, the ``Proposed Third Party Systems'').
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\6\ See Securities Exchange Act Release No. 85828 (May 10,
2019), 84 FR 21841 (May 15, 2019) (In the Matter of the Application
of Long Term Stock Exchange, Inc.; for Registration as a National
Securities Exchange; Findings, Opinion, and Order of the
Commission).
\7\ See Securities Exchange Act Release No. 88806 (May 4, 2020),
85 FR 27451 (May 8, 2020) (In the Matter of the Application of MEMX
LLC for Registration as a National Securities Exchange; Findings,
Opinion, and Order of the Commission).
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<bullet> To reflect Cboe Canada`s integration,\8\ combine Cboe
MATCHNow into Cboe Canada.
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\8\ See ``Cboe Canada Announces Planned Unification of its
Canadian Operations'' (December 18, 2023) (available at <a href="https://ir.cboe.com/news/news-details/2023/CBOE-CANADA-ANNOUNCES-PLANNED-UNIFICATION-OF-ITS-CANADIAN-OPERATIONS/default.aspx">https://ir.cboe.com/news/news-details/2023/CBOE-CANADA-ANNOUNCES-PLANNED-UNIFICATION-OF-ITS-CANADIAN-OPERATIONS/default.aspx</a>).
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To make these changes, the list of available Third Party Systems
would be amended as follows (proposed deletions bracketed, proposed
additions italicized):
Third Party Systems
B3 Bovespa
Blue Ocean ATS (BOATS)
Boston Options Exchange (BOX)
Canadian Imperial Bank of Commerce (CIBC)
Cboe Canada
[Cboe MATCHNow]
Cboe US
Chicago Mercantile Exchange (CME Group)
Investors Exchange (IEX)
Long Term Stock Exchange
MEMX
MIAX
Nasdaq Canada (CXC, CXD, CX2)
Nasdaq US Stock Market
NYFIX Marketplace
Omega
OTC Markets Group
Pragma
Small Exchange
TMX Group
The Exchange does not propose to change the monthly recurring fee
Users pay for access to each Third Party System. Although the proposed
changes to the list of Third Party Systems would combine the names of
several current Third Party Systems, no User would be charged more as a
consequence of the combination. A User would continue to be able to
choose which systems it wants from any Third Party System. It would not
have to receive any systems, or pay for any bandwidth, that it did not
choose.\9\
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\9\ For example, if a User connected to Cboe Canada but did not
access any other Cboe system, including Cboe MATCHNow, it would not
pay for any additional system or have its monthly fee changed as a
consequence of the proposed combination.
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Changes to Connectivity to Third Party Data Feeds
The Exchange expects that the connectivity partner of BOATS will
charge a redistribution fee, which will be passed through to the User.
Accordingly, the Exchange proposes to add ``and their partners'' to the
first sentence of the second paragraph under ``Connectivity to Third
Party Data Feeds,'' which describes who can charge redistribution fees,
so that it includes connectivity partners.
The Exchange proposes to make the following changes to the list of
Third Party Data Feeds (together, the ``Proposed Third Party Data
Feeds''):
<bullet> Add the following Third Party Data Feeds with the
following fees for monthly recurring connectivity:
[cir] Blue Ocean ATS (BOATS), for $750 a month;
[cir] Cboe CFE Futures, for $1,500 per month;
[cir] Long Term Stock Exchange, for $2,600 per month; \10\
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\10\ See supra note 6.
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[cir] MEMX Equities, for $2,000 per month; \11\
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\11\ See supra note 7.
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[cir] MEMX Options, for $2,000 per month; \12\ and
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\12\ See id.
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[cir] Small Exchange, for $1,000 per month.
<bullet> Reflecting Cboe Canada's integration,\13\ combine Cboe
MATCHNow into Cboe Canada and change the combined monthly recurring
connectivity fee to $2,000 per month.
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\13\ See supra note 8.
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<bullet> Replace Miami International Securities Exchange/MIAX Pearl
with the following five feeds:
[cir] MIAX Emerald, at a $2,600 monthly recurring connectivity fee;
[cir] MIAX Options, at a $2,600 monthly recurring connectivity fee;
[cir] MIAX Pearl Equities, at a $2,600 monthly recurring
connectivity fee;
[cir] MIAX Pearl Options, at a $2,600 monthly recurring
connectivity fee; and
[cir] MIAX Sapphire, at a $2,600 monthly recurring connectivity
fee.
<bullet> Combine Nasdaq Stock Market with Nasdaq ISE under the name
``Nasdaq Stock Market'' and change the combined monthly recurring
connectivity fee to $3,000 per month.
<bullet> Combine TMX Group and Montreal Exchange \14\ under the
name of ``TMX Group'' with a combined monthly recurring connectivity
fee of $2,500 per month.
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\14\ The Montreal Exchange is a subsidiary of TMX Group. See
https://www.m-x.ca/en/about-us/mx/
overview#:~:text=Today%2C%20a%20wholly%20owned%20subsidiary,retail%20
and%20institutional%20investors%20needs.
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In addition, the Exchange proposes to change the monthly recurring
connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under ``Connectivity to Third Party
Data Feeds'' and list of available Third Party Data Feeds would be
amended as follows (proposed deletions bracketed, proposed additions
italicized):
Third Party Data Feed providers and their partners may charge
redistribution fees. When the Exchange receives a redistribution fee,
it passes through the charge to the User, without change to the fee.
The fee is labeled as a pass-through of a redistribution fee on the
User's invoice. The Exchange does not charge third party markets or
content providers for connectivity to their own feeds.
------------------------------------------------------------------------
Monthly recurring
Third Party Data Feed connectivity fee per
Third Party Data Feed
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B3 Bovespa..................................... $3,[000]900
Blue Ocean ATS (BOATS)......................... 750
Boston Options Exchange (BOX).................. 1,[000]300
Cboe BZX Exchange (CboeBZX) and Cboe BYX [2,000]1,500
Exchange (CboeBYX)............................
[[Page 19049]]
Cboe Canada.................................... [1,200]2,000
Cboe CFE Futures............................... 1,500
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA [2,000]1,500
Exchange (CboeEDGA)...........................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2). [2,000]1,500
[Cboe MATCHNow................................. 1,000]
Chicago Mercantile Exchange (CME Group)........ 3,000
Financial Industry Regulatory Authority (FINRA) [500]650
Global OTC..................................... [100]150
ICE Data Services Consolidated Feed <=100 Mb... 200
ICE Data Services Consolidated Feed >100 Mb to 500
<=1 Gb........................................
ICE Data Services Consolidated Feed >1 Gb...... 1,000
ICE Data Services Consolidated Feed Shared Farm [200]300
<=100Mb.......................................
ICE Data Services Consolidated Feed Shared Farm [500]750
>100 Mb to <=1 Gb.............................
ICE Data Services Consolidated Feed Shared Farm [1]2,000
>1 Gb.........................................
ICE Data Services PRD.......................... [200]300
ICE Data Services PRD CEP...................... [400]500
Intercontinental Exchange (ICE)................ 1,[500]950
Investors Exchange (IEX)....................... 1,[000]300
Long Term Stock Exchange....................... 2,600
MEMX Equities.................................. 2,000
MEMX Options................................... 2,000
MIAX Emerald................................... 2,600
MIAX Options................................... 2,600
MIAX Pearl Equities............................ 2,600
[Miami International Securities Exchange/]MIAX 2,[000]600
[PEARL]Pearl Options..........................
MIAX Sapphire.................................. 2,600
[Montr[eacute]al Exchange (MX)................. 1,000]
Nasdaq Stock Market............................ [2]3,000
Nasdaq Global Index Data Service (GIDS)........ 100
Nasdaq UQDF & UTDF............................. [500]650
Nasdaq Canada (CXC, CXD, CX2).................. 1,[500]950
[Nasdaq ISE.................................... 1,000]
Omega.......................................... 1,[000]300
OTC Markets Group.............................. 1,[000]300
Small Exchange................................. 1,000
TMX Group...................................... 2,500
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Access to the Proposed Third Party Systems
The Exchange would provide access to the Proposed Third Party
Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the
Proposed Third Party Systems over the internet protocol (``IP'')
network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access
to a Proposed Third Party System, the User would enter into an
agreement with the relevant proposed third party, pursuant to which it
would charge the User for access to the Proposed Third Party System.
The Exchange would then enable unicast connectivity between the User
and the Proposed Third Party System over the IP network.\15\ The
Exchange would charge the User for the connectivity to the Proposed
Third Party System. A User would only receive, and would only be
charged for, access to the Proposed Third Party System for which it
enters into agreements with the third party.
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\15\ Information flows over existing network connections in two
formats: ``unicast'' format, which is a format that allows one-to-
one communication, similar to a phone line, in which information is
sent to and from the Exchange; and ``multicast'' format, which is a
format in which information is sent one-way from the Exchange to
multiple recipients at once, like a radio broadcast.
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The Exchange has no affiliation with the providers of any of the
Proposed Third Party Systems. Establishing a User's access to a
Proposed Third Party System would not give the Exchange any right to
use the Proposed Third Party System. Connectivity to a Proposed Third
Party System would not provide access or order entry to the Exchange's
execution system, and a User's connection to a Proposed Third Party
System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for
connectivity to the Proposed Third Party Systems that it does for the
current Third Party Systems. Specifically, when a User requested access
to a Proposed Third Party System, it would identify the applicable
third party and what bandwidth connection would be required. The fees
for such bandwidth connection would vary based on the size of the
connection, not on the particular Third Party System the User chooses.
The Exchange is not proposing to change the pricing of any of these
bandwidth connections; the Exchange is simply expanding the list of
Third Party Systems that Users may access via these bandwidth
connections.
Connectivity to the Proposed Third Party Data Feeds
The Exchange would provide connectivity to the Proposed Third Party
Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the
Exchange would receive a Proposed Third Party Data Feed from the
content service provider at the relevant source. The Exchange would
then provide connectivity to that data to Users for a fee. Users would
connect to the Proposed Third Party Data Feeds over the IP network. The
Proposed Third Party Data Feeds would include trading and other
information concerning the securities that are traded on the relevant
third party systems.
[[Page 19050]]
As with the existing connections to Third Party Data Feeds, in
order to connect to a Proposed Third Party Data Feed, a User would
enter into a contract with the third party content service provider,
pursuant to which it may charge the User for the data feed. The
Exchange would receive the Proposed Third Party Data Feed in remote
locations and transport it over its fiber optic network to the MDC.
After the content service provider and User entered into an agreement
and the Exchange received authorization from the content service
provider, the Exchange would retransmit the data to the User over the
User's port. The Exchange would charge the User for connectivity to the
Proposed Third Party Data Feed. A User would only receive, and would
only be charged the fee for, connectivity to a Proposed Third Party
Data Feed for which it entered into a contract.
The Exchange has no affiliation with the sellers of the Proposed
Third Party Data Feeds and would have no right to use those feeds other
than as a redistributor of the data. None of the Proposed Third Party
Data Feeds would provide access or order entry to the Exchange's
execution system. The Proposed Third Party Data Feeds would not provide
access or order entry service to the execution systems of the third
parties generating the feeds. The Exchange would receive the Proposed
Third Party Data Feeds via arms-length agreements and would have no
inherent advantage over any other distributor of such data.
Application and Impact of the Proposed Changes
The proposed rule 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 Connectivity Fee Schedule is
applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity
to most of the Proposed Third Party Data Feeds were requested by Users,
but the Exchange believes that it would gain at most a handful of new
customers due to the proposed change. The Exchange does not expect that
the remainder of the proposed rule change will result in new customers.
Competitive Environment
The Exchange operates in a highly competitive market in which other
vendors offer colocation services as a means to facilitate the trading
and other market activities of those market participants who believe
that colocation enhances the efficiency of their operations. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. Specifically, in Regulation NMS, the
Commission highlighted the importance of market forces in determining
prices and SRO revenues and, also, recognized that current regulation
of the market system ``has been remarkably successful in promoting
market competition in its broader forms that are most important to
investors and listed companies.'' \16\
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\16\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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As explained below, the Exchange's provision of access to the
Proposed Third Party Systems (``Access'') and connectivity to the
Proposed Third Party Data Feeds (``Connectivity'') may compete with
access and connectivity provided by other third parties. Third-party
vendors are not at any competitive disadvantage created by the
Exchange.
The proposed change is not otherwise intended to address any other
issues relating to colocation services or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\17\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\18\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange further believes
that the proposed rule change is consistent with Section 6(b)(4) of the
Act,\19\ because it provides for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and other
persons using its facilities.
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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
\19\ 15 U.S.C. 78f(b)(4).
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The Proposed Rule Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees,
the Commission's market-based test considers ``whether the exchange was
subject to significant competitive forces in setting the terms of its
proposal . . ., including the level of any fees.'' \20\ If the Exchange
meets that burden, ``the Commission will find that its proposal is
consistent with the Act unless `there is a substantial countervailing
basis to find that the terms' of the proposal violate the Act or the
rules thereunder.'' \21\ Here, the Exchange is subject to significant
competitive forces in setting the terms on which it offers its
proposal, in particular because substantially similar substitutes are
available and the Exchange has not placed present or future third party
vendors at a competitive disadvantage created by the Exchange.
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\20\ See Securities Exchange Act Release No. 90209 (October 15,
2020), 85 FR 67044, 67049 (October 21, 2020) (Order Granting
Accelerated Approval to Establish a Wireless Fee Schedule Setting
Forth Available Wireless Bandwidth Connections and Wireless Market
Data Connections) (SR-NYSE-2020-05, SR-NYSEAMER-2020-05, SR-
NYSEARCA-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-03, SR-NYSE-
2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-NYSECHX-2020-
05, SR-NYSENAT-2020-08) (``Wireless Approval Order''), citing
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR
74770, 74781 (December 9, 2008) (``2008 ArcaBook Approval Order'').
See NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\21\ See Wireless Approval Order, supra note 20, at 67049,
citing 2008 ArcaBook Approval Order, supra note 20, at 74781.
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Substantially Similar Substitutes Are Available
The Exchange's proposed Access and Connectivity would compete with
other methods by which both the Exchange and various third parties
already provide, or could provide, Users with access to Third Party
Systems and connectivity to Third Party Data Feeds. Third-party vendors
are not at any competitive disadvantage created by the Exchange.
The Exchange believes that access to at least two of the Proposed
Third Party Data Feeds are available to Users from one or more third
parties in the MDC. The Exchange does not have visibility into whether
additional third parties currently offer, or intend to offer, Users
access to the Proposed Third Party Systems or connectivity to the
Proposed Third Party Data Feeds, as such third
[[Page 19051]]
parties are not required to make that information public. However, the
market for access to the Proposed Third Party Systems and connectivity
to the Proposed Third Party Data Feeds is competitive, and there is no
reason to believe that other third party providers of access and
connectivity would not provide it to Users if they considered it to be
in their commercial interest. FIDS competes with other providers that
offer such access and connectivity.
Such third parties compete, or, if additional third parties wish to
offer access or connectivity, would compete, with the Exchange's Access
and Connectivity and exert, or would exert, significant competitive
forces on the Exchange in setting the terms of its proposal, including
the level of the Exchange's proposed fees.\22\ If the Exchange were to
set its proposed fees too high, Users could respond by instead
selecting third parties' substantially similar access and connectivity.
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\22\ See 2008 ArcaBook Approval Order, supra note 20, at 74789
and n.295 (recognizing that products need not be identical to be
substitutable).
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Third Party Competitors Are Not at a Competitive Disadvantage Created
by the Exchange
The Exchange does not believe that FIDS would have any competitive
advantage over either existing third-party providers or any future
providers of access to Proposed Third Party Systems or connectivity to
Proposed Third Party Data Feeds. If a third party offers such access or
connectivity to Users, a User may utilize a cross connect, a third
party telecommunication network, the MDC network, or a combination
thereof to access such access or connectivity through a connection to
another User inside the MDC or a third party vendor outside the
MDC.\23\ The Exchange's proposed service for Access and Connectivity
does not have any special access to or advantage within the MDC, as all
distances in the MDC are normalized.
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\23\ A Hosted Customer may use its connection to a Hosting User
for such access or connectivity. A User may host another entity in
its space within the MDC. Such Users are called ``Hosting Users,''
and their customers are referred to as ``Hosted Customers.'' In
contrast to Users, Hosted Customers do not have a direct contractual
relationship with the Exchange vis-[agrave]-vis co-location
services. See Securities Exchange Act Release No. 76008 (September
29, 2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-2015-40).
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Moreover, the Exchange does not believe that FIDS would have any
competitive advantage because it would charge for connectivity only,
not the Proposed Third Party System or Proposed Third Party Data Feed
itself. All Users that connect to a Proposed Third Party System or
Proposed Third Party Data Feed, whether they elect to connect using the
Exchange's proposed service or that of the Exchange's competitors,
would have to pay a third party for the Proposed Third Party System or
Proposed Third Party Data Feed.
To be clear, third party competitors would not be required to
obtain the Proposed Third Party Systems or Proposed Third Party Data
Feeds from FIDS; rather, they could obtain them from other third
parties and transport them into the MDC, via telecom equipment, in
order to redistribute them to other Users. Whether they are Users or
third party vendors outside the MDC, actual or future competitors of
the Exchange would not have to pay the Exchange for the Proposed Third
Party System or Proposed Third Party Data Feed itself.
Nor does the Exchange believe that FIDS has a competitive advantage
over any third-party competitors offering access to the Proposed Third
Party Systems or connectivity to the Proposed Third Party Data Feeds by
virtue of the fact that ICE owns and operates the MDC's meet-me-rooms.
Users purchasing Access or Connectivity--like Users of any other
colocation service--would require a circuit connecting out of the MDC,
and in most cases, such circuits are provided by third-party
telecommunications service providers that have installed their
equipment in the MDC's two meet-me-rooms (``Telecoms'').\24\ Currently,
16 Telecoms operate in the meet-me-rooms and provide a variety of
circuit choices. It is in the Exchange's best interest to set the fees
that Telecoms pay to operate in the meet-me-rooms at a reasonable level
\25\ so that market participants, including Telecoms, will maximize
their use of the MDC. By setting the meet-me-room fees at a reasonable
level, the Exchange encourages Telecoms to participate in the meet-me-
rooms and to sell circuits to Users for connecting into and out of the
MDC. These Telecoms then compete with each other by pricing such
circuits at competitive rates. These competitive rates for circuits
help draw in more Users and Hosted Customers to the MDC, which directly
benefits the Exchange by increasing the customer base to whom the
Exchange can sell its colocation services, which include cabinets,
power, ports, and connectivity to many third-party data feeds, and
because having more Users and Hosted Customers leads, in many cases, to
greater participation on the Exchange. In this way, by setting the
meet-me-room fees at a level attractive to telecommunications firms,
the Exchange spurs demand for all of the services it sells at the MDC,
while setting the meet-me-room fees too high would negatively affect
the Exchange's ability to sell its services at the MDC.\26\
Accordingly, there are real constraints on the meet-me-room fees the
Exchange charges, such that the Exchange does not have an advantage in
terms of costs when compared to third parties that enter the MDC
through the meet-me-rooms to provide services to compete with the
Exchange's services.
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\24\ Note that in the case of wireless connectivity, a User in
colocation still requires a fiber circuit to transport data. If a
Telecom is used, the data is transmitted wirelessly to the relevant
pole, and then from the pole to the meet-me-room using a fiber
circuit.
\25\ See Securities Exchange Act Release No. 97998 (July 26,
2023), 88 FR 50238 (August 1, 2023) (SR-NYSE-2023-27) (``MMR
Notice'').
\26\ See id. at 50241. Importantly, the Exchange is prevented
from making any alteration to its meet-me-room services or fees
without filing a proposal for such changes with the Commission.
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If anything, the Exchange would be subject to a competitive
disadvantage vis-[agrave]-vis third-party competitors offering access
to the Proposed Third Party Systems or connectivity to the Proposed
Third Party Data Feeds. Third-party competitors are not subject to the
Commission's filing requirements, and therefore can freely change their
services and pricing in response to competitive forces. In contrast,
the Exchange's service and pricing would be standardized as set out in
this filing, and the Exchange would be unable to respond to pricing
pressure from its competitors without seeking a formal fee change in a
filing before the Commission.
In sum, because the Exchange is subject to significant competitive
forces in setting the terms on which it offers its proposal, in
particular because the Exchange believes that a substantially similar
substitute for at least two of the Proposed Third Party Systems and at
least two of the Proposed Third Party Data Feeds is available, and the
Exchange has not placed third-party vendors at a competitive
disadvantage created by the Exchange, the proposed fees for the
Exchange's connectivity to Proposed Third Party Systems and Proposed
Third Party Data Feeds are reasonable.\27\ If the Exchange were to set
its prices for access to Proposed Third Party Systems or Proposed Third
Party Data Feeds at a level that Users found to be too high, Users
could easily choose
[[Page 19052]]
to connect to Proposed Third Party Systems or Proposed Third Party Data
Feeds through competing connections, as detailed above.
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\27\ See Wireless Approval Order, supra note 20. There is no fee
change proposed for the Proposed Third Party Systems.
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Additional Considerations
The Exchange believes that it is reasonable to add ``and their
partners'' to the second paragraph under ``Connectivity to Third Party
Data Feeds'' (``Proposed Pass-Through Edit'') as that would add clarity
as to who may charge redistribution fees, making the paragraph more
precise.
The Exchange believes that it is reasonable to make the proposed
changes, as connectivity to the Proposed Third Party Systems and access
to the Proposed Third Party Data Feeds was generally requested by
Users.
The Exchange does not propose to change the monthly recurring fee
Users pay for access to each Third Party System. Although the proposed
changes to the list of Third Party Systems would combine the names of
several current Third Party Systems, no User would be charged more as a
consequence of the combinations. A User would continue to be able to
choose which systems it wants from any Third Party System. It would not
have to receive any systems, or pay for any bandwidth, that it did not
choose.
The Exchange believes that the fees for connectivity to the
Proposed Third Party Data Feeds are reasonable.
<bullet> The combination of Cboe MATCHNow into Cboe Canada reflects
the integration of Cboe Canada.\28\ The combined fee is less than the
sum of the current fees for those feeds.
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\28\ See supra note 8.
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<bullet> The proposed fee for the combination of the Nasdaq Stock
Market and Nasdaq ISE is equal to the sum of the current fees for those
feeds.
<bullet> The proposed fee for the combination of the TMX Group and
Montreal Exchange is less than the sum of the current fees for those
feeds.
<bullet> By breaking out the MIAX options into five Proposed Third
Party Data Feeds, Users may connect to only the market or markets that
they wish. Unlike other Proposed Third Party Data Feeds, MIAX requires
dedicated connectivity by individual data feed, and so separating them
into five Proposed Third Party Data Feeds follows MIAX's own
connectivity model.
The Proposed Rule Change Is Equitable
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the Proposed Pass-Through Edit is
equitable as it would add clarity as to who may charge redistribution
fees, making the paragraph more precise and thereby ensuring the
accuracy of, and adding clarity and transparency to, the Connectivity
Fee Schedule. Without this proposed rule change, Users would have fewer
options for connectivity to the Proposed Third Party Systems and
Proposed Third Party Data Feeds. By offering Access and Connectivity,
the Exchange gives each User additional options for addressing its
needs, responding to User demand for options. Providing additional
services helps each User tailor its data center operations to the
requirements of its business operations by allowing it to select the
form and latency of connectivity that best suits its needs. Users that
do not opt to utilize the Exchange's Access or Connectivity should
still be able to access Proposed Third Party Systems or connect to
Proposed Third Party Data Feeds using third party connections.
The Exchange believes that the proposed change is equitable because
it will result in fees being charged only to Users that voluntarily
select to receive the corresponding services and because those services
will be available to all Users.
Furthermore, the Exchange believes that the services and fees
proposed herein are equitably allocated because, in addition to the
services being completely voluntary, they are available to all Users on
an equal basis (i.e., the same products and services are available to
all Users). All Users that voluntarily select the Exchange's Access or
Connectivity would be charged the same amount for the same services.
Users who opt not to use the Access or Connectivity would not be
charged. In this way, the proposed rule change equitably allocates the
proposed fees only to Users who choose to use Exchange's Access or
Connectivity.
The Proposed Change Is Not Unfairly Discriminatory
The Exchange believes that the proposed rule change is not unfairly
discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not
unfairly discriminatory as it would add clarity as to who may charge
redistribution fees, making the paragraph more precise and thereby
ensuring the accuracy of, and adding clarity and transparency to, the
Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options
for access to Proposed Third Party Systems or connectivity to Proposed
Third Party Data Feeds. The proposed change would provide Users with an
additional choice with respect to the form and optimal latency of the
access they use to connect to Proposed Third Party Systems or
connectivity to Proposed Third Party Data Feeds, allowing a User to
select the connectivity that better suits its needs, helping it tailor
its colocation operations to the requirements of its business
operations. Users that do not opt to utilize the Exchange's proposed
Access or Connectivity would still be able to access the Proposed Third
Party Systems or connect to Proposed Third Party Data Feeds using third
party systems.
The Exchange believes that the proposed change is not unfairly
discriminatory because it will result in fees being charged only to
Users that voluntarily select to receive the corresponding services and
because those services will be available to all Users. Furthermore, the
Exchange believes that the services and fees proposed herein are not
unfairly discriminatory because, in addition to the services being
completely voluntary, they are available to all Users on an equal basis
(i.e., the same products and services are available to all Users). All
Users that voluntarily select the Exchange's Access or Connectivity
would be charged the same amount for the same services.
For all 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,\29\ 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. The proposed change would not affect competition
among national securities exchanges or among members of the Exchange,
but rather between FIDS and its commercial competitors. By offering
Access and Connectivity, the Exchange would give each User additional
options for addressing its needs, responding to User demand for
options. Providing additional services would help each User tailor its
data center operations to the requirements of its business operations
by allowing it to select the form and latency of connectivity that best
suits its needs. Users that do not opt to utilize the Exchange's
proposed Access or Connectivity should still be able to access Proposed
Third Party
[[Page 19053]]
Systems and connect to Proposed Third Party Data Feeds using third
party connections.
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\29\ 15 U.S.C. 78f(b)(8).
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The Exchange does not believe that FIDS would have any competitive
advantage over either existing third-party providers or any future
providers of access to Proposed Third Party Systems or connectivity to
Proposed Third Party Data Feeds. If a third party offers such access or
connectivity to Users, a User may utilize a cross connect, a third
party telecommunication network, the MDC network, or a combination
thereof to access such access or connectivity through a connection to
another User inside the MDC or a third party vendor outside the MDC.
The Exchange's proposed service for Access and Connectivity does not
have any special access to or advantage within the MDC. All distances
in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any
competitive advantage because it would charge for connectivity only,
not the Third Party System or Third Party Data Feed itself. All Users
that connect to a Proposed Third Party System or Proposed Third Party
Data Feed, whether they elect to connect using the Exchange's proposed
service or that of the Exchange's competitors, would have to pay a
third party for the Proposed Third Party System or Proposed Third Party
Data Feed.
To be clear, third party competitors would not be required to
obtain the Proposed Third Party Systems or Proposed Third Party Data
Feeds from FIDS; rather, they could obtain them from other third
parties and transport them into the MDC, via telecom equipment, in
order to redistribute them to other Users. Whether they are Users or
third party vendors outside the MDC, actual or future competitors of
the Exchange would not have to pay the Exchange for the Proposed Third
Party System or Proposed Third Party Data Feed itself.
Nor does the Exchange believe that FIDS has a competitive advantage
over any third-party competitors offering access to the Proposed Third
Party Systems or connectivity to the Proposed Third Party Data Feeds by
virtue of the fact that ICE owns and operates the MDC's meet-me-rooms.
Users purchasing Access or Connectivity--like Users of any other
colocation service--would require a circuit connecting out of the MDC,
and in most cases, such circuits are provided by third-party Telecoms.
Currently, 16 Telecoms operate in the meet-me-rooms and provide a
variety of circuit choices. It is in the Exchange's best interest to
set the fees that Telecoms pay to operate in the meet-me-rooms at a
reasonable level \30\ so that market participants, including Telecoms,
will maximize their use of the MDC. By setting the meet-me-room fees at
a reasonable level, the Exchange encourages Telecoms to participate in
the meet-me-rooms and to sell circuits to Users for connecting into and
out of the MDC. These Telecoms then compete with each other by pricing
such circuits at competitive rates. These competitive rates for
circuits help draw in more Users and Hosted Customers to the MDC, which
directly benefits the Exchange by increasing the customer base to whom
the Exchange can sell its colocation services, which include cabinets,
power, ports, and connectivity to many third-party data feeds, and
because having more Users and Hosted Customers leads, in many cases, to
greater participation on the Exchange. In this way, by setting the
meet-me-room fees at a level attractive to telecommunications firms,
the Exchange spurs demand for all of the services it sells at the MDC,
while setting the meet-me-room fees too high would negatively affect
the Exchange's ability to sell its services at the MDC.\31\
Accordingly, there are real constraints on the meet-me-room fees the
Exchange charges, such that the Exchange does not have an advantage in
terms of costs when compared to third parties that enter the MDC
through the meet-me-rooms to provide services to compete with the
Exchange's services.
---------------------------------------------------------------------------
\30\ See MMR Notice, supra note 25.
\31\ See supra note 26.
---------------------------------------------------------------------------
If anything, the Exchange would be subject to a competitive
disadvantage vis-[agrave]-vis third-party competitors offering access
to the Proposed Third Party Systems or connectivity to the Proposed
Third Party Data Feeds. Third-party competitors are not subject to the
Commission's filing requirements, and therefore can freely change their
services and pricing in response to competitive forces. In contrast,
the Exchange's service and pricing would be standardized as set out in
this filing, and the Exchange would be unable to respond to pricing
pressure from its competitors without seeking a formal fee change in a
filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on
competition. It is not intended to address competitive issues but
rather is concerned solely with adding clarity as to who may charge
redistribution fees.
The changes would not put any market participants at a relative
disadvantage compared to other market participants or penalize one or
more categories of market participants in a manner that would impose an
undue burden on competition.
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 \32\ and Rule 19b-4(f)(6) thereunder.\33\
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.\34\
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\32\ 15 U.S.C. 78s(b)(3)(A)(iii).
\33\ 17 CFR 240.19b-4(f)(6).
\34\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \35\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\35\ 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:
[[Page 19054]]
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#9eecebf2fbb3fdf1f3f3fbf0eaeddeedfbfdb0f9f1e8"><span class="__cf_email__" data-cfemail="e193948d84cc828e8c8c848f9592a1928482cf868e97">[email protected]</span></a>. Please include
file number SR-NYSE-2025-13 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-NYSE-2025-13. 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="https://www.sec.gov/rules/sro.shtml">https://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 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-NYSE-2025-13 and should be
submitted on or before May 27, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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\36\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-07702 Filed 5-2-25; 8:45 am]
BILLING CODE 8011-01-P
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