Notice2025-14358
Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE American LLC; NYSE Arca, Inc.; NYSE Texas, Inc.; NYSE National, Inc.; Notice of Filing of Amendments and Order Granting Accelerated Approval of Proposed Rule Changes, Each as Modified by the Amendment, To Expand the Virtual Control Circuit Service in the Connectivity Fee Schedule
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
July 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 144 (Wednesday, July 30, 2025)</title>
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[Federal Register Volume 90, Number 144 (Wednesday, July 30, 2025)]
[Notices]
[Pages 35950-35954]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14358]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103548; File Nos. SR-NYSE-2025-12, SR-NYSEAMER-2025-21,
SR-NYSEARCA-2025-29, SR-NYSETEX-2025-03, SR-NYSENAT-2025-07]
Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE
American LLC; NYSE Arca, Inc.; NYSE Texas, Inc.; NYSE National, Inc.;
Notice of Filing of Amendments and Order Granting Accelerated Approval
of Proposed Rule Changes, Each as Modified by the Amendment, To Expand
the Virtual Control Circuit Service in the Connectivity Fee Schedule
July 25, 2025.
I. Introduction
On April 7, 2025, New York Stock Exchange LLC (``NYSE''), NYSE
American LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), NYSE
Texas, Inc. (``NYSE Texas''), and NYSE National, Inc. (``NYSE
National'') (each an ``Exchange,'' collectively, ``Exchanges'') each
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposal to amend its
connectivity fee schedule to add and establish fees for connectivity
from the Mahwah Data Center to one or more trading floors. On April 16,
2025, NYSE American filed Amendment No. 1 to its proposed rule
change.\3\ The proposed rule changes were published for comment in the
Federal Register on April 28, 2025.\4\ On June 11, 2025, pursuant to
Section 19(b)(2) of the Act,\5\ the Commission designated a longer
period within which to approve the proposed rule changes, disapprove
the proposed rule changes, or institute proceedings to determine
whether to disapprove the proposed rule changes.\6\ The Commission has
not received any comments on the proposed rule changes. On June 26,
2025, NYSE, NYSE Arca, NYSE Texas and NYSE National each filed
Amendment No. 1 to its proposed rule change, and NYSE American filed
Amendment No. 2 to its proposed rule change (each an ``Amendment'' and
collectively, ``Amendments'').\7\ The Amendments superseded each
Exchange's prior filing in its entirety.\8\ This order provides notice
of the filings of Amendment No. 1 to NYSE, NYSE Arca, NYSE Texas and
NYSE National's proposed rule changes, and notice of the filing of
Amendment No. 2 to NYSE American's proposed rule change, and grants
approval of the proposed rule changes, each as modified by Amendment
No. 1 or Amendment No. 2, as applicable, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 to NYSE American's proposed rule change more
closely conformed the text of Exhibit 1 of the proposed rule change
to the filed Form 19b-4.
\4\ See Securities Exchange Act Release Nos. 102898 (April 22,
2025), 90 FR 17635 (SR-NYSE-2025-12); 102897 (April 22, 2025), 90 FR
17658 (SR-NYSEAMER-2025-21); 102899 (April 22, 2025), 90 FR 17640
(SR-NYSEARCA-2025-29); 102902 (April 22, 2025), 90 FR 17665 (SR-
NYSETEX-2025-03); 102900 (April 22, 2025), 90 FR 17675 (SR-NYSENAT-
2025-07).
\5\ 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 103224, 90 FR 25698
(June 17, 2025) (designating July 27, 2025, as the date by which the
Commission shall either approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change).
\7\ Amendment No. 1 to the proposed rule changes for NYSE, NYSE
Arca, NYSE Texas and NYSE National, and Amendment No. 2 to NYSE
American's proposed rule change are identical in substance. For ease
of reference, this order provides page citations to SR-NYSE-2025-12
Amendment No. 1, which is available on the Commission's website at:
<a href="https://www.sec.gov/comments/sr-nyse-2025-12/srnyse202512-617407-1811334.pdf">https://www.sec.gov/comments/sr-nyse-2025-12/srnyse202512-617407-1811334.pdf</a> (``Amendment No. 1'').
\8\ The Amendments revise the proposals to provide additional
explanation for why the Exchanges believe the proposed service is
reasonable. Specifically, the Exchanges, in the Amendments, provide
additional support for the assertion that telecommunication service
providers (``Telecoms'') provide a substantially similar substitute
for the Exchanges' proposed service, including a description of the
path the Telecoms and Exchanges take to the Exchanges' trading
floors. The Exchanges also clarify that the pathways offered by the
proposed connections and the Telecom circuits are not normalized
within the Exchange buildings. The Amendment for each filing is
available on the Commission's website at: <a href="https://www.sec.gov/comments/sr-nyse-2025-12/srnyse202512-617407-1811334.pdf">https://www.sec.gov/comments/sr-nyse-2025-12/srnyse202512-617407-1811334.pdf</a> (SR-NYSE-
2025-12); <a href="https://www.sec.gov/comments/sr-nyseamer-2025-21I/srnyseamer202521-617427-1811354.pdf">https://www.sec.gov/comments/sr-nyseamer-2025-21I/srnyseamer202521-617427-1811354.pdf</a> (SR-NYSEAMER-2025-21); <a href="https://www.sec.gov/comments/sr-nysearca-2025-29/srnysearca202529-617428-1811374.pdf">https://www.sec.gov/comments/sr-nysearca-2025-29/srnysearca202529-617428-1811374.pdf</a> (SR-NYSEARCA-2025-29); <a href="https://www.sec.gov/comments/sr-nysetex-2025-03/srnysetex202503-617467-1811414.pdf">https://www.sec.gov/comments/sr-nysetex-2025-03/srnysetex202503-617467-1811414.pdf</a> (SR-NYSETEX-2025-
03); <a href="https://www.sec.gov/comments/sr-nysenat-2025-07/srnysenat202507-617447-1811394.pdf">https://www.sec.gov/comments/sr-nysenat-2025-07/srnysenat202507-617447-1811394.pdf</a> (SR-NYSENAT-2025-07).
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II. Description of the Proposed Rule Changes, as Modified by the
Amendments
A. Background
The Exchanges currently offer a virtual control circuit (``VCC'')
service \9\ that is a unicast connection through which two Users can
establish a connection between two points over dedicated bandwidth.\10\
The Exchanges offer VCC connections between two Users in the Mahwah
Data Center (``MDC'').\11\ The Exchanges, in 2024, amended this service
to also offer VCCs between the MDC and the U.S. FIDS remote access
centers; specifically, the Exchanges offer a connection between a User
in the MDC and either the same User outside the MDC at a remote access
center or a third party outside the MDC at a remote access center.\12\
Fees for VCC services are based on the bandwidth requirements chosen by
the User per VCC connections.\13\ Connectivity to VCCs requires
permission from both parties before the Exchanges will establish the
connection.\14\
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\9\ See Securities Exchange Act Release No. 80311 (March 24,
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45); 80309 (March
24, 2017), 82 FR 15725 (March 30, 2017) (SR-NYSEMKT-2016-63); 80310
(March 24, 2017), 82 FR 15763 (March 30, 2017) (SR-NYSEARCA-2016-
89); 83351 (May 31, 2018), 83 FR 26314 (June 6, 2018) (SR-NYSENAT-
2018-07); 87408 (October 28, 2019), 84 FR 58778 (November 1, 2019)
(SR-NYSECHX-2019-12) (adding the VCC service and related fees).
\10\ See Amendment No. 1, supra note 7, at 4.
\11\ Id. The Exchanges state that through its Fixed Income and
Data Services (``FIDS'') business, Intercontinental Exchange, Inc.
(``ICE'') operates the MDC and that the Exchanges are indirect
subsidiaries of ICE. See id., at 4 n.5.
\12\ Id. See also Securities Exchange Act Release Nos. 101582
(November 12, 2024), 89 FR 90812 (November 18, 2024) (SR-NYSE-2024-
69); 101575 (November 12, 2024), 89 FR 90770 (November 18, 2024)
(SR-NYSEAMER-2024-64); 101576 (November 12, 2024), 89 FR 90775
(November 18, 2024) (SR-NYSEARCA-2024-91); 102902 (November 12,
2024), 89 FR 90893 (November 18, 2024) (SR-NYSECHX-2024-31); 101578
(November 12, 2024), 89 FR 90794 (November 18, 2024) (SR-NYSENAT-
2024-28) (adding VCC services between the MDC and the U.S. remote
access centers to the connectivity fee schedule).
\13\ Id. at 5.
\14\ Id.
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The Exchanges propose to further expand this service to offer
connectivity from the MDC to the NYSE, NYSE American, and NYSE Arca
trading floors (each a ``Trading Floor,'' collectively, ``Trading
Floors'').\15\ These connections may be between a User at the MDC and
itself on a Trading Floor, or between a User at the MDC and a third
party on
[[Page 35951]]
a Trading Floor (``Trading Floor Connections'').\16\ As with the
existing VCCs, the Trading Floor Connections would be unicast
connections over dedicated bandwidth over the IGN network.\17\ The
Trading Floor Connections can be in the form of a VCC between the MDC
and a single Trading Floor (``Trading Floor VCC'') or a virtual routing
and forwarding service between the MDC and one or more Trading Floors
(``Trading Floor VRF'').\18\
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\15\ As noted by the Exchanges, ``Trading Floor'' is used as
defined in, as applicable, NYSE Rule 6A (Trading Floor), NYSE
American Scope of Terms (17), and NYSE Arca Rule 1 (Definitions),
Floor, Trading Floor and Options Trading Floor. NYSE National and
NYSE Texas do not have trading floors. Id. at 4 n.3.
\16\ Id. at 4. The connection would run between the MDC and the
User's or third party's equipment physically located on one or more
of the Trading Floors.
\17\ See id.
\18\ The Exchanges state that because both Trading Floor VCCs
and Trading Floor VRFs use the IGN network, both sets of connections
are substantially the same in latency and reliability. A User would
choose between them based on factors including technical preference
and consistency. As an example, the Exchanges state that a User
might prefer a Trading Floor VRF if it was setting up a link between
the MDC and two Trading Floors but might prefer to use a Trading
Floor VCC if it was already using VCCs. Id. at 4.
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As with the current VCC service, the monthly charge for a Trading
Floor VCC or VRF connection would be based on the size of the bandwidth
connection the User requests.\19\ The Exchanges propose to charge the
same fee for the Trading Floor Connections as the Exchanges currently
charge for VCCs.\20\ The per connection fees for one Trading Floor VCC
and one Trading Floor VRF connection would be identical to each other
and to the current fees for a VCC connection.\21\
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\19\ Id. at 5.
\20\ Id. The Exchanges state that all Trading Floor Connections
must be authorized by both parties before FIDS will establish the
connection.
\21\ Id. The Exchanges note that although the proposed fees for
the Trading Floor VCC and the Trading Floor VRF are identical, a
User's monthly fee could vary based which form of connection the
User chooses. For example, if a User chooses to purchase VCCs or a
combination of VCCs and a VRF, it would be charged separately for
each connection. If the User chose one VRF to connect to multiple
Trading Floors, it would be charged for one connection. The
Exchanges propose to amend the connectivity fee schedule to clarify
the potential impact of the choice of the connection on the fees.
Id.
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The Exchanges state that Users would determine how the Trading
Floor Connections are used and that neither the Exchanges nor FIDS have
visibility into Users' Trading Floor Connections.\22\ The Exchanges
state that the Trading Floor Connections are not used for latency-
sensitive trading data, but for trading-related data or communications
like email or chat with a User's back office.\23\ Specifically,
potential uses could include receiving and transmitting trading-related
information, including trading data and clearing information (e.g., an
options market maker \24\ on a Trading Floor using a computer with a
firm's options market data to provide verbal bids/offers in response to
floor broker requests for quotes) and providing access to back office
services to individuals physically located on a Trading Floor.\25\ Each
Exchange represents that a User's Trading Floor Connection will not be
through the Exchange's execution systems and that a Trading Floor
Connection will not provide direct access or order entry to the
Exchange's execution systems.\26\ The Exchanges also state that
establishing a Trading Floor Connection would not give FIDS or an
Exchange the right to use the relevant Exchange's systems.\27\
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\22\ Id.
\23\ Id. at 8.
\24\ Id. at 5 n.8 and accompanying text.
\25\ Id. at 5.
\26\ Id.
\27\ Id.
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The Exchanges further represent that all NYSE, NYSE American, and
NYSE Arca equities and options members and member organizations,
including NYSE floor brokers and Designated Market Makers, and floor
brokers, options market makers, and specialists on the NYSE American
and NYSE Arca Trading Floors remain subject to NYSE, NYSE American, and
NYSE Arca rules regarding activities on the Trading Floors.\28\ The
Exchanges state that all NYSE, NYSE American or NYSE Arca rules would
continue to apply, including any rules regarding limitations on the use
of electronic communications from or to the Trading Floor.\29\ The
Exchanges represent that the proposed connections from the MDC to the
Trading Floors do not contravene or limit the rules or the ability of
the NYSE, NYSE American, or NYSE Arca to surveil for compliance with
such rules.\30\ These rules include NYSE Rules 36 (Communications
Between Exchange and Member Offices), 98 (Operation of a DMM Unit), and
104 (Dealings and Responsibilities of DMMs.\31\
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\28\ Id. at 5.
\29\ Id.
\30\ Id.
\31\ Id.
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III. Discussion and Commission Findings
The Commission has historically applied a ``market-based'' test in
its assessment of market data fees, which has also been applied in the
context of connectivity fees, such as those proposed here.\32\ Under
that test, the Commission considers ``whether the exchange was subject
to significant competitive forces in setting the terms of its proposal
. . . , including the level of any fees.'' \33\ If an exchange meets
this 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.\34\ If an exchange cannot demonstrate that it was subject
to significant competitive forces, it must ``provide a substantial
basis, other than competitive forces, . . . demonstrating that the
terms of the proposal are equitable, fair, reasonable, and not
unreasonably discriminatory.'' \35\
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\32\ See Securities Exchange Act Release No. 90209 (October 15,
2020), 85 FR 67044 (October 21, 2020) (File Nos. 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) (Notice of Filings
of Partial Amendment No. 3 and Order Granting Accelerated Approval
to Proposed Rule Changes, Each as Modified by Partial Amendment No.
3, To Establish a Wireless Fee Schedule Setting Forth Available
Wireless Bandwidth Connections and Wireless Market Data Connections)
(``Wireless Order'').
See also Securities Exchange Act Release Nos. 85459 (March 29,
2019), 84 FR 13363, 13367 (April 4, 2019) (File Nos. SR-BOX-2018-24;
SR-BOX-2018-37; and SR-BOX-2019-04) (Order Disapproving Proposed
Rule Changes To Amend the Fee Schedule on the BOX Market LLC Options
Facility To Establish BOX Connectivity Fees for Participants and
Non-Participants Who Connect to the BOX Network); and 88493 (March
27, 2020) 85 FR 18617 (April 2, 2020) (File Nos. SR-BOX-2018-24; SR-
BOX-2018-37; and SR-BOX-2019-04) (Order Affirming Action by
Delegated Authority and Disapproving Proposed Rule Changes Related
to Connectivity and Port Fee) (``BOX Order'').
\33\ Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74781 (December 9, 2008) (``2008 ArcaBook
Approval Order'').
\34\ Id. See also In the Matter of the Application of SIFMA,
Securities Exchange Act Release No. 84432, 22 (October 16, 2018),
available at <a href="https://www.sec.gov/litigation/opinions/2018/34-84432.pdf">https://www.sec.gov/litigation/opinions/2018/34-84432.pdf</a> (``SIFMA Decision''), vacated on other grounds, NASDAQ
Stock Mkt., LLC v. SEC, 961 F.3d 421 (D.C. Cir. 2020).
\35\ 2008 ArcaBook Approval Order, supra note 33, at 74781. See
also SIFMA Decision, supra note 34, at 22. See also BOX Order, supra
note 32, at 18622-24 (noting that the exchange had failed to
demonstrate significant competitive forces, and therefore did not
establish a basis on which to conclude that the proposed fees were
equitable and reasonable.)
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The Commission finds that the proposed rule changes, each as
modified by Amendment No. 1 or Amendment No. 2, as applicable, are
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\36\ In particular, the Commission finds that each of the
proposed rule changes is consistent
[[Page 35952]]
with Section 6(b)(4) of the Act \37\ which requires that a national
securities exchange provide for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and other
persons using its facilities; Section 6(b)(5) of the Act,\38\ which
requires that the rules of a national securities exchange be designed,
among other things, to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, 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 not be designed to permit unfair discrimination
between customers, issuers, brokers or dealers; and Section 6(b)(8) of
the Act,\39\ which requires that the rules of a national securities
exchange do not impose any burden on competition that is not necessary
or appropriate in furtherance of the Act.
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\36\ In approving the proposed rule changes, each as modified by
Amendment No. 1 or Amendment No. 2, as applicable, the Commission
notes that it has considered the proposed rules' impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\37\ 15 U.S.C. 78f(b)(4).
\38\ 15 U.S.C. 78f(b)(5).
\39\ 15 U.S.C. 78f(b)(8).
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The Exchanges state that the Trading Floor Connections are offered
on terms that are reasonable and do not impose a burden on competition
that is not necessary or appropriate because they are offered in a
competitive environment where substantially similar substitutes are
available.\40\ The Exchanges state that the Trading Floor Connections
compete with circuits offered by Telecoms.\41\ These Telecom circuits,
like the Trading Floor Connections, can also provide connectivity
between the MDC and the Trading Floors.\42\ The Exchanges state that
sixteen Telecoms currently have installed their equipment in the
Exchanges' two meet-me-rooms at the MDC.\43\ The Exchanges state that
there are also Telecoms currently located in the same buildings as the
Trading Floors.\44\ The Telecoms would connect to a Trading Floor
entity's equipment in the same building as the Trading Floor, in an
area that the Exchanges state is ``essentially a meet-me-room.'' \45\
The Exchanges state that once the Trading Floor Connections and the
Telecom circuits reach the Trading Floor buildings, the connections
would extend to the Trading Floor itself through the Exchanges' network
and infrastructure.\46\
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\40\ See Amendment No. 1, supra note 7, at 7-10. The Exchanges
further state that the Trading Floor Connections are offered on
terms that are equitable and not unfairly discriminatory because
they are voluntary and available to all market participants on an
equal basis. They also believe that the proposal to offer two forms
of Trading Floor Connections (VCCs and VRFs) is equitable, not
unfairly discriminatory and would not impose a burden on competition
that is not necessary or appropriate because both forms of
connectivity are over the IGN network and therefore are
substantially the same in latency and reliability. See id., at 11-
12.
\41\ Id. at 7.
\42\ See id. at 8.
\43\ Id. at 7-8. The Exchanges filed to add meet-me-room
services and associated fees in 2023. See Securities Exchange Act
Release Nos. 97998 (July 26, 2023), 88 FR 50238 (August 1, 2023)
(SR-NYSE-2023-27); 97999 (July 26, 2023), 88 FR 50190 (August 1,
2023) (SR-NYSEAMER-2023-36); 98000 (July 26, 2023), 88 FR 50244
(August 1, 2023) (SR-NYSEARCA-2023-47); 98001 (July 26, 2023), 88 FR
50196 (August 1, 2023) (SR-NYSECHX-2023-14); 98002 (July 26, 2023),
88 FR 50232 (August 1, 2023) (SR-NYSENAT-2023-12).
\44\ Id. at 8.
\45\ Id.
\46\ Id. The Exchanges represent that ``[t]he path the traffic
takes from when it enters the building of the Trading Floor to the
Trading Floor--its pathway--is the same irrespective of whether the
service is a Telecom circuit or a TF Connection.'' Id.
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The Exchanges state that the Telecoms are not at a competitive
disadvantage created by the Exchanges with respect to the Telecoms'
connectivity inside the MDC and the Trading Floor buildings.
Specifically, the Exchanges state that Trading Floor Connections do not
have a competitive advantage over the Telecom circuits in terms of the
pathways that the connections would take to reach the Trading
Floors.\47\ With respect to the MDC, the Exchanges state that the
Trading Floor Connections do not have a distance or latency advantage
over the Telecoms' circuits.\48\ FIDS has normalized (a) the distance
between the meet-me-rooms and the colocation halls and (b) the distance
between the rooms where the FIDS circuits and the Trading Floor
Connections exit the MDC and the colocation halls.\49\ As a result,
according to the Exchanges, a User choosing whether to use the Trading
Floor Connections or Telecom circuits does not face any difference in
the distances or latency within the MDC.\50\
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\47\ Id.
\48\ Id. at 9. The Exchanges state with respect to the MDC that
they are not aware of any differences under their control that give
the Exchanges a latency advantage. Id.
\49\ Id.
\50\ Id.
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With respect to the Trading Floor buildings, the Exchanges state
that the Trading Floor Connections do not have any bandwidth or
substantial distance advantage over the Telecoms' circuits within the
buildings of the Trading Floors.\51\ The Exchanges state that once the
Trading Floor Connections and the Telecom circuits connections reach
the Trading Floor buildings, the pathways that both types of
connections would take to reach the Trading Floor are the same (i.e.,
extending to the Trading Floor itself through the Exchanges' network
and infrastructure).\52\ The Exchanges also state that Telecoms can
offer circuits with a variety of latency and bandwidth specifications,
some of which may exceed the specifications of the Trading Floor
Connections.\53\
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\51\ Id.
\52\ Id. at 8. The Exchanges acknowledge that the pathways of
the Trading Floor Connections and the Telecom circuits are not
normalized within Exchanges' buildings (i.e., the length of the
connections may ``slightly'' differ) but state that the connections
do not need to be normalized because Users would not use them for
latency-sensitive purposes (e.g., transmitting data to the matching
engine). Id. Instead, the Exchanges state that they would be used
for purposes such as communicating with the back office. Id. The
Exchanges note that Users would choose to purchase connections based
on factors such as bandwidth, price, termination point, technical
preference and consistency. Id.
\53\ Id. The Exchanges note that the specifications of FIDS's
competitors' circuits are not public. The Exchanges understand that
any information FIDS has about its competitors was obtained through
anecdotal communications, by observing customers' purchasing choices
in the competitive market, and from its own experience as a
purchaser of circuits from telecommunications providers to build
FIDS's own networks. Id. at 9 n.19.
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The Exchanges also state that they have no competitive advantage
over Telecom circuits with respect to fees they charge the Telecoms for
access to the meet-me-rooms at the MDC.\54\ The Exchanges believe that
the amount of the meet-me-room fees they can charge Telecoms are
constrained, and they do not have a competitive advantage over any
third-party competitor by virtue of owning and operating the MDC meet-
me-rooms.\55\ The Exchanges state that they are incentivized to set
fees to operate in the meet-me-room at a reasonable rate because
reasonable fees will incentivize Telecoms to participate in the meet-
me-rooms.\56\ The Exchanges state that these Telecoms would compete
with each other by pricing circuits at competitive rates, which will
draw Users to the MDC and that the Exchanges benefit from the Telecoms
selling circuits to Users because these Users increase the customer
base to which the Exchanges can sell their colocations services,
including cabinets, power, ports, and connectivity to third-party data
feeds.\57\ The Exchanges also state that more Users would lead, in many
cases, to greater participation on the Exchanges.\58\ The Exchanges
state that the incentive to attract Telecoms to the MDC meet-me-rooms
constrains the Exchanges' meet-me-room fees such that the Exchanges do
not have an advantage in terms of costs when compared to
[[Page 35953]]
third parties that enter through the meet-me-room to provide competing
services.\59\ In fact, according to each Exchange, setting meet-me-room
fees too high would negatively impact the Exchange's ability to sell
its services to Users at the MDC.\60\ With respect to the Telecoms'
presence in the Trading Floor buildings, the Exchanges represent that
the Telecoms do not pay a fee to connect to the Trading Floor entity's
equipment in the same room as the Trading Floor.\61\ The Exchanges also
represent that the Trading Floor entities do not pay fees to any of the
Exchanges for the connection.\62\
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\54\ See supra note 43.
\55\ See Amendment No. 1, supra note 7, at 9-10.
\56\ Id. at 9.
\57\ Id.
\58\ Id.
\59\ Id. at 10.
\60\ Id. The Exchanges also state that they are at a competitive
disadvantage compared to the Telecoms because the Exchanges are
required to file their services and pricing with the Commission
pursuant to Section 19(b) of the Exchange Act.
\61\ Id. at 9.
\62\ Id.
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The Exchanges state that the Trading Floor Connections would be
offered at the same price as the VCCs currently offered by the
Exchanges, and if Users found the fees too high, they have the option
to choose alternative options offered by the Telecoms.\63\ The
Exchanges also state that they have no incentive to undercut fees that
the Telecoms offer or might offer for competing services because the
Telecoms might reassess whether it make sense to participate in the
Exchanges' meet-me-rooms, which could negatively impact User
participation in colocation and on the Exchanges.\64\
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\63\ Id. at 10.
\64\ Id.
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The Exchanges have demonstrated that they are subject to
significant competitive forces in setting the terms on which they offer
Trading Floor Connections, in particular because substantially similar
substitutes are available.\65\ As stated earlier, the Exchanges state
that Telecoms are available at both the MDC and the Trading Floor
buildings.\66\ The Exchanges have demonstrated that they do not have a
competitive advantage compared to the Telecoms with respect to the
Trading Floor Connections. Based on the record, the Commission believes
that there are sufficiently comparable alternatives to the Trading
Floor Connections. Thus, the Exchanges are subject to significant
competitive forces that constrain the terms on which the Trading Floor
Connections are offered, and the Commission approves the proposals, as
amended, because there is no substantial countervailing basis to find
that the terms of the proposals, as amended, violate the Act or rules
thereunder.\67\
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\65\ See ArcaBook Approval Order, supra note 33, at 74785; SIFMA
Decision, supra note 76, at 43-44 (citation omitted) (``We recognize
that products need not be identical to be substitutable.'').
\66\ See supra notes 43-44 and accompanying text.
\67\ See Wireless Order, supra note 32.
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The Trading Floor Connections are not offered on terms that are
unfairly discriminatory or would impose a burden on competition not
necessary or appropriate in furtherance of the Act. In particular, the
proposed services are available to all market participants equally, and
the Exchanges have sufficiently demonstrated that they do not have a
competitive advantage compared to the Telecoms.
Based on this, the Commission finds the proposed rule changes, as
modified by Amendment No. 1 or Amendment No. 2, as applicable, to be
consistent with Section 6(b)(4) of the Act,\68\ which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and issuers and other persons using its facilities and Section
6(b)(8), which prohibits any national securities exchange from imposing
any burden on competition not necessary or appropriate in furtherance
of the Act. Further, because the Trading Floor Connections are designed
to offer market participants an additional option for Users to transmit
information related to trading and clearing to entities and individuals
on the Trading Floors, including market makers and floor brokers, and
competitors may offer a similar level of services for the reasons
discussed above, the Commission finds the proposals, as amended, to be
consistent with the Section 6(b)(5) of the Act, which requires that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, 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 not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.\69\
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\68\ 15 U.S.C. 78f(b)(4).
\69\ 15 U.S.C. 78f(b)(5).
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For the foregoing reasons, the Commission finds that the proposed
rule changes of NYSE, NYSE Arca, NYSE Texas and NYSE National, each as
modified by Amendment No. 1, and the proposed rule change of NYSE
American, as modified by Amendment No. 2, are consistent with the Act.
IV. Solicitation of Comments on the Amendments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 1
or Amendment No. 2, as applicable, to the proposed rule changes 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#295b5c454c044a4644444c475d5a695a4c4a074e465f"><span class="__cf_email__" data-cfemail="790b0c151c541a1614141c170d0a390a1c1a571e160f">[email protected]</span></a>. Please include
File Numbers SR-NYSE-2025-12, SR-NYSEAMER-2025-21, SR-NYSEARCA-2025-29,
SR-NYSETEX-2025-03, SR-NYSENAT-2025-07 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 Numbers SR-NYSE-2025-12, SR-
NYSEAMER-2025-21, SR-NYSEARCA-2025-29, SR-NYSETEX-2025-03, SR-NYSENAT-
2025-07. These file numbers 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 filing will be available for inspection
and copying at the principal office of the Exchanges. 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 Numbers SR-NYSE-2025-12, SR-NYSEAMER-2025-21, SR-
NYSEARCA-2025-29, SR-NYSETEX-2025-03, SR-NYSENAT-2025-07 and should be
submitted on or before August 20, 2025.
V. Accelerated Approval of Proposed Rule Changes, as Modified by the
Amendments
The Commission finds good cause to approve the proposed rule
changes of NYSE, NYSE Arca, NYSE Texas and NYSE National, each as
modified by Amendment No. 1, and the proposed rule change of NYSE
American, as
[[Page 35954]]
modified by Amendment No. 2, prior to the 30th day after the date of
publication of notice of the Amendments in the Federal Register. The
Amendments revise the proposals to provide additional explanation for
why the Exchanges believe the proposed service is reasonable.
Specifically, the Exchanges, in the Amendments, provide additional
support for the assertion that Telecoms provide a substantially similar
substitute for the Exchanges' proposed service. The Commission believes
that the Amendments provide additional support for why the proposals
are consistent with the Act, thereby facilitating the Commission's
ability to make the findings set forth above to approve the proposals.
Accordingly, pursuant to Section 19(b)(2) of the Act,\70\ the
Commission finds good cause to approve the proposed rule changes of
NYSE, NYSE Arca, NYSE Texas and NYSE National, each as modified by
Amendment No. 1, and the proposed rule change of NYSE American, as
modified by Amendment No. 2, on an accelerated basis.
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\70\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\71\ that the proposed rule changes (SR-NYSE-2025-12; SR-NYSEAMER-
2025-21; SR-NYSEARCA-2025-29; SR-NYSETEX-2025-03; SR-NYSENAT-2025-07),
as amended, be, and hereby are approved.
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\71\ See id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\72\
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\72\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14358 Filed 7-29-25; 8:45 am]
BILLING CODE 8011-01-P
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