Notice2026-05340
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Exchange's Co-Location Services
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
March 19, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 53 (Thursday, March 19, 2026)</title>
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[Federal Register Volume 91, Number 53 (Thursday, March 19, 2026)]
[Notices]
[Pages 13381-13384]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05340]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105009; File No. SR-PHLX-2026-10]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Expand the
Exchange's Co-Location Services
March 16, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 3, 2026, Nasdaq PHLX LLC (``PHLX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. 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\ 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 expand its co-location services by
offering new cabinet and power options in the Exchange's expanded data
center, as described here below.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings</a>,
and at the principal office of the Exchange.
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 Exchange 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to expand its co-location services by
offering new cabinet and power options in the
[[Page 13382]]
Exchange's expanded data center. The Exchange's current data center
consists of the original data center (``NY11''), an expansion area
(``NY11-4''), and a future expansion area (``NY11-5'').
The Exchange submits this filing to propose a new service in NY11-
5, as described below. The Exchange will submit a fee filing to
establish fees for the services described herein.
New Service in NY11-5: Liquid Cooled Cabinet
Currently, co-location customers have the option of obtaining a
cabinet capable of accommodating varying power options. Co-location
customers may obtain a Cabinet and choose among varying power options
as provided under Rule General 8, Section 1.\3\
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\3\ See Rule General 8, Section 1(a)-(c).
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The Exchange proposes to introduce an additional cabinet option in
NY11-5. Specifically, the Exchange proposes to introduce a cabinet
featuring liquid cooling,\4\ a cooling method that uses liquid, rather
than air, to absorb and transfer heat away from equipment, such as
servers (``Liquid-Cooled Cabinet'').\5\ As proposed, data center
customers may either supply their own cabinets or elect to have Nasdaq
provide the cabinets for the customer's use in connection with the
proposed Liquid-Cooled Cabinet service.\6\ Depending on business needs
of data center customers, a Liquid-Cooled Cabinet might be more
attractive to data center customers because liquid cooling is more
efficient and enables space optimization in ways that air cooling
methods would struggle to support. For example, a Liquid-Cooled Cabinet
could handle greater power densities within a given space than would
air cooling. For data center customers, this translates into the
ability to deploy more computing power within the same cabinet
footprint. In effect, Liquid-Cooled Cabinets would allow data center
customers to install more of the computing equipment that data center
customers typically use within their cabinet than they would with air
cooling methods because liquid cooling is more efficient at dissipating
heat from a given cabinet space. The Exchange notes that data center
customers prefer denser environments to minimize distance between
equipment and thus maximize computing power within a given space. As
proposed, the Liquid-Cooled Cabinet option would only be offered in
NY11-5 because the required liquid-cooled infrastructure necessary to
support the proposed cabinets is not available in other parts of the
data center.\7\ The Exchange notes that Liquid-Cooled Cabinets are
offered as one other option for data center customers to choose from
because traditionally cooled cabinets throughout the data center will
continue to provide the level of thermal management appropriate for
each cabinet offering that the Exchange provides.
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\4\ The proposed cabinets would offer liquid versus air cooling.
Specifically, the liquid-cooling method uses pipes to circulate
chilled water or specialized coolant to client equipment. Liquid
cooling facilitates heat dissipation, allowing processors to operate
more efficiently than those cooled by air-to-air heat exchange.
Liquids have a much higher thermal conductivity and heat capacity,
so they can absorb and move heat faster and in smaller volumes.
\5\ See proposed Rule General 8, Section 1(a). To effect this
change, the Exchange proposes to amend Rule General 8, Section 1(a)
as follows. First, the Exchange proposes to insert the proposed
Liquid-Cooled Cabinet in the table at subparagraph (a) of Rule
General 8, Section 1 by inserting the words ``Liquid-Cooled
Cabinet--Nasdaq Provided**'' and the words ``Liquid-Cooled Cabinet--
Customer Provided**'' immediately following the ``Cabinet'' entry in
Rule General 8, Section 1(a). The Exchange further proposes to
designate such entries with the symbol ``**'' to make clear, as
provided in the proposed footnote to Rule General 8, Section 1(a),
that Liquid-Cooled Cabinets, both the Exchange as well as Customer
provided, are available only in NY11-5. Pending the submission of a
fee filing for the proposed Liquid-Cooled Cabinet, the Exchange
proposes a non-substantive change to enter the acronym ``TBD'' under
the column titled ``NY11-4/-5 Installation Fee'' as well as the
column titled ``Ongoing Monthly Fee.'' The Exchange believes this
proposed non-substantive change is appropriate to indicate that all
such fees for the proposed Liquid-Cooled Cabinet have yet to be
established. Finally, the Exchange proposes to enter ``N/A'' under
the column titled ``NY11 Installation Fee'' to clarify that NY-11-
related fees are not applicable to Liquid-Cooled Cabinets available
only in NY11-5. See id.
\6\ See proposed Rule General 8, Section 1(a). The proposal
would permit customers to use either Nasdaq-provided Liquid-Cooled
Cabinets or their own, unlike traditional air-cooled cabinets, which
must be Nasdaq-provided. Providing the option for customer-provided
cabinets is appropriate here because the Liquid-Cooled Cabinet is
purpose-built for the customer within a dedicated enclosure
specifically designed to suit the customer's liquid-cooling
infrastructure requirements for which a self-provided cabinet may,
depending on the circumstances, be more appropriate to suit the
customer's needs.
\7\ To the best of the Exchange's knowledge, no other national
securities exchange offers liquid-cooled cabinets as a colocation
option.
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As discussed above, the Exchange is offering the Liquid-Cooled
Cabinets as a convenience to its customers and notes that use of
colocation services, including the proposed Liquid-Cooled Cabinet
service, is completely optional. Colocation services, including the
proposed offering, are voluntary, and each customer may determine
whether any colocation option is appropriate for its business needs.
NY11-5 Cabinet Power Circuits
Rule General 8, Section 1(c) provides that the following five
cabinet power circuit options are only available in (and that one of
these must be selected for) NY11-4: Phase 1 20 amp 240 volt, Phase 1 32
amp 240 volt, Phase 1 40 amp 240 volt, Phase 3 20 amp 415 volt, and
Phase 3 32 amp 415 volt.\8\ The Exchange proposes to provide that the
foregoing five cabinet power circuit options are also available for
Liquid-Cooled Cabinets in NY11-5.\9\
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\8\ See Rule General 8, Section 1(c).
\9\ The five cabinet power circuit options (Phase 1 20A/240V,
32A/240V, 40A/240V; Phase 3 20A/415V, 32A/415V) are available for
both air-cooled and Liquid-Cooled Cabinets because the cabinet power
they support (approximately 5-23 kW) remains within the thermal
capabilities of traditional air-cooling systems. By contrast, the
higher-power Phase 3 40A/415V and 60A/415V options ([ap]29-43 kW)
discussed below exceed the threshold at which air cooling is
efficient or practicable and therefore are limited to Liquid-Cooled
Cabinets. To effect this change, the Exchange proposes to amend the
footnotes to Rule General 8, Section 1(c) as follows. The Exchange
proposes to modify the footnote designated with a single asterisk
(``*'') to add, immediately following the final sentence in that
footnote, the following sentence: ``These options are available also
for Liquid-Cooled Cabinets in NY11-5.'' In addition, and pending the
submission of a proposal to establish fees for proposed Liquid-
Cooled Cabinets in NY11-5, the Exchange proposes to clarify, in a
new footnote to Rule General 8, Section 1(c) designated with a
dagger symbol (``[dagger]''), that fees depicted under Rule General
8, Section 1(c) for cabinet power options that are designated with
the dagger symbol (``[dagger]'') are fees for other than Liquid-
Cooled Cabinets in NY11-5. The Exchange believes these proposed
changes are appropriate to clarify the applicability of fees under
Rule General 8, Section 1(c) and to make clear that fees for cabinet
power options applicable to Liquid Cooled Cabinets in NY11-5 have
yet to be established. See proposed Rule General 8, Section 1(c).
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The Exchange further proposes to provide two new power options that
will be available only for Liquid-Cooled Cabinets in NY11-5: Phase 3,
40 amp, 415 volt and Phase 3, 60 amp 415 volt.\10\
[[Page 13383]]
These power circuit options are available only for Liquid-Cooled
Cabinets in NY11-5 as an additional offering for customers seeking
higher power options for their Liquid-Cooled Cabinets. Although
different options will be offered throughout the data center due to
differing power configurations, the new cabinet power options are not
inherently preferable to the existing cabinet power options because
customers have varying preferences for power circuits based on their
operational needs and the Exchange does not anticipate material
differences in equipment performance based on the power distribution.
As between the various power circuit options, customers choose power
based on their preferences and capacity needs.
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\10\ See proposed Rule General 8, Section 1(c). To effect this
change, the Exchange proposes to enter under subparagraph (c) of
Rule General 8, Section 1 the proposed cabinet power circuit options
for NY11-5 by inserting ``Phase 3 40 amp 415 volt***'' and ``Phase 3
60 amp 415 volt***'' thereunder. The Exchange proposes to use the
symbol triple asterisk (``***'') to clarify that such cabinet power
circuits are for use in in Liquid-Cooled Cabinets in NY11-5 only, as
provided in the proposed footnote to Rule General 8, Section 1(c).
Pending the submission of its fee filing for such Liquid-Cooled
Cabinet service, the Exchange further proposes to clarify, in the
columns titled ``NY11-4/-5 Installation Fee'' and ``NY11-4/-5
Ongoing Monthly Fee ($550 per kVA)'' and using the acronym ``TBD''
in each instance, that the installation and ongoing monthly fees for
such power circuits for Liquid-Cooled Cabinets in NY11-5 have yet to
be determined. Finally, the Exchange proposes to enter ``N/A'' under
the columns titled ``NY11 Installation Fee'' and ``NY11 Ongoing
Monthly Fee ($550 per kVA)'' to clarify that that NY11-specific fees
are not applicable to power circuits available only for Liquid-
Cooled Cabinets in NY11-5. The Exchange believes the foregoing
changes are appropriate to clarify that fees for the proposed
services have yet to be determined as well as to provide greater
specificity with respect to the applicability of certain fees to the
Exchange's offerings, thereby facilitating comprehension of the
Exchange's connectivity schedule as well as its use. See id. See
also supra note 10 and accompanying text (explaining the rationale
for limiting these offerings to Liquid-Cooled Cabinets).
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Implementation
Although the timing is subject to change,\11\ the Exchange
anticipates granting access to NY11-5 during the first quarter of 2026,
on or about April 3, 2026. As discussed above, the Exchange will submit
a fee filing to establish fees for the services described herein.
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\11\ The Exchange will announce modifications to the proposed
timing via the Nasdaq Customer Portal, which is the web portal used
for order and inventory management of colocation services, and email
communication to all colocation customers.
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In concert with this filing, the Exchange will allow customers to
place orders for Liquid-Cooled Cabinets in NY11-5, which orders would
not be fee liable until fees for such services are established and
customers are provided access to the space for their immediate use,
whether to trade or otherwise, on or about April 3, 2026.\12\ Allowing
customers to place orders in advance of opening its doors will allow
the Exchange to plan ahead for capacity and demand for services, as
well as procure necessary equipment.
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\12\ Charging customers once access is provided is consistent
with current practice and allows customers to set up equipment and
begin using power.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\14\ in particular, in that it is 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. Today, the Exchange offers a cabinet option and varying power
options for its data center colocation customers. The Exchange's
proposal would expand these cabinet and power circuit options by
introducing an additional cabinet featuring liquid cooling, as well as
several options for powering such cabinet. Specifically, the proposal
would benefit the public interest by providing colocation customers
with a Liquid-Cooled Cabinet not offered by other exchanges, and one
which offers customers the ability to deploy greater computing power
with a defined cabinet space, as compared to air-cooled cabinets.
Liquid-Cooled Cabinets are optional, however, because for many data
center customers, air-cooled cabinets may be better suited to meet the
requirements of their business operations. In general, the proposal is
consistent with the Act because the Exchange's expansion of the data
center, including the expansion of available cabinet options and
related power will enable the Exchange to meet customer preferences and
address customer demand for such services. In lieu of collocating
directly with the Exchange, market participants may choose not to
collocate at all or to collocate indirectly through a vendor.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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The Exchange also believes that the proposal will not be unfairly
discriminatory, consistent with the objectives of Section 6(b)(5) of
the Act \15\ because the expanded cabinet and related power options in
the data center would be offered equally to all customers. Although
optionality varies due to differing power configurations across the
data center, any customer may order cabinets and power across the data
center on the same terms as any other customer.
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\15\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that this
proposal does not concern itself with the speed at which customers can
trade or the Equalization Project \16\ because its scope is limited to
introducing a liquid-cooled cabinet option in NY11-5 and does not
extend to data communications networks.\17\
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\16\ The Equalization Project is an Exchange initiative to
equalize cross connects across the Exchange's entire data center
campus. See Securities Exchange Act Release No. 34-101078 (Sep. 18,
2024), 89 FR 77937 (Sept. 24, 2024) (SR-NASDAQ-2024-054).
\17\ See supra note 15 and accompanying text.
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Nothing in the proposal imposes any burden on the ability of other
exchanges to compete. The Exchange operates in a highly competitive
market in which exchanges and 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.
Nothing in the Proposal burdens intra-market competition because
the Exchange's colocation services, including those proposed herein,
are available to any customer that wishes to order cabinets and power,
and all such customers can do so on a non-discriminatory basis. Use of
any colocation service is completely voluntary, and each market
participant is able to determine whether to use colocation services
based on the requirements of its business operations.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) \18\ of the Act and Rule 19b-4(f)(6) thereunder \19\
in that it effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6). Furthermore, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file a proposed rule change under
that subsection at least five business days prior to the date of
filing, 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 the 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
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Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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="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#2052554c450d434f4d4d454e5453605345430e474f56"><span class="__cf_email__" data-cfemail="6210170e074f010d0f0f070c1611221107014c050d14">[email protected]</span></a>. Please include
file number SR-PHLX-2026-10 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-PHLX-2026-10. 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 filing 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-PHLX-2026-10 and should be submitted on
or before April 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-05340 Filed 3-18-26; 8:45 am]
BILLING CODE 8011-01-P
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