80 FR 66955 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Options Testing Facility
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 210 (October 30, 2015)
Federal Register Volume 80, Issue 210 (October 30, 2015)
| Page Range | 66955-66958 | |
| FR Document | 2015-27657 |
[Federal Register Volume 80, Number 210 (Friday, October 30, 2015)] [Notices] [Pages 66955-66958] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-27657] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76260; File No. SR-Phlx-2015-81] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Options Testing Facility October 26, 2015. 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 October 16, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend its Pricing Schedule at Chapter VII to adopt a new Section E, entitled ``Testing Facilities'' which describes fees in connection with the use of the Testing Facility (``NTF'') test environment located in Carteret, New Jersey. While the changes proposed herein are effective upon filing, the Exchange has designated that the amendments be operative on October 26, 2015. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for [[Page 66956]] 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 Phlx proposes to amend its Pricing Schedule at Chapter VII to adopt a new Section E, entitled ``Testing Facilities'' to establish fees to subscribe for testing. Currently, Options members may test in a virtual trading environment for purposes of testing in Ashburn, Virginia (``Ashburn''), at no cost. The NTF provides subscribers a virtual system environment for testing upcoming Phlx releases and product enhancements, as well as testing firm software prior to implementation. The test environment closely approximates the production environment to enable subscribers to test their automated systems that integrate with the Exchange. The Exchange is moving the options test environment from the Ashburn location to Carteret, NJ (``Carteret''), which is also the location of Phlx's primary trading System. While Options members will be able to continue to utilize the Ashburn facility at no cost until that facility is no longer in use, Options members will be able to subscribe to the Carteret test facility for future testing.\3\ --------------------------------------------------------------------------- \3\ The Exchange anticipates that it will sunset the Ashburn trading testing functionality on January 29, 2016. --------------------------------------------------------------------------- The relatively large distance between the Ashburn Testing Facility and the majority of Phlx firms results in expensive connectivity costs for customers that connect via telecommunication providers. As a consequence, a large majority of member firms do not connect to Ashburn for NTF connectivity. In an effort to improve the utility of the NTF, Phlx is developing a test environment located in Carteret that will provide the same functionality as the testing functionality of Ashburn, yet more closely approximate the live trading environment due to its proximity to the System and upgraded hardware. In particular, the Carteret test environment will take advantage of technology upgrades Phlx is making to its trading-related systems. Unlike the Ashburn test environment, the Carteret test environment will provide dedicated connectivity to the facility via a cross-connection to either a member firm's direct connection router in Carteret or its co-location cabinet. Phlx notes that, because the Carteret facility also houses the System, subscribers to the Carteret test environment will no longer need to pay for third party connectivity to Ashburn,\4\ provided the sole purpose for connecting to Ashburn is for testing and not also for co-location or disaster recovery. Such member firms may use an existing connection to Carteret to access the NTF through the use of a dedicated switch port and cross connect within the facility. Similar to the equities test facility,\5\ the Exchange will assess a fee for the connection to this virtual trading environment for testing. Specifically, Phlx proposes a $1,000 per hand-off, per month fee for connection to the Testing Facility. The hand-off fee includes either a 1Gb or 10Gb switch port and a cross connect to the Testing Facility. Subscribers shall also pay a one-time installation fee of $1,000 per hand-off. --------------------------------------------------------------------------- \4\ Today, member firms pay fees to third party connectivity providers to provide connection from the member firm to Ashburn. \5\ See Phlx's Pricing Schedule at Chapter VIII concerning equities pricing. --------------------------------------------------------------------------- The connectivity provided under this rule also provides connectivity to the other test environments of The NASDAQ Stock Market LLC and NASDAQ OMX BX, Inc. Additionally, the connectivity may be utilized for either equities or options testing. If for example a Phlx member has already paid the $1,000 per hand-off, per month for connection to the Testing Facility in Carteret, there would be no need to pay this fee for options testing. Notwithstanding the foregoing, Phlx will also continue to offer certain limited testing capabilities free of charge at Carteret. Options members that connect to Cartert's [sic] NTF through a virtual private network (``VPN'') through the internet for site-to-site limited order routing capability only will not be assessed a fee. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \6\ in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\7\ in particular. Phlx believes the proposal is consistent with Section 6(b)(4) of the Act \8\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the Exchange operates or controls. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(4) and (5). \8\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The proposed fees are equitably allocated because all Options members desiring to connect to the Carteret test environment will be assessed a uniform fee for those services. The Exchange believes that offering subscribers the option to subscribe to either 1Gb or 10Gb for the same fee is an equitable allocation because, unlike the live trading environment, there is no competitive advantage to possessing a higher capacity switch port in the test environment. The test environment is designed to closely mirror the live trading environment for Options members, including matching the capacity of each Options member's live environment switch port. In the absence of any competitive advantage, charging a uniform fee for both 1Gb and 10Gb switch ports is an equitable allocation of fees. Phlx believes that charging a uniform fee will encourage member firms to subscribe to Carteret, and further encourage those that subscribe to use the same hardware as is used by them for connectivity to the live trading environment. The proposed fees are reasonable because they are designed to cover the costs incurred by the Exchange to develop the test facility and the costs incurred by the Exchange to continue to offer the test environment. The proposed fee should allow the Exchange to recoup these costs and also make a profit, while providing Options members with a superior test environment that more closely mirrors that of the live trading environment on the Exchange. Phlx believes that offering both 1Gb and 10Gb connectivity for the same fee is reasonable as the increased incremental cost it incurs by offering the 10Gb switch port at the lower fee is outweighed by the benefit all subscribers will receive if Options members use hardware identical to what they use in the live trading environment, hence furthering the goal of creating a test environment that closely mirrors the live trading environment. Further, the connectivity provided under this rule also provides connectivity to the other test environments of The NASDAQ Stock Market LLC and NASDAQ OMX BX, Inc. This connectivity may be utilized for either equities or options testing. If for example a Phlx member has already paid the $1,000 per hand-off, per month for connection to the Testing Facility in Carteret, there would be no need to pay this fee for options testing. [[Page 66957]] The Exchange also believes the proposal furthers the objectives of Section 6(b)(5) of the Act \9\ 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 and is not designed to permit unfair discrimination between customer, issuers, brokers and dealers. Phlx does not believe that the proposed fees are unfairly discriminatory to subscribers utilizing 10Gb live trading environment connectivity because, unlike the live trading environment where the capacity of connectivity to Phlx may confer a competitive advantage to a market participant and therefore price differentiation is appropriate for the benefit conferred, there is no such benefit conferred in the trade test environment. Phlx does not believe that the proposed fees are unfairly discriminatory among subscribers to the Carteret test facility because all Options members that subscribe to the service will be assessed the same fees. Because the proposed fees do not discriminate between 1Gb and 10Gb connectivity options, Options members are able to subscribe to Carteret without regard to the cost of their switch port capacity election. Phlx believes that by not discriminating on this basis it will encourage members to connect to the Carteret test environment in the same manner as they do to the live trading environment, and thereby help Carteret more closely mirror the live test environment, as discussed above. Providing a more useful and accurate test environment will serve to improve live trading on Phlx and the national market system by permitting Options members the ability to accurately test changes prior to implementing them in the live trading environment, thereby reducing the likelihood of a potentially disruptive system failure in the live trading environment, which has the potential to affect all market participants. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Finally, the Exchange will continue to offer Options members certain limited testing capabilities free of charge at Carteret through VPN. While this feature offers limited capability in terms of functionality, the Exchange continues to offer a free of charge alternative to Options Participants [sic] desiring to utilize the NTF. B. Self-Regulatory Organization's Statement on Burden on Competition Phlx does not believe that the proposed rule change will result in any intra-market or inter-market burdens on competition that are not necessary or appropriate in furtherance of the purposes of the Act, as amended. The proposed fees for access to the Carteret test environment more closely approximate the live trading environment. Subscribing member firms will be able to more accurately test their trading systems and avoid potentially disruptive system failures in the live trading environment. Despite the fee that will now be assessed to Options members for testing, the Exchange believes that Options members utilizing this service will benefit from the move to Carteret because the test environment is designed to closely mirror the live trading environment for Options members, including matching the capacity of each Options member's live environment switch port. Also, the connectivity provided under this rule also provides connectivity to the other test environments of The NASDAQ Stock Market LLC and NASDAQ OMX BX, Inc. Members that are already connected for equities testing would not incur an additional charge. This connectivity may be utilized for either equities or options testing. Finally, subscribing to the test facility is optional. Additionally, the Exchange does not believe that the move to Carteret and imposition of connectivity fees to the NTF creates an undue burden on competition because the Exchange will continue to offer Options members certain limited testing capabilities free of charge at Carteret through VPN. 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)(ii) of the Act.\10\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-Phlx-2015-81 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2015-81. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2015-81, and should be submitted on or before November 20, 2015. [[Page 66958]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-27657 Filed 10-29-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Notices 66955
impediments to and perfect the and 2 are consistent with the Act. For the Commission, by the Division of
mechanism and a free and open market Comments may be submitted by any of Trading and Markets, pursuant to delegated
by allowing the entry of RPIs to build the following methods: authority.41
a book of liquidity that would be Robert W. Errett,
Electronic Comments
available to provide price improvement Deputy Secretary.
to incoming Retail Orders as soon as the • Use the Commission’s Internet [FR Doc. 2015–27656 Filed 10–29–15; 8:45 am]
Core Trading Session begins.38 comment form (http://www.sec.gov/ BILLING CODE 8011–01–P
Based on the Exchange’s rules/sro.shtml); or
representations, the Commission
• Send an email to rule-comments@
believes that the proposed rule change SECURITIES AND EXCHANGE
sec.gov. Please include File Number SR–
does not raise any novel regulatory COMMISSION
NYSEArca-2015–56 on the subject line.
considerations and should provide
[Release No. 34–76260; File No. SR–Phlx–
greater specificity with respect to the Paper Comments 2015–81]
functionality available on the Exchange
as symbols are migrated to the Pillar • Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities Self-Regulatory Organizations;
platform. For these reasons, the NASDAQ OMX PHLX LLC; Notice of
Commission believes that the proposal and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090. Filing and Immediate Effectiveness of
should help to prevent fraudulent and Proposed Rule Change to Options
manipulative acts and practices, All submissions should refer to File Testing Facility
promote just and equitable principles of Number SR–NYSEArca–2015–56. This
trade, remove impediments to and file number should be included on the October 26, 2015.
perfect the mechanism of a free and subject line if email is used. To help the Pursuant to Section 19(b)(1) of the
open market and a national market Commission process and review your Securities Exchange Act of 1934
system, and, in general, protect comments more efficiently, please use (‘‘Act’’),1 and Rule 19b–4 thereunder,2
investors and the public interest. only one method. The Commission will notice is hereby given that, on October
post all comments on the Commission’s 16, 2015, NASDAQ OMX PHLX LLC
IV. Accelerated Approval of (‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Amendment Nos. 1 and 2 Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the Securities and Exchange Commission
In Amendment No. 1, the Exchange submission, all subsequent (‘‘Commission’’) the proposed rule
proposes to delete references to IOC amendments, all written statements change as described in Items I, II, and
Routable Cross Orders because the with respect to the proposed rule III below, which Items have been
Exchange has determined not to offer change that are filed with the prepared by the Exchange. The
this order type when it implements Commission, and all written Commission is publishing this notice to
Pillar. In Amendment No. 2, the communications relating to the solicit comments on the proposed rule
Exchange proposes to: (i) Correct a cross proposed rule change between the change from interested persons.
reference in proposed Rule Commission and any person, other than
7.31P(a)(2)(B) from Rule 7.10 to Rule I. Self-Regulatory Organization’s
those that may be withheld from the Statement of the Terms of the Substance
7.10P; (ii) add a new sentence to public in accordance with the
proposed Rule 7.31P(b)(2)(A) to specify of the Proposed Rule Change
provisions of 5 U.S.C. 552, will be
that an incoming Limit IOC Order with available for Web site viewing and The Exchange proposes to amend its
a MTS must be at least a round lot and, printing in the Commission’s Public Pricing Schedule at Chapter VII to adopt
if the MTS is larger than the size of the Reference Room, 100 F Street NE., a new Section E, entitled ‘‘Testing
Limit IOC Order, the order would be Washington, DC 20549 on official Facilities’’ which describes fees in
rejected on arrival; (iii) to add a hard business days between the hours of connection with the use of the Testing
paragraph return between proposed 10:00 a.m. and 3:00 p.m. Copies of such Facility (‘‘NTF’’) test environment
Rule 7.31P(i)(1) and 7.31P(i)(2); and (iv) filing also will be available for located in Carteret, New Jersey.
remove an extraneous reference to inspection and copying at the principal While the changes proposed herein
‘‘500’’ in the sixth paragraph in the first office of the Exchange. All comments are effective upon filing, the Exchange
example of proposed Rule 7.44P(l). received will be posted without change; has designated that the amendments be
The Commission believes that the the Commission does not edit personal operative on October 26, 2015.
changes proposed in Amendment Nos. 1 identifying information from The text of the proposed rule change
and 2 are non-substantive and further submissions. You should submit only is available on the Exchange’s Web site
clarify the operation of the proposed information that you wish to make at http://
rules governing Pillar. Accordingly, the available publicly. All submissions nasdaqomxphlx.cchwallstreet.com/, at
Commission finds good cause, pursuant should refer to File Number SR– the principal office of the Exchange, and
to Section 19(b)(2) of the Act,39 to NYSEArca–2015–56, and should be at the Commission’s Public Reference
approve the proposed rule change, as submitted on or before November 20, Room.
modified by Amendment Nos. 1 and 2, 2015. II. Self-Regulatory Organization’s
on an accelerated basis.
VI. Conclusion Statement of the Purpose of, and
V. Solicitation of Comments on Statutory Basis for, the Proposed Rule
Amendment Nos. 1 and 2 It is therefore ordered, pursuant to Change
tkelley on DSK3SPTVN1PROD with NOTICES
Interested persons are invited to Section 19(b)(2) of the Act,40 that the In its filing with the Commission, the
submit written data, views, and proposed rule change (SR–NYSEArca– Exchange included statements
arguments concerning the foregoing, 2015–56), as modified by Amendment concerning the purpose of and basis for
including whether Amendment Nos. 1 Nos. 1 and 2 thereto, be, and hereby is,
approved on an accelerated basis. 41 17 CFR 200.30–3(a)(12).
38 Id. 1 15 U.S.C. 78s(b)(1).
39 15 U.S.C. 78s(b)(2). 40 15 U.S.C. 78s(b)(2). 2 17 CFR 240.19b–4.
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the proposed rule change and discussed environment will provide dedicated issuers and other persons using any
any comments it received on the connectivity to the facility via a cross- facility or system which the Exchange
proposed rule change. The text of these connection to either a member firm’s operates or controls.
statements may be examined at the direct connection router in Carteret or The proposed fees are equitably
places specified in Item IV below. The its co-location cabinet. allocated because all Options members
Exchange has prepared summaries, set Phlx notes that, because the Carteret desiring to connect to the Carteret test
forth in sections A, B, and C below, of facility also houses the System, environment will be assessed a uniform
the most significant aspects of such subscribers to the Carteret test fee for those services. The Exchange
statements. environment will no longer need to pay believes that offering subscribers the
for third party connectivity to Ashburn,4 option to subscribe to either 1Gb or
A. Self-Regulatory Organization’s provided the sole purpose for
Statement of the Purpose of, and 10Gb for the same fee is an equitable
connecting to Ashburn is for testing and allocation because, unlike the live
Statutory Basis for, the Proposed Rule not also for co-location or disaster
Change trading environment, there is no
recovery. Such member firms may use competitive advantage to possessing a
1. Purpose an existing connection to Carteret to higher capacity switch port in the test
Phlx proposes to amend its Pricing access the NTF through the use of a environment. The test environment is
Schedule at Chapter VII to adopt a new dedicated switch port and cross connect designed to closely mirror the live
Section E, entitled ‘‘Testing Facilities’’ within the facility. Similar to the trading environment for Options
to establish fees to subscribe for testing. equities test facility,5 the Exchange will members, including matching the
Currently, Options members may test in assess a fee for the connection to this capacity of each Options member’s live
a virtual trading environment for virtual trading environment for testing. environment switch port. In the absence
purposes of testing in Ashburn, Virginia Specifically, Phlx proposes a $1,000 per of any competitive advantage, charging
(‘‘Ashburn’’), at no cost. The NTF hand-off, per month fee for connection a uniform fee for both 1Gb and 10Gb
provides subscribers a virtual system to the Testing Facility. The hand-off fee switch ports is an equitable allocation of
environment for testing upcoming Phlx includes either a 1Gb or 10Gb switch fees. Phlx believes that charging a
releases and product enhancements, as port and a cross connect to the Testing uniform fee will encourage member
well as testing firm software prior to Facility. Subscribers shall also pay a firms to subscribe to Carteret, and
implementation. The test environment one-time installation fee of $1,000 per further encourage those that subscribe to
closely approximates the production hand-off. use the same hardware as is used by
The connectivity provided under this
environment to enable subscribers to them for connectivity to the live trading
rule also provides connectivity to the
test their automated systems that environment.
other test environments of The
integrate with the Exchange. The proposed fees are reasonable
The Exchange is moving the options NASDAQ Stock Market LLC and
NASDAQ OMX BX, Inc. Additionally, because they are designed to cover the
test environment from the Ashburn costs incurred by the Exchange to
location to Carteret, NJ (‘‘Carteret’’), the connectivity may be utilized for
either equities or options testing. If for develop the test facility and the costs
which is also the location of Phlx’s incurred by the Exchange to continue to
primary trading System. While Options example a Phlx member has already
paid the $1,000 per hand-off, per month offer the test environment. The
members will be able to continue to proposed fee should allow the Exchange
utilize the Ashburn facility at no cost for connection to the Testing Facility in
Carteret, there would be no need to pay to recoup these costs and also make a
until that facility is no longer in use, profit, while providing Options
Options members will be able to this fee for options testing.
Notwithstanding the foregoing, Phlx members with a superior test
subscribe to the Carteret test facility for environment that more closely mirrors
future testing.3 will also continue to offer certain
limited testing capabilities free of charge that of the live trading environment on
The relatively large distance between the Exchange. Phlx believes that offering
the Ashburn Testing Facility and the at Carteret. Options members that
connect to Cartert’s [sic] NTF through a both 1Gb and 10Gb connectivity for the
majority of Phlx firms results in same fee is reasonable as the increased
expensive connectivity costs for virtual private network (‘‘VPN’’) through
the internet for site-to-site limited order incremental cost it incurs by offering the
customers that connect via 10Gb switch port at the lower fee is
telecommunication providers. As a routing capability only will not be
assessed a fee. outweighed by the benefit all
consequence, a large majority of subscribers will receive if Options
member firms do not connect to 2. Statutory Basis members use hardware identical to what
Ashburn for NTF connectivity. In an
The Exchange believes that its they use in the live trading
effort to improve the utility of the NTF,
proposal is consistent with Section 6(b) environment, hence furthering the goal
Phlx is developing a test environment
of the Act 6 in general, and with of creating a test environment that
located in Carteret that will provide the
Sections 6(b)(4) and 6(b)(5) of the Act,7 closely mirrors the live trading
same functionality as the testing
in particular. Phlx believes the proposal environment.
functionality of Ashburn, yet more
is consistent with Section 6(b)(4) of the Further, the connectivity provided
closely approximate the live trading
Act 8 in that it provides for the equitable under this rule also provides
environment due to its proximity to the
allocation of reasonable dues, fees and connectivity to the other test
System and upgraded hardware. In
other charges among members and environments of The NASDAQ Stock
particular, the Carteret test environment
Market LLC and NASDAQ OMX BX,
will take advantage of technology
tkelley on DSK3SPTVN1PROD with NOTICES
4 Today, member firms pay fees to third party Inc. This connectivity may be utilized
upgrades Phlx is making to its trading- connectivity providers to provide connection from for either equities or options testing. If
related systems. Unlike the Ashburn test the member firm to Ashburn.
for example a Phlx member has already
environment, the Carteret test 5 See Phlx’s Pricing Schedule at Chapter VIII
concerning equities pricing. paid the $1,000 per hand-off, per month
3 The Exchange anticipates that it will sunset the 6 15 U.S.C. 78f(b). for connection to the Testing Facility in
Ashburn trading testing functionality on January 29, 7 15 U.S.C. 78f(b)(4) and (5). Carteret, there would be no need to pay
2016. 8 15 U.S.C. 78f(b)(4). this fee for options testing.
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The Exchange also believes the B. Self-Regulatory Organization’s furtherance of the purposes of the Act.
proposal furthers the objectives of Statement on Burden on Competition If the Commission takes such action, the
Section 6(b)(5) of the Act 9 in that it is Phlx does not believe that the Commission shall institute proceedings
designed to promote just and equitable proposed rule change will result in any to determine whether the proposed rule
principles of trade, to remove intra-market or inter-market burdens on should be approved or disapproved.
impediments to and perfect the competition that are not necessary or IV. Solicitation of Comments
mechanism of a free and open market appropriate in furtherance of the
and a national market system, and, in purposes of the Act, as amended. The Interested persons are invited to
general to protect investors and the proposed fees for access to the Carteret submit written data, views, and
public interest and is not designed to test environment more closely arguments concerning the foregoing,
permit unfair discrimination between approximate the live trading including whether the proposed rule
customer, issuers, brokers and dealers. environment. Subscribing member firms change is consistent with the Act.
Phlx does not believe that the proposed will be able to more accurately test their Comments may be submitted by any of
fees are unfairly discriminatory to trading systems and avoid potentially the following methods:
subscribers utilizing 10Gb live trading disruptive system failures in the live
Electronic Comments
environment connectivity because, trading environment. Despite the fee
unlike the live trading environment
that will now be assessed to Options • Use the Commission’s Internet
members for testing, the Exchange comment form (http://www.sec.gov/
where the capacity of connectivity to
believes that Options members utilizing rules/sro.shtml); or
Phlx may confer a competitive this service will benefit from the move
advantage to a market participant and • Send an email to rule-comments@
to Carteret because the test environment sec.gov. Please include File Number SR–
therefore price differentiation is is designed to closely mirror the live
appropriate for the benefit conferred, Phlx–2015–81 on the subject line.
trading environment for Options
there is no such benefit conferred in the members, including matching the Paper Comments
trade test environment. Phlx does not capacity of each Options member’s live
believe that the proposed fees are • Send paper comments in triplicate
environment switch port.
unfairly discriminatory among Also, the connectivity provided under to Brent J. Fields, Secretary, Securities
subscribers to the Carteret test facility this rule also provides connectivity to and Exchange Commission, 100 F Street
the other test environments of The NE., Washington, DC 20549–1090.
because all Options members that
subscribe to the service will be assessed NASDAQ Stock Market LLC and All submissions should refer to File
the same fees. Because the proposed NASDAQ OMX BX, Inc. Members that Number SR–Phlx–2015–81. This file
fees do not discriminate between 1Gb are already connected for equities number should be included on the
and 10Gb connectivity options, Options testing would not incur an additional subject line if email is used. To help the
members are able to subscribe to charge. This connectivity may be Commission process and review your
Carteret without regard to the cost of utilized for either equities or options comments more efficiently, please use
testing. Finally, subscribing to the test only one method. The Commission will
their switch port capacity election. Phlx
facility is optional. post all comments on the Commission’s
believes that by not discriminating on Additionally, the Exchange does not
this basis it will encourage members to Internet Web site (http://www.sec.gov/
believe that the move to Carteret and rules/sro.shtml). Copies of the
connect to the Carteret test environment imposition of connectivity fees to the submission, all subsequent
in the same manner as they do to the NTF creates an undue burden on amendments, all written statements
live trading environment, and thereby competition because the Exchange will with respect to the proposed rule
help Carteret more closely mirror the continue to offer Options members change that are filed with the
live test environment, as discussed certain limited testing capabilities free Commission, and all written
above. Providing a more useful and of charge at Carteret through VPN. communications relating to the
accurate test environment will serve to proposed rule change between the
C. Self-Regulatory Organization’s
improve live trading on Phlx and the Commission and any person, other than
Statement on Comments on the
national market system by permitting Proposed Rule Change Received From those that may be withheld from the
Options members the ability to Members, Participants, or Others public in accordance with the
accurately test changes prior to provisions of 5 U.S.C. 552, will be
implementing them in the live trading No written comments were either
available for Web site viewing and
environment, thereby reducing the solicited or received.
printing in the Commission’s Public
likelihood of a potentially disruptive III. Date of Effectiveness of the Reference Room, 100 F Street NE.,
system failure in the live trading Proposed Rule Change and Timing for Washington, DC 20549 on official
environment, which has the potential to Commission Action business days between the hours of
affect all market participants. The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such
Finally, the Exchange will continue to effective pursuant to Section filing also will be available for
19(b)(3)(A)(ii) of the Act.10 inspection and copying at the principal
offer Options members certain limited
At any time within 60 days of the office of the Exchange. All comments
testing capabilities free of charge at
filing of the proposed rule change, the received will be posted without change;
Carteret through VPN. While this feature
Commission summarily may the Commission does not edit personal
offers limited capability in terms of identifying information from
tkelley on DSK3SPTVN1PROD with NOTICES
functionality, the Exchange continues to temporarily suspend such rule change if
it appears to the Commission that such submissions. You should submit only
offer a free of charge alternative to information that you wish to make
Options Participants [sic] desiring to action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection available publicly. All submissions
utilize the NTF. should refer to File Number SR–Phlx–
of investors; or (iii) otherwise in
2015–81, and should be submitted on or
9 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(3)(A)(ii). before November 20, 2015.
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![66958 Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Notices
For the Commission, by the Division of The Exchange has prepared summaries, move some Users’ equipment within the
Trading and Markets, pursuant to delegated set forth in sections A, B, and C below, Data Center (the ‘‘Migration’’).
authority.11 of the most significant parts of such The Exchange proposes to put the
Robert W. Errett, statements. following procedures in place to manage
Deputy Secretary. the process for the Migration.
A. Self-Regulatory Organization’s First, the Exchange would identify
[FR Doc. 2015–27657 Filed 10–29–15; 8:45 am]
Statement of the Purpose of, and the Users that would be required to move in
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule the Migration based on (a) the current
Change location of the User and its current
SECURITIES AND EXCHANGE 1. Purpose equipment and power requirements and
COMMISSION The Exchange operates a data center (b) the availability of another location in
in Mahwah, New Jersey, from which it the Data Center that would
[Release No. 34–76270; File No. SR– accommodate the equipment and power
NYSEARCA–2015–85] provides co-location services to Users.4
The Exchange’s co-location services requirements for which such User
Self-Regulatory Organizations; NYSE allow Users to rent space in the Data currently subscribes. No User would be
Arca, Inc.; Notice of Filing and Center so they may locate their required to move more than once within
Immediate Effectiveness of Proposed electronic servers in close physical any 12-month period.
Rule Change Establishing Procedures Second, the Exchange would notify a
proximity to the Exchange’s trading and
and Credits in Connection With the Re- User in writing (the ‘‘Notice’’) that the
execution system.5 The Exchange
location of Equipment in the proposes to establish procedures and User’s equipment and network
Exchange’s Data Center waive certain fees in connection with connections in the Data Center are to be
the Exchange’s re-location of Users’ moved as part of the Migration. The
October 26, 2015.
equipment in the Exchange’s Data Notice would identify the 90-day period
Pursuant to Section 19(b)(1) 1 of the Center, operative beginning November during which the User must move its
Securities Exchange Act of 1934 (the 1, 2015.6 equipment, which period would
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 The Data Center opened in 2010, and commence at least 60 days from the date
notice is hereby given that, on October at that time, the Exchange represented of the Notice. The exact date or dates for
22, 2015, NYSE Arca, Inc. (the that it offers co-location space based on the move for each User would be agreed
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with availability and that it had sufficient upon between the User and the
the Securities and Exchange space in the Data Center to Exchange. If a move date or dates cannot
Commission (the ‘‘Commission’’) the accommodate demand on an equitable be agreed on, the Exchange would
proposed rule change as described in basis for the foreseeable future.7 The schedule the move for a date or dates no
Items I, II, and III below, which Items Exchange continues to believe that there later than 180 days after the date of the
have been prepared by the self- is sufficient space in the Data Center to Notice.
regulatory organization. The accommodate demand. However, much Third, each User’s move would be
Commission is publishing this notice to of the space available now is available facilitated by the Exchange in
solicit comments on the proposed rule in smaller segments, resulting from an cooperation with the User, including the
change from interested persons. increasing number of Users, multiple un-racking and re-racking of all of the
moves within the Data Center, and User’s equipment, and the re-
I. Self-Regulatory Organization’s installation of the User’s networking
Statement of the Terms of Substance of changes to Users’ space requirements—
both increases and decreases—since connections, and the Exchange would
the Proposed Rule Change make reasonable efforts to ensure that
2010. At this time, the Exchange has
The Exchange proposes to establish determined that, in order to continue to the moves take place outside of the
procedures and credits in connection be able to meet its obligation to Exchange’s hours for business.8
with the re-location of equipment in the accommodate demand, and in particular Fourth, in connection with facilitating
Exchange’s Data Center The text of the to make available more contiguous, each User’s move, the Exchange
proposed rule change is available on the larger spaces for new and existing Users, proposes to waive certain fees.
Exchange’s Web site at www.nyse.com, the Exchange must exercise its right to Specifically, the Exchange proposes to
at the principal office of the Exchange, waive the monthly recurring fees
and at the Commission’s Public 4 The Exchange initially filed rule changes incurred in connection with the User’s
Reference Room. relating to its co-location services with the new space for the month during which
Securities and Exchange Commission the User’s move commences. This
II. Self-Regulatory Organization’s (‘‘Commission’’) in 2010. See Securities Exchange
waiver of the monthly recurring fees
Statement of the Purpose of, and Act Release No. 63275 (November 8, 2010), 75 FR
70048 (November 16, 2010) (SR–NYSEArca–2010– would mean that the User would not
Statutory Basis for, the Proposed Rule 100) (‘‘2010 Release’’). incur these fees for the period of
Change 5 See id. at 70049.
overlapping use of the equipment and
6 As specified in the NYSE Arca Equities
In its filing with the Commission, the services in the old and the new
Schedule of Fees and Charges for Exchange Services
self-regulatory organization included and the NYSE Arca Options Fee Schedule, a User locations, as long as the move is
statements concerning the purpose of, that incurs co-location fees for a particular co- completed within one month.
and basis for, the proposed rule change location service pursuant thereto would not be In addition, the Exchange proposes to
subject to co-location fees for the same co-location waive all service-related charges that the
and discussed any comments it received service charged by the Exchange’s affiliates NYSE
on the proposed rule change. The text MKT LLC and New York Stock Exchange LLC. See User would incur if such a move were
tkelley on DSK3SPTVN1PROD with NOTICES
of those statements may be examined at Securities Exchange Act Release No. 70173 (August to take place at a User’s request with
the places specified in Item IV below. 13, 2013), 78 FR 50459 (August 19, 2013) (SR– respect to the User’s existing services
NYSEArca–2013–80).The Exchange’s affiliates have and equipment. The service-related
also submitted substantially the same proposed rule
11 17 CFR 200.30–3(a)(12). change to propose the changes described herein. charges to be waived would be: (a) The
1 15 U.S.C. 78s(b)(1). See SR–NYSE–2015–42 and SR–NYSEMKT–2015–
2 15 U.S.C. 78a. 70. 8 See NYSE Arca Equities Rule 1.1(j) and NYSE
3 17 CFR 240.19b–4. 7 See supra note 4 at 70049. Arca Options Rule 6.1A(a)(3).
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Document Created: 2015-12-14 15:30:17
Document Modified: 2015-12-14 15:30:17
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 66955 |
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