80_FR_78510 80 FR 78269 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change to Its Rules To Provide That the Co-Location Services Offered by the Exchange Include Three Time Feeds and Four Bundles of Co-Location Services

80 FR 78269 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change to Its Rules To Provide That the Co-Location Services Offered by the Exchange Include Three Time Feeds and Four Bundles of Co-Location Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 241 (December 16, 2015)

Page Range78269-78275
FR Document2015-31576

Federal Register, Volume 80 Issue 241 (Wednesday, December 16, 2015) 
[Federal Register Volume 80, Number 241 (Wednesday, December 16, 2015)]
[Notices]
[Pages 78269-78275]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-31576]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76612; File No. SR-NYSE-2015-53]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change to Its Rules To Provide That 
the Co-Location Services Offered by the Exchange Include Three Time 
Feeds and Four Bundles of Co-Location Services

December 10, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on November 27, 2015, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to change its rules to provide that the co-
location services offered by the Exchange include three time feeds and 
four bundles of co-location services (``Partial Cabinet Solution 
bundles''). The Exchange proposes to amend the Exchange's Price List 
(``Price List'') to reflect the time feeds and the Partial Cabinet 
Solution bundles.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.nyse.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 self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to change its rules to provide that the co-
location \4\ services offered by the Exchange include three time feeds 
and four new Partial Cabinet Solution bundles. In addition, the 
Exchange proposes to amend the Price List to reflect the time feeds and 
the Partial Cabinet Solution bundles. The Exchange proposes to offer 
the Partial Cabinet Solution bundles beginning January 1, 2016.
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    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in 2010. See Securities Exchange Act Release No. 
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56) (the ``Original Co-location Filing''). The Exchange 
operates a data center in Mahwah, New Jersey (the ``data center'') 
from which it provides co-location services to Users.
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Time Feeds
    The proposed rule change would provide that Users \5\ may purchase 
access to three time feeds, each of which provides a feed with the 
current time of day using one of three different time protocols: GPS 
Time Source, the Network Time Protocol feed (``NTP''), and Precision 
Timing Protocol (``PTP'').\6\
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    \5\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange, a ``Hosting User'' 
means a User that hosts a Hosted Customer in the User's co-location 
space, and a ``Hosted Customer'' means a customer of a Hosting User 
that is hosted in a Hosting User's co-location space. See Securities 
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List, 
a User that incurs co-location fees for a particular co-location 
service pursuant thereto would not be subject to co-location fees 
for the same co-location service charged by the Exchange's 
affiliates NYSE MKT LLC and NYSE Arca, Inc. See Securities Exchange 
Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 
2013) (SR-NYSE-2013-59).
    \6\ The time feeds are unrelated to trading on the Exchange or 
the Exchange's data feeds. A User does not require connectivity to a 
time feed to trade on the Exchange, and usage of a time feed has no 
effect on a User's orders going to, or trade data coming from, the 
Exchange.
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    Time feeds are used to receive time and to synchronize clocks 
between computer systems or throughout a

[[Page 78270]]

computer network. A User may opt to connect to a time feed for various 
reasons, including record keeping or measuring response times.\7\ The 
proposed connectivity to time feeds would provide Users a convenient 
way to access time protocols.
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    \7\ For example, a User may connect to a time feed for record 
keeping purposes if it uses that specific time protocol for all its 
activities, both inside and out of the data center.
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    The proposed change includes three time feeds. Global Positioning 
System (``GPS'') is a time and location system maintained by the United 
States government. The Exchange accesses the GPS Time Source feed 
through dedicated equipment and subscribing Users connect to the feed 
over dedicated cables. For the NTP and PTP time feeds, the Exchange 
routes the GPS data through dedicated equipment that reformats the GPS 
data into NTP and PTP.\8\ Subscribing Users connect to PTP over 
dedicated cables and NTP over the Liquidity Center Network (``LCN''), a 
local area network available in the data center.
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    \8\ The reformatting equipment is programmed by the vendor to 
generate NTP and PTP time feeds that comply with industry standards. 
The Exchange does not program or manage the reformatting of the GPS 
data into NTP and PTP.
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    Currently, the Exchange's co-location services allow a User to 
request a physical cabinet to house its servers and other equipment in 
the data center. A User has the option of receiving an entire cabinet 
that is dedicated solely to that User (``dedicated cabinet'') or a 
partial cabinet available in increments of eight-rack units of space 
(``partial cabinet'').\9\ Connectivity to all three time protocols 
would be available for dedicated cabinets. Due to technical 
limitations, connectivity to the NTP and PTP would be available for 
partial cabinets, but connectivity to GPS would not.\10\
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    \9\ See Original Co-location Filing, at 59310 and Securities 
Exchange Act Release No. 71122 (December 18, 2013), 78 FR 77739 
(December 24, 2013) (SR-NYSE-2013-81) (notice of filing and 
immediate effectiveness of proposed rule change to offer partial 
cabinets).
    \10\ The Exchange does not propose to make connectivity to GPS 
available for partial cabinets because the proximity of the GPS and 
power connections into a partial cabinet would expose GPS to 
interference from the cable power connections, interfering with the 
delivery of the GPS data.
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    The Exchange proposes to amend its Price List to reflect fees 
related to these services, as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Connection to Time Protocol Feed  Network Time        $300 initial
                                   Protocol Feed       charge plus $100
                                   (Note: LCN only).   monthly.
                                  Precision Time      $1,000 initial
                                   Protocol.           charge plus $250
                                                       monthly.
                                  GPS Time Source     $3,000 initial
                                   (Note: dedicated    charge plus $400
                                   cabinets only).     monthly.
------------------------------------------------------------------------

    Users that order the proposed time feed services will be subject to 
a 12-month minimum commitment, after which period they are subject to a 
60-day rolling time period.\11\
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    \11\ The Exchange believes that the 12-month minimum period is 
common practice for colocation offerings. See, e.g., Securities 
Exchange Act Release No. 68735 (January 25, 2013), 78 FR 6842 
(January 31, 2013) (SR-NASDAQ-2012-119) (noting that NASDAQ 
represented that the lock-in feature ``is common practice for 
colocation offerings''). If a User upgrades a service (i.e., goes 
from a 10 Gb to a 40 Gb LCN circuit), it will not be held to the 
minimum period for the first service, but will be subject to a 12-
month minimum period for the upgraded service, starting from the 
date of the upgrade.
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Partial Cabinet Solution Bundles
    The Exchange proposes to offer four Partial Cabinet Solution 
bundles intended to make it more cost effective for smaller Users to 
utilize co-location. These proposed Partial Cabinet Solution bundles 
would provide smaller Users a convenient way to create a colocation 
environment, by including in each Partial Cabinet Solution bundle 
cabinet space, network access, fiber connections (``cross connects''), 
and the choice of either the NTP or PTP time feed. The Exchange expects 
that such Users would include those with minimal power or cabinet space 
demands and Users for which the costs attendant with having a dedicated 
cabinet or greater network connection bandwidth are too burdensome. The 
Exchange expects that the majority of Users that purchase a Partial 
Cabinet Solution bundle will not previously have been a User or Hosted 
Customer, but recognizes that it is possible that purchasing Users may 
include entities that otherwise would be Hosted Customers. The Exchange 
proposes to offer the Partial Cabinet Solution bundles beginning 
January 1, 2016.
    As noted above, currently a User may opt to receive a partial 
cabinet available in increments of eight-rack units of space. Each 
partial cabinet is allocated up to two kilowatts (``kWs'') of power. In 
addition, the Exchange offers Users access to two local area networks 
available in the data center: The LCN and the internet protocol 
(``IP'') network.\12\ The Exchange offers 1 and 10 gigabit (``Gb'') IP 
network access, 1, 10, and 40 Gb LCN network access, and LCN 10 Gb LX 
network access.\13\
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    \12\ See Original Co-location Filing, at 59311 and Securities 
Exchange Act Release Nos. 74222 (February 6, 2015), 80 FR 7888 
(February 12, 2015) (SR-NYSE-2015-05) (notice of filing and 
immediate effectiveness of proposed rule change to include IP 
network connections and fiber cross connects between a User's 
cabinet and a non-User's equipment) (``Release No. 74222'') and 
70888 (November 15, 2013), 78 FR 69907 (November 21, 2013) (SR-NYSE-
2013-73) (notice of filing and immediate effectiveness of proposed 
rule change to include LCN 10 Gb LX connection).
    \13\ The Exchange also proposes to provide 40 Gb IP network 
access. The 40 Gb IP network connection is expected to be available 
no later than April 15, 2016. The Exchange will announce the date 
that the 40 Gb IP network connection will be available through a 
customer notice. See Securities Exchange Act Release No. 76369 
(November 5, 2015), 80 FR 70027 (November 12, 2015) (SR-NYSE-2015-
54) (notice of filing and immediate effectiveness of proposed rule 
change to include IP 40 Gb network connections).
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    Users may use cross connects to connect cabinets within the data 
center, including between a User's cabinet and a non-User's equipment 
within the data center. For example, a User may utilize a cross connect 
with a non-User to connect to a carrier's equipment in order to access 
the carrier's network outside the data center.\14\
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    \14\ See Release No. 74222, supra note 12.
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    The Exchange proposes to offer four Partial Cabinet Solution 
bundles. Because the Partial Cabinet Solution bundles are intended to 
make it more cost effective for smaller Users to utilize co-location, 
the Exchange proposes only to provide access to a Partial Cabinet 
Solution bundle to a User that meets the following conditions: (1) The 
User purchases only one Partial Cabinet Solution bundle; (2) the User 
and its Affiliates \15\ do not currently have a Partial Cabinet 
Solution bundle; and (3) after the purchase of the Partial Cabinet 
Solution bundle, the User, together with its Affiliates, will have an 
aggregate cabinet footprint of no more than 2 kW.\16\ A User's 
aggregate cabinet footprint is the total kW of its cabinets, including 
both partial and dedicated

[[Page 78271]]

cabinets, and a Hosted Customer's aggregate cabinet footprint is the 
total kW of the portion of the Hosting User's cabinet, whether partial 
or dedicated, allocated to such Hosted Customer.\17\
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    \15\ For purposes of the Partial Cabinet Solution bundles, an 
``Affiliate'' of a User would be any other User or a Hosted Customer 
that is under 50% or greater common ownership or control of the 
first User.
    \16\ For example, a User with a 4 kW dedicated cabinet would not 
be eligible for a Partial Cabinet Solution bundle, as its aggregate 
cabinet footprint would be either 5 kW or 6 kW once a Partial 
Cabinet Solution bundle was added.
    \17\ The Exchange similarly aggregates eligible activity of 
member organization affiliates for purposes of charges or credits 
based on volume. See Securities Exchange Act Release No. 74640 
(April 2, 2015), 80 FR 18873 (April 8, 2015) (SR-NYSE-2015-13). The 
threshold percentage used in the definition of ``affiliate'' for 
purposes of charges or credits based on volume is 75%. Id. The 
Exchange proposes a lower threshold in the present case in order to 
discourage any User from taking deliberate advantage of the proposed 
Partial Cabinet Solution bundle by setting up separate corporate 
entities to act as Users or Hosted Customers.
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    The Exchange proposes to aggregate the aggregate cabinet footprint 
of a User of a Partial Cabinet Solution bundle with the aggregate 
cabinet footprint of its Affiliates for purposes of determining whether 
the User has satisfied the conditions in order to avoid disparate 
treatment of Users that have divided their various business activities 
between separate corporate entities, including between a User and a 
Hosted Customer, as compared to Users that operate those business 
activities within a single corporate entity. Accordingly, the Exchange 
proposes that a User requesting a Partial Cabinet Solution bundle be 
required to represent to the Exchange (a) whether it has any Affiliates 
that are Users or Hosted Customers, and (b) that its aggregate cabinet 
footprint, together with the aggregate cabinet footprint of its 
Affiliates that are also Users or Hosted Customers and the cabinet 
footprint of the Partial Cabinet Solution bundle, will not exceed 2 kW. 
In addition, the User of a Partial Cabinet Solution bundle would be 
required to inform the Exchange immediately of any event that causes 
another User or Hosted Customer to become an Affiliate.\18\ The 
Exchange proposes to revise the Price List accordingly.
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    \18\ The Exchange would review available information regarding 
the entities and may request additional information to verify the 
Affiliate status of a User or Hosted Customer. The Exchange would 
approve a request for a Partial Cabinet Solution bundle unless it 
determines that the certification is not accurate.
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    If a User of a Partial Cabinet Solution bundle became Affiliated 
with one or more other Users or Hosted Customers and thereby no longer 
met the conditions for access to the Partial Cabinet Solution bundle, 
or if the User otherwise ceased to meet the conditions for access, the 
Exchange would no longer offer access to the Partial Cabinet Solution 
bundle to such User. Once the User ceased to meet the conditions for 
access to the Partial Cabinet Solution bundle, it would be charged for 
each of the services individually, at the price for each such service 
set out in the Price List. Such price change would be effective as of 
the date that the User ceased to meet the conditions.
    The Exchange proposes that Users that purchase a Partial Cabinet 
Solution bundle would be charged a non-recurring initial charge 
(``NRC'') and a monthly recurring charge (``MRC'').\19\ The Exchange 
proposes that Users that order a Partial Cabinet Solution bundle on or 
before December 31, 2016 would have their MRC reduced by 50% for the 
first 12 months.
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    \19\ A User that changes its Partial Cabinet Solution bundle 
would not be subject to a second NRC. Rather, it would pay the 
difference, if any, between the NRCs. For example, a User that buys 
an Option A Partial Cabinet Solution bundle would pay a $7,500 NRC. 
If it then opted to change to Option C, it would pay $2,500, i.e. 
the difference between the Option A and Option C NRCs of $7,500 and 
$10,000, respectively.
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    The Exchange proposes to amend its Price List to reflect fees 
related to these new services, as follows:

------------------------------------------------------------------------
        Type of service              Description       Amount of charge
------------------------------------------------------------------------
Partial Cabinet Solution         Option A:.........  $7,500 initial
 bundles (effective from         1 kW partial         charge per bundle
 January 1, 2016).                cabinet, 1 LCN      plus monthly
Note: A User and its Affiliates   connection (1       charge per bundle
 are limited to one Partial       Gb), 1 IP network   as follows:
 Cabinet Solution bundle at a     connection (1       For Users
 time. A User and its             Gb), 2 fiber        that order on or
 Affiliates must have an          cross connections   before December
 aggregate cabinet footprint of   and either the      31, 2016: $3,000
 2 kW or less to qualify for a    Network Time        monthly for first
 Partial Cabinet Solution         Protocol Feed or    12 months of
 bundle.                          Precision Timing    service, and
                                  Protocol.           $6,000 monthly
                                                      thereafter.
                                                      For Users
                                                      that order after
                                                      December 31, 2016:
                                                      $6,000 monthly.
                                 Option B:           $7,500 initial
                                 2 kW partial         charge per bundle
                                  cabinet, 1 LCN      plus monthly
                                  connection (1       charge per bundle
                                  Gb), 1 IP network   as follows:
                                  connection (1       For Users
                                  Gb), 2 fiber        that order on or
                                  cross connections   before December
                                  and either the      31, 2016: $3,500
                                  Network Time        monthly for first
                                  Protocol Feed or    12 months of
                                  Precision Timing    service, and
                                  Protocol.           $7,000 monthly
                                                      thereafter.
                                                      For Users
                                                      that order after
                                                      December 31, 2016:
                                                      $7,000 monthly.
                                 Option C:           $10,000 initial
                                 1 kW partial         charge per bundle
                                  cabinet, 1 LCN      plus monthly
                                  connection (10      charge per bundle
                                  Gb), 1 IP network   as follows:
                                  connection (10      For Users
                                  Gb), 2 fiber        that order on or
                                  cross connections   before December
                                  and either the      31, 2016: $7,000
                                  Network Time        monthly for first
                                  Protocol Feed or    12 months of
                                  Precision Timing    service, and
                                  Protocol.           $14,000 monthly
                                                      thereafter.
                                                      For Users
                                                      that order after
                                                      December 31, 2016:
                                                      $14,000 monthly.
                                 Option D:           $10,000 initial
                                 2 kW partial         charge per bundle
                                  cabinet, 1 LCN      plus monthly
                                  connection (10      charge per bundle
                                  Gb), 1 IP network   as follows:
                                  connection (10      For Users
                                  Gb), 2 fiber        that order on or
                                  cross connections   before December
                                  and either the      31, 2016: $7,500
                                  Network Time        monthly for first
                                  Protocol Feed or    12 months of
                                  Precision Timing    service, and
                                  Protocol.           $15,000 monthly
                                                      thereafter.
                                                      For Users
                                                      that order after
                                                      December 31, 2016:
                                                      $15,000 monthly.
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    Each proposed Partial Cabinet Solution bundle is made up of a 
number of different services. If a User purchased each of the 
components of a Partial Cabinet Solution bundle, whether over several 
purchases or in one order, and met the conditions described above for 
access to the Partial Cabinet Solution bundle, the Exchange would 
automatically treat the User's services as a Partial Cabinet Solution 
bundle and, effective the date of installation of the

[[Page 78272]]

final component, reduce the User's MRC to the MRC for the relevant 
bundle.\20\
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    \20\ The Exchange proposes to implement the proposed Partial 
Cabinet Solution bundle changes effective January 1, 2016. If as of 
that date a User already had each of the components of a Partial 
Cabinet Solution bundle and met the conditions described above for 
access to the Partial Cabinet Solution bundle, the Exchange would 
automatically treat the User's services as a Partial Cabinet 
Solution bundle and reduce the User's MRC to the MRC for the 
relevant bundle, effective January 1, 2016.
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    Finally, the Exchange proposes to make non-substantive changes to 
the Price List to add subheadings under ``Co-Location Fees'' for 
``Definitions'' and ``General Notes''. Definitions of aggregate cabinet 
footprint and Affiliate would be added under ``Definitions''. The 
existing note stating that a User that incurs co-location fees for a 
particular co-location service would not be subject to co-location fees 
for the same co-location service charged by the Exchange's affiliates 
would become note one under ``General Notes'' and the proposed 
provisions regarding aggregate cabinet footprints and what portion of 
an NRC, if any, a User would be subject to if it changed bundles would 
become note two.\21\
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    \21\ See note 18, supra.
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    Users that purchase a proposed Partial Cabinet Solution bundle 
would not be subject to the 12-month minimum commitment, but rather 
would be subject to a 90-day commitment, after which period they would 
be subject to the 60-day rolling time period. As noted above, the 
Exchange anticipates that Users of the Partial Cabinet Solution bundles 
would include those with minimum power or cabinet space demands and 
Users for which the costs attendant with having a dedicated cabinet or 
greater network connection bandwidth are too burdensome. The Exchange 
proposes to have a reduced minimum commitment period for the Partial 
Cabinet Solution bundle to further reduce the cost commitment for such 
Users.
General
    As is the case with all Exchange co-location arrangements, (i) 
neither a User nor any of the User's customers would be permitted to 
submit orders directly to the Exchange unless such User or customer is 
a member organization, a Sponsored Participant or an agent thereof 
(e.g., a service bureau providing order entry services); (ii) use of 
the co-location services proposed herein would be completely voluntary 
and available to all Users on a non-discriminatory basis; \22\ and 
(iii) a User would only incur one charge for the particular co-location 
service described herein, regardless of whether the User connects only 
to the Exchange or to the Exchange and one or both of its 
affiliates.\23\
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    \22\ As is currently the case, Users that receive co-location 
services from the Exchange will not receive any means of access to 
the Exchange's trading and execution systems that is separate from, 
or superior to, that of other Users. In this regard, all orders sent 
to the Exchange enter the Exchange's trading and execution systems 
through the same order gateway, regardless of whether the sender is 
co-located in the data center or not. In addition, co-located Users 
do not receive any market data or data service product that is not 
available to all Users, although Users that receive co-location 
services normally would expect reduced latencies in sending orders 
to, and receiving market data from, the Exchange.
    \23\ See SR-NYSE-2013-59, supra note 5 at 51766. The Exchange's 
affiliates have also submitted the same proposed rule change to 
propose the changes described herein. See SR-NYSEMKT-2015-89 and SR-
NYSEArca-2015-102.
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    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\24\ in general, and furthers the 
objectives of Sections 6(b)(5) of the Act,\25\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that providing connectivity to time feeds is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers because the service would offer 
connectivity to different time feed options, allowing a User that opts 
to connect to a time feed to select the time protocol that best suits 
its needs, helping it tailor its data center operations to the 
requirements of its business operations. The time feeds are unrelated 
to trading on the Exchange or the Exchange's data feeds. A User does 
not require connectivity to a time feed to trade on the Exchange, and 
usage of a time feed has no effect on a User's orders going to, or 
trade data coming from, the Exchange.
    The Exchange believes that providing connectivity to GPS for 
dedicated cabinets but not partial cabinets and to NTP through the LCN 
but not the IP network is not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers because the Exchange 
proposes to offer connectivity to time feeds, including GPS and NTP, as 
a convenience to Users, and usage of a time feed has no effect on a 
User's orders going to, or trade data coming from, the Exchange. 
Regarding GPS, the proximity of GPS and power connections into a 
partial cabinet would expose GPS to interference from the cable power 
connections, interfering with the delivery of the GPS data, and so the 
Exchange is not able to offer connectivity to GPS for partial cabinets. 
A User that requires connectivity to GPS could opt to purchase a 
dedicated cabinet or become a Hosted Customer of a Hosting User with a 
dedicated cabinet. Regarding NTP, the Exchange has opted to offer the 
NTP only over the LCN due to a lack of demand for the NTP over the IP 
network. A User that requires connectivity to NTP could connect to the 
LCN.
    The Exchange believes that the Partial Cabinet Solution bundles are 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers because the Partial Cabinet Solution 
bundles would offer four different Partial Cabinet Solution bundles 
with options with respect to cabinet footprint and network connections. 
Users that require other sizes or combinations of cabinets, network 
connections and cross connects could still request them.
    The Exchange believes that its proposal would remove impediments 
to, and perfects the mechanisms of, a free and open market and a 
national market system and, in general, protects investors and the 
public interest because the proposed connectivity to time feeds would 
provide Users a convenient way to access time protocols. Having 
different time feed options would allow a User with a dedicated cabinet 
to select the time protocol that suits its needs, and for a User with a 
partial cabinet to select between the NTP and PTP.
    In addition, the Exchange believes that its proposal would remove 
impediments to, and perfects the mechanisms of, a free and open market 
and a national market system and, in general, protects investors and 
the public interest because the proposed Partial Cabinet Solution 
bundles would make it more cost effective for Users

[[Page 78273]]

that meet the conditions described above for access to the Partial 
Cabinet Solution bundle to utilize co-location by creating a convenient 
way to create a colocation environment, through four Partial Cabinet 
Solution bundles with options with respect to cabinet footprint and 
network connections. The Exchange expects that such Users would include 
those with minimal power or cabinet space demands and Users for which 
the costs attendant with having a dedicated cabinet or greater network 
connection bandwidth are too burdensome. Such Users may choose to pass 
on such cost savings to their customers. The Exchange expects that the 
majority of Users that purchase a Partial Cabinet Solution bundle will 
not previously have been a User or Hosted Customer, but recognizes that 
it is possible that purchasing Users may include entities that 
otherwise would be Hosted Customers.
    The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\26\ in particular, because 
it provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers. Overall, the Exchange believes that the 
proposed fees for the time feed connectivity and Partial Cabinet 
Solution bundles are reasonable because the Exchange proposes to offer 
the services as a convenience to Users, but in doing so will incur 
certain costs, including costs related to the data center facility, 
hardware and equipment and costs related to personnel required for 
initial installation and monitoring, support and maintenance of such 
services. The higher fee in connection with the GPS reflects the 
greater costs for its equipment, installation and maintenance in 
comparison with the other time feeds. The Exchange believes that 
submitting Users that order the proposed time feed services to a 12-
month minimum commitment, after which period they would be subject a 
60-day rolling time period, is reasonable, as it reflects the 
investment the Exchange incurs in order to provide the service. The 
Exchange believes that the 12-month minimum period is common practice 
for colocation offerings.
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    \26\ 15 U.S.C. 78f(b)(4).
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    In addition, the Exchange believes that its proposal to limit 
access to Partial Cabinet Solution bundles to a User that meets the 
conditions described above, specifically, that (1) the User purchases 
only one Partial Cabinet Solution bundle, (2) the User and its 
Affiliates do not currently have a Partial Cabinet Solution bundle, 
and, (3) after the purchase of a Partial Cabinet Solution bundle, the 
User, together with its Affiliates, will have an aggregate cabinet 
footprint of no more than 2 kW, is reasonable, because the Partial 
Cabinet Solution bundles are intended to make it more cost effective 
for smaller Users to utilize co-location. All Users would be subject to 
the same limits on the number of Partial Cabinet Solution bundles and 
aggregate cabinet footprint. The Exchange believes that the proposal is 
reasonable because it establishes a manner for the Exchange to treat 
Users for purposes of assessing aggregate cabinet footprint. The 
provision is equitable because all Users seeking to purchase a Partial 
Cabinet Solution bundle would be subject to the same parameters. The 
Exchange further notes that the proposal would serve to reduce any 
potential for confusion on how cabinet footprint can be aggregated or 
what entities would constitute Affiliates.
    The Exchange believes that, by aggregating the aggregate cabinet 
footprint of a User with the aggregate cabinet footprint of its 
Affiliates for purposes of determining whether the User has satisfied 
the conditions, the proposed rule change avoids disparate treatment of 
Users that have divided their various business activities between 
separate corporate entities, including between a User and a Hosted 
Customer, as compared to Users that operate those business activities 
within a single corporate entity. The Exchange believes that setting 
the common ownership or control threshold in the definition of 
Affiliates at 50% is reasonable because it will discourage any User 
from taking deliberate advantage of the proposed Partial Cabinet 
Solution bundle by setting up separate corporate entities to act as 
Users or Hosted Customers.
    The Exchange believes that it is reasonable that Users that order a 
Partial Cabinet Solution bundle on or before December 31, 2016 would 
have their MRC reduced by 50% for the first 12 months because the 
Partial Cabinet Solution bundles are a new service, and so it is 
reasonable to offer such reduction as an incentive to Users to utilize 
the new service. Similarly, the Exchange believes that submitting Users 
that purchase the propose Partial Cabinet Solution bundle to a 90-day 
commitment, rather than the 12-month minimum commitment, after which 
period they would be subject to the 60-day rolling time period, is 
reasonable. As noted above, the Exchange anticipates that Users of the 
Partial Cabinet Solution bundles would include those with minimum power 
or cabinet space demands and Users for which the costs attendant with 
having a dedicated cabinet or greater network connection bandwidth are 
too burdensome. The Exchange believes that it is reasonable to have a 
reduced minimum commitment period for the Partial Cabinet Solution 
bundle to further reduce the cost commitment for such Users as an 
incentive to Users to utilize the new service.
    The Exchange believes that it is reasonable not to charge a User 
that changes its Partial Cabinet Solution bundle a second NRC, but 
instead charge the difference, if any, between the NRCs, because the 
cost to the Exchange of modifying the service to move a User to a 
different Partial Cabinet Solution bundle is lower than the cost of the 
initial installation of a Partial Cabinet Solution bundle.
    The Exchange also believes that the services and fees proposed 
herein for Partial Cabinet Solution bundles are reasonable because if a 
User purchased each of the components of a Partial Cabinet Solution 
bundle, whether over several purchases or in one order, and met the 
conditions described above for access to the Partial Cabinet Solution 
bundle, the Exchange would automatically treat the User's services as a 
Partial Cabinet Solution bundle and, effective the date of installation 
of the final component, reduce the User's MRC to the MRC for the 
relevant bundle.
    The Exchange believes that the proposed change to provide Users 
access to time feeds is equitable and not unfairly discriminatory 
because it will result in fees being charged only to Users that 
voluntarily select to receive the corresponding services and because 
those services will be available to all Users. Furthermore, the 
Exchange believes that the services and fees proposed herein are not 
unfairly discriminatory and are equitably allocated because, in 
addition to the connectivity to time feeds being completely voluntary, 
it is available to all Users on an equal basis (i.e., the same 
connectivity to time feed products and services is available to all 
Users, and the same conditions described above for access to the 
Partial Cabinet Solution bundles would apply to all Users). All Users 
that voluntarily select connectivity to one or more of the proposed 
time feeds would be charged the same amount for the same services.
    The Exchange believes that the proposed change to provide Partial 
Cabinet Solution bundles is equitable and not unfairly discriminatory 
because

[[Page 78274]]

it would be available to all Users that meet the conditions described 
above for access to the Partial Cabinet Solution bundle and would 
result in fees being charged only to such Users that voluntarily select 
to receive the corresponding service.
    The Exchange believes that the proposed change to provide Partial 
Cabinet Solution bundles provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities. As previously stated, the proposal 
would make it more cost effective for Users that meet the conditions 
described above for access to the Partial Cabinet Solution bundle to 
utilize co-location. While the Exchange expects that the majority of 
Users that purchase a Partial Cabinet Solution bundle will not 
previously have been a User or Hosted Customer, it recognizes that it 
is possible that purchasing Users may include entities that otherwise 
would be Hosted Customers. However, it notes that being a Hosted 
Customer and being a User with a Partial Cabinet Solution bundle are 
not fungible. A Hosting User manages the service provided to the Hosted 
Customer, which services may include, for example, supporting the 
Hosted Customer's technology, whether hardware or software. The Hosted 
Customer has no relationship with the Exchange. A User with a Partial 
Cabinet Solution bundle, by contrast, is responsible for supporting its 
own technology and is in a direct contractual relationship with the 
Exchange. Providing entities with the additional option of the Partial 
Cabinet Solution bundle will allow them to select the relationship and 
type of service that better corresponds to their needs and resources.
    Furthermore, the Exchange believes that the Partial Cabinet 
Solution bundle services and fees proposed herein are not unfairly 
discriminatory and are equitably allocated because, in addition to the 
services being completely voluntary, they are available to all Users on 
an equal basis (i.e., the same products and services are available to 
all Users, and the same conditions described above for access to the 
Partial Cabinet Solution bundles would apply to all Users). All Users 
that voluntarily select the proposed Partial Cabinet Solution bundle 
service would be subject to the same limits on the number of Partial 
Cabinet Solution bundles and aggregate cabinet footprint. The Exchange 
believes that, by aggregating the aggregate cabinet footprint of a User 
with the aggregate cabinet footprint of its Affiliates for purposes of 
determining whether the User has satisfied the conditions, the proposed 
limit on aggregate cabinet footprint avoids disparate treatment of 
Users that have divided their various business activities between 
separate corporate entities, including between a User and a Hosted 
Customer, as compared to Users that operate those business activities 
within a single corporate entity. Finally, all Users that order a 
bundle on or before December 31, 2016 would have their MRC reduced by 
50% for the first 12 months.
    The Exchange believes that it is equitable and not unfairly 
discriminatory to not charge a User that changes its Partial Cabinet 
Solution bundle a second NRC, but instead charge the difference, if 
any, between the NRCs, because the cost to the Exchange of modifying 
the service to move a User to a different Partial Cabinet Solution 
bundle is lower than the cost of the initial installation of a Partial 
Cabinet Solution bundle.
    The Exchange also believes that the services and fees proposed 
herein for Partial Cabinet Solution bundles are not unfairly 
discriminatory and are equitably allocated because if a User purchased 
each of the components of a Partial Cabinet Solution bundle, whether 
over several purchases or in one order, and met the conditions 
described above for access to the Partial Cabinet Solution bundle, the 
Exchange would automatically treat the User's services as a Partial 
Cabinet Solution bundle and, effective the date of installation of the 
final component, reduce the User's MRC to the MRC for the relevant 
bundle.
    For the reasons above, the proposed changes do not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions established from time to time by the Exchange.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\27\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because, in addition to the proposed services being 
completely voluntary, they are available to all Users on an equal basis 
(i.e. the same products and services are available to all Users, and 
the same conditions described above for access to the Partial Cabinet 
Solution bundles would apply to all Users).
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange believes that providing Users with connectivity to 
time feeds will not impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because such connectivity satisfies User demand for a convenient way to 
access time protocols. Having connectivity to different time feed 
options would allow a User with a dedicated cabinet to select the time 
protocol that best suits its needs, and for a User with a partial 
cabinet to select between the NTP and PTP, helping Users tailor their 
data center operations to the requirements of their business 
operations. In addition, the Exchange believes that providing 
connectivity to GPS for dedicated cabinets but not partial cabinets and 
to NTP through the LCN but not the IP network will not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the Exchange proposes to 
offer connectivity to time feeds, including GPS and NTP, as a 
convenience to Users, and usage of a time feed has no effect on a 
User's orders going to, or trade data coming from, the Exchange.
    The Exchange believes that allowing Users to purchase Partial 
Cabinet Solution bundles will not impose any burden on competition that 
is not necessary or appropriate in furtherance of the purposes of the 
Act because such access will satisfy User demand for cost effective 
options for smaller Users that choose to utilize co-location. All Users 
that meet the conditions described above for access to the Partial 
Cabinet Solution bundle would be subject to the same limits on the 
number of Partial Cabinet Solution bundles and aggregate cabinet 
footprint, all Users that order a bundle on or before December 31, 2016 
would have their MRC reduced by 50% for the first 12 months, and all 
Users that change Partial Cabinet Solution bundles would not be charged 
a second NRC, but instead charged the difference, if any, between the 
NRCs.
    The Exchange believes that allowing Users to purchase Partial 
Cabinet Solution bundles will not impose any burden on competition that 
is not necessary or appropriate in furtherance of the purposes of the 
Act because, as previously stated, the proposal would make it more cost 
effective for Users

[[Page 78275]]

that meet the conditions described above for access to the Partial 
Cabinet Solution bundle to utilize co-location. While the Exchange 
expects that the majority of Users that purchase a Partial Cabinet 
Solution bundle will not previously have been a User or Hosted 
Customer, it recognizes that it is possible that purchasing Users may 
include entities that otherwise would be Hosted Customers. However, it 
notes that being a Hosted Customer and being a User with a Partial 
Cabinet Solution bundle are not fungible. A Hosting User manages the 
service provided to the Hosted Customer, which services may include, 
for example, supporting the Hosted Customer's technology, whether 
hardware or software. The Hosted Customer has no relationship with the 
Exchange. A User with a Partial Cabinet Solution bundle, by contrast, 
is responsible for supporting its own technology and is in a direct 
contractual relationship with the Exchange. Providing entities with the 
additional option of the Partial Cabinet Solution bundle will allow 
them to select the relationship and type of service that better 
corresponds to their needs and resources.
    The proposed changes will also enhance competition by making it 
more cost effective for Users that meet the conditions described above 
for access to the Partial Cabinet Solution bundle to utilize co-
location by creating a convenient way to create a colocation 
environment, through Partial Cabinet Solution bundles with options with 
respect to cabinet footprint and network connections. Such Users may 
choose to pass on such cost savings to their customers.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually 
review, and consider adjusting, its services and related fees and 
credits to remain competitive with other exchanges. For the reasons 
described above, the Exchange believes that the proposed rule change 
reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission shall: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be 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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-NYSE-2015-53 on the subject line.

Paper Comments

     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 No. SR-NYSE-2015-53. 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 No. SR-NYSE-2015-53, and should be 
submitted on or before January 6, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-31576 Filed 12-15-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78269 (ii) as to which the Exchange consents, For the Commission, by the Division of statements concerning the purpose of, the Commission shall: (a) By order Trading and Markets, pursuant to delegated and basis for, the proposed rule change approve or disapprove such proposed authority.28 and discussed any comments it received rule change, or (b) institute proceedings Brent J. Fields, on the proposed rule change. The text to determine whether the proposed rule Secretary. of those statements may be examined at change should be disapproved. [FR Doc. 2015–31577 Filed 12–15–15; 8:45 am] the places specified in Item IV below. BILLING CODE 8011–01–P The Exchange has prepared summaries, IV. Solicitation of Comments set forth in sections A, B, and C below, Interested persons are invited to of the most significant parts of such submit written data, views, and SECURITIES AND EXCHANGE statements. arguments concerning the foregoing, COMMISSION A. Self-Regulatory Organization’s including whether the proposed rule [Release No. 34–76612; File No. SR–NYSE– Statement of the Purpose of, and change is consistent with the Act. 2015–53] Statutory Basis for, the Proposed Rule Comments may be submitted by any of Change the following methods: Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of 1. Purpose Electronic Comments Filing of Proposed Rule Change to Its The Exchange proposes to change its • Use the Commission’s Internet Rules To Provide That the Co-Location rules to provide that the co-location 4 comment form (http://www.sec.gov/ Services Offered by the Exchange services offered by the Exchange rules/sro.shtml); or Include Three Time Feeds and Four include three time feeds and four new • Send an email to rule-comments@ Bundles of Co-Location Services Partial Cabinet Solution bundles. In sec.gov. Please include File No. SR– addition, the Exchange proposes to NYSEMKT–2015–89 on the subject line. December 10, 2015. amend the Price List to reflect the time Pursuant to Section 19(b)(1) 1 of the feeds and the Partial Cabinet Solution Paper Comments Securities Exchange Act of 1934 (the bundles. The Exchange proposes to offer • Send paper comments in triplicate ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 the Partial Cabinet Solution bundles to Secretary, Securities and Exchange notice is hereby given that, on beginning January 1, 2016. Commission, 100 F Street NE., November 27, 2015, New York Stock Washington, DC 20549–1090. Exchange LLC (‘‘NYSE’’ or the Time Feeds All submissions should refer to File No. ‘‘Exchange’’) filed with the Securities The proposed rule change would SR–NYSEMKT–2015–89. This file and Exchange Commission (the provide that Users 5 may purchase number should be included on the ‘‘Commission’’) the proposed rule access to three time feeds, each of which subject line if email is used. To help the change as described in Items I and II provides a feed with the current time of Commission process and review your below, which Items have been prepared day using one of three different time comments more efficiently, please use by the self-regulatory organization. The protocols: GPS Time Source, the only one method. The Commission will Commission is publishing this notice to Network Time Protocol feed (‘‘NTP’’), post all comments on the Commission’s solicit comments on the proposed rule and Precision Timing Protocol (‘‘PTP’’).6 Internet Web site (http://www.sec.gov/ change from interested persons. Time feeds are used to receive time rules/sro.shtml). Copies of the and to synchronize clocks between I. Self-Regulatory Organization’s computer systems or throughout a submission, all subsequent Statement of the Terms of the Substance amendments, all written statements of the Proposed Rule Change 4 The Exchange initially filed rule changes with respect to the proposed rule relating to its co-location services with the change that are filed with the The Exchange proposes to change its Securities and Exchange Commission Commission, and all written rules to provide that the co-location (‘‘Commission’’) in 2010. See Securities Exchange communications relating to the services offered by the Exchange Act Release No. 62960 (September 21, 2010), 75 FR proposed rule change between the include three time feeds and four 59310 (September 27, 2010) (SR–NYSE–2010–56) bundles of co-location services (‘‘Partial (the ‘‘Original Co-location Filing’’). The Exchange Commission and any person, other than operates a data center in Mahwah, New Jersey (the those that may be withheld from the Cabinet Solution bundles’’). The ‘‘data center’’) from which it provides co-location public in accordance with the Exchange proposes to amend the services to Users. provisions of 5 U.S.C. 552, will be Exchange’s Price List (‘‘Price List’’) to 5 For purposes of the Exchange’s co-location reflect the time feeds and the Partial services, a ‘‘User’’ means any market participant available for Web site viewing and that requests to receive co-location services directly printing in the Commission’s Public Cabinet Solution bundles. from the Exchange, a ‘‘Hosting User’’ means a User Reference Room, 100 F Street NE., The text of the proposed rule change that hosts a Hosted Customer in the User’s co- Washington, DC 20549 on official is available on the Exchange’s Web site location space, and a ‘‘Hosted Customer’’ means a at www.nyse.com, at the principal office customer of a Hosting User that is hosted in a business days between the hours of Hosting User’s co-location space. See Securities 10:00 a.m. and 3:00 p.m. Copies of such of the Exchange, and at the Exchange Act Release No. 76008 (September 29, filing also will be available for Commission’s Public Reference Room. 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE– inspection and copying at the principal 2015–40). As specified in the Price List, a User that II. Self-Regulatory Organization’s incurs co-location fees for a particular co-location office of the Exchange. All comments Statement of the Purpose of, and service pursuant thereto would not be subject to co- received will be posted without change; Statutory Basis for, the Proposed Rule location fees for the same co-location service the Commission does not edit personal Change charged by the Exchange’s affiliates NYSE MKT identifying information from LLC and NYSE Arca, Inc. See Securities Exchange tkelley on DSK9F6TC42PROD with NOTICES submissions. You should submit only In its filing with the Commission, the Act Release No. 70206 (August 15, 2013), 78 FR self-regulatory organization included 51765 (August 21, 2013) (SR–NYSE–2013–59). information that you wish to make 6 The time feeds are unrelated to trading on the available publicly. All submissions 28 17 Exchange or the Exchange’s data feeds. A User does CFR 200.30–3(a)(12). not require connectivity to a time feed to trade on should refer to File No. SR–NYSEMKT– 1 15 U.S.C.78s(b)(1). the Exchange, and usage of a time feed has no effect 2015–89, and should be submitted on or 2 15 U.S.C. 78a. on a User’s orders going to, or trade data coming before January 6, 2016. 3 17 CFR 240.19b–4. from, the Exchange. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

78270 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices computer network. A User may opt to cables. For the NTP and PTP time feeds, that User (‘‘dedicated cabinet’’) or a connect to a time feed for various the Exchange routes the GPS data partial cabinet available in increments reasons, including record keeping or through dedicated equipment that of eight-rack units of space (‘‘partial measuring response times.7 The reformats the GPS data into NTP and cabinet’’).9 Connectivity to all three time proposed connectivity to time feeds PTP.8 Subscribing Users connect to PTP protocols would be available for would provide Users a convenient way over dedicated cables and NTP over the dedicated cabinets. Due to technical to access time protocols. Liquidity Center Network (‘‘LCN’’), a limitations, connectivity to the NTP and The proposed change includes three local area network available in the data PTP would be available for partial time feeds. Global Positioning System center. cabinets, but connectivity to GPS would (‘‘GPS’’) is a time and location system Currently, the Exchange’s co-location not.10 maintained by the United States services allow a User to request a government. The Exchange accesses the physical cabinet to house its servers and The Exchange proposes to amend its GPS Time Source feed through other equipment in the data center. A Price List to reflect fees related to these dedicated equipment and subscribing User has the option of receiving an services, as follows: Users connect to the feed over dedicated entire cabinet that is dedicated solely to Connection to Time Protocol Feed ................... Network Time Protocol Feed (Note: LCN only) $300 initial charge plus $100 monthly. Precision Time Protocol ................................... $1,000 initial charge plus $250 monthly. GPS Time Source (Note: dedicated cabinets $3,000 initial charge plus $400 monthly. only). Users that order the proposed time the majority of Users that purchase a a non-User’s equipment within the data feed services will be subject to a 12- Partial Cabinet Solution bundle will not center. For example, a User may utilize month minimum commitment, after previously have been a User or Hosted a cross connect with a non-User to which period they are subject to a 60- Customer, but recognizes that it is connect to a carrier’s equipment in day rolling time period.11 possible that purchasing Users may order to access the carrier’s network include entities that otherwise would be outside the data center.14 Partial Cabinet Solution Bundles Hosted Customers. The Exchange The Exchange proposes to offer four The Exchange proposes to offer four proposes to offer the Partial Cabinet Partial Cabinet Solution bundles. Partial Cabinet Solution bundles Solution bundles beginning January 1, Because the Partial Cabinet Solution intended to make it more cost effective 2016. bundles are intended to make it more for smaller Users to utilize co-location. As noted above, currently a User may cost effective for smaller Users to utilize These proposed Partial Cabinet Solution opt to receive a partial cabinet available co-location, the Exchange proposes only bundles would provide smaller Users a in increments of eight-rack units of to provide access to a Partial Cabinet convenient way to create a colocation space. Each partial cabinet is allocated Solution bundle to a User that meets the environment, by including in each up to two kilowatts (‘‘kWs’’) of power. following conditions: (1) The User Partial Cabinet Solution bundle cabinet In addition, the Exchange offers Users purchases only one Partial Cabinet space, network access, fiber connections access to two local area networks Solution bundle; (2) the User and its (‘‘cross connects’’), and the choice of available in the data center: The LCN Affiliates 15 do not currently have a either the NTP or PTP time feed. The and the internet protocol (‘‘IP’’) Partial Cabinet Solution bundle; and (3) Exchange expects that such Users would network.12 The Exchange offers 1 and 10 after the purchase of the Partial Cabinet include those with minimal power or gigabit (‘‘Gb’’) IP network access, 1, 10, Solution bundle, the User, together with cabinet space demands and Users for and 40 Gb LCN network access, and its Affiliates, will have an aggregate which the costs attendant with having a LCN 10 Gb LX network access.13 cabinet footprint of no more than 2 dedicated cabinet or greater network Users may use cross connects to kW.16 A User’s aggregate cabinet connection bandwidth are too connect cabinets within the data center, footprint is the total kW of its cabinets, burdensome. The Exchange expects that including between a User’s cabinet and including both partial and dedicated 7 For example, a User may connect to a time feed offerings. See, e.g., Securities Exchange Act Release 13 The Exchange also proposes to provide 40 Gb for record keeping purposes if it uses that specific No. 68735 (January 25, 2013), 78 FR 6842 (January IP network access. The 40 Gb IP network time protocol for all its activities, both inside and 31, 2013) (SR–NASDAQ–2012–119) (noting that connection is expected to be available no later than out of the data center. NASDAQ represented that the lock-in feature ‘‘is April 15, 2016. The Exchange will announce the 8 The reformatting equipment is programmed by common practice for colocation offerings’’). If a date that the 40 Gb IP network connection will be the vendor to generate NTP and PTP time feeds that User upgrades a service (i.e., goes from a 10 Gb to available through a customer notice. See Securities comply with industry standards. The Exchange a 40 Gb LCN circuit), it will not be held to the Exchange Act Release No. 76369 (November 5, does not program or manage the reformatting of the minimum period for the first service, but will be GPS data into NTP and PTP. 2015), 80 FR 70027 (November 12, 2015) (SR– subject to a 12-month minimum period for the NYSE–2015–54) (notice of filing and immediate 9 See Original Co-location Filing, at 59310 and upgraded service, starting from the date of the effectiveness of proposed rule change to include IP Securities Exchange Act Release No. 71122 upgrade. (December 18, 2013), 78 FR 77739 (December 24, 40 Gb network connections). 12 See Original Co-location Filing, at 59311 and 2013) (SR–NYSE–2013–81) (notice of filing and 14 See Release No. 74222, supra note 12. immediate effectiveness of proposed rule change to Securities Exchange Act Release Nos. 74222 15 For purposes of the Partial Cabinet Solution offer partial cabinets). (February 6, 2015), 80 FR 7888 (February 12, 2015) (SR–NYSE–2015–05) (notice of filing and bundles, an ‘‘Affiliate’’ of a User would be any other 10 The Exchange does not propose to make tkelley on DSK9F6TC42PROD with NOTICES immediate effectiveness of proposed rule change to User or a Hosted Customer that is under 50% or connectivity to GPS available for partial cabinets greater common ownership or control of the first because the proximity of the GPS and power include IP network connections and fiber cross connects between a User’s cabinet and a non-User’s User. connections into a partial cabinet would expose 16 For example, a User with a 4 kW dedicated GPS to interference from the cable power equipment) (‘‘Release No. 74222’’) and 70888 connections, interfering with the delivery of the (November 15, 2013), 78 FR 69907 (November 21, cabinet would not be eligible for a Partial Cabinet GPS data. 2013) (SR–NYSE–2013–73) (notice of filing and Solution bundle, as its aggregate cabinet footprint 11 The Exchange believes that the 12-month immediate effectiveness of proposed rule change to would be either 5 kW or 6 kW once a Partial minimum period is common practice for colocation include LCN 10 Gb LX connection). Cabinet Solution bundle was added. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78271 cabinets, and a Hosted Customer’s Affiliates that are Users or Hosted longer offer access to the Partial Cabinet aggregate cabinet footprint is the total Customers, and (b) that its aggregate Solution bundle to such User. Once the kW of the portion of the Hosting User’s cabinet footprint, together with the User ceased to meet the conditions for cabinet, whether partial or dedicated, aggregate cabinet footprint of its access to the Partial Cabinet Solution allocated to such Hosted Customer.17 Affiliates that are also Users or Hosted bundle, it would be charged for each of The Exchange proposes to aggregate Customers and the cabinet footprint of the services individually, at the price for the aggregate cabinet footprint of a User the Partial Cabinet Solution bundle, will each such service set out in the Price of a Partial Cabinet Solution bundle not exceed 2 kW. In addition, the User List. Such price change would be with the aggregate cabinet footprint of of a Partial Cabinet Solution bundle effective as of the date that the User its Affiliates for purposes of determining would be required to inform the ceased to meet the conditions. whether the User has satisfied the Exchange immediately of any event that The Exchange proposes that Users conditions in order to avoid disparate causes another User or Hosted Customer that purchase a Partial Cabinet Solution treatment of Users that have divided to become an Affiliate.18 The Exchange bundle would be charged a non- their various business activities between proposes to revise the Price List recurring initial charge (‘‘NRC’’) and a separate corporate entities, including accordingly. monthly recurring charge (‘‘MRC’’).19 between a User and a Hosted Customer, If a User of a Partial Cabinet Solution The Exchange proposes that Users that as compared to Users that operate those bundle became Affiliated with one or order a Partial Cabinet Solution bundle business activities within a single more other Users or Hosted Customers on or before December 31, 2016 would corporate entity. Accordingly, the and thereby no longer met the have their MRC reduced by 50% for the Exchange proposes that a User conditions for access to the Partial first 12 months. requesting a Partial Cabinet Solution Cabinet Solution bundle, or if the User The Exchange proposes to amend its bundle be required to represent to the otherwise ceased to meet the conditions Price List to reflect fees related to these Exchange (a) whether it has any for access, the Exchange would no new services, as follows: Type of service Description Amount of charge Partial Cabinet Solution bundles (effec- Option A: .............................................. $7,500 initial charge per bundle plus monthly charge per bun- tive from January 1, 2016). 1 kW partial cabinet, 1 LCN connec- dle as follows: Note: A User and its Affiliates are lim- tion (1 Gb), 1 IP network connection • For Users that order on or before December 31, 2016: ited to one Partial Cabinet Solution (1 Gb), 2 fiber cross connections $3,000 monthly for first 12 months of service, and $6,000 bundle at a time. A User and its Af- and either the Network Time Pro- monthly thereafter. filiates must have an aggregate cabi- tocol Feed or Precision Timing Pro- • For Users that order after December 31, 2016: $6,000 net footprint of 2 kW or less to qual- tocol. monthly. ify for a Partial Cabinet Solution bun- dle. Option B: $7,500 initial charge per bundle plus monthly charge per bun- 2 kW partial cabinet, 1 LCN connec- dle as follows: tion (1 Gb), 1 IP network connection • For Users that order on or before December 31, 2016: (1 Gb), 2 fiber cross connections $3,500 monthly for first 12 months of service, and $7,000 and either the Network Time Pro- monthly thereafter. tocol Feed or Precision Timing Pro- • For Users that order after December 31, 2016: $7,000 tocol. monthly. Option C: $10,000 initial charge per bundle plus monthly charge per 1 kW partial cabinet, 1 LCN connec- bundle as follows: tion (10 Gb), 1 IP network connec- • For Users that order on or before December 31, 2016: tion (10 Gb), 2 fiber cross connec- $7,000 monthly for first 12 months of service, and $14,000 tions and either the Network Time monthly thereafter. Protocol Feed or Precision Timing • For Users that order after December 31, 2016: $14,000 Protocol. monthly. Option D: $10,000 initial charge per bundle plus monthly charge per 2 kW partial cabinet, 1 LCN connec- bundle as follows: tion (10 Gb), 1 IP network connec- • For Users that order on or before December 31, 2016: tion (10 Gb), 2 fiber cross connec- $7,500 monthly for first 12 months of service, and $15,000 tions and either the Network Time monthly thereafter. Protocol Feed or Precision Timing • For Users that order after December 31, 2016: $15,000 Protocol. monthly. Each proposed Partial Cabinet Cabinet Solution bundle, whether over bundle, the Exchange would Solution bundle is made up of a number several purchases or in one order, and automatically treat the User’s services as of different services. If a User purchased met the conditions described above for a Partial Cabinet Solution bundle and, each of the components of a Partial access to the Partial Cabinet Solution effective the date of installation of the 17 The Exchange similarly aggregates eligible advantage of the proposed Partial Cabinet Solution 19 A User that changes its Partial Cabinet Solution activity of member organization affiliates for bundle by setting up separate corporate entities to bundle would not be subject to a second NRC. tkelley on DSK9F6TC42PROD with NOTICES purposes of charges or credits based on volume. See act as Users or Hosted Customers. Rather, it would pay the difference, if any, between Securities Exchange Act Release No. 74640 (April 18 The Exchange would review available the NRCs. For example, a User that buys an Option 2, 2015), 80 FR 18873 (April 8, 2015) (SR–NYSE– information regarding the entities and may request A Partial Cabinet Solution bundle would pay a 2015–13). The threshold percentage used in the additional information to verify the Affiliate status $7,500 NRC. If it then opted to change to Option definition of ‘‘affiliate’’ for purposes of charges or of a User or Hosted Customer. The Exchange would credits based on volume is 75%. Id. The Exchange approve a request for a Partial Cabinet Solution C, it would pay $2,500, i.e. the difference between proposes a lower threshold in the present case in bundle unless it determines that the certification is the Option A and Option C NRCs of $7,500 and order to discourage any User from taking deliberate not accurate. $10,000, respectively. 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78272 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices final component, reduce the User’s MRC incur one charge for the particular co- orders going to, or trade data coming to the MRC for the relevant bundle.20 location service described herein, from, the Exchange. Finally, the Exchange proposes to regardless of whether the User connects The Exchange believes that providing make non-substantive changes to the only to the Exchange or to the Exchange connectivity to GPS for dedicated Price List to add subheadings under and one or both of its affiliates.23 cabinets but not partial cabinets and to ‘‘Co-Location Fees’’ for ‘‘Definitions’’ The proposed change is not otherwise NTP through the LCN but not the IP and ‘‘General Notes’’. Definitions of intended to address any other issues network is not designed to permit unfair aggregate cabinet footprint and Affiliate relating to co-location services and/or discrimination between customers, would be added under ‘‘Definitions’’. related fees, and the Exchange is not issuers, brokers, or dealers because the The existing note stating that a User that aware of any problems that Users would Exchange proposes to offer connectivity incurs co-location fees for a particular have in complying with the proposed to time feeds, including GPS and NTP, co-location service would not be subject change. as a convenience to Users, and usage of to co-location fees for the same co- a time feed has no effect on a User’s 2. Statutory Basis location service charged by the orders going to, or trade data coming Exchange’s affiliates would become note The Exchange believes that the from, the Exchange. Regarding GPS, the one under ‘‘General Notes’’ and the proposed rule change is consistent with proximity of GPS and power proposed provisions regarding aggregate Section 6(b) of the Act,24 in general, and connections into a partial cabinet would cabinet footprints and what portion of furthers the objectives of Sections expose GPS to interference from the an NRC, if any, a User would be subject 6(b)(5) of the Act,25 in particular, cable power connections, interfering to if it changed bundles would become because it is designed to prevent with the delivery of the GPS data, and note two.21 fraudulent and manipulative acts and so the Exchange is not able to offer Users that purchase a proposed Partial practices, to promote just and equitable connectivity to GPS for partial cabinets. Cabinet Solution bundle would not be principles of trade, to foster cooperation A User that requires connectivity to GPS subject to the 12-month minimum and coordination with persons engaged could opt to purchase a dedicated commitment, but rather would be in regulating, clearing, settling, cabinet or become a Hosted Customer of subject to a 90-day commitment, after processing information with respect to, a Hosting User with a dedicated cabinet. which period they would be subject to and facilitating transactions in Regarding NTP, the Exchange has opted the 60-day rolling time period. As noted securities, to remove impediments to, to offer the NTP only over the LCN due above, the Exchange anticipates that and perfect the mechanisms of, a free to a lack of demand for the NTP over the Users of the Partial Cabinet Solution and open market and a national market IP network. A User that requires bundles would include those with system and, in general, to protect connectivity to NTP could connect to minimum power or cabinet space investors and the public interest and the LCN. demands and Users for which the costs because it is not designed to permit The Exchange believes that the Partial attendant with having a dedicated unfair discrimination between Cabinet Solution bundles are not cabinet or greater network connection customers, issuers, brokers, or dealers. designed to permit unfair bandwidth are too burdensome. The The Exchange believes that providing discrimination between customers, Exchange proposes to have a reduced connectivity to time feeds is not issuers, brokers, or dealers because the minimum commitment period for the designed to permit unfair Partial Cabinet Solution bundles would Partial Cabinet Solution bundle to discrimination between customers, offer four different Partial Cabinet further reduce the cost commitment for issuers, brokers, or dealers because the Solution bundles with options with such Users. service would offer connectivity to respect to cabinet footprint and network different time feed options, allowing a connections. Users that require other General User that opts to connect to a time feed sizes or combinations of cabinets, As is the case with all Exchange co- to select the time protocol that best suits network connections and cross connects location arrangements, (i) neither a User its needs, helping it tailor its data center could still request them. nor any of the User’s customers would operations to the requirements of its The Exchange believes that its be permitted to submit orders directly to business operations. The time feeds are proposal would remove impediments to, the Exchange unless such User or unrelated to trading on the Exchange or and perfects the mechanisms of, a free customer is a member organization, a the Exchange’s data feeds. A User does and open market and a national market Sponsored Participant or an agent not require connectivity to a time feed system and, in general, protects thereof (e.g., a service bureau providing to trade on the Exchange, and usage of investors and the public interest order entry services); (ii) use of the co- a time feed has no effect on a User’s because the proposed connectivity to location services proposed herein would time feeds would provide Users a be completely voluntary and available any means of access to the Exchange’s trading and convenient way to access time to all Users on a non-discriminatory execution systems that is separate from, or superior protocols. Having different time feed to, that of other Users. In this regard, all orders sent options would allow a User with a basis; 22 and (iii) a User would only to the Exchange enter the Exchange’s trading and execution systems through the same order gateway, dedicated cabinet to select the time 20 The Exchange proposes to implement the regardless of whether the sender is co-located in the protocol that suits its needs, and for a proposed Partial Cabinet Solution bundle changes data center or not. In addition, co-located Users do User with a partial cabinet to select effective January 1, 2016. If as of that date a User not receive any market data or data service product between the NTP and PTP. already had each of the components of a Partial that is not available to all Users, although Users that In addition, the Exchange believes Cabinet Solution bundle and met the conditions receive co-location services normally would expect described above for access to the Partial Cabinet reduced latencies in sending orders to, and that its proposal would remove tkelley on DSK9F6TC42PROD with NOTICES Solution bundle, the Exchange would automatically receiving market data from, the Exchange. impediments to, and perfects the treat the User’s services as a Partial Cabinet 23 See SR–NYSE–2013–59, supra note 5 at 51766. mechanisms of, a free and open market Solution bundle and reduce the User’s MRC to the The Exchange’s affiliates have also submitted the and a national market system and, in MRC for the relevant bundle, effective January 1, same proposed rule change to propose the changes 2016. described herein. See SR–NYSEMKT–2015–89 and general, protects investors and the 21 See note 18, supra. SR–NYSEArca–2015–102. public interest because the proposed 22 As is currently the case, Users that receive co- 24 15 U.S.C. 78f(b). Partial Cabinet Solution bundles would location services from the Exchange will not receive 25 15 U.S.C. 78f(b)(5). make it more cost effective for Users VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78273 that meet the conditions described the User purchases only one Partial anticipates that Users of the Partial above for access to the Partial Cabinet Cabinet Solution bundle, (2) the User Cabinet Solution bundles would include Solution bundle to utilize co-location by and its Affiliates do not currently have those with minimum power or cabinet creating a convenient way to create a a Partial Cabinet Solution bundle, and, space demands and Users for which the colocation environment, through four (3) after the purchase of a Partial costs attendant with having a dedicated Partial Cabinet Solution bundles with Cabinet Solution bundle, the User, cabinet or greater network connection options with respect to cabinet footprint together with its Affiliates, will have an bandwidth are too burdensome. The and network connections. The Exchange aggregate cabinet footprint of no more Exchange believes that it is reasonable expects that such Users would include than 2 kW, is reasonable, because the to have a reduced minimum those with minimal power or cabinet Partial Cabinet Solution bundles are commitment period for the Partial space demands and Users for which the intended to make it more cost effective Cabinet Solution bundle to further costs attendant with having a dedicated for smaller Users to utilize co-location. reduce the cost commitment for such cabinet or greater network connection All Users would be subject to the same Users as an incentive to Users to utilize bandwidth are too burdensome. Such limits on the number of Partial Cabinet the new service. Users may choose to pass on such cost Solution bundles and aggregate cabinet The Exchange believes that it is savings to their customers. The footprint. The Exchange believes that reasonable not to charge a User that Exchange expects that the majority of the proposal is reasonable because it changes its Partial Cabinet Solution Users that purchase a Partial Cabinet establishes a manner for the Exchange to bundle a second NRC, but instead Solution bundle will not previously treat Users for purposes of assessing charge the difference, if any, between have been a User or Hosted Customer, aggregate cabinet footprint. The the NRCs, because the cost to the but recognizes that it is possible that provision is equitable because all Users Exchange of modifying the service to purchasing Users may include entities seeking to purchase a Partial Cabinet move a User to a different Partial that otherwise would be Hosted Solution bundle would be subject to the Cabinet Solution bundle is lower than Customers. same parameters. The Exchange further the cost of the initial installation of a The Exchange also believes that the notes that the proposal would serve to Partial Cabinet Solution bundle. proposed rule change is consistent with reduce any potential for confusion on The Exchange also believes that the Section 6(b)(4) of the Act,26 in how cabinet footprint can be aggregated services and fees proposed herein for particular, because it provides for the or what entities would constitute Partial Cabinet Solution bundles are equitable allocation of reasonable dues, Affiliates. reasonable because if a User purchased fees, and other charges among its The Exchange believes that, by each of the components of a Partial members, issuers and other persons aggregating the aggregate cabinet Cabinet Solution bundle, whether over using its facilities and does not unfairly footprint of a User with the aggregate several purchases or in one order, and discriminate between customers, cabinet footprint of its Affiliates for met the conditions described above for issuers, brokers or dealers. Overall, the purposes of determining whether the access to the Partial Cabinet Solution Exchange believes that the proposed User has satisfied the conditions, the bundle, the Exchange would fees for the time feed connectivity and proposed rule change avoids disparate automatically treat the User’s services as Partial Cabinet Solution bundles are treatment of Users that have divided a Partial Cabinet Solution bundle and, reasonable because the Exchange their various business activities between effective the date of installation of the proposes to offer the services as a separate corporate entities, including final component, reduce the User’s MRC convenience to Users, but in doing so between a User and a Hosted Customer, to the MRC for the relevant bundle. will incur certain costs, including costs as compared to Users that operate those The Exchange believes that the related to the data center facility, business activities within a single proposed change to provide Users hardware and equipment and costs corporate entity. The Exchange believes access to time feeds is equitable and not related to personnel required for initial that setting the common ownership or unfairly discriminatory because it will installation and monitoring, support control threshold in the definition of result in fees being charged only to and maintenance of such services. The Affiliates at 50% is reasonable because Users that voluntarily select to receive higher fee in connection with the GPS it will discourage any User from taking the corresponding services and because reflects the greater costs for its deliberate advantage of the proposed those services will be available to all equipment, installation and Partial Cabinet Solution bundle by Users. Furthermore, the Exchange maintenance in comparison with the setting up separate corporate entities to believes that the services and fees other time feeds. The Exchange believes act as Users or Hosted Customers. proposed herein are not unfairly that submitting Users that order the The Exchange believes that it is discriminatory and are equitably proposed time feed services to a 12- reasonable that Users that order a Partial allocated because, in addition to the month minimum commitment, after Cabinet Solution bundle on or before connectivity to time feeds being which period they would be subject a December 31, 2016 would have their completely voluntary, it is available to 60-day rolling time period, is MRC reduced by 50% for the first 12 all Users on an equal basis (i.e., the reasonable, as it reflects the investment months because the Partial Cabinet same connectivity to time feed products the Exchange incurs in order to provide Solution bundles are a new service, and and services is available to all Users, the service. The Exchange believes that so it is reasonable to offer such and the same conditions described the 12-month minimum period is reduction as an incentive to Users to above for access to the Partial Cabinet common practice for colocation utilize the new service. Similarly, the Solution bundles would apply to all offerings. Exchange believes that submitting Users Users). All Users that voluntarily select tkelley on DSK9F6TC42PROD with NOTICES In addition, the Exchange believes that purchase the propose Partial connectivity to one or more of the that its proposal to limit access to Cabinet Solution bundle to a 90-day proposed time feeds would be charged Partial Cabinet Solution bundles to a commitment, rather than the 12-month the same amount for the same services. User that meets the conditions minimum commitment, after which The Exchange believes that the described above, specifically, that (1) period they would be subject to the 60- proposed change to provide Partial day rolling time period, is reasonable. Cabinet Solution bundles is equitable 26 15 U.S.C. 78f(b)(4). As noted above, the Exchange and not unfairly discriminatory because VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

78274 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices it would be available to all Users that conditions, the proposed limit on addition to the proposed services being meet the conditions described above for aggregate cabinet footprint avoids completely voluntary, they are available access to the Partial Cabinet Solution disparate treatment of Users that have to all Users on an equal basis (i.e. the bundle and would result in fees being divided their various business activities same products and services are available charged only to such Users that between separate corporate entities, to all Users, and the same conditions voluntarily select to receive the including between a User and a Hosted described above for access to the Partial corresponding service. Customer, as compared to Users that Cabinet Solution bundles would apply The Exchange believes that the operate those business activities within to all Users). proposed change to provide Partial a single corporate entity. Finally, all The Exchange believes that providing Cabinet Solution bundles provides for Users that order a bundle on or before Users with connectivity to time feeds the equitable allocation of reasonable December 31, 2016 would have their will not impose any burden on dues, fees, and other charges among its MRC reduced by 50% for the first 12 competition that is not necessary or members, issuers and other persons months. appropriate in furtherance of the using its facilities. As previously stated, The Exchange believes that it is purposes of the Act because such the proposal would make it more cost equitable and not unfairly connectivity satisfies User demand for a effective for Users that meet the discriminatory to not charge a User that convenient way to access time conditions described above for access to changes its Partial Cabinet Solution protocols. Having connectivity to the Partial Cabinet Solution bundle to bundle a second NRC, but instead different time feed options would allow utilize co-location. While the Exchange charge the difference, if any, between a User with a dedicated cabinet to select expects that the majority of Users that the NRCs, because the cost to the the time protocol that best suits its purchase a Partial Cabinet Solution Exchange of modifying the service to needs, and for a User with a partial bundle will not previously have been a move a User to a different Partial cabinet to select between the NTP and User or Hosted Customer, it recognizes Cabinet Solution bundle is lower than PTP, helping Users tailor their data that it is possible that purchasing Users the cost of the initial installation of a center operations to the requirements of may include entities that otherwise Partial Cabinet Solution bundle. their business operations. In addition, would be Hosted Customers. However, The Exchange also believes that the the Exchange believes that providing it notes that being a Hosted Customer services and fees proposed herein for connectivity to GPS for dedicated and being a User with a Partial Cabinet Partial Cabinet Solution bundles are not cabinets but not partial cabinets and to Solution bundle are not fungible. A unfairly discriminatory and are NTP through the LCN but not the IP Hosting User manages the service equitably allocated because if a User network will not impose any burden on provided to the Hosted Customer, which purchased each of the components of a competition that is not necessary or services may include, for example, Partial Cabinet Solution bundle, appropriate in furtherance of the supporting the Hosted Customer’s whether over several purchases or in purposes of the Act because the technology, whether hardware or one order, and met the conditions Exchange proposes to offer connectivity software. The Hosted Customer has no described above for access to the Partial to time feeds, including GPS and NTP, relationship with the Exchange. A User Cabinet Solution bundle, the Exchange as a convenience to Users, and usage of with a Partial Cabinet Solution bundle, would automatically treat the User’s a time feed has no effect on a User’s by contrast, is responsible for services as a Partial Cabinet Solution orders going to, or trade data coming supporting its own technology and is in bundle and, effective the date of from, the Exchange. a direct contractual relationship with installation of the final component, The Exchange believes that allowing the Exchange. Providing entities with reduce the User’s MRC to the MRC for Users to purchase Partial Cabinet the additional option of the Partial the relevant bundle. Solution bundles will not impose any Cabinet Solution bundle will allow For the reasons above, the proposed burden on competition that is not them to select the relationship and type changes do not unfairly discriminate necessary or appropriate in furtherance of service that better corresponds to between or among market participants of the purposes of the Act because such their needs and resources. that are otherwise capable of satisfying access will satisfy User demand for cost Furthermore, the Exchange believes any applicable co-location fees, effective options for smaller Users that that the Partial Cabinet Solution bundle requirements, terms and conditions choose to utilize co-location. All Users services and fees proposed herein are established from time to time by the that meet the conditions described not unfairly discriminatory and are Exchange. above for access to the Partial Cabinet equitably allocated because, in addition Finally, the Exchange believes that it Solution bundle would be subject to the to the services being completely is subject to significant competitive same limits on the number of Partial voluntary, they are available to all Users forces, as described below in the Cabinet Solution bundles and aggregate on an equal basis (i.e., the same Exchange’s statement regarding the cabinet footprint, all Users that order a products and services are available to all burden on competition. bundle on or before December 31, 2016 Users, and the same conditions For these reasons, the Exchange would have their MRC reduced by 50% described above for access to the Partial believes that the proposal is consistent for the first 12 months, and all Users Cabinet Solution bundles would apply with the Act. that change Partial Cabinet Solution to all Users). All Users that voluntarily bundles would not be charged a second select the proposed Partial Cabinet B. Self-Regulatory Organization’s NRC, but instead charged the difference, Solution bundle service would be Statement on Burden on Competition if any, between the NRCs. subject to the same limits on the number In accordance with Section 6(b)(8) of The Exchange believes that allowing tkelley on DSK9F6TC42PROD with NOTICES of Partial Cabinet Solution bundles and the Act,27 the Exchange believes that the Users to purchase Partial Cabinet aggregate cabinet footprint. The proposed rule change will not impose Solution bundles will not impose any Exchange believes that, by aggregating any burden on competition that is not burden on competition that is not the aggregate cabinet footprint of a User necessary or appropriate in furtherance necessary or appropriate in furtherance with the aggregate cabinet footprint of of the purposes of the Act because, in of the purposes of the Act because, as its Affiliates for purposes of determining previously stated, the proposal would whether the User has satisfied the 27 15 U.S.C. 78f(b)(8). make it more cost effective for Users VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78275 that meet the conditions described III. Date of Effectiveness of the office of the Exchange. All comments above for access to the Partial Cabinet Proposed Rule Change and Timing for received will be posted without change; Solution bundle to utilize co-location. Commission Action the Commission does not edit personal While the Exchange expects that the Within 45 days of the date of identifying information from majority of Users that purchase a Partial publication of this notice in the Federal submissions. You should submit only Cabinet Solution bundle will not Register or within such longer period (i) information that you wish to make previously have been a User or Hosted as the Commission may designate up to available publicly. All submissions Customer, it recognizes that it is should refer to File No. SR–NYSE– 90 days of such date if it finds such possible that purchasing Users may 2015–53, and should be submitted on or longer period to be appropriate and include entities that otherwise would be before January 6, 2016. publishes its reasons for so finding or Hosted Customers. However, it notes (ii) as to which the Exchange consents, For the Commission, by the Division of that being a Hosted Customer and being the Commission shall: (a) By order Trading and Markets, pursuant to delegated a User with a Partial Cabinet Solution authority.28 approve or disapprove such proposed bundle are not fungible. A Hosting User rule change, or (b) institute proceedings Brent J. Fields, manages the service provided to the to determine whether the proposed rule Secretary. Hosted Customer, which services may change should be disapproved. [FR Doc. 2015–31576 Filed 12–15–15; 8:45 am] include, for example, supporting the BILLING CODE 8011–01–P IV. Solicitation of Comments Hosted Customer’s technology, whether hardware or software. The Hosted Interested persons are invited to Customer has no relationship with the submit written data, views, and SECURITIES AND EXCHANGE Exchange. A User with a Partial Cabinet arguments concerning the foregoing, COMMISSION Solution bundle, by contrast, is including whether the proposed rule [Release No. 34–76616; File No. SR– responsible for supporting its own change is consistent with the Act. NYSEARCA–2015–102] technology and is in a direct contractual Comments may be submitted by any of relationship with the Exchange. the following methods: Self-Regulatory Organizations; NYSE Providing entities with the additional Arca, Inc.; Notice of Filing of Proposed Electronic Comments Rule Change to Its Rules To Provide option of the Partial Cabinet Solution • Use the Commission’s Internet That the Co-location Services Offered bundle will allow them to select the comment form (http://www.sec.gov/ by the Exchange Include Three Time relationship and type of service that rules/sro.shtml); or Feeds and Four Bundles of Co-location better corresponds to their needs and • Send an email to rule-comments@ Services resources. sec.gov. Please include File No. SR– The proposed changes will also NYSE–2015–53 on the subject line. December 10, 2015. enhance competition by making it more Pursuant to Section 19(b)(1) 1 of the cost effective for Users that meet the Paper Comments Securities Exchange Act of 1934 (the conditions described above for access to • Send paper comments in triplicate ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 the Partial Cabinet Solution bundle to to Secretary, Securities and Exchange notice is hereby given that, on utilize co-location by creating a Commission, 100 F Street NE., November 27, 2015, NYSE Arca, Inc. convenient way to create a colocation Washington, DC 20549–1090. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed environment, through Partial Cabinet All submissions should refer to File No. with the Securities and Exchange Solution bundles with options with SR–NYSE–2015–53. This file number Commission (the ‘‘Commission’’) the respect to cabinet footprint and network should be included on the subject line proposed rule change as described in connections. Such Users may choose to if email is used. To help the Items I and II below, which Items have pass on such cost savings to their Commission process and review your been prepared by the self-regulatory comments more efficiently, please use organization. The Commission is customers. only one method. The Commission will publishing this notice to solicit Finally, the Exchange notes that it comments on the proposed rule change operates in a highly competitive market post all comments on the Commission’s Internet Web site (http://www.sec.gov/ from interested persons. in which market participants can readily favor competing venues if they rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s deem fee levels at a particular venue to submission, all subsequent Statement of the Terms of the Substance be excessive. In such an environment, amendments, all written statements of the Proposed Rule Change with respect to the proposed rule The Exchange proposes to change its the Exchange must continually review, change that are filed with the rules to provide that the co-location and consider adjusting, its services and Commission, and all written services offered by the Exchange related fees and credits to remain communications relating to the include three time feeds and four competitive with other exchanges. For proposed rule change between the bundles of co-location services (‘‘Partial the reasons described above, the Commission and any person, other than Cabinet Solution bundles’’). The Exchange believes that the proposed those that may be withheld from the rule change reflects this competitive Exchange proposes to amend the NYSE public in accordance with the Arca Options Fee Schedule (the environment. provisions of 5 U.S.C. 552, will be ‘‘Options Fee Schedule’’) and, through C. Self-Regulatory Organization’s available for Web site viewing and its wholly owned subsidiary NYSE Arca tkelley on DSK9F6TC42PROD with NOTICES Statement on Comments on the printing in the Commission’s Public Equities, Inc. (‘‘NYSE Arca Equities’’), Proposed Rule Change Received From Reference Room, 100 F Street NE., the NYSE Arca Equities Schedule of Members, Participants, or Others Washington, DC 20549 on official business days between the hours of 28 17 CFR 200.30–3(a)(12). No written comments were solicited 10:00 a.m. and 3:00 p.m. Copies of such 1 15 U.S.C. 78s(b)(1). or received with respect to the proposed filing also will be available for 2 15 U.S.C. 78a. rule change. inspection and copying at the principal 3 17 CFR 240.19b–4. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1


Document Created: 2015-12-16 01:01:28
Document Modified: 2015-12-16 01:01:28
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 78269 
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