80_FR_78516 80 FR 78275 - Self-Regulatory Organizations; NYSE Arca, Inc.; 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 78275 - Self-Regulatory Organizations; NYSE Arca, Inc.; 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 Range78275-78282
FR Document2015-31578

Federal Register, Volume 80 Issue 241 (Wednesday, December 16, 2015) 
[Federal Register Volume 80, Number 241 (Wednesday, December 16, 2015)]
[Notices]
[Pages 78275-78282]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-31578]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76616; File No. SR-NYSEARCA-2015-102]


Self-Regulatory Organizations; NYSE Arca, Inc.; 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, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 NYSE Arca Options Fee 
Schedule (the ``Options Fee Schedule'') and, through its wholly owned 
subsidiary NYSE Arca Equities, Inc. (``NYSE Arca Equities''), the NYSE 
Arca Equities Schedule of

[[Page 78276]]

Fees and Charges for Exchange Services (the ``Equities Fee Schedule'' 
and, together with the Options Fee Schedule, the ``Fee Schedules'') 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 Fee Schedules 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. 
63275 (November 8, 2010), 75 FR 70048 (November 16, 2010) (SR-
NYSEArca-2010-100) (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. 76010 (September 29, 2015), 80 FR 60197 
(October 5, 2015) (SR-NYSEArca-2015-82). As specified in the Fee 
Schedules, 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 New York Stock Exchange LLC and NYSE MKT LLC. 
See Securities Exchange Act Release No. 70173 (August 13, 2013), 78 
FR 50459 (August 19, 2013) (SR-NYSEArca-2013-80).
    \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 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 70049 and Securities 
Exchange Act Release No. 71130 (December 18, 2013), 78 FR 77765 
(December 24, 2013) (SR-NYSEArca-2013-143) (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 the Fee Schedules 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

[[Page 78277]]

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 70049 and Securities 
Exchange Act Release Nos. 74219 (February 6, 2015), 80 FR 7899 
(February 12, 2015) (SR-NYSEArca-2015-03) (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. 74219'') and 
70887 (November 15, 2013), 78 FR 69897 (November 21, 2013) (SR-
NYSEArca-2013-123) (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. 76372 
(November 5, 2015), 80 FR 70039 (November 12, 2015) (SR-NYSEArca-
2015-105) (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. 74219, 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 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's subsidiary NYSE Arca Equities similarly 
aggregates eligible activity of member organization affiliates for 
purposes of charges or credits based on volume. See Securities 
Exchange Act Release No. 74604 (March 30, 2015), 80 FR 18270 (April 
3, 2015) (SR-NYSEArca-2015-20), 80 FR 20043 (April 14, 2015) 
(correction). 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 Fee Schedules 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 Fee Schedules. 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 the Fee Schedules to reflect fees 
related to these new services, as follows:

[[Page 78278]]



------------------------------------------------------------------------
        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.
------------------------------------------------------------------------

    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 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 Fee Schedules 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-NYSEArca-2013-80, supra note 5 at 50459. The 
Exchange's affiliates have also submitted the same proposed rule 
change to propose the changes described herein. See SR-NYSE-2015-53 
and SR-NYSEMKT-2015-89.
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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.

[[Page 78279]]

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 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 member organizations, issuers and other persons 
using its facilities and does not unfairly discriminate between 
customers, issuers, brokers or dealers.
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    \26\ 15 U.S.C. 78f(b)(4).
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    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.
    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

[[Page 78280]]

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 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.

[[Page 78281]]

    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 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:

[[Page 78282]]

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-NYSEARCA-2015-102 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-NYSEARCA-2015-102. 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-NYSEARCA-2015-102, and should 
be submitted on or before January 6, 2016.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
Brent J. Fields,
Secretary.
[FR Doc. 2015-31578 Filed 12-15-15; 8:45 am]
BILLING CODE 8011-01-P

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

78276 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices Fees and Charges for Exchange Services services offered by the Exchange dedicated equipment and subscribing (the ‘‘Equities Fee Schedule’’ and, include three time feeds and four new Users connect to the feed over dedicated together with the Options Fee Schedule, Partial Cabinet Solution bundles. In cables. For the NTP and PTP time feeds, the ‘‘Fee Schedules’’) to reflect the time addition, the Exchange proposes to the Exchange routes the GPS data feeds and the Partial Cabinet Solution amend the Fee Schedules to reflect the through dedicated equipment that bundles. The text of the proposed rule time feeds and the Partial Cabinet reformats the GPS data into NTP and change is available on the Exchange’s Solution bundles. The Exchange PTP.8 Subscribing Users connect to PTP Web site at www.nyse.com, at the proposes to offer the Partial Cabinet over dedicated cables and NTP over the principal office of the Exchange, and at Solution bundles beginning January 1, Liquidity Center Network (‘‘LCN’’), a the Commission’s Public Reference 2016. local area network available in the data Room. Time Feeds center. II. Self-Regulatory Organization’s Currently, the Exchange’s co-location The proposed rule change would Statement of the Purpose of, and services allow a User to request a provide that Users 5 may purchase Statutory Basis for, the Proposed Rule physical cabinet to house its servers and access to three time feeds, each of which Change provides a feed with the current time of other equipment in the data center. A In its filing with the Commission, the day using one of three different time User has the option of receiving an self-regulatory organization included protocols: GPS Time Source, the entire cabinet that is dedicated solely to statements concerning the purpose of, Network Time Protocol feed (‘‘NTP’’), that User (‘‘dedicated cabinet’’) or a and basis for, the proposed rule change and Precision Timing Protocol (‘‘PTP’’).6 partial cabinet available in increments and discussed any comments it received Time feeds are used to receive time of eight-rack units of space (‘‘partial on the proposed rule change. The text and to synchronize clocks between cabinet’’).9 Connectivity to all three time of those statements may be examined at computer systems or throughout a protocols would be available for the places specified in Item IV below. computer network. A User may opt to The Exchange has prepared summaries, dedicated cabinets. Due to technical connect to a time feed for various limitations, connectivity to the NTP and set forth in sections A, B, and C below, reasons, including record keeping or of the most significant parts of such PTP would be available for partial measuring response times.7 The statements. cabinets, but connectivity to GPS would proposed connectivity to time feeds not.10 A. Self-Regulatory Organization’s would provide Users a convenient way Statement of the Purpose of, and to access time protocols. The Exchange proposes to amend the Statutory Basis for, the Proposed Rule The proposed change includes three Fee Schedules to reflect fees related to Change time feeds. Global Positioning System these services, as follows: (‘‘GPS’’) is a time and location system 1. Purpose maintained by the United States The Exchange proposes to change its government. The Exchange accesses the rules to provide that the co-location 4 GPS Time Source feed through 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 Partial Cabinet Solution Bundles for smaller Users to utilize co-location. feed services will be subject to a 12- These proposed Partial Cabinet Solution month minimum commitment, after The Exchange proposes to offer four bundles would provide smaller Users a which period they are subject to a 60- Partial Cabinet Solution bundles convenient way to create a colocation day rolling time period.11 intended to make it more cost effective environment, by including in each 4 The Exchange initially filed rule changes same co-location service charged by the Exchange’s 2013) (SR–NYSEArca–2013–143) (notice of filing relating to its co-location services with the affiliates New York Stock Exchange LLC and NYSE and immediate effectiveness of proposed rule Securities and Exchange Commission MKT LLC. See Securities Exchange Act Release No. change to offer partial cabinets). (‘‘Commission’’) in 2010. See Securities Exchange 70173 (August 13, 2013), 78 FR 50459 (August 19, 10 The Exchange does not propose to make Act Release No. 63275 (November 8, 2010), 75 FR 2013) (SR–NYSEArca–2013–80). connectivity to GPS available for partial cabinets 70048 (November 16, 2010) (SR–NYSEArca–2010– 6 The time feeds are unrelated to trading on the because the proximity of the GPS and power 100) (the ‘‘Original Co-location Filing’’). The Exchange or the Exchange’s data feeds. A User does connections into a partial cabinet would expose Exchange operates a data center in Mahwah, New not require connectivity to a time feed to trade on GPS to interference from the cable power Jersey (the ‘‘data center’’) from which it provides the Exchange, and usage of a time feed has no effect connections, interfering with the delivery of the co-location services to Users. 5 For purposes of the Exchange’s co-location on a User’s orders going to, or trade data coming GPS data. from, the Exchange. 11 The Exchange believes that the 12-month services, a ‘‘User’’ means any market participant 7 For example, a User may connect to a time feed that requests to receive co-location services directly minimum period is common practice for colocation for record keeping purposes if it uses that specific offerings. See, e.g., Securities Exchange Act Release from the Exchange, a ‘‘Hosting User’’ means a User time protocol for all its activities, both inside and No. 68735 (January 25, 2013), 78 FR 6842 (January that hosts a Hosted Customer in the User’s co- location space, and a ‘‘Hosted Customer’’ means a out of the data center. 31, 2013) (SR–NASDAQ–2012–119) (noting that tkelley on DSK9F6TC42PROD with NOTICES 8 The reformatting equipment is programmed by NASDAQ represented that the lock-in feature ‘‘is customer of a Hosting User that is hosted in a Hosting User’s co-location space. See Securities the vendor to generate NTP and PTP time feeds that common practice for colocation offerings’’). If a Exchange Act Release No. 76010 (September 29, comply with industry standards. The Exchange User upgrades a service (i.e., goes from a 10 Gb to 2015), 80 FR 60197 (October 5, 2015) (SR– does not program or manage the reformatting of the a 40 Gb LCN circuit), it will not be held to the NYSEArca–2015–82). As specified in the Fee GPS data into NTP and PTP. minimum period for the first service, but will be Schedules, a User that incurs co-location fees for a 9 See Original Co-location Filing, at 70049 and subject to a 12-month minimum period for the particular co-location service pursuant thereto Securities Exchange Act Release No. 71130 upgraded service, starting from the date of the would not be subject to co-location fees for the (December 18, 2013), 78 FR 77765 (December 24, upgrade. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78277 Partial Cabinet Solution bundle cabinet The Exchange proposes to offer four Exchange (a) whether it has any space, network access, fiber connections Partial Cabinet Solution bundles. Affiliates that are Users or Hosted (‘‘cross connects’’), and the choice of Because the Partial Cabinet Solution Customers, and (b) that its aggregate either the NTP or PTP time feed. The bundles are intended to make it more cabinet footprint, together with the Exchange expects that such Users would cost effective for smaller Users to utilize aggregate cabinet footprint of its include those with minimal power or co-location, the Exchange proposes only Affiliates that are also Users or Hosted cabinet space demands and Users for to provide access to a Partial Cabinet Customers and the cabinet footprint of which the costs attendant with having a Solution bundle to a User that meets the the Partial Cabinet Solution bundle, will dedicated cabinet or greater network following conditions: (1) The User not exceed 2 kW. In addition, the User connection bandwidth are too purchases only one Partial Cabinet of a Partial Cabinet Solution bundle burdensome. The Exchange expects that Solution bundle; (2) the User and its would be required to inform the the majority of Users that purchase a Affiliates 15 do not currently have a Exchange immediately of any event that Partial Cabinet Solution bundle will not Partial Cabinet Solution bundle; and (3) causes another User or Hosted Customer previously have been a User or Hosted after the purchase of the Partial Cabinet to become an Affiliate.18 The Exchange Customer, but recognizes that it is Solution bundle, the User, together with proposes to revise the Fee Schedules possible that purchasing Users may its Affiliates, will have an aggregate accordingly. include entities that otherwise would be cabinet footprint of no more than 2 Hosted Customers. The Exchange kW.16 A User’s aggregate cabinet If a User of a Partial Cabinet Solution proposes to offer the Partial Cabinet footprint is the total kW of its cabinets, bundle became Affiliated with one or Solution bundles beginning January 1, including both partial and dedicated more other Users or Hosted Customers 2016. cabinets, and a Hosted Customer’s and thereby no longer met the As noted above, currently a User may aggregate cabinet footprint is the total conditions for access to the Partial opt to receive a partial cabinet available kW of the portion of the Hosting User’s Cabinet Solution bundle, or if the User in increments of eight-rack units of cabinet, whether partial or dedicated, otherwise ceased to meet the conditions space. Each partial cabinet is allocated allocated to such Hosted Customer.17 for access, the Exchange would no up to two kilowatts (‘‘kWs’’) of power. The Exchange proposes to aggregate longer offer access to the Partial Cabinet In addition, the Exchange offers Users the aggregate cabinet footprint of a User Solution bundle to such User. Once the access to two local area networks of a Partial Cabinet Solution bundle User ceased to meet the conditions for available in the data center: the LCN with the aggregate cabinet footprint of access to the Partial Cabinet Solution and the internet protocol (‘‘IP’’) its Affiliates for purposes of determining bundle, it would be charged for each of network.12 The Exchange offers 1 and 10 whether the User has satisfied the the services individually, at the price for gigabit (‘‘Gb’’) IP network access, 1, 10, conditions in order to avoid disparate each such service set out in the Fee and 40 Gb LCN network access, and treatment of Users that have divided Schedules. Such price change would be LCN 10 Gb LX network access.13 their various business activities between effective as of the date that the User Users may use cross connects to separate corporate entities, including ceased to meet the conditions. connect cabinets within the data center, between a User and a Hosted Customer, The Exchange proposes that Users including between a User’s cabinet and as compared to Users that operate those a non-User’s equipment within the data that purchase a Partial Cabinet Solution business activities within a single bundle would be charged a non- center. For example, a User may utilize corporate entity. Accordingly, the a cross connect with a non-User to recurring initial charge (‘‘NRC’’) and a Exchange proposes that a User connect to a carrier’s equipment in monthly recurring charge (‘‘MRC’’).19 requesting a Partial Cabinet Solution order to access the carrier’s network The Exchange proposes that Users that bundle be required to represent to the outside the data center.14 order a Partial Cabinet Solution bundle 15 For purposes of the Partial Cabinet Solution on or before December 31, 2016 would 12 See Original Co-location Filing, at 70049 and bundles, an ‘‘Affiliate’’ of a User would be any other have their MRC reduced by 50% for the Securities Exchange Act Release Nos. 74219 User or a Hosted Customer that is under 50% or first 12 months. (February 6, 2015), 80 FR 7899 (February 12, 2015) greater common ownership or control of the first (SR–NYSEArca–2015–03) (notice of filing and User. The Exchange proposes to amend the immediate effectiveness of proposed rule change to 16 For example, a User with a 4 kW dedicated Fee Schedules to reflect fees related to include IP network connections and fiber cross cabinet would not be eligible for a Partial Cabinet these new services, as follows: connects between a User’s cabinet and a non-User’s Solution bundle, as its aggregate cabinet footprint equipment) (‘‘Release No. 74219’’) and 70887 would be either 5 kW or 6 kW once a Partial 18 The Exchange would review available (November 15, 2013), 78 FR 69897 (November 21, Cabinet Solution bundle was added. information regarding the entities and may request 2013) (SR–NYSEArca–2013–123) (notice of filing 17 The Exchange’s subsidiary NYSE Arca Equities additional information to verify the Affiliate status and immediate effectiveness of proposed rule similarly aggregates eligible activity of member of a User or Hosted Customer. The Exchange would change to include LCN 10 Gb LX connection). organization affiliates for purposes of charges or 13 The Exchange also proposes to provide 40 Gb approve a request for a Partial Cabinet Solution credits based on volume. See Securities Exchange bundle unless it determines that the certification is IP network access. The 40 Gb IP network Act Release No. 74604 (March 30, 2015), 80 FR not accurate. connection is expected to be available no later than 18270 (April 3, 2015) (SR–NYSEArca–2015–20), 80 19 A User that changes its Partial Cabinet Solution April 15, 2016. The Exchange will announce the FR 20043 (April 14, 2015) (correction). The date that the 40 Gb IP network connection will be threshold percentage used in the definition of bundle would not be subject to a second NRC. available through a customer notice. See Securities ‘‘affiliate’’ for purposes of charges or credits based Rather, it would pay the difference, if any, between Exchange Act Release No. 76372 (November 5, on volume is 75%. Id. The Exchange proposes a the NRCs. For example, a User that buys an Option 2015), 80 FR 70039 (November 12, 2015) (SR– lower threshold in the present case in order to A Partial Cabinet Solution bundle would pay a NYSEArca–2015–105) (notice of filing and discourage any User from taking deliberate $7,500 NRC. If it then opted to change to Option immediate effectiveness of proposed rule change to advantage of the proposed Partial Cabinet Solution C, it would pay $2,500, i.e. the difference between include IP 40 Gb network connections). bundle by setting up separate corporate entities to the Option A and Option C NRCs of $7,500 and tkelley on DSK9F6TC42PROD with NOTICES 14 See Release No. 74219, supra note 12. act as Users or Hosted Customers. $10,000, respectively. 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78278 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 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 affiliates would become note one under Sponsored Participant or an agent Solution bundle is made up of a number ‘‘General Notes’’ and the proposed thereof (e.g., a service bureau providing of different services. If a User purchased provisions regarding aggregate cabinet order entry services); (ii) use of the co- each of the components of a Partial footprints and what portion of an NRC, location services proposed herein would Cabinet Solution bundle, whether over if any, a User would be subject to if it be completely voluntary and available several purchases or in one order, and changed bundles would become note to all Users on a non-discriminatory met the conditions described above for two.21 basis; 22 and (iii) a User would only access to the Partial Cabinet Solution Users that purchase a proposed Partial incur one charge for the particular co- bundle, the Exchange would Cabinet Solution bundle would not be location service described herein, automatically treat the User’s services as subject to the 12-month minimum regardless of whether the User connects a Partial Cabinet Solution bundle and, commitment, but rather would be only to the Exchange or to the Exchange effective the date of installation of the subject to a 90-day commitment, after and one or both of its affiliates.23 final component, reduce the User’s MRC which period they would be subject to to the MRC for the relevant bundle.20 the 60-day rolling time period. As noted The proposed change is not otherwise Finally, the Exchange proposes to above, the Exchange anticipates that intended to address any other issues make non-substantive changes to the Users of the Partial Cabinet Solution relating to co-location services and/or Fee Schedules to add subheadings bundles would include those with related fees, and the Exchange is not under ‘‘Co-Location Fees’’ for minimum power or cabinet space aware of any problems that Users would ‘‘Definitions’’ and ‘‘General Notes’’. demands and Users for which the costs have in complying with the proposed Definitions of aggregate cabinet attendant with having a dedicated change. footprint and Affiliate would be added cabinet or greater network connection under ‘‘Definitions’’. The existing note bandwidth are too burdensome. The 22 As is currently the case, Users that receive co- stating that a User that incurs co- Exchange proposes to have a reduced location services from the Exchange will not receive location fees for a particular co-location minimum commitment period for the any means of access to the Exchange’s trading and execution systems that is separate from, or superior service would not be subject to co- Partial Cabinet Solution bundle to to, that of other Users. In this regard, all orders sent location fees for the same co-location further reduce the cost commitment for to the Exchange enter the Exchange’s trading and service charged by the Exchange’s such Users. execution systems through the same order gateway, regardless of whether the sender is co-located in the 20 The Exchange proposes to implement the General data center or not. In addition, co-located Users do proposed Partial Cabinet Solution bundle changes not receive any market data or data service product As is the case with all Exchange co- that is not available to all Users, although Users that effective January 1, 2016. If as of that date a User tkelley on DSK9F6TC42PROD with NOTICES already had each of the components of a Partial location arrangements, (i) neither a User receive co-location services normally would expect Cabinet Solution bundle and met the conditions nor any of the User’s customers would reduced latencies in sending orders to, and described above for access to the Partial Cabinet be permitted to submit orders directly to receiving market data from, the Exchange. Solution bundle, the Exchange would automatically 23 See SR–NYSEArca–2013–80, supra note 5 at the Exchange unless such User or treat the User’s services as a Partial Cabinet 50459. The Exchange’s affiliates have also Solution bundle and reduce the User’s MRC to the customer is a member organization, a submitted the same proposed rule change to MRC for the relevant bundle, effective January 1, propose the changes described herein. See SR– 2016. 21 See note 18, supra. NYSE–2015–53 and SR–NYSEMKT–2015–89. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78279 2. Statutory Basis Regarding NTP, the Exchange has opted Section 6(b)(4) of the Act,26 in The Exchange believes that the to offer the NTP only over the LCN due particular, because it provides for the proposed rule change is consistent with to a lack of demand for the NTP over the equitable allocation of reasonable dues, Section 6(b) of the Act,24 in general, and IP network. A User that requires fees, and other charges among its furthers the objectives of Sections connectivity to NTP could connect to member organizations, issuers and other the LCN. persons using its facilities and does not 6(b)(5) of the Act,25 in particular, The Exchange believes that the Partial unfairly discriminate between because it is designed to prevent Cabinet Solution bundles are not customers, issuers, brokers or dealers. fraudulent and manipulative acts and designed to permit unfair Overall, the Exchange believes that practices, to promote just and equitable discrimination between customers, the proposed fees for the time feed principles of trade, to foster cooperation issuers, brokers, or dealers because the connectivity and Partial Cabinet and coordination with persons engaged Partial Cabinet Solution bundles would Solution bundles are reasonable because in regulating, clearing, settling, offer four different Partial Cabinet the Exchange proposes to offer the processing information with respect to, Solution bundles with options with services as a convenience to Users, but and facilitating transactions in respect to cabinet footprint and network in doing so will incur certain costs, securities, to remove impediments to, connections. Users that require other including costs related to the data center and perfect the mechanisms of, a free sizes or combinations of cabinets, facility, hardware and equipment and and open market and a national market network connections and cross connects costs related to personnel required for system and, in general, to protect could still request them. initial installation and monitoring, investors and the public interest and The Exchange believes that its support and maintenance of such because it is not designed to permit proposal would remove impediments to, services. The higher fee in connection unfair discrimination between and perfects the mechanisms of, a free with the GPS reflects the greater costs customers, issuers, brokers, or dealers. and open market and a national market for its equipment, installation and The Exchange believes that providing system and, in general, protects maintenance in comparison with the connectivity to time feeds is not investors and the public interest other time feeds. The Exchange believes designed to permit unfair because the proposed connectivity to that submitting Users that order the discrimination between customers, time feeds would provide Users a proposed time feed services to a 12- issuers, brokers, or dealers because the convenient way to access time month minimum commitment, after service would offer connectivity to protocols. Having different time feed which period they would be subject a different time feed options, allowing a options would allow a User with a 60-day rolling time period, is User that opts to connect to a time feed dedicated cabinet to select the time reasonable, as it reflects the investment to select the time protocol that best suits protocol that suits its needs, and for a the Exchange incurs in order to provide its needs, helping it tailor its data center User with a partial cabinet to select the service. The Exchange believes that operations to the requirements of its between the NTP and PTP. the 12-month minimum period is business operations. The time feeds are In addition, the Exchange believes common practice for colocation unrelated to trading on the Exchange or that its proposal would remove offerings. the Exchange’s data feeds. A User does impediments to, and perfects the In addition, the Exchange believes not require connectivity to a time feed mechanisms of, a free and open market that its proposal to limit access to to trade on the Exchange, and usage of and a national market system and, in Partial Cabinet Solution bundles to a a time feed has no effect on a User’s general, protects investors and the User that meets the conditions orders going to, or trade data coming public interest because the proposed described above, specifically, that (1) from, the Exchange. Partial Cabinet Solution bundles would the User purchases only one Partial The Exchange believes that providing make it more cost effective for Users Cabinet Solution bundle, (2) the User connectivity to GPS for dedicated that meet the conditions described and its Affiliates do not currently have cabinets but not partial cabinets and to above for access to the Partial Cabinet a Partial Cabinet Solution bundle, and, NTP through the LCN but not the IP Solution bundle to utilize co-location by (3) after the purchase of a Partial network is not designed to permit unfair creating a convenient way to create a Cabinet Solution bundle, the User, discrimination between customers, colocation environment, through four together with its Affiliates, will have an issuers, brokers, or dealers because the Partial Cabinet Solution bundles with aggregate cabinet footprint of no more Exchange proposes to offer connectivity options with respect to cabinet footprint than 2 kW, is reasonable, because the to time feeds, including GPS and NTP, and network connections. The Exchange Partial Cabinet Solution bundles are as a convenience to Users, and usage of expects that such Users would include intended to make it more cost effective a time feed has no effect on a User’s those with minimal power or cabinet for smaller Users to utilize co-location. orders going to, or trade data coming space demands and Users for which the All Users would be subject to the same from, the Exchange. Regarding GPS, the costs attendant with having a dedicated limits on the number of Partial Cabinet proximity of GPS and power cabinet or greater network connection Solution bundles and aggregate cabinet connections into a partial cabinet would bandwidth are too burdensome. Such footprint. The Exchange believes that expose GPS to interference from the Users may choose to pass on such cost the proposal is reasonable because it cable power connections, interfering savings to their customers. The establishes a manner for the Exchange to with the delivery of the GPS data, and Exchange expects that the majority of treat Users for purposes of assessing so the Exchange is not able to offer Users that purchase a Partial Cabinet aggregate cabinet footprint. The connectivity to GPS for partial cabinets. Solution bundle will not previously provision is equitable because all Users tkelley on DSK9F6TC42PROD with NOTICES A User that requires connectivity to GPS have been a User or Hosted Customer, seeking to purchase a Partial Cabinet could opt to purchase a dedicated but recognizes that it is possible that Solution bundle would be subject to the cabinet or become a Hosted Customer of purchasing Users may include entities same parameters. The Exchange further a Hosting User with a dedicated cabinet. that otherwise would be Hosted notes that the proposal would serve to Customers. reduce any potential for confusion on 24 15 U.S.C. 78f(b). The Exchange also believes that the 25 15 U.S.C. 78f(b)(5). proposed rule change is consistent with 26 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

78280 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices how cabinet footprint can be aggregated The Exchange also believes that the would be Hosted Customers. However, or what entities would constitute services and fees proposed herein for it notes that being a Hosted Customer Affiliates. Partial Cabinet Solution bundles are and being a User with a Partial Cabinet The Exchange believes that, by reasonable because if a User purchased Solution bundle are not fungible. A aggregating the aggregate cabinet each of the components of a Partial Hosting User manages the service footprint of a User with the aggregate Cabinet Solution bundle, whether over provided to the Hosted Customer, which cabinet footprint of its Affiliates for several purchases or in one order, and services may include, for example, purposes of determining whether the met the conditions described above for supporting the Hosted Customer’s User has satisfied the conditions, the access to the Partial Cabinet Solution technology, whether hardware or proposed rule change avoids disparate bundle, the Exchange would software. The Hosted Customer has no treatment of Users that have divided automatically treat the User’s services as relationship with the Exchange. A User their various business activities between a Partial Cabinet Solution bundle and, with a Partial Cabinet Solution bundle, separate corporate entities, including effective the date of installation of the by contrast, is responsible for between a User and a Hosted Customer, final component, reduce the User’s MRC supporting its own technology and is in as compared to Users that operate those to the MRC for the relevant bundle. a direct contractual relationship with business activities within a single The Exchange believes that the the Exchange. Providing entities with corporate entity. The Exchange believes proposed change to provide Users the additional option of the Partial that setting the common ownership or access to time feeds is equitable and not Cabinet Solution bundle will allow control threshold in the definition of unfairly discriminatory because it will them to select the relationship and type Affiliates at 50% is reasonable because result in fees being charged only to of service that better corresponds to it will discourage any User from taking Users that voluntarily select to receive their needs and resources. deliberate advantage of the proposed the corresponding services and because Furthermore, the Exchange believes Partial Cabinet Solution bundle by those services will be available to all that the Partial Cabinet Solution bundle setting up separate corporate entities to Users. Furthermore, the Exchange services and fees proposed herein are act as Users or Hosted Customers. believes that the services and fees not unfairly discriminatory and are proposed herein are not unfairly equitably allocated because, in addition The Exchange believes that it is discriminatory and are equitably to the services being completely reasonable that Users that order a Partial allocated because, in addition to the voluntary, they are available to all Users Cabinet Solution bundle on or before connectivity to time feeds being on an equal basis (i.e., the same December 31, 2016 would have their completely voluntary, it is available to products and services are available to all MRC reduced by 50% for the first 12 all Users on an equal basis (i.e., the Users, and the same conditions months because the Partial Cabinet same connectivity to time feed products described above for access to the Partial Solution bundles are a new service, and and services is available to all Users, Cabinet Solution bundles would apply so it is reasonable to offer such and the same conditions described to all Users). All Users that voluntarily reduction as an incentive to Users to above for access to the Partial Cabinet select the proposed Partial Cabinet utilize the new service. Similarly, the Solution bundles would apply to all Solution bundle service would be Exchange believes that submitting Users Users). All Users that voluntarily select subject to the same limits on the number that purchase the propose Partial connectivity to one or more of the of Partial Cabinet Solution bundles and Cabinet Solution bundle to a 90-day proposed time feeds would be charged aggregate cabinet footprint. The commitment, rather than the 12-month the same amount for the same services. Exchange believes that, by aggregating minimum commitment, after which The Exchange believes that the the aggregate cabinet footprint of a User period they would be subject to the 60- proposed change to provide Partial with the aggregate cabinet footprint of day rolling time period, is reasonable. Cabinet Solution bundles is equitable its Affiliates for purposes of determining As noted above, the Exchange and not unfairly discriminatory because whether the User has satisfied the anticipates that Users of the Partial it would be available to all Users that conditions, the proposed limit on Cabinet Solution bundles would include meet the conditions described above for aggregate cabinet footprint avoids those with minimum power or cabinet access to the Partial Cabinet Solution disparate treatment of Users that have space demands and Users for which the bundle and would result in fees being divided their various business activities costs attendant with having a dedicated charged only to such Users that between separate corporate entities, cabinet or greater network connection voluntarily select to receive the including between a User and a Hosted bandwidth are too burdensome. The corresponding service. Customer, as compared to Users that Exchange believes that it is reasonable The Exchange believes that the operate those business activities within to have a reduced minimum proposed change to provide Partial a single corporate entity. Finally, all commitment period for the Partial Cabinet Solution bundles provides for Users that order a bundle on or before Cabinet Solution bundle to further the equitable allocation of reasonable December 31, 2016 would have their reduce the cost commitment for such dues, fees, and other charges among its MRC reduced by 50% for the first 12 Users as an incentive to Users to utilize members, issuers and other persons months. the new service. using its facilities. As previously stated, The Exchange believes that it is The Exchange believes that it is the proposal would make it more cost equitable and not unfairly reasonable not to charge a User that effective for Users that meet the discriminatory to not charge a User that changes its Partial Cabinet Solution conditions described above for access to changes its Partial Cabinet Solution bundle a second NRC, but instead the Partial Cabinet Solution bundle to bundle a second NRC, but instead tkelley on DSK9F6TC42PROD with NOTICES charge the difference, if any, between utilize co-location. While the Exchange charge the difference, if any, between the NRCs, because the cost to the expects that the majority of Users that the NRCs, because the cost to the Exchange of modifying the service to purchase a Partial Cabinet Solution Exchange of modifying the service to move a User to a different Partial bundle will not previously have been a move a User to a different Partial Cabinet Solution bundle is lower than User or Hosted Customer, it recognizes Cabinet Solution bundle is lower than the cost of the initial installation of a that it is possible that purchasing Users the cost of the initial installation of a Partial Cabinet Solution bundle. may include entities that otherwise Partial Cabinet Solution bundle. VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices 78281 The Exchange also believes that the believes that providing connectivity to option of the Partial Cabinet Solution services and fees proposed herein for GPS for dedicated cabinets but not bundle will allow them to select the Partial Cabinet Solution bundles are not partial cabinets and to NTP through the relationship and type of service that unfairly discriminatory and are LCN but not the IP network will not better corresponds to their needs and equitably allocated because if a User impose any burden on competition that resources. purchased each of the components of a is not necessary or appropriate in The proposed changes will also Partial Cabinet Solution bundle, furtherance of the purposes of the Act enhance competition by making it more whether over several purchases or in because the Exchange proposes to offer cost effective for Users that meet the one order, and met the conditions connectivity to time feeds, including conditions described above for access to described above for access to the Partial GPS and NTP, as a convenience to Cabinet Solution bundle, the Exchange Users, and usage of a time feed has no the Partial Cabinet Solution bundle to would automatically treat the User’s effect on a User’s orders going to, or utilize co-location by creating a services as a Partial Cabinet Solution trade data coming from, the Exchange. convenient way to create a colocation bundle and, effective the date of The Exchange believes that allowing environment, through Partial Cabinet installation of the final component, Users to purchase Partial Cabinet Solution bundles with options with reduce the User’s MRC to the MRC for Solution bundles will not impose any respect to cabinet footprint and network the relevant bundle. burden on competition that is not connections. Such Users may choose to For the reasons above, the proposed necessary or appropriate in furtherance pass on such cost savings to their changes do not unfairly discriminate of the purposes of the Act because such customers. between or among market participants access will satisfy User demand for cost Finally, the Exchange notes that it that are otherwise capable of satisfying effective options for smaller Users that operates in a highly competitive market any applicable co-location fees, choose to utilize co-location. All Users in which market participants can requirements, terms and conditions that meet the conditions described readily favor competing venues if they established from time to time by the above for access to the Partial Cabinet deem fee levels at a particular venue to Exchange. Solution bundle would be subject to the be excessive. In such an environment, Finally, the Exchange believes that it same limits on the number of Partial the Exchange must continually review, is subject to significant competitive Cabinet Solution bundles and aggregate and consider adjusting, its services and forces, as described below in the cabinet footprint, all Users that order a related fees and credits to remain Exchange’s statement regarding the bundle on or before December 31, 2016 competitive with other exchanges. For burden on competition. would have their MRC reduced by 50% the reasons described above, the For these reasons, the Exchange for the first 12 months, and all Users Exchange believes that the proposed believes that the proposal is consistent that change Partial Cabinet Solution rule change reflects this competitive with the Act. bundles would not be charged a second environment. B. Self-Regulatory Organization’s NRC, but instead charged the difference, Statement on Burden on Competition if any, between the NRCs. C. Self-Regulatory Organization’s The Exchange believes that allowing Statement on Comments on the In accordance with Section 6(b)(8) of Users to purchase Partial Cabinet Proposed Rule Change Received From the Act,27 the Exchange believes that the Solution bundles will not impose any Members, Participants, or Others proposed rule change will not impose burden on competition that is not any burden on competition that is not necessary or appropriate in furtherance No written comments were solicited necessary or appropriate in furtherance of the purposes of the Act because, as or received with respect to the proposed of the purposes of the Act because, in previously stated, the proposal would rule change. addition to the proposed services being make it more cost effective for Users completely voluntary, they are available III. Date of Effectiveness of the that meet the conditions described to all Users on an equal basis (i.e. the above for access to the Partial Cabinet Proposed Rule Change and Timing for same products and services are available Solution bundle to utilize co-location. Commission Action to all Users, and the same conditions While the Exchange expects that the Within 45 days of the date of described above for access to the Partial majority of Users that purchase a Partial publication of this notice in the Federal Cabinet Solution bundles would apply Cabinet Solution bundle will not Register or within such longer period (i) to all Users). previously have been a User or Hosted as the Commission may designate up to The Exchange believes that providing Customer, it recognizes that it is 90 days of such date if it finds such Users with connectivity to time feeds possible that purchasing Users may longer period to be appropriate and will not impose any burden on include entities that otherwise would be publishes its reasons for so finding or competition that is not necessary or Hosted Customers. However, it notes (ii) as to which the Exchange consents, appropriate in furtherance of the that being a Hosted Customer and being the Commission shall: (a) by order purposes of the Act because such a User with a Partial Cabinet Solution approve or disapprove such proposed connectivity satisfies User demand for a bundle are not fungible. A Hosting User convenient way to access time protocols rule change, or (b) institute proceedings manages the service provided to the Having connectivity to different time to determine whether the proposed rule Hosted Customer, which services may feed options would allow a User with a include, for example, supporting the change should be disapproved. dedicated cabinet to select the time Hosted Customer’s technology, whether IV. Solicitation of Comments protocol that best suits its needs, and for hardware or software. The Hosted Interested persons are invited to tkelley on DSK9F6TC42PROD with NOTICES a User with a partial cabinet to select Customer has no relationship with the between the NTP and PTP, helping Exchange. A User with a Partial Cabinet submit written data, views, and Users tailor their data center operations Solution bundle, by contrast, is arguments concerning the foregoing, to the requirements of their business responsible for supporting its own including whether the proposed rule operations. In addition, the Exchange technology and is in a direct contractual change is consistent with the Act. relationship with the Exchange. Comments may be submitted by any of 27 15 U.S.C. 78f(b)(8). Providing entities with the additional the following methods: VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1

78282 Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / Notices Electronic Comments SMALL BUSINESS ADMINISTRATION Incident: Heavy rains and flooding. Incident Period: 09/29/2015. • Use the Commission’s Internet [Disaster Declaration #14549 and #14550] comment form (http://www.sec.gov/ Effective Date: 12/09/2015. Texas Disaster Number TX–00461 Physical Loan Application Deadline rules/sro.shtml); or AGENCY: U.S. Small Business Date: 02/08/2016. • Send an email to rule-comments@ sec.gov. Please include File No. SR– Administration. Economic Injury (EIDL) Loan NYSEARCA–2015–102 on the subject ACTION: Amendment 1. Application Deadline Date: 09/09/2016. line. SUMMARY: This is an amendment of the ADDRESSES: Submit completed loan Presidential declaration of a major applications to: U.S. Small Business Paper Comments Administration, Processing and disaster for the State of Texas (FEMA– • Send paper comments in triplicate 4245–DR), dated 11/25/2015. Disbursement Center, 14925 Kingsport to Secretary, Securities and Exchange Incident: Severe Storms, Tornadoes, Road, Fort Worth, TX 76155. Commission, 100 F Street NE., Straight-line Winds, and Flooding. FOR FURTHER INFORMATION CONTACT: A. Washington, DC 20549–1090. Incident Period: 10/22/2015 through Escobar, Office of Disaster Assistance, 10/31/2015. U.S. Small Business Administration, All submissions should refer to File No. Effective Date: 12/09/2015. 409 3rd Street SW., Suite 6050, SR–NYSEARCA–2015–102. This file Physical Loan Application Deadline Washington, DC 20416. number should be included on the Date: 01/25/2016. subject line if email is used. To help the EIDL Loan Application Deadline Date: SUPPLEMENTARY INFORMATION: Notice is Commission process and review your 08/25/2016. hereby given that as a result of the comments more efficiently, please use ADDRESSES: Submit completed loan Administrator’s disaster declaration, only one method. The Commission will applications to: U.S. Small Business applications for disaster loans may be post all comments on the Commission’s Administration, Processing and filed at the address listed above or other Internet Web site (http://www.sec.gov/ Disbursement Center, 14925 Kingsport locally announced locations. rules/sro.shtml). Copies of the Road, Fort Worth, TX 76155. The following areas have been submission, all subsequent FOR FURTHER INFORMATION CONTACT: A. determined to be adversely affected by amendments, all written statements Escobar, Office of Disaster Assistance, the disaster: with respect to the proposed rule U.S. Small Business Administration, Primary Counties: Frederick. change that are filed with the 409 3rd Street SW., Suite 6050, Contiguous Counties: Commission, and all written Washington, DC 20416. Maryland: Carroll, Howard, communications relating to the SUPPLEMENTARY INFORMATION: The notice Montgomery, Washington. proposed rule change between the of the Presidential disaster declaration for the State of Texas, dated 11/25/2015 Pennsylvania: Adams, Franklin. Commission and any person, other than those that may be withheld from the is hereby amended to include the Virginia: Loudoun. public in accordance with the following areas as adversely affected by The Interest Rates are: provisions of 5 U.S.C. 552, will be the disaster: available for Web site viewing and Primary Counties: (Physical Damage Percent printing in the Commission’s Public and Economic Injury Loans): Cameron. For Physical Damage: Reference Room, 100 F Street NE., Homeowners With Credit Avail- Washington, DC 20549 on official All counties contiguous to the above able Elsewhere ...................... 3.750 business days between the hours of named primary county have previously Homeowners Without Credit 10:00 a.m. and 3:00 p.m. Copies of such been declared. Available Elsewhere .............. 1.875 filing also will be available for All other information in the original Businesses With Credit Avail- inspection and copying at the principal declaration remains unchanged. able Elsewhere ...................... 6.000 (Catalog of Federal Domestic Assistance Businesses Without Credit office of the Exchange. All comments Available Elsewhere .............. 4.000 received will be posted without change; Numbers 59008) Non-Profit Organizations With the Commission does not edit personal Lisa Lopez-Suarez, Credit Available Elsewhere ... 2.625 identifying information from Acting Associate Administrator for Disaster Non-Profit Organizations With- submissions. You should submit only Assistance. out Credit Available Else- information that you wish to make where ..................................... 2.625 [FR Doc. 2015–31588 Filed 12–15–15; 8:45 am] For Economic Injury: available publicly. All submissions BILLING CODE 8025–01–P Businesses & Small Agricultural should refer to File No. SR– Cooperatives Without Credit NYSEARCA–2015–102, and should be Available Elsewhere .............. 4.000 submitted on or before January 6, 2016. SMALL BUSINESS ADMINISTRATION Non-Profit Organizations With- For the Commission, by the Division of out Credit Available Else- [Disaster Declaration #14573 and #14574] where ..................................... 2.625 Trading and Markets, pursuant to delegated authority.28 Maryland Disaster #MD–00029 The number assigned to this disaster Brent J. Fields, AGENCY: U.S. Small Business for physical damage is 14573 6 and for tkelley on DSK9F6TC42PROD with NOTICES Secretary. Administration. economic injury is 14574 0. [FR Doc. 2015–31578 Filed 12–15–15; 8:45 am] ACTION: Notice. The States which received an EIDL BILLING CODE 8011–01–P Declaration # are Maryland, SUMMARY: This is a notice of an Administrative declaration of a disaster Pennsylvania, Virginia. for the State of Maryland dated 12/09/ (Catalog of Federal Domestic Assistance 28 17 CFR 200.30–3(a)(12). 2015. Numbers 59002 and 59008) VerDate Sep<11>2014 17:21 Dec 15, 2015 Jkt 238001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\16DEN1.SGM 16DEN1


Document Created: 2015-12-16 01:01:36
Document Modified: 2015-12-16 01:01:36
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 78275 
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