80_FR_81898 80 FR 81648 - Self-Regulatory Organizations; NYSE MKT LLC; Order Approving Proposed Rule Change to the Co-location Services Offered by the Exchange (the Offering of a Wireless Connection to Allow Users to Receive Market Data Feeds from Third Party Markets) and to Reflect Changes to the NYSE MKT Equities Price List and the NYSE Amex Options Fee Schedule Related to These Services

80 FR 81648 - Self-Regulatory Organizations; NYSE MKT LLC; Order Approving Proposed Rule Change to the Co-location Services Offered by the Exchange (the Offering of a Wireless Connection to Allow Users to Receive Market Data Feeds from Third Party Markets) and to Reflect Changes to the NYSE MKT Equities Price List and the NYSE Amex Options Fee Schedule Related to These Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 250 (December 30, 2015)

Page Range81648-81650
FR Document2015-32811

Federal Register, Volume 80 Issue 250 (Wednesday, December 30, 2015) 
[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Notices]
[Pages 81648-81650]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-32811]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76750; File No. SR-NYSEMKT-2015-85]


Self-Regulatory Organizations; NYSE MKT LLC; Order Approving 
Proposed Rule Change to the Co-location Services Offered by the 
Exchange (the Offering of a Wireless Connection to Allow Users to 
Receive Market Data Feeds from Third Party Markets) and to Reflect 
Changes to the NYSE MKT Equities Price List and the NYSE Amex Options 
Fee Schedule Related to These Services

December 23, 2015.

I. Introduction

    On October 23, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') pursuant to Section 19(b)(1) \1\ of the Securities 
Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ a 
proposed rule change to amend the co-location services offered by the 
Exchange to include a means for co-located Users to receive market data 
feeds from third party markets through a wireless connection. The 
proposed rule change was published in the Federal Register on November 
12, 2015.\4\ No comment letters were received in response to the 
Notice. This order approves the proposed rule change.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 76366 (November 5, 
2015), 80 FR 70047 (November 12, 2015) (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange proposes to change the co-location services offered by 
the Exchange to include a means for Users to receive market data feeds 
from third party markets (the ``Third Party Data'') through a wireless 
connection.\5\ In addition, the proposed rule change reflects changes 
to the Exchange's Price List and the Fee Schedule related to these co-
location services.
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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. See Securities 
Exchange Act Release No. 76009 (September 29, 2015), 80 FR 60213 
(October 5, 2015) (SR-NYSEMKT-2015-67). As specified in the Price 
List and the Fee Schedule, 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 Arca, 
Inc. See Securities Exchange Act Release No. 70176 (August 13, 
2013), 78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-67).
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    The Exchange proposes to offer the wireless connection to provide 
Users with an alternative means of connectivity for Third Party Data. 
As the Exchange notes, wireless connections involve beaming signals 
through the air between antennas that are within sight of one 
another.\6\ Because the signals travel a straight, unimpeded line, and 
because light waves travel faster through air than through glass (fiber 
optics), wireless messages have lower latency than messages travelling 
through fiber optics.\7\
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    \6\ See Notice, supra note 4 at 70048.
    \7\ See id.
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    Under the proposed rule change, the Exchange would utilize a 
network vendor to provide a wireless connection to the Third Party Data 
through wireless connections from the Exchange access centers in 
Secaucus and Carteret, New Jersey, to its data center in Mahwah, New 
Jersey, through a series of towers equipped with wireless equipment.\8\ 
A User that chooses this optional service would be able to receive data 
feeds from NASDAQ and BATS Exchange, Inc. over a wireless connection. 
To receive Third Party Data, the User would enter into a contract with 
the relevant third party market, which would charge the User the 
applicable market data fees for the Third Party Data. The Exchange 
would charge the User fees for the wireless connection for the Third 
Party Data.\9\
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    \8\ The NASDAQ Stock Market LLC (``NASDAQ'') offers a similar 
wireless service. See Securities Exchange Act Release No. 68735 
(January 25, 2013), 78 FR 6842 (January 31, 2013) (SR-NASDAQ-2012-
119) (approving a proposed rule change to establish a new optional 
wireless connectivity for co-located clients).
    \9\ A User would only receive the Third Party Data for which it 
had entered into a contract. For example, a User that contracted 
with NASDAQ for the NASDAQ Totalview-ITCH data feed but did not 
contract to receive any other Third Party Data would receive only 
the NASDAQ Totalview-ITCH data feed through its wireless connection.
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    A User would be charged a $5,000 non-recurring initial charge for 
each wireless connection and a monthly recurring charge (``MRC'') that 
would vary depending upon the feed that the User opts to receive. If a 
User purchased two wireless connections, it would pay two non-recurring 
initial charges. The MRC for a wireless connection to each of BATS 
Pitch BZX Gig shaped data, DirectEdge EDGX Gig shaped data, and NASDAQ 
BX Totalview-ITCH data will be $6,000; the MRC for a wireless 
connection of NASDAQ Totalview-ITCH data will be $8,500; and the MRC 
for a wireless connection of NASDAQ Totalview-ITCH and BX Totalview-
ITCH data will be $12,000. The

[[Page 81649]]

Exchange proposes to waive the first month's MRC, to allow Users to 
test the receipt of the feed(s) for a month before incurring any MRCs.
    The wireless connections would include the use of one port for 
connectivity to the Third Party Data. A User will only require one port 
to connect to the Third Party Data, irrespective of how many of the 
five wireless connections it orders. If a User that has more than one 
wireless connection wishes to use more than one port to connect to the 
Third Party Data,\10\ the Exchange proposes to make such additional 
ports available for a monthly fee per port of $3,000.
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    \10\ For example, a User with two wireless connections for Third 
Party Data may opt to purchase an additional port in order to route 
the options and equity data it receives to different cabinets.
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    The Exchange represents that there is limited bandwidth available 
on the wireless connection for data feeds from third parties. As a 
result, the Exchange has decided to offer as Third Party Data only the 
data feeds that are in high demand from Users. Although constrained by 
bandwidth with respect to the number of feeds it can carry, the 
Exchange represents that the wireless network offered by the Exchange 
can be made available to an unlimited number of Users.
    The wireless connection would provide Users with an alternative 
means of connectivity for Third Party Data. Currently, Users can 
receive Third Party Data through other methods, including, for example, 
from another User, through a telecommunications provider, or over the 
internet protocol (``IP'') network.\11\ In addition, Users can receive 
Third Party Data from wireless networks offered by third party vendors. 
The Exchange represents that there are currently at least four third 
party vendors that offer Users wireless network connections using 
wireless equipment installed on towers and buildings near the data 
center. The Exchange states that its proposed wireless connection would 
traverse wireless connections through a series of towers equipped with 
wireless equipment, including a pole on the grounds of the data 
center.\12\ The Exchange states that access to such pole or the roof is 
not required for third parties to establish wireless networks that can 
compete with Exchange's proposed service and, in particular, represents 
that based on the information available to it, the proposed wireless 
connection would provide data at the same or similar speed, and at the 
same or similar cost, as existing wireless networks, thereby enhancing 
competition.\13\
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    \11\ The IP network is a local area network available in the 
data center. See Securities Exchange Act Release No. 74220 (February 
6, 2015), 80 FR 7894 (February 12, 2015) (SR-NYSEMKT-2015-08) 
(notice of filing and immediate effectiveness of proposed rule 
change to include IP network connections).
    \12\ See Notice, supra note 4 at 70050.
    \13\ See Notice, supra note 4 at 70049-50.
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    The wireless connection to the Third Party Data is expected to be 
available no later than March 1, 2016. The Exchange will announce the 
date that the wireless connection to the Third Party Data will be 
available through a customer notice.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
exchange.\14\ In particular, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(4) of the Act,\15\ which 
requires that the rules of a national securities exchange provide for 
the equitable allocation of reasonable dues, fees and other charges 
among its members and issuers and other persons using its facilities, 
and with Section 6(b)(5) of the Act,\16\ which requires, among other 
things, that the rules of a national securities exchange be designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system and, in general, to protect investors and the public 
interest, and not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. In addition, the Commission 
finds that the proposed rule change is consistent with Section 6(b)(8) 
of the Act,\17\ which requires that the rules of the exchange not 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
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    \14\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78f(b)(8).
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    The Commission believes that the Exchange's proposal to provide 
this additional connectivity option is consistent with the requirement 
of Section 6(b)(5) of the Act. The Commission believes that the 
proposal is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers because the Exchange makes 
wireless connectivity available to all Users on an equal basis. All 
Users that voluntarily select this service option will be charged the 
same amount for the same services, and there would be no 
differentiation among Users with regard to the fees charged for the 
service. Further, the Exchange represents that Users of the new 
wireless connection would not receive Third Party Data that is not 
available to all Users. In addition, the Exchange represents that Users 
that do not opt to utilize the Exchange's wireless connections would 
still be able to obtain Third Party Data through other methods, such as 
from wireless networks offered by third party vendors, other Users, 
through telecommunications providers, or over the IP network.
    The Commission also believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act.\18\ All Users that 
voluntarily select this service option will be charged the same amount 
for the same services, and there would be no differentiation among 
Users with regard to the fees charged for the service. The Commission 
notes the Exchange's representation that the fees associated with 
providing the wireless connections are reasonable because the Exchange 
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 Exchange states that the costs 
associated with the wireless connections are incrementally higher than 
fiber optics-based solutions due to the expense of the wireless 
equipment, cost of installation and testing and ongoing maintenance of 
the network, and that the fees also reflect the benefit received by 
Users in terms of lower latency over the fiber optics option. In 
addition, the Exchange believes that the proposed waiver of the first 
month's MRC is reasonable as it would allow Users to test the receipt 
of the feed(s) for a month before incurring any monthly recurring fees 
and may act as an incentive to Users to utilize the new service.
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    \18\ 15 U.S.C. 78f(b)(4).
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    The Commission also finds that consistent with Section 6(b)(8) of 
the Act the proposed rule change does not impose a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. The Exchange states that Users currently can receive Third 
Party Data from competing wireless networks offered by third party 
vendors, including at least four third party vendors that offer Users 
wireless network connections using

[[Page 81650]]

wireless equipment installed on towers and buildings near the data 
center. The Exchange represents, based on the information available to 
it, that the proposed wireless connection would provide data at the 
same or similar speed, and at the same or similar cost, as existing 
wireless networks, thereby enhancing competition.\19\ The Exchange also 
notes that the proposed wireless connection would compete not just with 
other wireless connections, but also with fiber optic networks, which 
may be more attractive to some Users as they are more reliable and less 
susceptible to weather conditions. For these reasons, the Commission 
does not believe that the proposed rule change imposes a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act.
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    \19\ See supra notes 12 and 13 and accompanying text.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\20\ that the proposed rule change (SR-NYSEMKT-2015-85) be, and it 
hereby is, approved.
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    \20\ 15 U.S.C. 78s(b)(2).
    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
Brent J. Fields,
Secretary.
[FR Doc. 2015-32811 Filed 12-29-15; 8:45 am]
 BILLING CODE 8011-01-P

81648 Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices Paper Comments SECURITIES AND EXCHANGE List and the Fee Schedule related to COMMISSION these co-location services. • Send paper comments in triplicate The Exchange proposes to offer the to Secretary, Securities and Exchange [Release No. 34–76750; File No. SR– wireless connection to provide Users Commission, 100 F Street NE., NYSEMKT–2015–85] with an alternative means of Washington, DC 20549–1090. connectivity for Third Party Data. As the Self-Regulatory Organizations; NYSE All submissions should refer to File No. MKT LLC; Order Approving Proposed Exchange notes, wireless connections SR–BATS–2015–118. This file number Rule Change to the Co-location involve beaming signals through the air should be included on the subject line Services Offered by the Exchange (the between antennas that are within sight Offering of a Wireless Connection to of one another.6 Because the signals if email is used. To help the Allow Users to Receive Market Data travel a straight, unimpeded line, and Commission process and review your Feeds from Third Party Markets) and to because light waves travel faster through comments more efficiently, please use air than through glass (fiber optics), only one method. The Commission will Reflect Changes to the NYSE MKT Equities Price List and the NYSE Amex wireless messages have lower latency post all comments on the Commission’s than messages travelling through fiber Internet Web site (http://www.sec.gov/ Options Fee Schedule Related to These Services optics.7 rules/sro.shtml). Copies of the Under the proposed rule change, the submission, all subsequent December 23, 2015. Exchange would utilize a network amendments, all written statements vendor to provide a wireless connection with respect to the proposed rule I. Introduction to the Third Party Data through wireless change that are filed with the On October 23, 2015, NYSE MKT LLC connections from the Exchange access Commission, and all written (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed centers in Secaucus and Carteret, New communications relating to the with the Securities and Exchange Jersey, to its data center in Mahwah, proposed rule change between the Commission (the ‘‘Commission’’) New Jersey, through a series of towers Commission and any person, other than pursuant to Section 19(b)(1) 1 of the equipped with wireless equipment.8 A those that may be withheld from the Securities Exchange Act of 1934 (the User that chooses this optional service public in accordance with the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 a would be able to receive data feeds from provisions of 5 U.S.C. 552, will be proposed rule change to amend the co- NASDAQ and BATS Exchange, Inc. over available for Web site viewing and location services offered by the a wireless connection. To receive Third printing in the Commission’s Public Exchange to include a means for co- Party Data, the User would enter into a Reference Room, 100 F Street NE., located Users to receive market data contract with the relevant third party Washington, DC 20549, on official feeds from third party markets through market, which would charge the User a wireless connection. The proposed the applicable market data fees for the business days between the hours of rule change was published in the Third Party Data. The Exchange would 10:00 a.m. and 3:00 p.m. Copies of such Federal Register on November 12, charge the User fees for the wireless filing will also be available for 2015.4 No comment letters were connection for the Third Party Data.9 inspection and copying at the principal received in response to the Notice. This A User would be charged a $5,000 office of the Exchange. All comments order approves the proposed rule non-recurring initial charge for each received will be posted without change; change. wireless connection and a monthly the Commission does not edit personal recurring charge (‘‘MRC’’) that would identifying information from II. Description of the Proposed Rule Change vary depending upon the feed that the submissions. You should submit only User opts to receive. If a User purchased information that you wish to make The Exchange proposes to change the two wireless connections, it would pay available publicly. All submissions co-location services offered by the two non-recurring initial charges. The should refer to File No. SR–BATS– Exchange to include a means for Users MRC for a wireless connection to each 2015–118 and should be submitted on to receive market data feeds from third of BATS Pitch BZX Gig shaped data, or before January 20, 2016. party markets (the ‘‘Third Party Data’’) DirectEdge EDGX Gig shaped data, and through a wireless connection.5 In NASDAQ BX Totalview-ITCH data will For the Commission, by the Division of Trading and Markets, pursuant to delegated addition, the proposed rule change be $6,000; the MRC for a wireless authority.13 reflects changes to the Exchange’s Price connection of NASDAQ Totalview-ITCH Brent J. Fields, data will be $8,500; and the MRC for a 1 15 U.S.C.78s(b)(1). wireless connection of NASDAQ Secretary. 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Totalview-ITCH and BX Totalview- [FR Doc. 2015–32825 Filed 12–29–15; 8:45 am] ITCH data will be $12,000. The 4 See Securities Exchange Act Release No. 76366 BILLING CODE 8011–01–P (November 5, 2015), 80 FR 70047 (November 12, 6 See Notice, supra note 4 at 70048. 2015) (‘‘Notice’’). 5 For purposes of the Exchange’s co-location 7 See id. 8 The NASDAQ Stock Market LLC (‘‘NASDAQ’’) services, a ‘‘User’’ means any market participant that requests to receive co-location services directly offers a similar wireless service. See Securities from the Exchange. See Securities Exchange Act Exchange Act Release No. 68735 (January 25, 2013), Release No. 76009 (September 29, 2015), 80 FR 78 FR 6842 (January 31, 2013) (SR–NASDAQ–2012– 60213 (October 5, 2015) (SR–NYSEMKT–2015–67). 119) (approving a proposed rule change to establish mstockstill on DSK4VPTVN1PROD with NOTICES As specified in the Price List and the Fee Schedule, a new optional wireless connectivity for co-located a User that incurs co-location fees for a particular clients). co-location service pursuant thereto would not be 9 A User would only receive the Third Party Data subject to co-location fees for the same co-location for which it had entered into a contract. For service charged by the Exchange’s affiliates New example, a User that contracted with NASDAQ for York Stock Exchange LLC and NYSE Arca, Inc. See the NASDAQ Totalview-ITCH data feed but did not Securities Exchange Act Release No. 70176 (August contract to receive any other Third Party Data 13, 2013), 78 FR 50471 (August 19, 2013) (SR– would receive only the NASDAQ Totalview-ITCH 13 17 CFR 200.30–3(a)(12). NYSEMKT–2013–67). data feed through its wireless connection. VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices 81649 Exchange proposes to waive the first proposed service and, in particular, available to all Users on an equal basis. month’s MRC, to allow Users to test the represents that based on the information All Users that voluntarily select this receipt of the feed(s) for a month before available to it, the proposed wireless service option will be charged the same incurring any MRCs. connection would provide data at the amount for the same services, and there The wireless connections would same or similar speed, and at the same would be no differentiation among include the use of one port for or similar cost, as existing wireless Users with regard to the fees charged for connectivity to the Third Party Data. A networks, thereby enhancing the service. Further, the Exchange User will only require one port to competition.13 represents that Users of the new connect to the Third Party Data, The wireless connection to the Third wireless connection would not receive irrespective of how many of the five Party Data is expected to be available no Third Party Data that is not available to wireless connections it orders. If a User later than March 1, 2016. The Exchange all Users. In addition, the Exchange that has more than one wireless will announce the date that the wireless represents that Users that do not opt to connection wishes to use more than one connection to the Third Party Data will utilize the Exchange’s wireless port to connect to the Third Party be available through a customer notice. connections would still be able to obtain Data,10 the Exchange proposes to make Third Party Data through other methods, III. Discussion and Commission such additional ports available for a such as from wireless networks offered Findings monthly fee per port of $3,000. by third party vendors, other Users, The Exchange represents that there is After careful review, the Commission through telecommunications providers, limited bandwidth available on the finds that the proposed rule change is or over the IP network. wireless connection for data feeds from consistent with the requirements of the The Commission also believes that the third parties. As a result, the Exchange Act and the rules and regulations proposed rule change is consistent with has decided to offer as Third Party Data thereunder applicable to a national Section 6(b)(4) of the Act.18 All Users only the data feeds that are in high securities exchange.14 In particular, the that voluntarily select this service demand from Users. Although Commission finds that the proposed option will be charged the same amount constrained by bandwidth with respect rule change is consistent with Section for the same services, and there would to the number of feeds it can carry, the 6(b)(4) of the Act,15 which requires that be no differentiation among Users with Exchange represents that the wireless the rules of a national securities regard to the fees charged for the network offered by the Exchange can be exchange provide for the equitable service. The Commission notes the made available to an unlimited number allocation of reasonable dues, fees and Exchange’s representation that the fees of Users. other charges among its members and associated with providing the wireless The wireless connection would issuers and other persons using its connections are reasonable because the provide Users with an alternative means facilities, and with Section 6(b)(5) of the Exchange will incur certain costs, of connectivity for Third Party Data. Act,16 which requires, among other including costs related to the data center Currently, Users can receive Third Party things, that the rules of a national facility, hardware and equipment and Data through other methods, including, securities exchange be designed to costs related to personnel required for for example, from another User, through promote just and equitable principles of initial installation and monitoring, a telecommunications provider, or over trade, to remove impediments to and support and maintenance of such the internet protocol (‘‘IP’’) network.11 perfect the mechanism of a free and services. The Exchange states that the In addition, Users can receive Third open market and a national market costs associated with the wireless Party Data from wireless networks system and, in general, to protect connections are incrementally higher offered by third party vendors. The investors and the public interest, and than fiber optics-based solutions due to Exchange represents that there are not be designed to permit unfair the expense of the wireless equipment, currently at least four third party discrimination between customers, cost of installation and testing and vendors that offer Users wireless issuers, brokers, or dealers. In addition, ongoing maintenance of the network, network connections using wireless the Commission finds that the proposed and that the fees also reflect the benefit equipment installed on towers and rule change is consistent with Section received by Users in terms of lower buildings near the data center. The 6(b)(8) of the Act,17 which requires that latency over the fiber optics option. In Exchange states that its proposed the rules of the exchange not impose addition, the Exchange believes that the wireless connection would traverse any burden on competition not proposed waiver of the first month’s wireless connections through a series of necessary or appropriate in furtherance MRC is reasonable as it would allow towers equipped with wireless of the purposes of the Act. Users to test the receipt of the feed(s) for equipment, including a pole on the The Commission believes that the a month before incurring any monthly grounds of the data center.12 The Exchange’s proposal to provide this recurring fees and may act as an Exchange states that access to such pole additional connectivity option is incentive to Users to utilize the new or the roof is not required for third consistent with the requirement of service. parties to establish wireless networks Section 6(b)(5) of the Act. The The Commission also finds that that can compete with Exchange’s Commission believes that the proposal consistent with Section 6(b)(8) of the is not designed to permit unfair Act the proposed rule change does not 10 For example, a User with two wireless discrimination between customers, impose a burden on competition not connections for Third Party Data may opt to issuers, brokers, or dealers because the necessary or appropriate in furtherance purchase an additional port in order to route the Exchange makes wireless connectivity of the purposes of the Act. The options and equity data it receives to different mstockstill on DSK4VPTVN1PROD with NOTICES cabinets. Exchange states that Users currently can 11 The IP network is a local area network available 13 See Notice, supra note 4 at 70049–50. receive Third Party Data from 14 Inapproving this proposed rule change, the in the data center. See Securities Exchange Act competing wireless networks offered by Release No. 74220 (February 6, 2015), 80 FR 7894 Commission notes that it has considered the proposed rule’s impact on efficiency, competition, third party vendors, including at least (February 12, 2015) (SR–NYSEMKT–2015–08) (notice of filing and immediate effectiveness of and capital formation. See 15 U.S.C. 78c(f). four third party vendors that offer Users proposed rule change to include IP network 15 15 U.S.C. 78f(b)(4). wireless network connections using connections). 16 15 U.S.C. 78f(b)(5). 12 See Notice, supra note 4 at 70050. 17 15 U.S.C. 78f(b)(8). 18 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

81650 Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices wireless equipment installed on towers Commission is publishing this notice to The SEC Pay-to-Play Rule prohibits an and buildings near the data center. The solicit comments on the proposed rule investment adviser from providing Exchange represents, based on the change from interested persons. advisory services for compensation to a information available to it, that the government entity for two years after the I. Self-Regulatory Organization’s proposed wireless connection would adviser or its covered associates make a Statement of the Terms of Substance of provide data at the same or similar contribution to an official of the the Proposed Rule Change government entity, unless an exception speed, and at the same or similar cost, as existing wireless networks, thereby FINRA is proposing to adopt FINRA or exemption applies. In addition, it enhancing competition.19 The Exchange Rules 2030 (Engaging in Distribution prohibits an investment adviser from also notes that the proposed wireless and Solicitation Activities with soliciting from others, or coordinating, connection would compete not just with Government Entities) 3 and 4580 (Books contributions to government entity other wireless connections, but also and Records Requirements for officials or payments to political parties with fiber optic networks, which may be Government Distribution and where the adviser is providing or more attractive to some Users as they Solicitation Activities) to establish seeking to provide investment advisory are more reliable and less susceptible to ‘‘pay-to-play’’ 4 and related rules that services to a government entity. weather conditions. For these reasons, would regulate the activities of member The SEC Pay-to-Play Rule also the Commission does not believe that firms that engage in distribution or prohibits an investment adviser and its the proposed rule change imposes a solicitation activities for compensation covered associates from providing or burden on competition not necessary or with government entities on behalf of agreeing to provide, directly or appropriate in furtherance of the investment advisers. indirectly, payment to any person to purposes of the Act. The text of the proposed rule change solicit a government entity for is available on FINRA’s Web site at investment advisory services on behalf IV. Conclusion http://www.finra.org, at the principal of the investment adviser unless the It is therefore ordered, pursuant to office of FINRA and at the person is a ‘‘regulated person.’’ A Section 19(b)(2) of the Act,20 that the Commission’s Public Reference Room. ‘‘regulated person’’ includes a member proposed rule change (SR–NYSEMKT– firm, provided that: (a) FINRA rules II. Self-Regulatory Organization’s prohibit member firms from engaging in 2015–85) be, and it hereby is, approved. Statement of the Purpose of, and For the Commission, by the Division of distribution or solicitation activities if Statutory Basis for, the Proposed Rule political contributions have been made; Trading and Markets, pursuant to delegated Change authority.21 and (b) the SEC finds, by order, that Brent J. Fields, In its filing with the Commission, such rules impose substantially FINRA included statements concerning equivalent or more stringent restrictions Secretary. the purpose of and basis for the on member firms than the SEC Pay-to- [FR Doc. 2015–32811 Filed 12–29–15; 8:45 am] proposed rule change and discussed any Play Rule imposes on investment BILLING CODE 8011–01–P comments it received on the proposed advisers and that such rules are rule change. The text of these statements consistent with the objectives of the SEC may be examined at the places specified Pay-to-Play Rule.6 The SEC stated that SECURITIES AND EXCHANGE in Item IV below. FINRA has prepared this SEC ban on third-party solicitations COMMISSION summaries, set forth in sections A, B, would be effective nine months after the [Release No. 34–76767; File No. SR–FINRA– and C below, of the most significant compliance date of a final rule adopted 2015–056] aspects of such statements. by the SEC by which municipal advisors must register under the Exchange Act.7 Self-Regulatory Organizations; A. Self-Regulatory Organization’s The SEC adopted such a final rule on Financial Industry Regulatory Statement of the Purpose of, and September 20, 2013, with a compliance Authority, Inc.; Notice of Filing of a Statutory Basis for, the Proposed Rule date of July 1, 2014.8 Proposed Rule Change To Adopt Change FINRA Rule 2030 and FINRA Rule 4580 1. Purpose also Advisers Act Release No. 3221 (June 22, 2011), To Establish ‘‘Pay-To-Play’’ and 76 FR 42950 (July 19, 2011) (Rules Implementing Related Rules Background & Discussion Amendments to the Investment Advisers Act of 1940); Advisers Act Release No. 3418 (June 8, In July 2010, the SEC adopted Rule 2012), 77 FR 35263 (June 13, 2012) (Political December 24, 2015. 206(4)–5 under the Investment Advisers Contributions by Certain Investment Advisers; Ban Pursuant to Section 19(b)(1) of the Act of 1940 (‘‘Advisers Act’’) addressing on Third Party Solicitation; Extension of Securities Exchange Act of 1934 (‘‘Act,’’ pay-to-play practices by investment Compliance Date). ‘‘Exchange Act’’ or ‘‘SEA’’) 1 and Rule advisers (the ‘‘SEC Pay-to-Play Rule’’).5 6 See SEC Pay-to-Play Rule 206(4)–5(f)(9). A 19b–4 thereunder,2 notice is hereby ‘‘regulated person’’ also includes SEC registered investment advisers and SEC-registered municipal given that on December 16, 2015, 3 FINRA published the proposed rule change as advisors, subject to specified conditions. Financial Industry Regulatory FINRA Rule 2390 in Regulatory Notice 14–50 (Nov. 7 See Advisers Act Release No. 3418 (June 8, Authority, Inc. filed with the Securities 2014) (‘‘Regulatory Notice 14–50’’). FINRA has 2012), 77 FR 35263 (June 13, 2012). and Exchange Commission (‘‘SEC’’ or determined that the proposed rule change is more 8 See Exchange Act Release No. 70462 (Sept. 20, appropriately categorized under the FINRA Rule 2013), 78 FR 67468 (Nov. 12, 2013) (Registration of ‘‘Commission’’) the proposed rule 2000 Series relating to ‘‘Duties and Conflicts.’’ Municipal Advisors). On June 25, 2015, the SEC change as described in Items I, II, and 4 ‘‘Pay-to-play’’ practices typically involve a issued notice of the compliance date for its third III below, which Items have been person making cash or in-kind political party solicitation ban as July 31, 2015. See Advisers mstockstill on DSK4VPTVN1PROD with NOTICES substantially prepared by FINRA. The contributions (or soliciting or coordinating others to Act Release No. 4129 (June 25, 2015), 80 FR 37538 make such contributions) to help finance the (July 1, 2015). In addition, staff of the Division of 19 See election campaigns of state or local officials or bond Investment Management added Question I.4 to its supra notes 12 and 13 and accompanying ballot initiatives as a quid pro quo for the receipt Staff Responses to Questions About the Pay to Play text. of government contracts. 20 15 Rule stating, among other things, that until the later U.S.C. 78s(b)(2). 5 See Advisers Act Release No. 3043 (July 1, of (i) the effective date of a FINRA pay-to-play rule 21 17 CFR 200.30–3(a)(12). 2010), 75 FR 41018 (July 14, 2010) (Political or (ii) the effective date of an MSRB pay-to-play 1 15 U.S.C. 78s(b)(1). Contributions by Certain Investment Advisers) rule, the Division of Investment Management would 2 17 CFR 240.19b–4. (‘‘SEC Pay-to-Play Rule Adopting Release’’). See not recommend enforcement action to the VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1


Document Created: 2015-12-30 03:15:54
Document Modified: 2015-12-30 03:15:54
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 81648 
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