81 FR 13003 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Establishing Procedures for the Allocation of Cages to Its Co-Located Users, Including the Waiver of Certain Fees, and To Amend the Visitor Security Escort Requirements and Fee
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 48 (March 11, 2016)
Federal Register Volume 81, Issue 48 (March 11, 2016)
| Page Range | 13003-13007 | |
| FR Document | 2016-05434 |
[Federal Register Volume 81, Number 48 (Friday, March 11, 2016)] [Notices] [Pages 13003-13007] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-05434] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77303; File No. SR-NYSEArca-2016-21] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Establishing Procedures for the Allocation of Cages to Its Co-Located Users, Including the Waiver of Certain Fees, and To Amend the Visitor Security Escort Requirements and Fee March 7, 2016. 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 February 23, 2016, 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. On March 1, 2016, the Exchange filed Amendment No. 1 to the proposed rule change.\4\ The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. \4\ In Amendment No. 1, the Exchange clarified the proposal to specify that the visitor escort fee is equitable because all Users of the Exchange's Data Center would be charged the same fee. The Exchange also clarified the proposal to specify that while an individual User is on the waitlist for a cabinet, it will be granted a fee waiver for 2 bundles of 24 cross connects to be used to connect that User's non-contiguous cabinets. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to establish procedures for the allocation of cages to its co-located Users, including the waiver of certain fees, and to amend the visitor security escort requirements and fee. The Exchange proposes to amend the 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 Fees and Charges for Exchange Services (the ``Equities Fee Schedule'' and, together with the Options Fee Schedule, the ``Fee Schedules'') to reflect the changes. 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 establish procedures for the allocation of cages to Users, including the waiver of certain fees, and to amend the visitor security escort requirements.\5\ The Exchange proposes to amend the Fee Schedules to reflect the changes. --------------------------------------------------------------------------- \5\ 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. --------------------------------------------------------------------------- Proposed Cage Allocation Procedure A User is able to purchase a cage to house its cabinets within the Data Center.\6\ A cage would typically be purchased by a User that has several cabinets within the Data Center and wishes to arrange its cabinets contiguously while also enhancing privacy around its cabinets. The Exchange offers three sizes of cages corresponding to the number of cabinets housed therein, and charges fees for the cages based on the size.\7\ The physical footprint of each cage is greater than that of the cabinets that it houses, as each cage is constructed so as to include aisles around the purchasing User's cabinets, for accessibility and in compliance with safety regulations.\8\ Accordingly, in order to provide a User with a cage, the Data Center must have sufficient contiguous open space [[Page 13004]] available for the cage. The Exchange allocates cages on a first come/ first serve basis. --------------------------------------------------------------------------- \6\ 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). \7\ See Securities Exchange Act Release No. 67667 (August 15, 2012), 77 FR 50743 (August 22, 2012) (SR-NYSEArca-2012-63) (``2012 Release''). A User must have at least two cabinets in the Data Center to purchase a cage. See Securities Exchange Act Release No. 72720 (July 30, 2014), 79 FR 45577 (August 5, 2014) (SR-NYSEArca- 2014-81) (``2014 Release''). \8\ For example, a cage for 20 cabinets takes up as much floor space as 33 cabinets. --------------------------------------------------------------------------- The Data Center opened in 2010, and at that time, the Exchange represented that it offers co-location space based on availability and that it had sufficient space in the Data Center to accommodate demand on an equitable basis for the foreseeable future.\9\ The Exchange continues to believe that there is sufficient space in the Data Center to accommodate demand. --------------------------------------------------------------------------- \9\ See Original Co-Location Filing, at 70049. --------------------------------------------------------------------------- However, much of the space currently available for co-location is in smaller segments, resulting from an increasing number of Users, multiple moves within the Data Center, and changes to Users' space requirements--both increases and decreases--since 2010. Accordingly, in 2015, the Exchange determined that, to continue to be able to meet its obligation to accommodate demand, and in particular to make available more contiguous, larger spaces for new and existing Users, it would exercise its right to move some Users' equipment within the Data Center (the ``Migration'').\10\ The Exchange put procedures in place to manage the process for the Migration, and is implementing them. --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 76270 (October 26, 2015), 80 FR 66958 (October 30, 2015) SR-NYSEArca-2015-85 (``Migration Release''). --------------------------------------------------------------------------- While the Migration will make available more contiguous, larger spaces for new and existing Users, the Exchange believes that even after the Migration such contiguous open space will be limited, and may become more limited over time. Accordingly, the Exchange proposes to put procedures in place for the allocation of cages if the available open contiguous space in the Data Center is not sufficient to house a new cage or the open contiguous space available is sufficiently limited that the Exchange cannot both provide new cages and satisfy all User demand for other co-location services. The proposed procedures are as follows:The Exchange will place Users seeking new cages on a waitlist. The order of Users on the list will be based on the date the Exchange receives signed orders for the cages from each User. Once the list is established, Users, on a rolling basis, will be allocated a cage each time one becomes available.\11\ --------------------------------------------------------------------------- \11\ A cage may become available, for example, if a User terminates use of an existing cage or if contiguous cabinets become vacant, opening up contiguous space. The Exchange believes that the proposed procedures are consistent with the NASDAQ procedures for allocating cabinets if NASDAQ's inventory shrinks to zero. See Securities Exchange Act Release No. 62397 (June 28, 2010), 75 FR 38860 (July 6, 2010) (SR-NASDAQ-2010-019). --------------------------------------------------------------------------- If a cage becomes available and the User that is at the top of the waitlist turns it down because it requested a different size cage, the Exchange will offer the available cage to the next Users on the list, in order, until a User accepts it. A User that turns down a cage because it is not the correct size will remain on the waitlist. A User that turns down a cage that is the size that it requested will be removed from the waitlist. If a User requests two cages, after receiving the first cage it will move to the bottom of the waitlist. In connection with the above procedure, the Exchange proposes to waive certain fees for Users that have requested a cage and have been added to the waitlist pursuant to the allocation procedure. The Exchange expects that, while on the waitlist for a cage or for a larger cage, a User may have to use non-contiguous cabinets and/or cages, in which case it would connect the cabinets with cross connects, which are fiber connections used to connect cabinets within the Data Center.\12\ In such circumstances, the Exchange proposes to waive the initial and monthly fee for two bundles of 24 cross connects between the User's non-contiguous cabinets. Once the User is allocated a cage through the allocation procedure or is no longer on the waitlist, the Exchange would cease to waive the fee. --------------------------------------------------------------------------- \12\ A User is able to purchase cross connects individually or in bundles (i.e., multiple cross connects within a single sheath) of six, 12, 18 or 24 cross connects. The Commission approved the fee for cross connects between a single User's cabinets within the data center in the Original Co-Location Filing. See Original Co-Location Filing, at 70049. The use of cross connects was subsequently revised to allow each User to purchase cross connects between its cabinet(s) and the cabinets of separate Users or a non-User's equipment within the Data Center. See 2012 Release, at 50744, and Securities Exchange Act Release No. 74219 (February 6, 2015), 80 CFR 7899 (February 12, 2015) (SR-NYSEArca-2015-03). The Exchange notes that a User with a cage may request a new cage, either to add a second cage or to change cages. In such a case, the cross connects would be between the cabinets within the cage and the non-contiguous cabinets outside the cage. --------------------------------------------------------------------------- As noted above, a User that turns down a cage that is the size that it requested will be removed from the waitlist. If such User asks to be added back onto the waitlist, the Exchange will add the User to the bottom of the waitlist, but will not provide the proposed fee waiver a second time. The Exchange proposes to amend the Fee Schedules to add a new General Note 3 to the fee to furnish and install a bundle of 24 cross connects, as follows: The initial and monthly charge for 2 bundles of 24 cross connects will be waived for Users that are waitlisted for a cage for the duration of the waitlist period, provided that the cross connects may only be used to connect the Users' non-contiguous cabinets. The charge will no longer be waived once a User is removed from the waitlist. If a waitlist is created, a User seeking a new cage will be placed on the waitlist based on the date a signed order for the cage is received. A User that turns down a cage because it is not the correct size will remain on the waitlist. A User that requests to be removed or that turns down a cage that is the size that it requested will be removed from the waitlist. A User that is removed from the waitlist but subsequently requests a cage will be added back to the bottom of the waitlist, provided that, if the User was removed from the waitlist because it turned down a cage that is the size that it requested, it will not receive a second waiver of the charge. Visitor Security Escorts Currently, all User representatives are required to have a visitor security escort during visits to the Data Center, including User representatives who have a permanent Data Center site access badge.\13\ The Exchange proposes to amend the description of the visitor security escort fee to provide that it would not apply to User representatives visiting the User's cage and to provide that the cost is $75 per visit. --------------------------------------------------------------------------- \13\ See Original Co-Location Filing, at 70050. Fees for visitor security escorts for the move of a User's equipment within the Data Center are waived when incurred in connection with such a move required by the Exchange as part of the Migration. See Migration Release, at 66958. --------------------------------------------------------------------------- The Exchange requires visitor security escorts for security purposes, primarily to ensure that a visitor does not interfere with the cabinets of other Users or Exchange equipment. The Exchange believes it is not necessary to have a User representative accompanied by a visitor security escort when the representative is visiting the User's cage, because the User representative would only have access to that User's cabinets, which would be in the confined area within the locked cage. The User representative would not have access to the cabinets of other Users or Exchange equipment, which are locked as well. By comparison, Users that do not have cages share colocation space with other Users. While such spaces are locked, more than one User may have cabinets within a given locked space, and so a visitor security escort is warranted. [[Page 13005]] The Exchange proposes to make several additional non-substantive changes to the description of the visitor security escort fee, to reduce redundancy and increase clarity. The current description is as follows: NYSE employee escort, which is required during User visits to the data center. (Note: all User representatives are required to have a visitor security escort during visits to the data center, including User representatives who have a permanent data center site access badge.) The proposed description of the visitor escort fee would read as follows: All User representatives are required to be accompanied by a visitor security escort during visits to the data center unless visiting the User's cage. Requirement includes User representatives who have a permanent data center site access badge. The Exchange proposes to remove the first clause, with its reference to the visitor security escort as an ``NYSE employee escort,'' because it is redundant with the parenthetical and because the reference to ``NYSE employees'' could be potentially confusing, given that not just New York Stock Exchange LLC but also its affiliates, NYSE MKT LLC and the Exchange, provide co-location services at the Data Center. In addition, the Exchange proposes to use ``accompanied by a visitor security escort'' rather than ``have a visitor security escort'' because it believes that ``accompanied'' makes it more clear that the escort will accompany the User representative. The Fee Schedules include a Visitor Security Escort fee of $75 per hour. The Exchange proposes to amend the Fee Schedules to charge Users $75 per visit for such visitor security escorts. Based on the Exchange's experience, currently many of the escorted visits last an hour or less, and for Users that do not have a cage, escorted visits are typically about an hour. 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; \14\ 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.\15\ --------------------------------------------------------------------------- \14\ 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 others with access to the Exchange's trading and execution systems. 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 users that have access to the Exchange's trading and execution systems, although Users that receive co-location services normally would expect reduced latencies in sending orders to, and receiving market data from, the Exchange. \15\ See SR-NYSEArca-2013-80, supra note 5 at 50459. The Exchange's affiliates have also submitted substantially the same proposed rule change. See SR-NYSE-2016-13 and SR-NYSEMKT-2016-17. --------------------------------------------------------------------------- The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\16\ in general, and furthers the objectives of Sections 6(b)(5) of the Act,\17\ 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. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f(b). \17\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed procedure for allocating cages is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers because the proposal would establish rational, objective procedures that would be applied uniformly by the Exchange to Users that requested cages and would not unfairly discriminate among similarly situated Users of co-location services. All Users seeking to purchase a cage would be subject to the same procedures. The Exchange believes that the proposed procedure would serve to reduce any potential for confusion on how cages would be allocated should it become necessary. In addition, the proposed allocation procedure would assist the Exchange to ensure that it has sufficient space in the Data Center to accommodate demand for co- location services on an equitable basis for the foreseeable future. The Exchange believes that the proposal to waive fees for two bundles of 24 cross connects between a waitlisted User's non-contiguous cabinets is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers because the waiver would be applied uniformly by the Exchange to all waitlisted Users and would not unfairly discriminate among similarly situated Users of co-location services. A waitlisted User would only require cross connects between its non-contiguous cabinets due to the waitlist. If, instead of being put on the waitlist, the User had received the cage it requested, the User would not require the cross connects. In addition, the Exchange proposes that the cross connects could only be used to connect the User's non-contiguous cabinets. The waiver would help to alleviate the inconvenience for the waitlisted User of having cabinets in non- contiguous space by directly addressing, for the time period during which the User is waitlisted, a cost directly related to being on the waitlist. Once the User was allocated a cage through the allocation procedure or was removed from the waitlist, the Exchange would cease to waive the fee. The Exchange believes that the proposed amendment to the visitor security escort fee is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers because the escort fee would be applied uniformly by the Exchange to all Users unless a User representative was visiting the User's cage, and would not unfairly discriminate among similarly situated Users of co-location services. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4),\18\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f(b)(4), (5). --------------------------------------------------------------------------- The Exchange believes that the proposed procedure for allocating cages is equitable and not unfairly [[Page 13006]] discriminatory because the cages are offered simply as a convenience to Users. A User does not require a cage to trade on the Exchange, and usage of a cage has no effect on a User's orders going to, or trade data coming from, the Exchange, or the User's ability to utilize other co-location services. The proposed allocation procedure would assist the Exchange to ensure that it has sufficient space in the Data Center to accommodate demand for co-location services on an equitable basis for the foreseeable future. The Exchange believes that the proposal to waive fees for two bundles of 24 cross connects between a waitlisted User's non-contiguous cabinets is equitable and not unfairly discriminatory because a waitlisted User would only require the cross connects due to the waitlist. If, instead of being put on the waitlist, the User had received the cage it requested, the User would not require the cross connects. In addition, the Exchange proposes that the cross connects could only be used to connect the User's non-contiguous cabinets. The waiver would help to alleviate the inconvenience for the waitlisted User of having cabinets in non-contiguous space by directly addressing, for the time period during which the User is waitlisted, a cost directly related to being on the waitlist. Once the User was allocated a cage through the allocation procedure or was removed from the waitlist, the Exchange would cease to waive the fee. The Exchange believes that the proposed amendment to the visitor security escort fee is equitable and not unfairly discriminatory because the escort fee would be applied uniformly by the Exchange to all Users unless a User representative was visiting the User's cage, and would not unfairly discriminate among similarly situated Users of co-location services. The same requirements and fees would be applied uniformly to all Users. The Exchange believes that the amendment is equitable because the security purposes that lead the Exchange to require visitor security escorts, namely to ensure that a visitor does not interfere with the cabinets of other Users or Exchange equipment, are not present when a User representative is visiting the User's cage, because the User representative would only have access to the Users' cabinets, which would be in the confined area within the locked cage. The User representative would not have access to the cabinets of other Users or Exchange equipment, which are locked as well. The Exchange believes that the proposed allocation procedure for cages is reasonable because the proposal would establish rational, objective procedures that would be applied uniformly by the Exchange to Users. All Users seeking to purchase a cage would be subject to the same procedures. In addition, the Exchange believes that the proposed procedure would serve to reduce any potential for confusion on how cages would be allocated should it become necessary. The Exchange believes that the proposal to waive fees for two bundles of 24 cross connects between a waitlisted User's non-contiguous cabinets is reasonable because the waitlisted User would only require the cross connects due to the waitlist. If, instead of being put on the waitlist, the User had received the cage it requested, the User would not require the cross connects. In addition, the Exchange proposes that the cross connects could only be used to connect the User's non- contiguous cabinets. The waiver would help to alleviate the inconvenience for the waitlisted User of having cabinets in non- contiguous space by directly addressing, for the time period during which the User is waitlisted, a cost directly related to being on the waitlist. In addition, the Exchange believes that the proposal is reasonable because once the User was allocated a cage through the allocation procedure or was removed from the waitlist, the Exchange would cease to waive the fee. The Exchange also believes that, if a User is removed from the waitlist because it turned down a cage that is the size that it requested, it is reasonable not to provide the User a second waiver of the fee if the User subsequently requests a cage. To provide a second waiver would create an incentive for a User to use the waitlist to avoid paying the waived fees for cross connects despite being given an opportunity to get off the waitlist. The Exchange believes that the proposed amendments to the visitor security escort fee are reasonable, because the security purposes that lead the Exchange to visitor security escorts, namely to ensure that a visitor does not interfere with the cabinets of other Users or Exchange equipment, are not present when a User representative is visiting the User's cage, because the User representative would only have access to the Users' cabinets, which would be in the confined area within the locked cage. The User representative would not have access to the cabinets of other Users or Exchange equipment, which are locked as well. Finally, the Exchange believes that its non-substantive changes to the description of the visitor security escort fee are reasonable, because they would reduce redundancy and increase clarity in the description. The Exchange believes that the proposed rate of $75 per visit for the Visitor Security Escort, as opposed to $75 per hour, is reasonable because all Users would be subject to the same fee. The Exchange believes that charging a flat fee per visit is consistent with fees for other services performed by data center staff, including Change Fees and Initial Install Services.\19\ The proposed rate of $75 per visit for the Visitor Security Escort would be a fee reduction for any visit that lasted more than an hour, and so it would reduce the burden placed on Users that are still subject to the fee. --------------------------------------------------------------------------- \19\ See 2012 Release, supra note 6, at 50744, and 2014 Release, supra note 6, at 45578. Change Fees are charged per request and Initial Install Services fees are charged per cabinet or eight-rack unit in a partial cabinet. --------------------------------------------------------------------------- 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,\20\ 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. The Exchange believes that the proposed allocation procedures for cages would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed allocation procedure would assist the Exchange to ensure that it has sufficient space in the Data Center to accommodate demand for co-location services on an equitable basis for the foreseeable future. Similarly, the Exchange believes that the proposed fee waiver would facilitate the proposed allocation procedure, which would in turn facilitate use of the Data Center and provide access to the Data Center to current and additional market participants. In addition, because a User does not require a cage to trade on the Exchange, and usage of [[Page 13007]] a cage has no effect on a User's orders going to, or trade data coming from, the Exchange, or the User's ability to utilize other co-location services, the Exchange believes that being waitlisted for a cage will not impose a burden on a User's ability to compete. The Exchange believes that the proposed allocation procedure would establish rational, objective procedures that would reduce any potential for User confusion on how cages would be allocated should it become necessary. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Exchange believes that the proposed amendment to the visitor security escort fee would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because it would eliminate an unnecessary requirement, as the security purposes that lead the Exchange to visitor security escorts are not present when a User representative is visiting the User's cage, because the User representative would only have access to the Users' cabinets, which would be in the confined area within the locked cage. The User representative would not have access to the cabinets of other Users or Exchange equipment, which are locked as well. The proposed rate of $75 per visit for the Visitor Security Escort would be a fee reduction for any visit that lasted more than an hour, and so it would reduce the burden placed on Users that are still subject to the fee. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually review, and consider adjusting, its services and related fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission shall: (a) By order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File No. SR-NYSEArca-2016-21 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-2016-21. 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-2016-21, and should be submitted on or before April 1, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-05434 Filed 3-10-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 48 / Friday, March 11, 2016 / Notices 13003
All submissions should refer to File No. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 A. Self-Regulatory Organization’s
SR–NYSE–2016–13. This file number notice is hereby given that, on February Statement of the Purpose of, and
should be included on the subject line 23, 2016, NYSE Arca, Inc. (the Statutory Basis for, the Proposed Rule
if email is used. To help the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with Change
Commission process and review your the Securities and Exchange 1. Purpose
comments more efficiently, please use Commission (the ‘‘Commission’’) the
only one method. The Commission will proposed rule change as described in The Exchange proposes to establish
post all comments on the Commission’s Items I and II below, which Items have procedures for the allocation of cages to
Internet Web site (http://www.sec.gov/ been prepared by the self-regulatory Users, including the waiver of certain
rules/sro.shtml). Copies of the organization. On March 1, 2016, the fees, and to amend the visitor security
submission, all subsequent Exchange filed Amendment No. 1 to the escort requirements.5 The Exchange
amendments, all written statements proposed rule change.4 The Commission proposes to amend the Fee Schedules to
with respect to the proposed rule is publishing this notice to solicit reflect the changes.
change that are filed with the comments on the proposed rule change, Proposed Cage Allocation Procedure
Commission, and all written as modified by Amendment No. 1, from
communications relating to the A User is able to purchase a cage to
interested persons. house its cabinets within the Data
proposed rule change between the
Commission and any person, other than I. Self-Regulatory Organization’s Center.6 A cage would typically be
those that may be withheld from the Statement of the Terms of the Substance purchased by a User that has several
public in accordance with the of the Proposed Rule Change cabinets within the Data Center and
provisions of 5 U.S.C. 552, will be wishes to arrange its cabinets
available for Web site viewing and The Exchange proposes to establish contiguously while also enhancing
printing in the Commission’s Public procedures for the allocation of cages to privacy around its cabinets. The
Reference Room, 100 F Street NE., its co-located Users, including the Exchange offers three sizes of cages
Washington, DC 20549 on official waiver of certain fees, and to amend the corresponding to the number of cabinets
business days between the hours of visitor security escort requirements and housed therein, and charges fees for the
10:00 a.m. and 3:00 p.m. Copies of such fee. The Exchange proposes to amend cages based on the size.7 The physical
filing also will be available for the Arca Options Fee Schedule (the footprint of each cage is greater than
inspection and copying at the principal ‘‘Options Fee Schedule’’) and, through that of the cabinets that it houses, as
office of the Exchange. All comments its wholly owned subsidiary NYSE Arca each cage is constructed so as to include
received will be posted without change; Equities, Inc. (‘‘NYSE Arca Equities’’), aisles around the purchasing User’s
the Commission does not edit personal the NYSE Arca Equities Schedule of cabinets, for accessibility and in
identifying information from Fees and Charges for Exchange Services compliance with safety regulations.8
submissions. You should submit only (the ‘‘Equities Fee Schedule’’ and, Accordingly, in order to provide a User
information that you wish to make together with the Options Fee Schedule, with a cage, the Data Center must have
available publicly. All submissions the ‘‘Fee Schedules’’) to reflect the sufficient contiguous open space
should refer to File No. SR–NYSE– changes. The proposed rule change is
2016–13, and should be submitted on or available on the Exchange’s Web site at 5 The Exchange initially filed rule changes
before April 1, 2016. www.nyse.com, at the principal office of relating to its co-location services with the
Securities and Exchange Commission
For the Commission, by the Division of the Exchange, and at the Commission’s (‘‘Commission’’) in 2010. See Securities Exchange
Trading and Markets, pursuant to delegated Public Reference Room. Act Release No. 63275 (November 8, 2010), 75 FR
authority.21 70048 (November 16, 2010) (SR–NYSEArca–2010–
II. Self-Regulatory Organization’s 100) (the ‘‘Original Co-location Filing’’). The
Robert W. Errett,
Statement of the Purpose of, and Exchange operates a data center in Mahwah, New
Deputy Secretary. Statutory Basis for, the Proposed Rule Jersey (the ‘‘Data Center’’) from which it provides
[FR Doc. 2016–05433 Filed 3–10–16; 8:45 am] co-location services to Users.
Change 6 For purposes of the Exchange’s co-location
BILLING CODE 8011–01–P
services, a ‘‘User’’ means any market participant
In its filing with the Commission, the that requests to receive co-location services directly
self-regulatory organization included from the Exchange, a ‘‘Hosting User’’ means a User
SECURITIES AND EXCHANGE statements concerning the purpose of, that hosts a Hosted Customer in the User’s co-
COMMISSION and basis for, the proposed rule change location space, and a ‘‘Hosted Customer’’ means a
customer of a Hosting User that is hosted in a
[Release No. 34–77303; File No. SR– and discussed any comments it received Hosting User’s co-location space. See Securities
NYSEArca-2016–21] on the proposed rule change. The text Exchange Act Release No. 76010 (September 29,
of those statements may be examined at 2015), 80 FR 60197 (October 5, 2015) (SR–
Self-Regulatory Organizations; NYSE the places specified in Item IV below. NYSEArca–2015–82). As specified in the Fee
Schedules, a User that incurs co-location fees for a
Arca, Inc.; Notice of Filing of Proposed The Exchange has prepared summaries, particular co-location service pursuant thereto
Rule Change, as Modified by set forth in sections A, B, and C below, would not be subject to co-location fees for the
Amendment No. 1, Establishing of the most significant parts of such same co-location service charged by the Exchange’s
Procedures for the Allocation of Cages statements. affiliates New York Stock Exchange LLC and NYSE
MKT LLC. See Securities Exchange Act Release No.
to Its Co-Located Users, Including the 70173 (August 13, 2013), 78 FR 50459 (August 19,
Waiver of Certain Fees, and To Amend 2 15 U.S.C. 78a. 2013) (SR–NYSEArca–2013–80).
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the Visitor Security Escort 3 17 CFR 240.19b–4. 7 See Securities Exchange Act Release No. 67667
Requirements and Fee 4 In Amendment No. 1, the Exchange clarified the (August 15, 2012), 77 FR 50743 (August 22, 2012)
proposal to specify that the visitor escort fee is (SR–NYSEArca–2012–63) (‘‘2012 Release’’). A User
March 7, 2016. equitable because all Users of the Exchange’s Data must have at least two cabinets in the Data Center
Pursuant to Section 19(b)(1) 1 of the Center would be charged the same fee. The to purchase a cage. See Securities Exchange Act
Exchange also clarified the proposal to specify that Release No. 72720 (July 30, 2014), 79 FR 45577
Securities Exchange Act of 1934 (the while an individual User is on the waitlist for a (August 5, 2014) (SR–NYSEArca–2014–81) (‘‘2014
cabinet, it will be granted a fee waiver for 2 bundles Release’’).
21 17 CFR 200.30–3(a)(12). of 24 cross connects to be used to connect that 8 For example, a cage for 20 cabinets takes up as
1 15 U.S.C. 78s(b)(1). User’s non-contiguous cabinets. much floor space as 33 cabinets.
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![Federal Register / Vol. 81, No. 48 / Friday, March 11, 2016 / Notices 13007
a cage has no effect on a User’s orders publishes its reasons for so finding or For the Commission, by the Division of
going to, or trade data coming from, the (ii) as to which the Exchange consents, Trading and Markets, pursuant to delegated
Exchange, or the User’s ability to utilize the Commission shall: (a) By order authority.21
other co-location services, the Exchange approve or disapprove such proposed
believes that being waitlisted for a cage rule change, or (b) institute proceedings Robert W. Errett,
will not impose a burden on a User’s to determine whether the proposed rule Deputy Secretary.
ability to compete. The Exchange change should be disapproved. [FR Doc. 2016–05434 Filed 3–10–16; 8:45 am]
believes that the proposed allocation BILLING CODE 8011–01–P
IV. Solicitation of Comments
procedure would establish rational,
objective procedures that would reduce Interested persons are invited to
any potential for User confusion on how submit written data, views, and SECURITIES AND EXCHANGE
cages would be allocated should it arguments concerning the foregoing, COMMISSION
become necessary. including whether the proposed rule
[Release No. 34–77309; File No. SR–
The Exchange believes that the change is consistent with the Act.
NASDAQ–2016–035]
proposed amendment to the visitor Comments may be submitted by any of
security escort fee would not impose the following methods: Self-Regulatory Organizations; The
any burden on competition that is not Electronic Comments Nasdaq Stock Market LLC; Notice of
necessary or appropriate in furtherance Filing of Proposed Rule Change To
of the purposes of the Act because it • Use the Commission’s Internet
Establish a Secondary Contingency
would eliminate an unnecessary comment form (http://www.sec.gov/
Procedure To Enable the Exchange To
requirement, as the security purposes rules/sro.shtml); or
• Send an email to rule-comments@ Report an Official Closing Price on
that lead the Exchange to visitor Behalf of an Impaired Primary Listing
security escorts are not present when a sec.gov. Please include File No. SR–
NYSEArca–2016–21 on the subject line. Exchange
User representative is visiting the User’s
cage, because the User representative Paper Comments March 7, 2016.
would only have access to the Users’ Pursuant to Section 19(b)(1) of the
• Send paper comments in triplicate
cabinets, which would be in the Securities Exchange Act of 1934
to Secretary, Securities and Exchange
confined area within the locked cage. (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission, 100 F Street NE.,
The User representative would not have notice is hereby given that on March 2,
Washington, DC 20549–1090.
access to the cabinets of other Users or 2016, The Nasdaq Stock Market LLC
Exchange equipment, which are locked All submissions should refer to File No. (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
as well. The proposed rate of $75 per SR–NYSEArca–2016–21. This file Securities and Exchange Commission
number should be included on the (‘‘SEC’’ or ‘‘Commission’’) the proposed
visit for the Visitor Security Escort
subject line if email is used. To help the rule change as described in Items I, II,
would be a fee reduction for any visit
Commission process and review your
that lasted more than an hour, and so it and III below, which Items have been
comments more efficiently, please use
would reduce the burden placed on prepared by the Exchange. The
only one method. The Commission will
Users that are still subject to the fee. Commission is publishing this notice to
Finally, the Exchange notes that it post all comments on the Commission’s
solicit comments on the proposed rule
operates in a highly competitive market Internet Web site (http://www.sec.gov/
change from interested persons.
in which market participants can rules/sro.shtml). Copies of the
readily favor competing venues if they submission, all subsequent I. Self-Regulatory Organization’s
deem fee levels at a particular venue to amendments, all written statements Statement of the Terms of Substance of
be excessive. In such an environment, with respect to the proposed rule the Proposed Rule Change
the Exchange must continually review, change that are filed with the The Exchange proposes to establish a
and consider adjusting, its services and Commission, and all written Secondary Contingency Procedure that
related fees and credits to remain communications relating to the would enable the Exchange to report an
competitive with other exchanges. For proposed rule change between the Official Closing Price on behalf of an
the reasons described above, the Commission and any person, other than impaired primary listing exchange.
Exchange believes that the proposed those that may be withheld from the The text of the proposed rule change
rule change reflects this competitive public in accordance with the is available on the Exchange’s Web site
environment. provisions of 5 U.S.C. 552, will be at http://nasdaq.cchwallstreet.com, at
available for Web site viewing and the principal office of the Exchange, and
C. Self-Regulatory Organization’s printing in the Commission’s Public at the Commission’s Public Reference
Statement on Comments on the Reference Room, 100 F Street NE., Room.
Proposed Rule Change Received From Washington, DC 20549 on official
Members, Participants, or Others business days between the hours of II. Self-Regulatory Organization’s
No written comments were solicited 10:00 a.m. and 3:00 p.m. Copies of such Statement of the Purpose of, and
or received with respect to the proposed filing also will be available for Statutory Basis for, the Proposed Rule
rule change. inspection and copying at the principal Change
office of the Exchange. All comments In its filing with the Commission, the
III. Date of Effectiveness of the received will be posted without change;
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Proposed Rule Change and Timing for Exchange included statements
the Commission does not edit personal concerning the purpose of and basis for
Commission Action identifying information from the proposed rule change and discussed
Within 45 days of the date of submissions. You should submit only any comments it received on the
publication of this notice in the Federal information that you wish to make proposed rule change. The text of these
Register or within such longer period (i) available publicly. All submissions
as the Commission may designate up to should refer to File No. SR–NYSEArca– 21 17 CFR 200.30–3(a)(12).
90 days of such date if it finds such 2016–21, and should be submitted on or 1 15 U.S.C. 78s(b)(1).
longer period to be appropriate and before April 1, 2016. 2 17 CFR 240.19b–4.
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Document Created: 2016-03-11 01:51:30
Document Modified: 2016-03-11 01:51:30
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 13003 |
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