81_FR_49471 81 FR 49327 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services

81 FR 49327 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 144 (July 27, 2016)

Page Range49327-49331
FR Document2016-17663

Federal Register, Volume 81 Issue 144 (Wednesday, July 27, 2016)
[Federal Register Volume 81, Number 144 (Wednesday, July 27, 2016)]
[Notices]
[Pages 49327-49331]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17663]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78377; File No. SR-NYSEArca-2016-99]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule the NYSE Arca Equities Schedule of Fees and 
Charges for Exchange Services

July 21, 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 July 11, 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. 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 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 Fees and Charges for Exchange Services (the 
``Equities Fee Schedule'' and, together with the Options Fee Schedule, 
the ``Fee Schedules'') to add additional wireless connections and 
update or remove obsolete text. 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.

[[Page 49328]]

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's co-location \4\ services include the means for Users 
\5\ to receive market data feeds from third party markets (``Third 
Party Data'') through a wireless connection.\6\ The Exchange currently 
offers wireless connectivity to six Third Party Data feeds.\7\ The 
Exchange proposes to amend the Fee Schedules to (a) expand the existing 
wireless connections to Bats Pitch BZX Gig shaped data (``BZX'') and 
DirectEdge EDGX Gig shaped data (``EDGX'') to include additional market 
data feeds, and (b) provide a wireless connection to NASDAQ TotalView 
Ultra (FPGA) and BX TotalView-ITCH data. The Exchange also proposes to 
update or remove obsolete text.
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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 Exchange operates a data center in Mahwah, 
New Jersey (the ``data center'') from which it provides co-location 
services to Users.
    \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. 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\ See Securities Exchange Act Release No. 76749 (December 23, 
2015), 80 FR 81640 (December 30, 2015) (SR-NYSEArca-2015-99) 
(``Wireless Approval Release'').
    \7\ See Securities Exchange Act Release No. 77118 (February 11, 
2016), 81 FR 8265 (February 18, 2016) (SR-NYSEArca-2016-04).
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    More specifically, the Exchange proposes to amend the connections 
to BZX and EDGX as follows:
     The wireless connection to BZX data would also include 
Bats Pitch BYX Gig shaped data (``BYX''), and
     the wireless connection to EDGX data would also include 
Bats EDGA Gig shaped data (``EDGA'').
    The related fees would not change.
    Any User that presently has a wireless connection to BZX or EDGX 
data would also receive BYX or EDGA data, respectively, upon 
effectiveness of the proposed change. Such User would not be required 
to pay a second non-recurring initial charge.
    In addition, the Exchange proposes to add a seventh Third Party 
Data feed, which would include NASDAQ TotalView Ultra (FPGA) and BX 
TotalView-ITCH data (``FPGA and TotalView-ITCH''). Both such data feeds 
are currently offered separately. For each wireless connection to FPGA 
and TotalView-ITCH, a User would be charged a $5,000 non-recurring 
initial charge and a monthly recurring charge (``MRC'') of $14,500.
    Any User that presently has a wireless connection to the separate 
FPGA and TotalView-ITCH feeds would become subject to the $14,500 MRC 
upon effectiveness of the proposed change. Such User would not be 
required to pay another non-recurring initial charge.
    The Exchange accordingly proposes to revise the Fee Schedules to 
include the following:

------------------------------------------------------------------------
              Description                        Amount of charge
------------------------------------------------------------------------
Wireless connection of Bats Pitch BZX    $5,000 per connection initial
 Gig shaped data and Bats Pitch BYX Gig   charge plus monthly charge per
 shaped data.                             connection of $6,000.
                                         Fees are subject to a 30-day
                                          testing period, during which
                                          the monthly charge per
                                          connection is waived.
Wireless connection of Bats EDGX Gig     $5,000 per connection initial
 shaped data and Bats EDGA Gig shaped     charge plus monthly charge per
 data.                                    connection of $6,000.
                                         Fees are subject to a 30-day
                                          testing period, during which
                                          the monthly charge per
                                          connection is waived.
Wireless connection of NASDAQ Totalview  $5,000 per connection initial
 Ultra (FPGA) and BX Totalview-ITCH       charge plus monthly charge per
 data.                                    connection of $14,500.
                                         Fees are subject to a 30-day
                                          testing period, during which
                                          the monthly charge per
                                          connection is waived.
------------------------------------------------------------------------

    As with all the Third Party Data, the Exchange would utilize a 
network vendor to provide a wireless connection to BZX and BYX, EDGX 
and EDGA or FPGA and TotalView-ITCH data (together, the ``Additional 
Third Party Data'') through wireless connections from an Exchange 
access center to its data center in Mahwah, New Jersey, through a 
series of towers equipped with wireless equipment. A User that wished 
to receive Additional Third Party Data would enter into a contract with 
the relevant third party provider, which would charge the User the 
applicable market data fees. The Exchange would charge the User fees 
for the wireless connection.\8\
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    \8\ A User only receives the Third Party Data for which it 
enters into a contract with the third party provider. If a User 
requested not to be connected to one of the Third Party Data feeds 
(for example, if it entered into a contract with BATS for BZX but 
not BYX, or for EDGA but not EDGX), the Exchange would only provide 
the wireless connection requested, but would charge the User the 
full $5000 initial fee, plus $6000/monthly fee for the wireless 
connection.
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    As with the previously approved wireless connections to Third Party 
Data, if a User purchases two wireless connections to Additional Third 
Party Data, it pays two non-recurring initial charges. Wireless 
connections include the use of one port for connectivity to Third Party 
Data.\9\ As with the previously approved wireless connections to Third 
Party Data, the Exchange proposes to waive the first month's MRC, to 
allow Users to test the receipt of Additional Third Party Data for a 
month before incurring any MRCs.
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    \9\ A User only requires one port to connect to the Third Party 
Data, irrespective of how many of the wireless connections it 
orders. It may, however, purchase additional ports. See Wireless 
Approval Release, supra note 6, at 81641.
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    The Exchange proposes to offer the wireless connections to provide 
Users with an alternative means of connectivity to Additional Third 
Party

[[Page 49329]]

Data. Currently, Users can receive such Third Party Data from wireless 
networks offered by third party vendors.\10\ Users may also receive 
connections to Additional Third Party Data through other methods, 
including, for example, from another User, through a telecommunications 
provider, or over the internet protocol (``IP'') network.\11\
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    \10\ Currently, at least six third party vendors offer Users 
wireless network connections using wireless equipment installed on 
towers and buildings near the data center.
    \11\ The IP network is a local area network available in the 
data center. See Securities Exchange Act Release No. 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).
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    The proposed connectivity to the FPGA and TotalView-ITCH data feeds 
would be available upon effectiveness. The proposed connectivity to the 
BZX and BYX or EDGX and EDGA data feeds is expected to be available no 
later than September 1, 2016. The Exchange will announce the date that 
the wireless connections will be made available through a customer 
notice.
    In addition, the Exchange proposes to replace the existing 
references to ``DirectEdge'' and ``BATS'' in the Fee Schedules with 
references to ``Bats'' in order to reflect the recent name changes of 
BATS Exchange, Inc. and EDGX Exchange, Inc. to Bats BZX Exchange, Inc. 
and Bats EDGX Exchange, Inc., respectively.\12\
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    \12\ See Securities Exchange Act Release No. 77298 (March 4, 
2016), 81 FR 12757 (March 10, 2016) (SR-EDGX-2016-04) (notice of 
filing and immediate effectiveness of proposed rule change to 
reflect a legal name change by BATS Global Markets, Inc. and the 
legal names of certain subsidiaries).
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    Finally, the Exchange proposes to delete statements in the Fee 
Schedules that say that the wireless connections for Third Party Data 
are expected to be available no later than March 1, 2016, as such 
statements are obsolete. This proposed change would have no impact on 
pricing.
    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; \13\ 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.\14\
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    \13\ 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.
    \14\ See SR-NYSEArca-2013-80, supra note 5 at 50459. The 
Exchange's affiliates have also submitted substantially the same 
proposed rule change to propose the changes described herein. See 
SR-NYSE-2016-49 and SR-NYSEMKT-2016-70.
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    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\15\ in general, and Section 6(b)(5) of 
the Act,\16\ 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. The Exchange also believes that the proposed rule 
change furthers the objectives of Section 6(b)(4) of the Act,\17\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed service is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers because the proposed changes would provide Users with an 
alternative means of connectivity to the Additional Third Party Data. 
Users that do not opt to utilize the Exchange's proposed wireless 
connections would still be able to obtain the Additional Third Party 
Data through other methods, including, for example, from wireless 
networks offered by third party vendors, another User, through a 
telecommunications provider, or over the IP network. Users that opt to 
use wireless connections to Additional Third Party Data would receive 
the Additional Third Party Data that is available to all Users, as all 
market participants that contract with the relevant third party market 
for the Additional Third Party Data may receive it.
    The Exchange believes that this removes 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 it would provide Users with choices with respect to 
the form and optimal latency of the connectivity they use to receive 
Additional Third Party Data, allowing a User that opts to receive such 
Additional Third Party Data to select the connectivity and number of 
ports that better suit its needs, helping it tailor its data center 
operations to the requirements of its business operations.
    The Exchange believes that the proposed change 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 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). All Users that voluntarily 
select wireless connections to Additional Third Party Data would be 
charged the same amount for the same services and would have their 
first month MRC for wireless connections waived.
    Overall, the Exchange believes that the proposed change is 
reasonable because the Exchange proposes to offer the wireless 
connections to described herein as a convenience to Users, but in doing 
so would 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 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

[[Page 49330]]

testing and ongoing maintenance of the network.
    The Exchange believes that it is reasonable not to charge a User a 
second non-recurring initial charge if it has a wireless connection to 
BZX or EDGX data as of the date of effectiveness of the proposed 
change, because such User would have already paid a non-recurring 
initial charge for the wireless connection to BZX or EDGX data that it 
already has. The Exchange believes that it is reasonable that a User 
that presently has a wireless connection to the separate FPGA and 
TotalView-ITCH feeds would become subject to the $14,500 MRC upon 
effectiveness of the proposed change, because such User would have the 
same service as a User that obtained wireless connectivity to the FPGA 
and TotalView-ITCH feeds after effectiveness. Similarly, the Exchange 
believes that it is reasonable that such a User would not be required 
to pay another non-recurring initial charge, because such User would 
have already paid non-recurring initial charges for the two wireless 
connections that it already has.
    The Exchange believes that it is reasonable that a User that has 
already purchased wireless connections to other Third Party Data would 
be charged a non-recurring initial charge when it purchases a wireless 
connection to Additional Third Party Data, because the Exchange would 
incur certain costs in installing the wireless connection to such Third 
Party Data irrespective of whether the User had existing wireless 
connections to other Third Party Data. Such costs related to initial 
installation include, in particular, costs related to personnel 
required for initial installation and testing. The costs associated 
with installing wireless connections are incrementally higher than 
those associated with installing fiber optics-based solutions.
    The Exchange believes that the proposed pricing is reasonable 
because it allows Users to select the Additional Third Party Data 
connectivity option that better suits their needs. The fees also 
reflect the benefit received by Users in terms of lower latency over 
the fiber optics option. For competitive reasons, the Exchange has 
opted not to change the existing fees for the BZX and EDGX Third Party 
Data feeds. Accordingly, Users that already receive the BZX or EDGX 
Third Party Data feed will receive an additional feed at no incremental 
cost.
    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 for a month before incurring any monthly recurring fees and may 
act as an incentive to Users to connect to Additional Third Party Data.
    Moreover, the Exchange believes that the proposed fees are 
equitably allocated and not unfairly discriminatory because the 
wireless connections to Additional Third Party Data would provide Users 
with an alternative means of connectivity to such feeds. Users that do 
not opt to utilize the Exchange's proposed wireless connections would 
still be able to obtain Additional Third Party Data through other 
methods, including, for example, from wireless networks offered by 
third party vendors, another User, through a telecommunications 
provider, or over the IP network. Users that opt to use wireless 
connections for Additional Third Party Data would receive the 
Additional Third Party Data that is available to all Users, as all 
market participants that contract with the relevant third party market 
for the Additional Third Party Data may receive it.
    The Exchange believes that deleting statements in the Fee Schedules 
that say that the wireless connections for Third Party Data are 
expected to be available no later than March 1, 2016, is reasonable, 
equitable and not unfairly discriminatory because the reference is 
obsolete and no longer has an impact on pricing. The Exchange also 
believes that replacing the existing references to ``DirectEdge'' and 
``BATS'' in the Fee Schedules with references to ``Bats'' is 
reasonable, equitable and not unfairly discriminatory, because it will 
reflect the recent name changes of BATS Exchange, Inc. and EDGX 
Exchange, Inc. to Bats BZX Exchange, Inc. and Bats EDGX Exchange, Inc., 
respectively. The proposed changes would result in the removal or 
update of obsolete text from the Fee Schedules and therefore add 
greater clarity to the Fee Schedules regarding the services offered and 
the applicable fees.
    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 proposed fees are 
reasonable, equitable, and not unfairly discriminatory.

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

    In accordance with Section 6(b)(8) of the Act,\18\ 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).
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    \18\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that the proposed rule changes 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 
provide Users with wireless connectivity to additional Third Party Data 
feeds. Currently, Users can receive Additional Third Party Data from 
wireless networks offered by third party vendors. Based on the 
information available to it, the Exchange believes that its proposed 
wireless connection would provide data at the same or similar speed and 
at the same or similar cost as the other wireless networks. 
Accordingly, the proposed wireless connections to Additional Third 
Party Data would provide Users with an additional wireless connectivity 
option, thereby enhancing competition.
    The Exchange notes that the proposed wireless connections to 
Additional Third Party Data would compete not just with other wireless 
connections to such Additional Third Party Data, but also with fiber 
optic network connections to Additional Third Party Data, which may be 
more attractive to some Users as they are more reliable and less 
susceptible to weather conditions. Users that do not opt to utilize 
wireless connections would be able to obtain Additional Third Party 
Data through other methods, including, for example, from another User, 
through a telecommunications provider, or over the IP network. In this 
way, the proposed changes would enhance competition by helping Users 
tailor their connectivity to Additional Third Party Data to the needs 
of their business operations by allowing them to select the form and 
optimal latency of the connectivity they use to receive such Additional 
Third Party Data that best suits their needs, helping them tailor their 
data center operations to the requirements of their business 
operations.
    The proposed wireless connections to Additional Third Party Data 
would traverse wireless connections through a

[[Page 49331]]

series of towers equipped with wireless equipment, including a pole on 
the grounds of the data center. The wireless network has exclusive 
rights to operate wireless equipment on the data center pole. The 
Exchange will not sell rights to third parties to operate wireless 
equipment on the pole, due to space limitations, security concerns, and 
the interference that would arise between equipment placed too closely 
together. In addition to space issues, there are contractual 
restrictions on the use of the roof that the Exchange has determined 
would not be met if it offered space on the roof for third party 
wireless equipment. Moreover, access to the pole or roof is not 
required for third parties to establish wireless networks that can 
compete with the Exchange's proposed service, as witnessed by the 
existing wireless networks currently serving Users. Based on the 
information available to it, the Exchange believes that its proposed 
wireless connections to Additional Third Party Data would provide data 
at the same or similar speed, and at the same or similar cost, as its 
proposed wireless connection, thereby enhancing competition.\19\
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    \19\ The Exchange notes that the distance of a wireless network 
provider's wireless equipment from the User is only one factor in 
determining overall latency. Other factors include the number of 
repeaters in the route, the number of switches the data has to 
travel through, and the millimeter wave and switch technology used.
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    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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \20\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\21\ A proposed rule 
change filed under Rule 19b-4(f)(6) normally does not become operative 
prior to 30 days after the date of filing.\22\ Rule 19b-4(f)(6)(iii), 
however, permits the Commission to designate a shorter time if such 
action is consistent with the protection of investors and the public 
interest.\23\
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    \20\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ Id.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow Users that elect to receive wireless 
connections to both NASDAQ Totalview Ultra (FPGA) and BX Totalview-ITCH 
data to do so without delay at a reduced fee through the new bundle 
price. The Commission has therefore determined to waive the 30-day 
operative delay and designate the proposed rule change as operative 
upon filing with the Commission.\24\
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    \24\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \25\ to determine whether the proposed 
rule change should be approved or disapproved.
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    \25\ 15 U.S.C. 78s(b)(2)(B).
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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-2016-99 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-NYSEArca-2016-99. 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-2016-99, and should be 
submitted on or before August 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-17663 Filed 7-26-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                                             Federal Register / Vol. 81, No. 144 / Wednesday, July 27, 2016 / Notices                                                  49327

                                                series of Managed Fund Shares is not in                  intra-day values of their underlying                  No. 7 thereto, be, and it hereby is,
                                                compliance with the applicable listing                   assets.                                               approved.
                                                requirements, the Exchange will                             The Exchange also amends the                         For the Commission, by the Division of
                                                commence delisting procedures under                      continued listing requirement in NYSE                 Trading and Markets, pursuant to delegated
                                                NYSE Arca Equities Rule 5.5(m).68                        Arca Equities Rule 8.600(d)(2)(A),                    authority.76
                                                   The Commission believes that the                      which is applicable to all Managed                    Brent J. Fields,
                                                Managed Fund Shares generic listing                      Fund Shares, to require dissemination
                                                                                                                                                               Secretary.
                                                criteria, taken together, should promote                 of the Portfolio Indicative Value at least
                                                                                                                                                               [FR Doc. 2016–17825 Filed 7–26–16; 8:45 am]
                                                the listing only of Managed Fund Shares                  every 15 seconds during the Core
                                                that are not susceptible to manipulation.                Trading Session, as defined in NYSE                   BILLING CODE 8011–01–P

                                                Additionally, the generic listing                        Arca Equities Rule 7.34. The
                                                standards as a whole should ensure that                  Commission believes that this
                                                                                                         requirement is consistent with the                    SECURITIES AND EXCHANGE
                                                the underlying portfolios are composed
                                                                                                         intraday indicative value dissemination               COMMISSION
                                                predominantly of securities and
                                                instruments for which available intra-                   requirement for Investment Company
                                                day values allow market participants to                  Units,71 as well as with the                          [Release No. 34–78377; File No. SR–
                                                identify and capitalize upon arbitrage                   representations made in support of                    NYSEArca–2016–99]
                                                opportunities, which in turn should                      approved proposals to list and trade
                                                help keep the intra-day prices of                        shares of other series of Managed Fund                Self-Regulatory Organizations; NYSE
                                                generically listed Managed Fund Shares                   Shares.72                                             Arca, Inc.; Notice of Filing and
                                                reasonably aligned with the intra-day                       Finally, the Exchange adds as an                   Immediate Effectiveness of Proposed
                                                values of their underlying assets.                       initial listing criterion applicable to all           Rule Change Amending the NYSE Arca
                                                                                                         Managed Fund Shares (including those                  Options Fee Schedule the NYSE Arca
                                                   For the reasons discussed above, the                                                                        Equities Schedule of Fees and
                                                Commission finds that the generic                        that are generically listed) the
                                                                                                         requirement that Managed Fund Shares                  Charges for Exchange Services
                                                listing standards for Managed Fund
                                                Shares are consistent with Section                       must have a stated investment objective,              July 21, 2016.
                                                6(b)(5) of the Act.69                                    which shall be adhered to under
                                                                                                         ‘‘Normal Market Conditions,’’ defined as                 Pursuant to Section 19(b)(1)1 of the
                                                   In addition, the Exchange amends                      circumstances including, but not                      Securities Exchange Act of 1934 (the
                                                certain requirements of NYSE Arca                        limited to, the absence of: Trading halts             ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                                Equities Rule 8.600 that apply to all                    in the applicable financial markets                   notice is hereby given that, on July 11,
                                                Managed Fund Shares (i.e., both fund                     generally; operational issues causing                 2016, NYSE Arca, Inc. (the ‘‘Exchange’’
                                                shares listed generically under the                      dissemination of inaccurate market                    or ‘‘NYSE Arca’’) filed with the
                                                proposed standards and fund shares                       information or systems failure; or force              Securities and Exchange Commission
                                                listed pursuant to filings by the                        majeure type events, such as natural or               (the ‘‘Commission’’) the proposed rule
                                                Exchange under Section 19(b)(1) of the                   man-made disaster, act of God, armed                  change as described in Items I and II
                                                Act and Rule 19b–4 thereunder).                          conflict, act of terrorism, riot or labor             below, which Items have been prepared
                                                Specifically, the Exchange specifies the                 disruption, or any similar intervening                by the self-regulatory organization. The
                                                information that must be included in                     circumstance.73 The Commission                        Commission is publishing this notice to
                                                the Disclosed Portfolio disseminated by                  believes that this proposed change is                 solicit comments on the proposed rule
                                                each actively managed ETF. Previously                    consistent with previous Commission                   change from interested persons.
                                                approved listing rules for specific ETFs                 approvals of specific ETFs listed as
                                                listed as Managed Fund Shares have                       Managed Fund Shares.                                  I. Self-Regulatory Organization’s
                                                included identical disclosure                                                                                  Statement of the Terms of the Substance
                                                requirements.70 The mandatory                               For the foregoing reasons, the
                                                                                                         Commission finds that the proposed                    of the Proposed Rule Change
                                                disclosures include information that
                                                                                                         rule change, as modified by Amendment                    The Exchange proposes to amend the
                                                market participants can use to value an
                                                                                                         No. 7 thereto, is consistent with Section             NYSE Arca Options Fee Schedule (the
                                                actively managed ETF’s holdings intra-
                                                                                                         6(b)(5) of the Act 74 and the rules and               ‘‘Options Fee Schedule’’) and, through
                                                day, which should facilitate arbitrage
                                                opportunities that should help keep the                  regulations thereunder applicable to a                its wholly owned subsidiary NYSE Arca
                                                intra-day prices of Managed Fund                         national securities exchange.                         Equities, Inc. (‘‘NYSE Arca Equities’’),
                                                Shares reasonably aligned with the                       IV. Conclusion                                        the NYSE Arca Equities Schedule of
                                                                                                                                                               Fees and Charges for Exchange Services
                                                Managed Fund Shares includes a representation
                                                                                                           It is therefore ordered, pursuant to                (the ‘‘Equities Fee Schedule’’ and,
                                                that the exchange will ‘‘surveil’’ for compliance        Section 19(b)(2) of the Act,75 that the               together with the Options Fee Schedule,
                                                with the continued listing requirements. See, e.g.,      proposed rule change (SR–NYSEArca–                    the ‘‘Fee Schedules’’) to add additional
                                                Securities Exchange Act Release No. 78005 (Jun. 7,       2015–110), as modified by Amendment
                                                2016), 81 FR 38247 (Jun. 13, 2016) (SR–BATS–                                                                   wireless connections and update or
                                                2015–100). In the context of this representation, it                                                           remove obsolete text. The proposed rule
                                                                                                           71 See, e.g., Commentary .01(c) and Commentary
                                                is the Commission’s view that ‘‘monitor’’ and                                                                  change is available on the Exchange’s
                                                ‘‘surveil’’ both mean ongoing oversight of a fund’s      .02(c) to NYSE Arca Equities Rule 5.2(j)(3)
                                                compliance with the continued listing                    (currently requiring the index-based ETF’s intraday   Web site at www.nyse.com, at the
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                                                requirements. Therefore, the Commission does not         indicative value to be disseminated at least every    principal office of the Exchange, and at
                                                view ‘‘monitor’’ as a more or less stringent             15 seconds only during the Core Trading Session       the Commission’s Public Reference
                                                obligation than ‘‘surveil’’ with respect to the          of the Exchange).
                                                                                                           72 See Amendment No. 7, supra note 18, at 20–
                                                                                                                                                               Room.
                                                continued listing requirements.
                                                   68 See Amendment No. 7, supra note 18, at 19.         21.
                                                   69 15 U.S.C. 78f(b)(5).                                 73 See NYSE Arca Equities Rule 8.600(c)(5). See       76 17 CFR 200.30–3(a)(12).
                                                   70 See, e.g., Securities Exchange Act Release No.     also NYSE Arca Equities Rule 8.600(d)(1)(C).            1 15 U.S.C.78s(b)(1).
                                                                                                           74 15 U.S.C. 78f(b)(5).                               2 15 U.S.C. 78a.
                                                72666 (July 3, 2014), 79 FR 44224 (July 30, 2014)
                                                (SR–NYSEArca–2013–122).                                    75 15 U.S.C. 78s(b)(2).                               3 17 CFR 240.19b–4.




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                                                49328                         Federal Register / Vol. 81, No. 144 / Wednesday, July 27, 2016 / Notices

                                                II. Self-Regulatory Organization’s                       wireless connection.6 The Exchange                     respectively, upon effectiveness of the
                                                Statement of the Purpose of, and                         currently offers wireless connectivity to              proposed change. Such User would not
                                                Statutory Basis for, the Proposed Rule                   six Third Party Data feeds.7 The                       be required to pay a second non-
                                                Change                                                   Exchange proposes to amend the Fee                     recurring initial charge.
                                                   In its filing with the Commission, the                Schedules to (a) expand the existing                      In addition, the Exchange proposes to
                                                self-regulatory organization included                    wireless connections to Bats Pitch BZX                 add a seventh Third Party Data feed,
                                                statements concerning the purpose of,                    Gig shaped data (‘‘BZX’’) and                          which would include NASDAQ
                                                and basis for, the proposed rule change                  DirectEdge EDGX Gig shaped data                        TotalView Ultra (FPGA) and BX
                                                and discussed any comments it received                   (‘‘EDGX’’) to include additional market                TotalView-ITCH data (‘‘FPGA and
                                                on the proposed rule change. The text                    data feeds, and (b) provide a wireless                 TotalView-ITCH’’). Both such data feeds
                                                of those statements may be examined at                   connection to NASDAQ TotalView Ultra                   are currently offered separately. For
                                                the places specified in Item IV below.                   (FPGA) and BX TotalView-ITCH data.                     each wireless connection to FPGA and
                                                The Exchange has prepared summaries,                     The Exchange also proposes to update                   TotalView-ITCH, a User would be
                                                set forth in sections A, B, and C below,                 or remove obsolete text.                               charged a $5,000 non-recurring initial
                                                of the most significant parts of such                       More specifically, the Exchange                     charge and a monthly recurring charge
                                                statements.                                              proposes to amend the connections to                   (‘‘MRC’’) of $14,500.
                                                                                                         BZX and EDGX as follows:
                                                A. Self-Regulatory Organization’s                           • The wireless connection to BZX                       Any User that presently has a wireless
                                                Statement of the Purpose of, and                         data would also include Bats Pitch BYX                 connection to the separate FPGA and
                                                Statutory Basis for, the Proposed Rule                   Gig shaped data (‘‘BYX’’), and                         TotalView-ITCH feeds would become
                                                Change                                                      • the wireless connection to EDGX                   subject to the $14,500 MRC upon
                                                                                                         data would also include Bats EDGA Gig                  effectiveness of the proposed change.
                                                1. Purpose                                                                                                      Such User would not be required to pay
                                                                                                         shaped data (‘‘EDGA’’).
                                                   The Exchange’s co-location 4 services                    The related fees would not change.                  another non-recurring initial charge.
                                                include the means for Users 5 to receive                    Any User that presently has a wireless                 The Exchange accordingly proposes to
                                                market data feeds from third party                       connection to BZX or EDGX data would                   revise the Fee Schedules to include the
                                                markets (‘‘Third Party Data’’) through a                 also receive BYX or EDGA data,                         following:

                                                                                   Description                                                                    Amount of charge

                                                Wireless connection of Bats Pitch BZX Gig shaped data and Bats Pitch                 $5,000 per connection initial charge plus monthly charge per          connec-
                                                 BYX Gig shaped data.                                                                  tion of $6,000.
                                                                                                                                     Fees are subject to a 30-day testing period, during which the         monthly
                                                                                                                                       charge per connection is waived.
                                                Wireless connection of Bats EDGX Gig shaped data and Bats EDGA                       $5,000 per connection initial charge plus monthly charge per          connec-
                                                 Gig shaped data.                                                                      tion of $6,000.
                                                                                                                                     Fees are subject to a 30-day testing period, during which the         monthly
                                                                                                                                       charge per connection is waived.
                                                Wireless connection of NASDAQ Totalview Ultra (FPGA) and BX                          $5,000 per connection initial charge plus monthly charge per          connec-
                                                 Totalview-ITCH data.                                                                  tion of $14,500.
                                                                                                                                     Fees are subject to a 30-day testing period, during which the         monthly
                                                                                                                                       charge per connection is waived.



                                                   As with all the Third Party Data, the                 Party Data would enter into a contract                 the use of one port for connectivity to
                                                Exchange would utilize a network                         with the relevant third party provider,                Third Party Data.9 As with the
                                                vendor to provide a wireless connection                  which would charge the User the                        previously approved wireless
                                                to BZX and BYX, EDGX and EDGA or                         applicable market data fees. The                       connections to Third Party Data, the
                                                FPGA and TotalView-ITCH data                             Exchange would charge the User fees for                Exchange proposes to waive the first
                                                (together, the ‘‘Additional Third Party                  the wireless connection.8                              month’s MRC, to allow Users to test the
                                                Data’’) through wireless connections                       As with the previously approved                      receipt of Additional Third Party Data
                                                from an Exchange access center to its                    wireless connections to Third Party                    for a month before incurring any MRCs.
                                                data center in Mahwah, New Jersey,                       Data, if a User purchases two wireless                   The Exchange proposes to offer the
                                                through a series of towers equipped                      connections to Additional Third Party                  wireless connections to provide Users
                                                with wireless equipment. A User that                     Data, it pays two non-recurring initial                with an alternative means of
                                                wished to receive Additional Third                       charges. Wireless connections include                  connectivity to Additional Third Party
                                                   4 The Exchange initially filed rule changes           incurs co-location fees for a particular co-location      8 A User only receives the Third Party Data for

                                                relating to its co-location services with the            service pursuant thereto would not be subject to co-   which it enters into a contract with the third party
                                                Securities and Exchange Commission                       location fees for the same co-location service         provider. If a User requested not to be connected
                                                (‘‘Commission’’) in 2010. See Securities Exchange        charged by the Exchange’s affiliates New York          to one of the Third Party Data feeds (for example,
                                                Act Release No. 63275 (November 8, 2010), 75 FR          Stock Exchange LLC and NYSE MKT LLC. See               if it entered into a contract with BATS for BZX but
                                                70048 (November 16, 2010) (SR–NYSEArca–2010–             Securities Exchange Act Release No. 70173 (August      not BYX, or for EDGA but not EDGX), the Exchange
                                                100). The Exchange operates a data center in
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                                                                                                         13, 2013), 78 FR 50459 (August 19, 2013) (SR–          would only provide the wireless connection
                                                Mahwah, New Jersey (the ‘‘data center’’) from
                                                                                                         NYSEArca–2013–80).                                     requested, but would charge the User the full $5000
                                                which it provides co-location services to Users.
                                                   5 For purposes of the Exchange’s co-location
                                                                                                           6 See Securities Exchange Act Release No. 76749      initial fee, plus $6000/monthly fee for the wireless
                                                services, a ‘‘User’’ means any market participant        (December 23, 2015), 80 FR 81640 (December 30,         connection.
                                                that requests to receive co-location services directly   2015) (SR–NYSEArca–2015–99) (‘‘Wireless                   9 A User only requires one port to connect to the

                                                from the Exchange. See Securities Exchange Act           Approval Release’’).                                   Third Party Data, irrespective of how many of the
                                                Release No. 76010 (September 29, 2015), 80 FR              7 See Securities Exchange Act Release No. 77118      wireless connections it orders. It may, however,
                                                60197 (October 5, 2015) (SR–NYSEArca–2015–82).           (February 11, 2016), 81 FR 8265 (February 18, 2016)    purchase additional ports. See Wireless Approval
                                                As specified in the Fee Schedules, a User that           (SR–NYSEArca–2016–04).                                 Release, supra note 6, at 81641.



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                                                                               Federal Register / Vol. 81, No. 144 / Wednesday, July 27, 2016 / Notices                                                  49329

                                                Data. Currently, Users can receive such                    incur one charge for the particular co-                   the Additional Third Party Data through
                                                Third Party Data from wireless networks                    location service described herein,                        other methods, including, for example,
                                                offered by third party vendors.10 Users                    regardless of whether the User connects                   from wireless networks offered by third
                                                may also receive connections to                            only to the Exchange or to the Exchange                   party vendors, another User, through a
                                                Additional Third Party Data through                        and one or both of its affiliates.14                      telecommunications provider, or over
                                                other methods, including, for example,                       The proposed change is not otherwise                    the IP network. Users that opt to use
                                                from another User, through a                               intended to address any other issues                      wireless connections to Additional
                                                telecommunications provider, or over                       relating to co-location services and/or                   Third Party Data would receive the
                                                the internet protocol (‘‘IP’’) network.11                  related fees, and the Exchange is not                     Additional Third Party Data that is
                                                   The proposed connectivity to the                        aware of any problems that Users would                    available to all Users, as all market
                                                FPGA and TotalView-ITCH data feeds                         have in complying with the proposed                       participants that contract with the
                                                would be available upon effectiveness.                     change.                                                   relevant third party market for the
                                                The proposed connectivity to the BZX                                                                                 Additional Third Party Data may receive
                                                                                                           2. Statutory Basis
                                                and BYX or EDGX and EDGA data feeds                                                                                  it.
                                                is expected to be available no later than                     The Exchange believes that the                             The Exchange believes that this
                                                September 1, 2016. The Exchange will                       proposed rule change is consistent with
                                                                                                                                                                     removes impediments to, and perfects
                                                announce the date that the wireless                        Section 6(b) of the Act,15 in general, and
                                                                                                                                                                     the mechanisms of, a free and open
                                                connections will be made available                         Section 6(b)(5) of the Act,16 in
                                                                                                                                                                     market and a national market system
                                                through a customer notice.                                 particular, because it is designed to
                                                                                                                                                                     and, in general, protects investors and
                                                   In addition, the Exchange proposes to                   prevent fraudulent and manipulative
                                                                                                                                                                     the public interest because it would
                                                replace the existing references to                         acts and practices, to promote just and
                                                                                                                                                                     provide Users with choices with respect
                                                ‘‘DirectEdge’’ and ‘‘BATS’’ in the Fee                     equitable principles of trade, to foster
                                                                                                                                                                     to the form and optimal latency of the
                                                Schedules with references to ‘‘Bats’’ in                   cooperation and coordination with
                                                                                                                                                                     connectivity they use to receive
                                                order to reflect the recent name changes                   persons engaged in regulating, clearing,
                                                                                                                                                                     Additional Third Party Data, allowing a
                                                of BATS Exchange, Inc. and EDGX                            settling, processing information with
                                                                                                           respect to, and facilitating transactions                 User that opts to receive such
                                                Exchange, Inc. to Bats BZX Exchange,
                                                                                                           in securities, to remove impediments to,                  Additional Third Party Data to select the
                                                Inc. and Bats EDGX Exchange, Inc.,
                                                                                                           and perfect the mechanisms of, a free                     connectivity and number of ports that
                                                respectively.12
                                                   Finally, the Exchange proposes to                       and open market and a national market                     better suit its needs, helping it tailor its
                                                delete statements in the Fee Schedules                     system and, in general, to protect                        data center operations to the
                                                that say that the wireless connections                     investors and the public interest and                     requirements of its business operations.
                                                for Third Party Data are expected to be                    because it is not designed to permit                          The Exchange believes that the
                                                available no later than March 1, 2016, as                  unfair discrimination between                             proposed change is equitable and not
                                                such statements are obsolete. This                         customers, issuers, brokers, or dealers.                  unfairly discriminatory because it will
                                                proposed change would have no impact                       The Exchange also believes that the                       result in fees being charged only to
                                                on pricing.                                                proposed rule change furthers the                         Users that voluntarily select to receive
                                                   As is the case with all Exchange co-                    objectives of Section 6(b)(4) of the Act,17               the corresponding services and because
                                                location arrangements, (i) neither a User                  in particular, because it provides for the                those services will be available to all
                                                nor any of the User’s customers would                      equitable allocation of reasonable dues,                  Users. Furthermore, the Exchange
                                                be permitted to submit orders directly to                  fees, and other charges among its                         believes that the services and fees
                                                the Exchange unless such User or                           members, issuers and other persons                        proposed herein are not unfairly
                                                customer is a member organization, a                       using its facilities and does not unfairly                discriminatory and are equitably
                                                Sponsored Participant or an agent                          discriminate between customers,                           allocated because, in addition to the
                                                thereof (e.g., a service bureau providing                  issuers, brokers or dealers.                              services being completely voluntary,
                                                order entry services); (ii) use of the co-                    The Exchange believes that the                         they are available to all Users on an
                                                location services proposed herein would                    proposed service is not designed to                       equal basis (i.e., the same products and
                                                be completely voluntary and available                      permit unfair discrimination between                      services are available to all Users). All
                                                to all Users on a non-discriminatory                       customers, issuers, brokers, or dealers                   Users that voluntarily select wireless
                                                basis; 13 and (iii) a User would only                      because the proposed changes would                        connections to Additional Third Party
                                                                                                           provide Users with an alternative means                   Data would be charged the same amount
                                                   10 Currently, at least six third party vendors offer    of connectivity to the Additional Third                   for the same services and would have
                                                Users wireless network connections using wireless          Party Data. Users that do not opt to                      their first month MRC for wireless
                                                equipment installed on towers and buildings near           utilize the Exchange’s proposed wireless                  connections waived.
                                                the data center.
                                                   11 The IP network is a local area network available
                                                                                                           connections would still be able to obtain                     Overall, the Exchange believes that
                                                in the data center. See Securities Exchange Act                                                                      the proposed change is reasonable
                                                Release No. 74219 (February 6, 2015), 80 FR 7899           execution systems through the same order gateway,         because the Exchange proposes to offer
                                                (February 12, 2015) (SR–NYSEArca–2015–03)                  regardless of whether the sender is co-located in the     the wireless connections to described
                                                (notice of filing and immediate effectiveness of           data center or not. In addition, co-located Users do
                                                proposed rule change to include IP network                 not receive any market data or data service product       herein as a convenience to Users, but in
                                                connections).                                              that is not available to all Users, although Users that   doing so would incur certain costs,
                                                   12 See Securities Exchange Act Release No. 77298        receive co-location services normally would expect        including costs related to the data center
                                                                                                           reduced latencies in sending orders to, and
                                                (March 4, 2016), 81 FR 12757 (March 10, 2016) (SR–
                                                                                                           receiving market data from, the Exchange.
                                                                                                                                                                     facility, hardware and equipment and
                                                EDGX–2016–04) (notice of filing and immediate                                                                        costs related to personnel required for
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                                                                                                             14 See SR–NYSEArca–2013–80, supra note 5 at
                                                effectiveness of proposed rule change to reflect a
                                                legal name change by BATS Global Markets, Inc.             50459. The Exchange’s affiliates have also                initial installation and monitoring,
                                                and the legal names of certain subsidiaries).              submitted substantially the same proposed rule            support and maintenance of such
                                                   13 As is currently the case, Users that receive co-     change to propose the changes described herein.           services. The costs associated with the
                                                location services from the Exchange will not receive       See SR–NYSE–2016–49 and SR–NYSEMKT–2016–
                                                                                                           70.                                                       wireless connections are incrementally
                                                any means of access to the Exchange’s trading and
                                                execution systems that is separate from, or superior
                                                                                                             15 15 U.S.C. 78f(b).                                    higher than fiber optics-based solutions
                                                to, that of other Users. In this regard, all orders sent     16 15 U.S.C. 78f(b)(5).                                 due to the expense of the wireless
                                                to the Exchange enter the Exchange’s trading and             17 15 U.S.C. 78f(b)(4).                                 equipment, cost of installation and


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                                                49330                        Federal Register / Vol. 81, No. 144 / Wednesday, July 27, 2016 / Notices

                                                testing and ongoing maintenance of the                   recurring fees and may act as an                      B. Self-Regulatory Organization’s
                                                network.                                                 incentive to Users to connect to                      Statement on Burden on Competition
                                                   The Exchange believes that it is                      Additional Third Party Data.                             In accordance with Section 6(b)(8) of
                                                reasonable not to charge a User a second                     Moreover, the Exchange believes that              the Act,18 the Exchange believes that the
                                                non-recurring initial charge if it has a                 the proposed fees are equitably                       proposed rule change will not impose
                                                wireless connection to BZX or EDGX                       allocated and not unfairly                            any burden on competition that is not
                                                data as of the date of effectiveness of the              discriminatory because the wireless                   necessary or appropriate in furtherance
                                                proposed change, because such User                       connections to Additional Third Party                 of the purposes of the Act because, in
                                                would have already paid a non-                           Data would provide Users with an                      addition to the proposed services being
                                                recurring initial charge for the wireless                alternative means of connectivity to                  completely voluntary, they are available
                                                connection to BZX or EDGX data that it                   such feeds. Users that do not opt to                  to all Users on an equal basis (i.e. the
                                                already has. The Exchange believes that                  utilize the Exchange’s proposed wireless              same products and services are available
                                                it is reasonable that a User that                        connections would still be able to obtain
                                                presently has a wireless connection to                                                                         to all Users).
                                                                                                         Additional Third Party Data through                      The Exchange believes that the
                                                the separate FPGA and TotalView-ITCH                     other methods, including, for example,                proposed rule changes will not impose
                                                feeds would become subject to the                        from wireless networks offered by third               any burden on competition that is not
                                                $14,500 MRC upon effectiveness of the                    party vendors, another User, through a
                                                proposed change, because such User                                                                             necessary or appropriate in furtherance
                                                                                                         telecommunications provider, or over                  of the purposes of the Act because such
                                                would have the same service as a User                    the IP network. Users that opt to use
                                                that obtained wireless connectivity to                                                                         access will provide Users with wireless
                                                                                                         wireless connections for Additional                   connectivity to additional Third Party
                                                the FPGA and TotalView-ITCH feeds                        Third Party Data would receive the
                                                after effectiveness. Similarly, the                                                                            Data feeds. Currently, Users can receive
                                                                                                         Additional Third Party Data that is                   Additional Third Party Data from
                                                Exchange believes that it is reasonable                  available to all Users, as all market
                                                that such a User would not be required                                                                         wireless networks offered by third party
                                                                                                         participants that contract with the                   vendors. Based on the information
                                                to pay another non-recurring initial                     relevant third party market for the
                                                charge, because such User would have                                                                           available to it, the Exchange believes
                                                                                                         Additional Third Party Data may receive               that its proposed wireless connection
                                                already paid non-recurring initial                       it.
                                                charges for the two wireless connections                                                                       would provide data at the same or
                                                                                                             The Exchange believes that deleting               similar speed and at the same or similar
                                                that it already has.                                     statements in the Fee Schedules that say
                                                   The Exchange believes that it is                                                                            cost as the other wireless networks.
                                                                                                         that the wireless connections for Third               Accordingly, the proposed wireless
                                                reasonable that a User that has already                  Party Data are expected to be available
                                                purchased wireless connections to other                                                                        connections to Additional Third Party
                                                                                                         no later than March 1, 2016, is                       Data would provide Users with an
                                                Third Party Data would be charged a
                                                                                                         reasonable, equitable and not unfairly                additional wireless connectivity option,
                                                non-recurring initial charge when it
                                                                                                         discriminatory because the reference is               thereby enhancing competition.
                                                purchases a wireless connection to
                                                                                                         obsolete and no longer has an impact on                  The Exchange notes that the proposed
                                                Additional Third Party Data, because
                                                                                                         pricing. The Exchange also believes that              wireless connections to Additional
                                                the Exchange would incur certain costs
                                                                                                         replacing the existing references to                  Third Party Data would compete not
                                                in installing the wireless connection to
                                                                                                         ‘‘DirectEdge’’ and ‘‘BATS’’ in the Fee                just with other wireless connections to
                                                such Third Party Data irrespective of
                                                                                                         Schedules with references to ‘‘Bats’’ is              such Additional Third Party Data, but
                                                whether the User had existing wireless
                                                                                                         reasonable, equitable and not unfairly                also with fiber optic network
                                                connections to other Third Party Data.
                                                                                                         discriminatory, because it will reflect               connections to Additional Third Party
                                                Such costs related to initial installation
                                                include, in particular, costs related to                 the recent name changes of BATS                       Data, which may be more attractive to
                                                personnel required for initial                           Exchange, Inc. and EDGX Exchange, Inc.                some Users as they are more reliable
                                                installation and testing. The costs                      to Bats BZX Exchange, Inc. and Bats                   and less susceptible to weather
                                                associated with installing wireless                      EDGX Exchange, Inc., respectively. The                conditions. Users that do not opt to
                                                connections are incrementally higher                     proposed changes would result in the                  utilize wireless connections would be
                                                than those associated with installing                    removal or update of obsolete text from               able to obtain Additional Third Party
                                                fiber optics-based solutions.                            the Fee Schedules and therefore add                   Data through other methods, including,
                                                   The Exchange believes that the                        greater clarity to the Fee Schedules                  for example, from another User, through
                                                proposed pricing is reasonable because                   regarding the services offered and the                a telecommunications provider, or over
                                                it allows Users to select the Additional                 applicable fees.                                      the IP network. In this way, the
                                                Third Party Data connectivity option                         For the reasons above, the proposed               proposed changes would enhance
                                                that better suits their needs. The fees                  changes do not unfairly discriminate                  competition by helping Users tailor
                                                also reflect the benefit received by Users               between or among market participants                  their connectivity to Additional Third
                                                in terms of lower latency over the fiber                 that are otherwise capable of satisfying              Party Data to the needs of their business
                                                optics option. For competitive reasons,                  any applicable co-location fees,                      operations by allowing them to select
                                                the Exchange has opted not to change                     requirements, terms and conditions                    the form and optimal latency of the
                                                the existing fees for the BZX and EDGX                   established from time to time by the                  connectivity they use to receive such
                                                Third Party Data feeds. Accordingly,                     Exchange.                                             Additional Third Party Data that best
                                                Users that already receive the BZX or                        Finally, the Exchange believes that it            suits their needs, helping them tailor
                                                                                                         is subject to significant competitive
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                                                EDGX Third Party Data feed will receive                                                                        their data center operations to the
                                                an additional feed at no incremental                     forces, as described below in the                     requirements of their business
                                                cost.                                                    Exchange’s statement regarding the                    operations.
                                                   The Exchange believes that the                        burden on competition.                                   The proposed wireless connections to
                                                proposed waiver of the first month’s                         For these reasons, the Exchange                   Additional Third Party Data would
                                                MRC is reasonable as it would allow                      believes that the proposed fees are                   traverse wireless connections through a
                                                Users to test the receipt of the feed for                reasonable, equitable, and not unfairly
                                                a month before incurring any monthly                     discriminatory.                                         18 15   U.S.C. 78f(b)(8).



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                                                                             Federal Register / Vol. 81, No. 144 / Wednesday, July 27, 2016 / Notices                                                      49331

                                                series of towers equipped with wireless                  which it was filed, or such shorter time                  change is consistent with the Act.
                                                equipment, including a pole on the                       as the Commission may designate, it has                   Comments may be submitted by any of
                                                grounds of the data center. The wireless                 become effective pursuant to Section                      the following methods:
                                                network has exclusive rights to operate                  19(b)(3)(A)(iii) of the Act 20 and
                                                wireless equipment on the data center                    subparagraph (f)(6) of Rule 19b–4                         Electronic Comments
                                                pole. The Exchange will not sell rights                  thereunder.21 A proposed rule change                        • Use the Commission’s Internet
                                                to third parties to operate wireless                     filed under Rule 19b–4(f)(6) normally                     comment form (http://www.sec.gov/
                                                equipment on the pole, due to space                      does not become operative prior to 30                     rules/sro.shtml); or
                                                limitations, security concerns, and the                  days after the date of filing.22 Rule 19b–
                                                interference that would arise between                    4(f)(6)(iii), however, permits the                          • Send an email to rule-comments@
                                                equipment placed too closely together.                   Commission to designate a shorter time                    sec.gov. Please include File No. SR–
                                                In addition to space issues, there are                   if such action is consistent with the                     NYSEArca–2016–99 on the subject line.
                                                contractual restrictions on the use of the               protection of investors and the public                    Paper Comments
                                                roof that the Exchange has determined                    interest.23
                                                would not be met if it offered space on                     The Exchange has asked the                               • Send paper comments in triplicate
                                                the roof for third party wireless                        Commission to waive the 30-day                            to Brent J. Fields, Secretary, Securities
                                                equipment. Moreover, access to the pole                  operative delay so that the proposal may                  and Exchange Commission, 100 F Street
                                                or roof is not required for third parties                become operative immediately upon                         NE., Washington, DC 20549–1090.
                                                to establish wireless networks that can                  filing. The Commission believes that
                                                compete with the Exchange’s proposed                     waiver of the operative delay is                          All submissions should refer to File No.
                                                service, as witnessed by the existing                    consistent with the protection of                         SR–NYSEArca–2016–99. This file
                                                wireless networks currently serving                      investors and the public interest                         number should be included on the
                                                Users. Based on the information                          because such waiver will allow Users                      subject line if email is used. To help the
                                                available to it, the Exchange believes                   that elect to receive wireless                            Commission process and review your
                                                that its proposed wireless connections                   connections to both NASDAQ Totalview                      comments more efficiently, please use
                                                to Additional Third Party Data would                     Ultra (FPGA) and BX Totalview-ITCH                        only one method. The Commission will
                                                provide data at the same or similar                      data to do so without delay at a reduced                  post all comments on the Commission’s
                                                speed, and at the same or similar cost,                  fee through the new bundle price. The                     Internet Web site (http://www.sec.gov/
                                                as its proposed wireless connection,                     Commission has therefore determined to                    rules/sro.shtml). Copies of the
                                                thereby enhancing competition.19                         waive the 30-day operative delay and                      submission, all subsequent
                                                  Finally, the Exchange notes that it                    designate the proposed rule change as                     amendments, all written statements
                                                operates in a highly competitive market                  operative upon filing with the                            with respect to the proposed rule
                                                in which market participants can                         Commission.24                                             change that are filed with the
                                                readily favor competing venues if they                      At any time within 60 days of the                      Commission, and all written
                                                deem fee levels at a particular venue to                 filing of such proposed rule change, the                  communications relating to the
                                                be excessive. In such an environment,                    Commission summarily may                                  proposed rule change between the
                                                the Exchange must continually review,                    temporarily suspend such rule change if                   Commission and any person, other than
                                                and consider adjusting, its services and                 it appears to the Commission that such                    those that may be withheld from the
                                                related fees and credits to remain                       action is necessary or appropriate in the                 public in accordance with the
                                                competitive with other exchanges. For                    public interest, for the protection of                    provisions of 5 U.S.C. 552, will be
                                                the reasons described above, the                         investors, or otherwise in furtherance of                 available for Web site viewing and
                                                Exchange believes that the proposed                      the purposes of the Act. If the                           printing in the Commission’s Public
                                                rule change reflects this competitive                    Commission takes such action, the                         Reference Room, 100 F Street NE.,
                                                environment.                                             Commission shall institute proceedings                    Washington, DC 20549 on official
                                                C. Self-Regulatory Organization’s                        under Section 19(b)(2)(B) of the Act 25 to                business days between the hours of
                                                Statement on Comments on the                             determine whether the proposed rule                       10:00 a.m. and 3:00 p.m. Copies of such
                                                Proposed Rule Change Received From                       change should be approved or                              filing also will be available for
                                                Members, Participants, or Others                         disapproved.                                              inspection and copying at the principal
                                                                                                         IV. Solicitation of Comments                              office of the Exchange. All comments
                                                  No written comments were solicited                                                                               received will be posted without change;
                                                or received with respect to the proposed                   Interested persons are invited to                       the Commission does not edit personal
                                                rule change.                                             submit written data, views, and                           identifying information from
                                                III. Date of Effectiveness of the                        arguments concerning the foregoing,                       submissions. You should submit only
                                                Proposed Rule Change and Timing for                      including whether the proposed rule                       information that you wish to make
                                                Commission Action                                             20 15
                                                                                                                                                                   available publicly. All submissions
                                                                                                                  U.S.C. 78s(b)(3)(a)(iii).
                                                   Because the foregoing proposed rule                        21 17
                                                                                                                                                                   should refer to File No. SR–NYSEArca–
                                                                                                                  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                change does not: (i) Significantly affect                4(f)(6) requires a self-regulatory organization to give   2016–99, and should be submitted on or
                                                the protection of investors or the public                the Commission written notice of its intent to file       before August 17, 2016.
                                                                                                         the proposed rule change at least five business days
                                                interest; (ii) impose any significant                    prior to the date of filing of the proposed rule            For the Commission, by the Division of
                                                burden on competition; and (iii) become                  change, or such shorter time as designated by the         Trading and Markets, pursuant to delegated
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                                                operative for 30 days from the date on                   Commission. The Exchange has satisfied this               authority.26
                                                                                                         requirement.
                                                                                                           22 17 CFR 240.19b–4(f)(6)(iii).
                                                                                                                                                                   Robert W. Errett,
                                                   19 The Exchange notes that the distance of a

                                                wireless network provider’s wireless equipment
                                                                                                           23 Id.                                                  Deputy Secretary.
                                                                                                           24 For purposes only of waiving the 30-day              [FR Doc. 2016–17663 Filed 7–26–16; 8:45 am]
                                                from the User is only one factor in determining
                                                overall latency. Other factors include the number of     operative delay, the Commission has considered the
                                                                                                                                                                   BILLING CODE 8011–01–P
                                                repeaters in the route, the number of switches the       proposed rule’s impact on efficiency, competition,
                                                data has to travel through, and the millimeter wave      and capital formation. See 15 U.S.C. 78c(f).
                                                and switch technology used.                                25 15 U.S.C. 78s(b)(2)(B).                                26 17   CFR 200.30–3(a)(12).



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Document Created: 2018-02-08 08:02:49
Document Modified: 2018-02-08 08:02:49
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 Citation81 FR 49327 

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