81_FR_62377 81 FR 62203 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule and, the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Amend the Date That Two Wireless Connections to Third Party Data Feeds Are Expected To Be Available

81 FR 62203 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Options Fee Schedule and, the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Amend the Date That Two Wireless Connections to Third Party Data Feeds Are Expected To Be Available

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 174 (September 8, 2016)

Page Range62203-62205
FR Document2016-21495

Federal Register, Volume 81 Issue 174 (Thursday, September 8, 2016)
[Federal Register Volume 81, Number 174 (Thursday, September 8, 2016)]
[Notices]
[Pages 62203-62205]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21495]



[[Page 62203]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78752; File No. SR-NYSEArca-2016-122]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule and, the NYSE Arca Equities Schedule of Fees 
and Charges for Exchange Services To Amend the Date That Two Wireless 
Connections to Third Party Data Feeds Are Expected To Be Available

September 1, 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 August 24, 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, II, 
and III 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 amend the date that two wireless connections 
to third party data feeds are expected to be available. The proposed 
rule change is available on the Exchange's Web site at www.nyse.com, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend the Fee Schedules to amend the date 
that two wireless connections to third party data feeds are expected to 
be available.
    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 recently 
amended the Fee Schedules to:
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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 (``NYSE LLC'') and 
NYSE MKT LLC (``NYSE MKT''). 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).
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     Expand the existing wireless connection to Bats Pitch BZX 
Gig shaped data (``BZX'') to include Bats Pitch BYX Gig shaped data 
(``BYX''); and
     expand the existing wireless connection to Bats EDGX Gig 
shaped data (``EDGX'') to include Bats EDGA Gig shaped data 
(``EDGA'').\7\
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    \7\ See Securities Exchange Act Release No. 78377 (July 21, 
2016), 81 FR 49327 (July 27, 2016) (SR-NYSEArca-2016-99). The 
Commission designated the proposed rule change as operative upon 
filing with the Commission. Id. at 49331.
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    In its filing with the Securities and Exchange Commission 
(``Commission'') making such amendment, the Exchange stated that the 
proposed connectivity was expected to be available no later than 
September 1, 2016, and amended the Fee Schedules to note that 
connectivity to the BYX and EDGA data feeds was expected to be 
available no later than such date.\8\
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    \8\ Id. at 49329.
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    The Exchange now proposes to amend the Fee Schedules to update the 
expected availability date to December 31, 2016. As previously stated, 
the Exchange will announce the date that such wireless connections will 
be made available through a customer notice.
    No other aspect of the wireless connection to BZX and BYX or EDGX 
and EDGA (together, the ``Additional Third Party Data'') is being 
amended.
    By way of background, as with all wireless connections to Third 
Party Data, the Exchange would utilize a network vendor to provide a 
wireless connection to 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.\9\
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    \9\ A User only receives the Third Party Data for which it 
enters into a contract with the third party provider.
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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 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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    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; \12\ and 
(iii) a User would only

[[Page 62204]]

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.\13\
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    \12\ 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.
    \13\ 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-2016-61 and SR-NYSEMKT-2016-82.
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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,\14\ in general, and section 6(b)(4) of 
the Act,\15\ 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. 
The Exchange also believes that the proposed rule change furthers the 
objectives of 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change is reasonable, 
equitable and not unfairly discriminatory because amending the Fee 
Schedules to update the expected availability date for connectivity to 
the BYX and EDGA data feeds to December 31, 2016, would add greater 
clarity to the Fee Schedules regarding when such connectivity will be 
available and allow the Exchange more time to establish and test 
connectivity to the BYX and EDGA data feeds.
    The Exchange believes that the proposed change is equitable and not 
unfairly discriminatory because connectivity to the BYX and EDGA data 
feeds would be available to all Users on an equal basis (i.e., the 
connectivity to such feeds will be made available to all Users at the 
same time). Such connectivity is completely voluntary. 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.
    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,\17\ 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).
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that amending the Fee Schedules to update the 
expected availability date for connectivity to the BYX and EDGA data 
feeds to December 31, 2016, will not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because connectivity to the BYX and EDGA data feeds would be 
available to all Users on an equal basis (i.e., the connectivity to 
such feeds will be made available to all Users at the same time). The 
proposed change would add greater clarity to the Fee Schedules 
regarding when such connectivity will be available and allow the 
Exchange more time to establish and test connectivity to the BYX and 
EDGA data feeds. In addition, 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.
    The Exchange operates in a highly competitive market in which 
exchanges offer co-location services as a means to facilitate the 
trading and other market activities of those market participants who 
believe that co-location enhances the efficiency of their operations. 
Accordingly, fees charged for co-location services are constrained by 
the active competition for the order flow of, and other business from, 
such market participants. If a particular exchange charges excessive 
fees for co-location services, affected market participants will opt to 
terminate their co-location arrangements with that exchange, and adopt 
a possible range of alternative strategies, including placing their 
servers in a physically proximate location outside the exchange's data 
center (which could be a competing exchange), or pursuing strategies 
less dependent upon the lower exchange-to-participant latency 
associated with co-location. Accordingly, the exchange charging 
excessive fees would stand to lose not only co-location revenues but 
also the liquidity of the formerly co-located trading firms, which 
could have additional follow-on effects on the market share and revenue 
of the affected exchange.

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

    The foregoing rule change is effective upon filing pursuant to 
section 19(b)(3)(A) \18\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \19\ thereunder, because it establishes a due,

[[Page 62205]]

fee, or other charge imposed by the Exchange.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(2).
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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) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2016-122 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-2016-122. 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-2016-122, and should 
be submitted on or before September 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-21495 Filed 9-7-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                                             Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices                                                        62203

                                                  SECURITIES AND EXCHANGE                                  the places specified in Item IV below.                      The Exchange now proposes to amend
                                                  COMMISSION                                               The Exchange has prepared summaries,                     the Fee Schedules to update the
                                                                                                           set forth in sections A, B, and C below,                 expected availability date to December
                                                  [Release No. 34–78752; File No. SR–
                                                                                                           of the most significant parts of such                    31, 2016. As previously stated, the
                                                  NYSEArca–2016–122]
                                                                                                           statements.                                              Exchange will announce the date that
                                                  Self-Regulatory Organizations; NYSE                                                                               such wireless connections will be made
                                                                                                           A. Self-Regulatory Organization’s                        available through a customer notice.
                                                  Arca, Inc.; Notice of Filing and                         Statement of the Purpose of, and
                                                  Immediate Effectiveness of Proposed                                                                                  No other aspect of the wireless
                                                                                                           Statutory Basis for, the Proposed Rule                   connection to BZX and BYX or EDGX
                                                  Rule Change Amending the NYSE Arca                       Change
                                                  Options Fee Schedule and, the NYSE                                                                                and EDGA (together, the ‘‘Additional
                                                  Arca Equities Schedule of Fees and                       1. Purpose                                               Third Party Data’’) is being amended.
                                                                                                                                                                       By way of background, as with all
                                                  Charges for Exchange Services To                            The Exchange proposes to amend the                    wireless connections to Third Party
                                                  Amend the Date That Two Wireless                         Fee Schedules to amend the date that                     Data, the Exchange would utilize a
                                                  Connections to Third Party Data Feeds                    two wireless connections to third party                  network vendor to provide a wireless
                                                  Are Expected To Be Available                             data feeds are expected to be available.                 connection to the Additional Third
                                                                                                              The Exchange’s co-location 4 services                 Party Data through wireless connections
                                                  September 1, 2016.
                                                                                                           include the means for Users 5 to receive                 from an Exchange access center to its
                                                     Pursuant to section 19(b)(1) 1 of the
                                                                                                           market data feeds from third party                       data center in Mahwah, New Jersey,
                                                  Securities Exchange Act of 1934 (the
                                                                                                           markets (‘‘Third Party Data’’) through a                 through a series of towers equipped
                                                  ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                                                                                           wireless connection.6 The Exchange                       with wireless equipment. A User that
                                                  notice is hereby given that, on August
                                                                                                           recently amended the Fee Schedules to:                   wished to receive Additional Third
                                                  24, 2016, NYSE Arca, Inc. (the
                                                                                                             • Expand the existing wireless                         Party Data would enter into a contract
                                                  ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
                                                                                                           connection to Bats Pitch BZX Gig                         with the relevant third party provider,
                                                  the Securities and Exchange
                                                                                                           shaped data (‘‘BZX’’) to include Bats                    which would charge the User the
                                                  Commission (the ‘‘Commission’’) the
                                                                                                           Pitch BYX Gig shaped data (‘‘BYX’’);                     applicable market data fees. The
                                                  proposed rule change as described in
                                                                                                           and                                                      Exchange would charge the User fees for
                                                  Items I, II, and III below, which Items
                                                                                                             • expand the existing wireless                         the wireless connection.9
                                                  have been prepared by the self-
                                                                                                           connection to Bats EDGX Gig shaped                          The Exchange proposes to offer the
                                                  regulatory organization. The
                                                                                                           data (‘‘EDGX’’) to include Bats EDGA                     wireless connections to provide Users
                                                  Commission is publishing this notice to
                                                                                                           Gig shaped data (‘‘EDGA’’).7                             with an alternative means of
                                                  solicit comments on the proposed rule                       In its filing with the Securities and
                                                  change from interested persons.                                                                                   connectivity to Additional Third Party
                                                                                                           Exchange Commission (‘‘Commission’’)                     Data. Currently, Users can receive such
                                                  I. Self-Regulatory Organization’s                        making such amendment, the Exchange                      Third Party Data from wireless networks
                                                  Statement of the Terms of the Substance                  stated that the proposed connectivity                    offered by third party vendors.10 Users
                                                  of the Proposed Rule Change                              was expected to be available no later                    may also receive connections to
                                                     The Exchange proposes to amend the                    than September 1, 2016, and amended                      Additional Third Party Data through
                                                  NYSE Arca Options Fee Schedule (the                      the Fee Schedules to note that                           other methods, including, for example,
                                                  ‘‘Options Fee Schedule’’) and, through                   connectivity to the BYX and EDGA data                    from another User, through a
                                                  its wholly owned subsidiary NYSE Arca                    feeds was expected to be available no                    telecommunications provider, or over
                                                  Equities, Inc. (‘‘NYSE Arca Equities’’),                 later than such date.8                                   the internet protocol (‘‘IP’’) network.11
                                                  the NYSE Arca Equities Schedule of                                                                                   As is the case with all Exchange co-
                                                  Fees and Charges for Exchange Services
                                                                                                              4 The Exchange initially filed rule changes
                                                                                                                                                                    location arrangements, (i) neither a User
                                                                                                           relating to its co-location services with the            nor any of the User’s customers would
                                                  (the ‘‘Equities Fee Schedule’’ and,                      Securities and Exchange Commission
                                                  together with the Options Fee Schedule,                  (‘‘Commission’’) in 2010. See Securities Exchange        be permitted to submit orders directly to
                                                  the ‘‘Fee Schedules’’) to amend the date                 Act Release No. 63275 (November 8, 2010), 75 FR          the Exchange unless such User or
                                                  that two wireless connections to third                   70048 (November 16, 2010) (SR–NYSEArca–2010–             customer is a member organization, a
                                                                                                           100). The Exchange operates a data center in             Sponsored Participant or an agent
                                                  party data feeds are expected to be                      Mahwah, New Jersey (the ‘‘data center’’) from
                                                  available. The proposed rule change is                   which it provides co-location services to Users.
                                                                                                                                                                    thereof (e.g., a service bureau providing
                                                  available on the Exchange’s Web site at                     5 For purposes of the Exchange’s co-location          order entry services); (ii) use of the co-
                                                  www.nyse.com, at the principal office of                 services, a ‘‘User’’ means any market participant        location services proposed herein would
                                                  the Exchange, and at the Commission’s
                                                                                                           that requests to receive co-location services directly   be completely voluntary and available
                                                                                                           from the Exchange. See Securities Exchange Act           to all Users on a non-discriminatory
                                                  Public Reference Room.                                   Release No. 76010 (September 29, 2015), 80 FR
                                                                                                           60197 (October 5, 2015) (SR–NYSEArca–2015–82).           basis; 12 and (iii) a User would only
                                                  II. Self-Regulatory Organization’s                       As specified in the Fee Schedules, a User that
                                                  Statement of the Purpose of, and                         incurs co-location fees for a particular co-location       9 A User only receives the Third Party Data for

                                                  Statutory Basis for, the Proposed Rule                   service pursuant thereto would not be subject to co-     which it enters into a contract with the third party
                                                                                                           location fees for the same co-location service           provider.
                                                  Change                                                   charged by the Exchange’s affiliates New York              10 Currently, at least six third party vendors offer

                                                     In its filing with the Commission, the                Stock Exchange LLC (‘‘NYSE LLC’’) and NYSE MKT           Users wireless network connections using wireless
                                                                                                           LLC (‘‘NYSE MKT’’). See Securities Exchange Act          equipment installed on towers and buildings near
                                                  self-regulatory organization included                    Release No. 70173 (August 13, 2013), 78 FR 50459         the data center.
                                                  statements concerning the purpose of,                    (August 19, 2013) (SR–NYSEArca–2013–80).                   11 The IP network is a local area network available
mstockstill on DSK3G9T082PROD with NOTICES




                                                  and basis for, the proposed rule change                     6 See Securities Exchange Act Release No. 76749
                                                                                                                                                                    in the data center. See Securities Exchange Act
                                                  and discussed any comments it received                   (December 23, 2015), 80 FR 81640 (December 30,           Release No. 74219 (February 6, 2015), 80 FR 7899
                                                  on the proposed rule change. The text                    2015) (SR–NYSEArca–2015–99).                             (February 12, 2015) (SR–NYSEArca–2015–03)
                                                                                                              7 See Securities Exchange Act Release No. 78377       (notice of filing and immediate effectiveness of
                                                  of those statements may be examined at                   (July 21, 2016), 81 FR 49327 (July 27, 2016) (SR–        proposed rule change to include IP network
                                                                                                           NYSEArca–2016–99). The Commission designated             connections).
                                                    1 15 U.S.C. 78s(b)(1).                                 the proposed rule change as operative upon filing          12 As is currently the case, Users that receive co-
                                                    2 15 U.S.C. 78a.                                       with the Commission. Id. at 49331.                       location services from the Exchange will not receive
                                                    3 17 CFR 240.19b–4.                                       8 Id. at 49329.                                                                                   Continued




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                                                  62204                       Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices

                                                  incur one charge for the particular co-                    BYX and EDGA data feeds to December                    connectivity to such feeds will be made
                                                  location service described herein,                         31, 2016, would add greater clarity to                 available to all Users at the same time).
                                                  regardless of whether the User connects                    the Fee Schedules regarding when such                  The proposed change would add greater
                                                  only to the Exchange or to the Exchange                    connectivity will be available and allow               clarity to the Fee Schedules regarding
                                                  and one or both of its affiliates.13                       the Exchange more time to establish and                when such connectivity will be
                                                    The proposed change is not otherwise                     test connectivity to the BYX and EDGA                  available and allow the Exchange more
                                                  intended to address any other issues                       data feeds.                                            time to establish and test connectivity to
                                                  relating to co-location services and/or                       The Exchange believes that the                      the BYX and EDGA data feeds. In
                                                  related fees, and the Exchange is not                      proposed change is equitable and not                   addition, Users that do not opt to utilize
                                                  aware of any problems that Users would                     unfairly discriminatory because                        the Exchange’s proposed wireless
                                                  have in complying with the proposed                        connectivity to the BYX and EDGA data                  connections would still be able to obtain
                                                  change.                                                    feeds would be available to all Users on               the Additional Third Party Data through
                                                                                                             an equal basis (i.e., the connectivity to              other methods, including, for example,
                                                  2. Statutory Basis                                         such feeds will be made available to all               from wireless networks offered by third
                                                     The Exchange believes that the                          Users at the same time). Such                          party vendors, another User, through a
                                                  proposed rule change is consistent with                    connectivity is completely voluntary.                  telecommunications provider, or over
                                                  section 6(b) of the Act,14 in general, and                 Users that do not opt to utilize the                   the IP network.
                                                  section 6(b)(4) of the Act,15 in                           Exchange’s proposed wireless                              The Exchange operates in a highly
                                                  particular, because it provides for the                    connections would still be able to obtain              competitive market in which exchanges
                                                  equitable allocation of reasonable dues,                   the Additional Third Party Data through                offer co-location services as a means to
                                                  fees, and other charges among its                          other methods, including, for example,                 facilitate the trading and other market
                                                  members, issuers and other persons                         from wireless networks offered by third                activities of those market participants
                                                  using its facilities and does not unfairly                 party vendors, another User, through a                 who believe that co-location enhances
                                                  discriminate between customers,                            telecommunications provider, or over                   the efficiency of their operations.
                                                  issuers, brokers or dealers. The                           the IP network.                                        Accordingly, fees charged for co-
                                                  Exchange also believes that the                               For the reasons above, the proposed                 location services are constrained by the
                                                  proposed rule change furthers the                          changes do not unfairly discriminate                   active competition for the order flow of,
                                                  objectives of section 6(b)(5) of the Act,16                between or among market participants                   and other business from, such market
                                                  in particular, because it is designed to                   that are otherwise capable of satisfying               participants. If a particular exchange
                                                  prevent fraudulent and manipulative                        any applicable co-location fees,                       charges excessive fees for co-location
                                                  acts and practices, to promote just and                    requirements, terms and conditions                     services, affected market participants
                                                  equitable principles of trade, to foster                   established from time to time by the                   will opt to terminate their co-location
                                                  cooperation and coordination with                          Exchange.                                              arrangements with that exchange, and
                                                  persons engaged in regulating, clearing,                      Finally, the Exchange believes that it              adopt a possible range of alternative
                                                  settling, processing information with                      is subject to significant competitive                  strategies, including placing their
                                                  respect to, and facilitating transactions                  forces, as described below in the                      servers in a physically proximate
                                                  in securities, to remove impediments to,                   Exchange’s statement regarding the                     location outside the exchange’s data
                                                  and perfect the mechanisms of, a free                      burden on competition.                                 center (which could be a competing
                                                  and open market and a national market                         For these reasons, the Exchange                     exchange), or pursuing strategies less
                                                  system and, in general, to protect                         believes that the proposed fees are                    dependent upon the lower exchange-to-
                                                  investors and the public interest and                      reasonable, equitable, and not unfairly                participant latency associated with co-
                                                  because it is not designed to permit                       discriminatory.                                        location. Accordingly, the exchange
                                                  unfair discrimination between                              B. Self-Regulatory Organization’s                      charging excessive fees would stand to
                                                  customers, issuers, brokers, or dealers.                   Statement on Burden on Competition                     lose not only co-location revenues but
                                                     The Exchange believes that the                                                                                 also the liquidity of the formerly co-
                                                                                                                In accordance with section 6(b)(8) of               located trading firms, which could have
                                                  proposed change is reasonable,                             the Act,17 the Exchange believes that the
                                                  equitable and not unfairly                                                                                        additional follow-on effects on the
                                                                                                             proposed rule change will not impose                   market share and revenue of the affected
                                                  discriminatory because amending the                        any burden on competition that is not
                                                  Fee Schedules to update the expected                                                                              exchange.
                                                                                                             necessary or appropriate in furtherance
                                                  availability date for connectivity to the                  of the purposes of the Act because, in                 C. Self-Regulatory Organization’s
                                                                                                             addition to the proposed services being                Statement on Comments on the
                                                  any means of access to the Exchange’s trading and
                                                  execution systems that is separate from, or superior       completely voluntary, they are available               Proposed Rule Change Received From
                                                  to, that of other Users. In this regard, all orders sent   to all Users on an equal basis (i.e. the               Members, Participants, or Others
                                                  to the Exchange enter the Exchange’s trading and           same products and services are available                 No written comments were solicited
                                                  execution systems through the same order gateway,          to all Users).
                                                  regardless of whether the sender is co-located in the                                                             or received with respect to the proposed
                                                  data center or not. In addition, co-located Users do          The Exchange believes that amending                 rule change.
                                                  not receive any market data or data service product        the Fee Schedules to update the
                                                  that is not available to all Users, although Users that    expected availability date for                         III. Date of Effectiveness of the
                                                  receive co-location services normally would expect         connectivity to the BYX and EDGA data                  Proposed Rule Change and Timing for
                                                  reduced latencies in sending orders to, and                                                                       Commission Action
                                                  receiving market data from, the Exchange.                  feeds to December 31, 2016, will not
                                                                                                             impose any burden on competition that
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                                                    13 See SR–NYSEArca–2013–80, supra note 5, at                                                                       The foregoing rule change is effective
                                                  50459. The Exchange’s affiliates have also                 is not necessary or appropriate in                     upon filing pursuant to section
                                                  submitted substantially the same proposed rule             furtherance of the purposes of the Act                 19(b)(3)(A) 18 of the Act and
                                                  change to propose the changes described herein.
                                                  See SR–NYSE–2016–61 and SR–NYSEMKT–2016–
                                                                                                             because connectivity to the BYX and                    subparagraph (f)(2) of Rule 19b–4 19
                                                  82.                                                        EDGA data feeds would be available to                  thereunder, because it establishes a due,
                                                    14 15 U.S.C. 78f(b).                                     all Users on an equal basis (i.e., the
                                                    15 15 U.S.C. 78f(b)(4).                                                                                           18 15   U.S.C. 78s(b)(3)(A).
                                                    16 15 U.S.C. 78f(b)(5).                                   17 15   U.S.C. 78f(b)(8).                               19 17   CFR 240.19b–4(f)(2).



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                                                                                   Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices                                                      62205

                                                  fee, or other charge imposed by the                        10:00 a.m. and 3:00 p.m. Copies of such                   the Federal Register on July 20, 2016.5
                                                  Exchange.                                                  filing also will be available for                         The Commission received one comment
                                                     At any time within 60 days of the                       inspection and copying at the principal                   letter from the Exchange in response to
                                                  filing of such proposed rule change, the                   office of the Exchange. All comments                      the Notice.6 On September 1, 2016, the
                                                  Commission summarily may                                   received will be posted without change;                   Exchange filed an amendment to the
                                                  temporarily suspend such rule change if                    the Commission does not edit personal                     proposed rule change (‘‘Amendment No.
                                                  it appears to the Commission that such                     identifying information from                              1’’), which supersedes and replaces the
                                                  action is necessary or appropriate in the                  submissions. You should submit only                       proposal in its entirety.7
                                                  public interest, for the protection of                     information that you wish to make                            This order provides notice of filing of
                                                  investors, or otherwise in furtherance of                  available publicly. All submissions                       Amendment No. 1 and approves the
                                                  the purposes of the Act. If the                            should refer to File No. SR–NYSEArca–                     proposal, as modified by Amendment
                                                  Commission takes such action, the                          2016–122, and should be submitted on                      No. 1, on an accelerated basis.
                                                  Commission shall institute proceedings                     or before September 29, 2016.                             II. Description of the Amended
                                                  under section 19(b)(2)(B) 20 of the Act to                   For the Commission, by the Division of                  Proposal
                                                  determine whether the proposed rule                        Trading and Markets, pursuant to delegated
                                                  change should be approved or                               authority.21                                                 Proposed Exchange Rule 11.22(c)
                                                  disapproved.                                               Robert W. Errett,
                                                                                                                                                                       would specify the order handling for the
                                                                                                                                                                       following order types in Pilot Securities:
                                                  IV. Solicitation of Comments                               Deputy Secretary.
                                                                                                                                                                       (i) Market Orders; (ii) orders with a
                                                                                                             [FR Doc. 2016–21495 Filed 9–7–16; 8:45 am]
                                                    Interested persons are invited to                                                                                  Market Peg instruction; (iii) MidPoint
                                                                                                             BILLING CODE 8011–01–P                                    Peg Orders; (iv) orders with a
                                                  submit written data, views, and
                                                  arguments concerning the foregoing,                                                                                  Discretionary Range instruction; (v)
                                                  including whether the proposed rule                                                                                  Market Maker Peg Orders; (vi)
                                                                                                             SECURITIES AND EXCHANGE
                                                  change is consistent with the Act.                                                                                   Supplemental Peg Orders; and (vii)
                                                                                                             COMMISSION
                                                  Comments may be submitted by any of                                                                                  orders subject to the Display-Price
                                                  the following methods:                                     [Release No. 34–78767; File No. SR–                       Sliding process. As proposed, such
                                                                                                             BatsEDGX–2016–26]                                         order handling would apply to all
                                                  Electronic Comments                                                                                                  orders entered into the System for Pilot
                                                     • Use the Commission’s Internet                         Self-Regulatory Organizations; Bats                       Securities (i.e., Test Group One, Test
                                                  comment form (http://www.sec.gov/                          EDGX Exchange, Inc.; Notice of Filing                     Group Two, Test Group Three, and the
                                                  rules/sro.shtml); or                                       of Amendment No. 1 and Order                              Control Group). Additionally, the
                                                     • Send an email to rule-comments@                       Granting Accelerated Approval of a                        Exchange proposes to amend the last
                                                  sec.gov. Please include File No. SR–                       Proposed Rule Change, as Modified by                      sentence of Rule 11.22(a)(4) to specify
                                                  NYSEArca–2016–122 on the subject                           Amendment No. 1, To Amend                                 that the current permissible price
                                                  line.                                                      Exchange Rule 11.22 To Describe                           increments are set forth under Exchange
                                                                                                             Changes to System Functionality                           Rule 11.6(i), Minimum Price Variation.
                                                  Paper Comments                                             Necessary To Implement the                                   The Exchange proposes in Exchange
                                                    • Send paper comments in triplicate                      Regulation NMS Plan To Implement a                        Rule 11.22(c) specific procedures for
                                                  to Brent J. Fields, Secretary, Securities                  Tick Size Pilot Program                                   handling, executing, repricing and
                                                  and Exchange Commission, 100 F Street                                                                                displaying certain order types and order
                                                                                                             September 2, 2016.
                                                  NE., Washington, DC 20549–1090.                                                                                      type instructions. The provisions in
                                                  All submissions should refer to File No.                   I. Introduction                                           proposed Rule 11.22(c) would apply to
                                                  SR–NYSEArca–2016–122. This file                               On June 29, 2016, Bats EDGX                            all Pilot Securities. Further, the
                                                  number should be included on the                           Exchange, Inc. (‘‘Exchange’’ or ‘‘EDGX’’)                 Exchange proposes that only the
                                                  subject line if email is used. To help the                 filed with the Securities and Exchange                    provisions in Exchange Rules 11.22(a)
                                                  Commission process and review your                         Commission (‘‘Commission’’) pursuant                      and (b) would be limited to the Pilot
                                                  comments more efficiently, please use                      to Section 19(b)(1) of the Securities                     Period.8
                                                  only one method. The Commission will                       Exchange Act of 1934 (‘‘Exchange Act’’
                                                  post all comments on the Commission’s                      or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2
                                                                                                                                                                          5 Securities Exchange Act Release No. 78331 (July

                                                  Internet Web site (http://www.sec.gov/                                                                               14, 2016), 81 FR 47205 (‘‘Notice’’).
                                                                                                             a proposed rule change to adopt                              6 See Letter to Brent J. Fields, Secretary,
                                                  rules/sro.shtml). Copies of the                            Exchange Rule 11.22(c) to describe                        Commission, from Eric Swanson, General Counsel,
                                                  submission, all subsequent                                 changes to System 3 functionality to                      Exchange, dated July 26, 2016 (‘‘Exchange Letter’’).
                                                  amendments, all written statements                         implement the Regulation NMS Plan to                         7 In Amendment No. 1, the Exchange proposes to:

                                                  with respect to the proposed rule                                                                                    (1) Apply the changes in proposed Rule 11.22(c) to
                                                                                                             Implement a Tick Size Pilot Program                       all Pilot Securities; (2) clarify in Rule 11.22(c)(1)
                                                  change that are filed with the                             (‘‘Plan’’ or ‘‘Pilot’’).4 The proposed rule               that the increment for Market Orders and Rule
                                                  Commission, and all written                                change was published for comment in                       11.22(c)(5) that the increment for Market Maker Peg
                                                  communications relating to the                                                                                       Orders will be at ‘‘permissible’’ increments; (3) state
                                                  proposed rule change between the                             21 17                                                   in Rule 11.22(c)(2) that orders with a Market Peg
                                                                                                                      CFR 200.30–3(a)(12).
                                                                                                                                                                       instruction, Rule 11.22(c)(4) that orders with a
                                                  Commission and any person, other than                        1 15  U.S.C. 78s(b)(1).                                 Discretionary Range, and Rule 11.22(c)(6) that
                                                  those that may be withheld from the                           2 17 CFR 240.19b–4.
                                                                                                                                                                       Supplemental Peg Orders will not be accepted in
                                                                                                                3 The term ‘‘System’’ is defined as the ‘‘electronic
                                                  public in accordance with the                                                                                        Pilot Securities; (4) clarify in Rule 11.22(c)(3) that
                                                                                                             communications and trading facility designated by         MidPoint Peg Orders may not be alternatively
                                                  provisions of 5 U.S.C. 552, will be
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                                                                                                             the Board of Directors of the Exchange through            pegged to one minimum price variation inside the
                                                  available for Web site viewing and                         which securities orders of Users are consolidated         same side of the NBBO as the order; (5) delete the
                                                  printing in the Commission’s Public                        for ranking, execution and, when applicable,              proposal to amend orders with a Non-Displayed
                                                  Reference Room, 100 F Street NE.,                          routing away.’’ See Exchange Rule 1.5(cc).                instruction; and (6) clarify how orders subject to
                                                  Washington, DC 20549 on official                              4 See Securities Exchange Act Release No. 74892        Display-Price Sliding will operate when they are
                                                                                                             (May 6, 2015), 80 FR 27513 (May 13, 2015)                 unexecutable at the locking price.
                                                  business days between the hours of                         (‘‘Approval Order’’). Unless otherwise specified,            8 The Exchange proposes to clarify in the

                                                                                                             capitalized terms used in this rule filing are defined    introduction to Exchange Rule 11.22 that only the
                                                    20 15   U.S.C. 78s(b)(2)(B).                             as set forth in the Plan.                                                                              Continued




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Document Created: 2018-02-09 13:12:57
Document Modified: 2018-02-09 13:12:57
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 62203 

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