82 FR 3045 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Exchange's Price List Related to Co-location Services To Increase LCN and IP Network Fees and Add a Description of Access To Trading and Execution Services and Connectivity to Included Data Products
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 6 (January 10, 2017)
Federal Register Volume 82, Issue 6 (January 10, 2017)
| Page Range | 3045-3052 | |
| FR Document | 2017-00214 |
[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)] [Notices] [Pages 3045-3052] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-00214] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79730; File No. SR-NYSE-2016-92] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Exchange's Price List Related to Co-location Services To Increase LCN and IP Network Fees and Add a Description of Access To Trading and Execution Services and Connectivity to Included Data Products January 4, 2017. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the [[Page 3046]] ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on December 22, 2016, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') 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. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange's Price List related to co-location services to (a) provide a more detailed description of the access to trading and execution services and connectivity to data provided to Users with local area networks available in the data center, and (b) modify certain fees for access to the local area networks in the Exchange's data center. 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 Price List related to co- location \4\ services offered by the Exchange to (a) provide a more detailed description of the access to trading and execution services and connectivity to data provided to Users \5\ with connections to the Liquidity Center Network (``LCN'') and internet protocol (``IP'') network, local area networks available in the data center, and (b) modify certain fees for access to the LCN and IP networks. The Exchange proposes to implement the fee changes effective January 1, 2017. --------------------------------------------------------------------------- \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. 62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR- NYSE-2010-56) (the ``Original Co-location Filing''). The Exchange operates a data center in Mahwah, New Jersey (the ``data center'') from which it provides co-location services to Users. \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. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List, 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 NYSE MKT LLC (``NYSE MKT'') and NYSE Arca, Inc. (``NYSE Arca'' and, together with NYSE MKT, the ``Affiliate SROs''). See Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59). --------------------------------------------------------------------------- The Exchange offers LCN access of 1, 10 and 40 Gigabits (``Gb'') as well as a lower-latency 10 Gb LCN connection, referred to as the ``LCN 10 Gb LX.'' \6\ The Exchange offers IP network access in 1, 10 and 40 Gb capacities.\7\ A User also may purchase access to the LCN or IP network through purchase of 1 Gb or 10 Gb bundled network access or a Partial Cabinet Solution bundle, which include 1 and 10 Gb LCN and IP network connections.\8\ --------------------------------------------------------------------------- \6\ See Original Co-location Filing, supra note 4, at 59311; and Securities Exchange Act Release Nos. 70206 (Aug. 15, 2013), 78 FR 51765 (Aug. 21, 2013) (SR-NYSE-2013-59) (notice of filing and immediate effectiveness of proposed rule change to offer LCN 40 Gb connection); and 70888 (Nov. 15, 2013), 78 FR 69907 (Nov. 21, 2013) (SR-NYSE-2013-73) (notice of filing and immediate effectiveness of proposed rule change to offer LCN 10 Gb LX connection). \7\ See Securities Exchange Act Release Nos. 74222 (Feb. 6, 2015), 80 FR 7888 (Feb. 12, 2015) (SR-NYSE-2015-05) (notice of filing and immediate effectiveness of proposed rule change to offer IP network connections as co-location services) (the ``IP Network Release''), and 76369 (Nov. 5, 2015), 80 FR 70027 (Nov. 12, 2015) (SR-NYSE-2015-54) (notice of filing and immediate effectiveness of proposed rule change to offer 40 Gb IP network connection). \8\ See Securities Exchange Act Release Nos. 62732 (Aug 16, 2010), 75 FR 51512 (August 20, 2010) (notice of proposed rule change to reflect fees charged for co-location services, including bundled network access); and 77072 (February 5, 2016), 81 FR 7394 (February 11, 2016) (SR-NYSE-2015-53) (notice of filing and accelerated approval of proposed rule change to offer Partial Cabinet Bundle Options). --------------------------------------------------------------------------- Access to Trading and Execution Services and Connectivity to Data As the Exchange has previously stated, a User's connection to the LCN or IP network provides it access to the Exchange's trading and execution systems and Exchange market data products.\9\ More specifically, when a User purchases access to the LCN or IP network, it will receive access to the trading and execution systems of the Exchange and its Affiliate SROs (the ``Exchange Systems''), provided the User has authorization from the Exchange or relevant Affiliate SRO. In addition, when a User purchases access to the LCN or IP network, it will receive connectivity to certain market data products (the ``Included Data Products''), provided the User has have entered into a contract with the provider of the data feed. The Exchange proposes to revise the Price List to provide a more detailed description of the access to the Exchange Systems (``Access'') and connectivity to Included Data Products (``Connectivity'') that comes with connections to the LCN or IP network when the User has authorization from the Exchange or Affiliate SRO for such access or has a contract from the market data provider for such connectivity. --------------------------------------------------------------------------- \9\ See Original Co-location Filing, supra note 4, at 59311 (``According to NYSE, SFTI and LCN both provide Users with access to the Exchange's trading and execution systems and to the Exchange's proprietary market data products.'') and IP Network Release, supra note 7, at 7889 (``Like the LCN, the IP network provides Users with access to the Exchange's trading and execution systems and to the Exchanges' proprietary market data products.''). The IP network was previously sometimes referred to as SFTI. See id. --------------------------------------------------------------------------- Access to certification and testing feeds comes with the purchase of some Included Data Products from the provider of such data. Certification feeds are used to certify that a User conforms to any relevant technical requirements for receipt of data or access to Exchange Systems. Test feeds provide Users an environment in which to conduct tests with non-live data, including testing for upcoming Exchange releases and product enhancements or the User's own software development. Such feeds are solely used for certification and testing and do not carry live production data. When access to certification and testing feeds comes with the purchase of an Included Data Product from the provider of such data, the purchase of access to the IP network from the Exchange \10\ will provide Connectivity to such certification and testing feeds.' --------------------------------------------------------------------------- \10\ Access to certification and testing feeds is only available over the IP network. A User that does not have an IP network connection may obtain an IP network circuit for purposes of testing and certification for free for three months. See IP Network Release, supra note 7, at 7889. --------------------------------------------------------------------------- The Exchange provides Access and Connectivity as conveniences to Users. Use of Access or Connectivity is completely voluntary, and several other access and connectivity options are available to a User. As alternatives to [[Page 3047]] using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the Secure Financial Transaction Infrastructure (``SFTI'') network, or a combination thereof.\11\ --------------------------------------------------------------------------- \11\ A User that opted to obtain connectivity to Included Data Products through another User, a telecommunication provider, third party wireless network, or the SFTI network would receive the corresponding testing and certification feeds. --------------------------------------------------------------------------- Access to Exchange Systems As the Exchange has previously stated, Users' connections to the LCN or IP networks include access to Exchange Systems when the User has authorization from the Exchange or relevant Affiliate SRO.\12\ The Exchange notes that including access to Exchange Systems with the purchase of access to the LCN or IP network is consistent with Nasdaq's colocation service, which does not charge its co-located customers a separate fee for access to Exchange Systems.\13\ --------------------------------------------------------------------------- \12\ See note 9, supra. \13\ See Nasdaq Stock Market Rule 7034--Connectivity to Nasdaq. --------------------------------------------------------------------------- Accordingly, the Exchange proposes to add a new note to its Price List stating the following: When a User purchases access to the LCN or IP network, it receives the ability to access the trading and execution systems of the NYSE, NYSE MKT and NYSE Arca (Exchange Systems), subject, in each case, to authorization by the NYSE, NYSE MKT or NYSE Arca, as applicable. Such access includes access to the customer gateways that provide for order entry, order receipt (i.e. confirmation that an order has been received), receipt of drop copies and trade reporting (i.e. whether a trade is executed or cancelled), as well as for sending information to shared data services for clearing and settlement. A User can change the access it receives at any time, subject to authorization by NYSE, NYSE MKT or NYSE Arca, as applicable. NYSE, NYSE MKT and NYSE Arca also offer access to Exchange Systems to their members, such that a User does not have to purchase access to the LCN or IP network to obtain access to Exchange Systems. Connectivity to Included Data Products The majority of the Included Data Products are proprietary feeds of the Exchange and the Affiliate SROs.\14\ The Included Data Products also include the data feeds disseminated by the Consolidated Tape Association (``CTA'') (such data feeds, the ``NMS feeds''). CTA is responsible for disseminating consolidated, real-time trade and quote information in NYSE listed securities (Network A) and NYSE MKT, NYSE Arca and other regional exchanges' listed securities (Network B) pursuant to a national market system plan.\15\ The NMS feeds include the Consolidated Tape System and Consolidated Quote System data streams, as well as Options Price Reporting Authority feeds. --------------------------------------------------------------------------- \14\ See Securities Exchange Act Release Nos. 44138 (December 7, 2001), 66 FR 64895 (December 14, 2001) (SR-NYSE-2001-42) (establishing fees for NYSE OpenBook); 50844 (December 13, 2004), 69 FR 76806 (December 22, 2004) (SR-NYSE-2004-53) (establishing fee for NYSE Alerts); 59290 (January 23, 2009) 74 FR 5707 (January 30, 2009) (SR-NYSE- 2009-05) (establishing pilot program for NYSE Trades); 59543 (March 9, 2009), 74 FR 11159 (March 16, 2009) (establishing fee for NYSE Order Imbalances); 62181 (May 26, 2010), 75 FR 31488 (June 3, 2010) (SR-NYSE-2010-30) (establishing NYSE BBO); 65669 (Nov. 2, 2011), 76 FR 69311 (Nov. 8, 2011) (SR-NYSEArca-2011-78) (establishing the NYSE Arca Integrated Feed); 73553 (Nov. 6, 2014), 79 FR 67491 (Nov. 13, 2014) (SR-NYSE-2014-40) (establishing the NYSE Best Quote & Trades Data Feed); 74128 (Jan. 23, 2015), 80 FR 4951 (Jan. 29, 2015) (SR-NYSE-2015-03) (establishing the NYSE Integrated Feed); 74127 (Jan. 23, 2015), 80 FR 4956 (Jan. 29, 2015) (SR- NYSEMKT-2015-06) (establishing the NYSE MKT Integrated Feed); and 76968 (January 22, 2016), 81 FR 4689 (January 27, 2016) (establishing NYSE Arca Order Imbalances). \15\ The Included Data Products do not include the data feeds disseminated pursuant to the ``Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis'' (the ``UTP Plan''). The UTP Plan is responsible for disseminating consolidated, real-time trade and quote information in Nasdaq Stock Exchange LLC listed securities (Network C). --------------------------------------------------------------------------- In order to connect to an Included Data Product, a User enters into a contract with the provider of such data, pursuant to which the User is charged for the Included Data Product. After the User and data provider enter into the contract and the Exchange receives authorization from the provider of the data feed, the Exchange provides the User with connectivity to the Included Data Product over the User's LCN or IP network port. The Exchange does not charge the User separately for such connectivity to the Included Data Product, as it is included in the purchase of the access to the LCN or IP network. The Included Data Products are available over both the LCN and IP network.\16\ For a User that purchases access to the LCN and IP network, the Exchange works with such User to allocate its connectivity to Included Data Products between its LCN and IP network connections. Some Included Data Products require a network connection with a minimum Gb size in order to accommodate the feed.\17\ The Included Data Products do not provide access or order entry to the Exchange's execution system. --------------------------------------------------------------------------- \16\ As noted above, certification and testing feeds included by a data provider with an Included Data Product are only available over the IP network. \17\ Because each Included Data Product uses part of a User's bandwidth, a User may wish to limit the number of Included Data Products that it receives to those that it requires. --------------------------------------------------------------------------- The Exchange offers connectivity to Included Data Products in three forms: as a resilient feed, as ``Feed A'' or as ``Feed B.'' Resilient feeds include two copies of the same feed, for redundancy purposes. Feed A and Feed B are identical feeds.\18\ --------------------------------------------------------------------------- \18\ A User that wants redundancy would connect to both Feed A and Feed B or two resilient feeds, using two different ports. A User may opt to connect both Feed A and Feed B to the same port, the effect of which would be the same as if the User had connected to a resilient feed. The form of feed that a User selects may affect the connection it requires. For example, a User connecting to the NYSE Arca Integrated Feed, NYSE Integrated Feed or NYSE MKT Integrated Feed would need at least a 1 Gb IP network connection in order to connect to either Feed A or Feed B. To connect to a resilient feed, the User would require an LCN or IP network connection of at least 10 Gb. --------------------------------------------------------------------------- For some Included Data Products, connectivity to identical Feeds A and B is only available on the IP network. The Included Data Products are as follows: ------------------------------------------------------------------------ ------------------------------------------------------------------------- NMS feeds ------------------------------------------------------------------------ NYSE: NYSE Alerts NYSE BBO NYSE Integrated Feed NYSE OpenBook NYSE Order Imbalances NYSE Trades ------------------------------------------------------------------------ NYSE Amex Options ------------------------------------------------------------------------ NYSE Arca: NYSE ArcaBook NYSE Arca BBO NYSE Arca Integrated Feed NYSE Arca Order Imbalances NYSE Arca Trades ------------------------------------------------------------------------ NYSE Arca Options ------------------------------------------------------------------------ NYSE Best Quote and Trades (BQT) ------------------------------------------------------------------------ NYSE Bonds ------------------------------------------------------------------------ NYSE MKT: NYSE MKT Alerts NYSE MKT BBO NYSE MKT Integrated Feed NYSE MKT OpenBook NYSE MKT Order Imbalances NYSE MKT Trades ------------------------------------------------------------------------ [[Page 3048]] In addition to the above list of Included Data Products, the Exchange proposes to add the following language to the Price List: When a User purchases access to the LCN or IP network it receives connectivity to any of the Included Data Products that it selects, subject to any technical provisioning requirements and authorization from the provider of the data feed. Market data fees for the Included Data Products are charged by the provider of the data feed. A User can change the Included Data Products to which it receives connectivity at any time, subject to authorization from the provider of the data feed. The Exchange is not the exclusive method to connect to the Included Data Products. Fees for Access to the LCN and IP Network Users that connect to the LCN or IP network pay an initial non- recurring charge and a monthly recurring charge (``MRC''). A User that purchases five 10 GB LCN Circuits receives the sixth 10 GB LCN Circuit without being subject to an additional MRC. The Exchange proposes to amend the MRCs for 10 and 40 Gb LCN circuits, 10 Gb LX LCN circuits, 10 and 40 Gb IP network circuits, and the 10 Gb bundled network access (together, the ``Network Access Services''). The Exchange has not increased the MRCs for the Network Access Services since they were first filed: the proposed change will be the first increase in such fees.\19\ --------------------------------------------------------------------------- \19\ The 10 Gb LCN circuits and10 Gb bundled network access were first filed in 2010, and the 40 Gb LCN and 10 Gb LX LCN circuits were first filed in 2013. The 10 and 40 Gb IP network circuits were first filed in 2015. See Securities Exchange Act Release Nos. 62732, supra note 8; 65237 (Aug. 31, 2011), 76 FR 55432 (Sept. 7, 2011) (SR-NYSE-2011-46) (notice of filing and immediate effectiveness of proposed rule change adding MRC for 10 Gb circuit); 70287 (Aug. 29, 2013), 78 FR 54704 (Sept. 5, 2013) (SR-NYSE-2013-60) (notice of filing and immediate effectiveness of proposed rule change to offer LCN 40 Gb connection); 70979 (Dec. 4, 2013), 78 FR 74200 (Dec. 10, 2013) (SR-NYSE-2013-77) (notice of filing and immediate effectiveness of proposed rule change amending price list in order to provide fees for LCN 10 Gb LX); 74222 (Feb. 6, 2015), 80 FR 7888 (Feb. 12, 2015) (SR-NYSE-2015-05) (notice of filing and immediate effectiveness of proposed rule change to offer 1 Gb and 10 Gb IP network connections) and 76369 (Nov. 5, 2015), 80 FR 70027 (Nov. 12, 2015) (SR-NYSE-2015-54) (notice of filing and immediate effectiveness of proposed rule change to offer 40 Gb IP network connection). --------------------------------------------------------------------------- The proposed changes to the Network Access Service MRCs are as follows: ---------------------------------------------------------------------------------------------------------------- Amount of Amount of Type of service Description current MRC proposed MRC ---------------------------------------------------------------------------------------------------------------- LCN Access.................................... 10 Gb Circuit................... $12,000 $14,000 LCN Access.................................... 10 Gb LX Circuit................ 20,000 22,000 LCN Access.................................... 40 Gb Circuit................... 20,000 22,000 Bundled Network Access (2 LCN connections, 2 10 Gb Bundle.................... 47,000 53,000 IP network connections, and 2 optic connections to outside access center). IP Network Access............................. 10 Gb Circuit................... 10,000 11,000 IP Network Access............................. 40 Gb Circuit................... 17,000 18,000 ---------------------------------------------------------------------------------------------------------------- The initial non-recurring charge for the Network Access Services would not change, and Users that purchase five 10 Gb LCN circuits will continue to receive the sixth 10 Gb LCN Circuit without an additional MRC. The Exchange does not propose to change the fees associated with 1 Gb LCN and 1 Gb IP network access, 1 Gb bundled network access, or the Partial Cabinet Solution bundles. Currently, the Price List uses both ``Gb'' and ``GB'' as an abbreviation for gigabits. To make the usage consistent, the Exchange proposes to make non-substantive changes to the Price List to replace ``GB'' with ``Gb.'' General As is the case with all Exchange co-location arrangements, (i) neither a User nor any of the User's customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (e.g., a service bureau providing order entry services); (ii) use of the co-location services proposed herein would be completely voluntary and available to all Users on a non-discriminatory basis; \20\ 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 Affiliate SROs.\21\ --------------------------------------------------------------------------- \20\ 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, as compared to Users that are not co-located, in sending orders to, and receiving market data from, the Exchange. \21\ See SR-NYSE-2013-59, supra note 5, at 51766. The Affiliate SROs have also submitted substantially the same proposed rule change to propose the changes described herein. See SR-NYSEMKT-2016-126 and SR-NYSEArca-2016-172. --------------------------------------------------------------------------- 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,\22\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\23\ 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. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b). \23\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that revising the Price List to provide a more detailed description of the Access and Connectivity Users receive with their purchase of access to the LCN or IP network would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because the proposed changes would make the descriptions of access to the LCN and IP [[Page 3049]] network more accessible and transparent, thereby providing market participants with clarity as to what connectivity is included in the purchase of access to the LCN and IP network. Including the more detailed description of Access and Connectivity in the Price List is consistent with Nasdaq's Rule 7034, which includes similar information.\24\ --------------------------------------------------------------------------- \24\ See Nasdaq Stock Market Rule 7034--Market Data Connectivity (``Pricing is for connectivity only and is similar to connectivity fees imposed by other vendors. The fees are generally based on the amount of bandwidth needed to accommodate a particular feed and Nasdaq is not the exclusive method to get market data connectivity. Market data fees are charged independently by the Nasdaq Stock Market and other exchanges.'') --------------------------------------------------------------------------- Co-location was created to permit Users ``to rent space on premises controlled by the Exchange in order that they may locate their electronic servers in close physical proximity to the Exchange's trading and execution systems.'' \25\ The expectation was that normally Users ``would expect reduced latencies in sending orders to the Exchange and in receiving market data from the Exchange.'' \26\ Accordingly, the Exchange believes the Access and Connectivity is directly related to the purpose of co-location, and so revising the Price List to increase the description of such Access and Connectivity would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general protect investors and the public interest by increasing the transparency around Access and Connectivity. --------------------------------------------------------------------------- \25\ Original Co-Location Filing, supra note 4, at 59310. \26\ Id. --------------------------------------------------------------------------- Further, the Exchange believes that revising the Price List to provide a more detailed description of the Access and Connectivity Users receive with their purchase of access to the LCN or IP network would promote just and equitable principles of trade and remove impediments to, and perfect the mechanisms of, a free and open market and a national market system as it would make clear that all Users that voluntarily select to access the LCN or IP network would receive the same Access and Connectivity, and would not be subject to a charge above and beyond the fee paid for the relevant LCN or IP network access. Users are not required to use any of their bandwidth to access Exchange Systems or connect to an Included Data Product unless they wish to do so. Rather, a User only receives the Access and Connectivity that it selects, and a User can change what Access or Connectivity it receives at any time, subject to authorization from the data provider or relevant Exchange or Affiliate SRO. The Exchange believes that the proposed changes remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering Access and Connectivity, the Exchange gives each User additional options for addressing its access and connectivity needs, responding to User demand for access and connectivity options. Providing Access and Connectivity helps each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of access and connectivity that best suits its needs. The Exchange provides Access and Connectivity as conveniences to Users. Use of Access or Connectivity is completely voluntary, and each User has several other access and connectivity options available to it. As alternatives to using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the SFTI network, or a combination thereof. Similarly, the Exchange believes that the proposed fee changes remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering the Network Access Services, the Exchange gives each User options for access to the LCN and IP network, responding to User demand for options. Users have the convenience of choosing among the array of different Network Access Services available, as well as the 1 Gb LCN and 1 Gb IP network access options, 1 Gb bundled network access and Partial Cabinet Solutions, helping them tailor their data center operations to the requirements of their business operations by allowing them to select the capacity, form and latency of connectivity that best suits their needs. The Exchange believes that the proposed fee changes remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because the Exchange provides Network Access Services as conveniences to Users. Use of Network Access Services is completely voluntary, and each User has several other options available to it. As alternatives to using the Network Access Services provided by the Exchange, a User may access or connect to the Exchange through another User, as well as through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the SFTI network, or a combination thereof. The Exchange believes that conforming the use of ``Gb'' would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because the proposed changes would make the Price List more transparent, thereby providing market participants with additional clarity. The Exchange also believes that the proposed rule changes are consistent with Section 6(b)(4) of the Act,\27\ 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. --------------------------------------------------------------------------- \27\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that the proposed changes are consistent with Section 6(b)(4) of the Act \28\ for multiple reasons. 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 [[Page 3050]] additional follow-on effects on the market share and revenue of the affected exchange. --------------------------------------------------------------------------- \28\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that the proposed changes to the Network Access Service MRCs would provide for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities, and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, because the Network Access Services 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 purchase a Network Access Service would be charged the same amount for the same service. As is currently the case, the purchase of any colocation service (including Network Access Services) would be completely voluntary. Furthermore, each of the Network Access Services can be purchased independently of each other, and independently of any other colocation services or products that a User may choose. The Exchange believes that the proposed changes to the Network Access Service MRCs are reasonable, equitably allocated and not unfairly discriminatory because the MRCs for the Network Access Services have been the same since they were first filed, with some MRCs dating to the inception of co-location in 2010.\29\ During the time since the MRCs for the Network Access Services were filed, however, the Exchange has made numerous improvements to the network hardware and technology infrastructure. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including the increasing demand for bandwidth, and has established additional administrative controls. The Exchange offers the Network Access Services as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of the Network Access Services, including by responding to any production issues. The Exchange accordingly believes that the proposed changes to the Network Access Service MRCs will allow them to more accurately reflect the value of the services provided. --------------------------------------------------------------------------- \29\ See note 19, supra. The 10 LCN circuits and 1 Gb bundled network access were first filed in 2010, and the 40 Gb LCN and 10 Gb LX LCN circuits were first filed in 2013. The 10 and 40 Gb IP network circuits were first filed in 2015. --------------------------------------------------------------------------- The Exchange believes the proposed fees are reasonable because they allow the Exchange to defray or cover the costs associated with offering the Network Access Services while providing Users the benefit of choosing among the array of different Network Access Services available, as well as the 1 Gb LCN and 1 Gb IP network access options, 1 Gb bundled network access and Partial Cabinet Solutions, helping them tailor their data center operations to the requirements of their business operations by allowing them to select the capacity, form and latency of connectivity that best suits their needs. In addition, the Exchange believes the proposed increases in the MRCs for the Network Access Services are reasonable because they reflect the inclusion of additional data products in the list of Included Data Products. More specifically, the Exchange has opted to include connectivity to the three integrated feeds and the NYSE BQT as Included Data Products. The Exchange believes that its proposed MRCs for the Network Access Services are comparable to the fees Nasdaq charges its co-location customers. For instance, the ongoing monthly fees for 40 Gb and 10 Gb fiber connections to Nasdaq are $20,000 and $10,000, respectively, compared to the proposed $22,000 and $14,000 for the 40 Gb and 10 Gb LCN circuits and $18,000 and $11,000 for the 40 Gb and 10 Gb IP network circuits, respectively.\30\ --------------------------------------------------------------------------- \30\ See Nasdaq Stock Market Rule 7034--Connectivity to Nasdaq. --------------------------------------------------------------------------- Excluding the Partial Cabinet Solutions with 10 Gb connections to the LCN and IP networks from the proposed changes to MRCs is a business decision that the Exchange believes is reasonable, equitably allocated and not unfairly discriminatory because the MRCs for the Partial Cabinet Solutions have been in place less than a year, and so the Exchange believes they more accurately reflect the value of the services provided than those in place for longer periods.\31\ The Exchange believes that excluding the Partial Cabinet Solution MRCs from the present proposed changes would continue to make it more cost effective for smaller Users, including those with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome, to utilize co-location.\32\ --------------------------------------------------------------------------- \31\ The order approving the proposed rule change to provide that co-location services include the Partial Cabinet Solution Bundles was issued in February, 2016. See Securities Exchange Act Release No. 77072, supra note 8. \32\ See id, at 7396. --------------------------------------------------------------------------- Excluding the 1 Gb LCN, 1 Gb IP network access and 1 Gb bundled network access options from the proposed changes to the MRC is a business decision that the Exchange believes is reasonable, equitably allocated and not unfairly discriminatory, because the Exchange believes that the current MRCs for the services reflect the value of the services provided to the smallest connections. In addition, Users with 1 Gb connections generally do not connect to the new Included Data Products, which generally require a larger connection than 1 Gb. 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. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\33\ 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). The Exchange believes that the proposed changes are reasonable and designed to be fair and equitable, and therefore, will not unduly burden any particular group of Users. --------------------------------------------------------------------------- \33\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Exchange believes that providing Users with Access and Connectivity does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such Access and Connectivity satisfies User demand for access and connectivity options, and each User has several other access and connectivity options available to it. As alternatives to using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection [[Page 3051]] through a third party telecommunication provider, third party wireless network, the SFTI network, or a combination thereof. Users that opt to use Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the relevant market or content provider may receive access or connectivity. In this way, the proposed changes would enhance competition by helping Users tailor their Access and Connectivity to the needs of their business operations by allowing them to select the form and latency of access and connectivity that best suits their needs. The Exchange believes that revising the Price List to provide a more detailed description of the Access and Connectivity available to Users would make such descriptions more accessible and transparent, thereby providing market participants with clarity as to what Access and Connectivity is available to them and what the related costs are, thereby enhancing competition by ensuring that all Users have access to the same information regarding Access and Connectivity. Similarly, the Exchange believes that the proposed changes to the Network Access Service MRCs would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because, by offering the Network Access Services, the Exchange gives each User options for access to the LCN and IP network, responding to User demand for options. All Users that voluntarily purchase Network Access Services would be charged the same amount for the same services. As is currently the case, the purchase of any colocation service (including network and capacities) would be completely voluntary. Furthermore, each of the Network Access Services can be purchased independently of each other, and independently of any other colocation services or products that a User may choose. The Exchange believes that the proposed changes to the Network Access Service MRCs would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because the MRCs for the Network Access Services have been the same since they were first filed, with some MRCs dating to the inception of co-location in 2010.\34\ During the time since the MRCs for the Network Access Services were filed, however, the Exchange has made numerous improvements to the network hardware and technology infrastructure. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including the increasing demand for bandwidth, and has established additional administrative controls. The Exchange offers the Network Access Services as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of the Network Access Services, including by responding to any production issues. The Exchange accordingly believes that the proposed changes to the Network Access Service MRCs will allow them to more accurately reflect the value of the services provided. --------------------------------------------------------------------------- \34\ See note 19, supra. --------------------------------------------------------------------------- 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. 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 The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) \35\ of the Act and subparagraph (f)(2) of Rule 19b-4 \36\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \35\ 15 U.S.C. 78s(b)(3)(A). \36\ 17 CFR 240.19b&4(f)(2). --------------------------------------------------------------------------- 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) \37\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \37\ 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 CommentsUse 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-NYSE-2016-92 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-NYSE-2016-92. 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 [[Page 3052]] 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-NYSE-2016-92, and should be submitted on or before January 31, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\38\ --------------------------------------------------------------------------- \38\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-00214 Filed 1-9-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices 3045
2. Each Fund will consist of a for redemption. Applicants assert that having substantially the same
portfolio of securities and other assets the requested relief would not be investment objectives as the Feeder
and investment positions (‘‘Portfolio inconsistent with the spirit and intent of Fund (‘‘Master Fund’’) beyond the
Holdings’’). Each Fund will disclose on section 22(e) to prevent unreasonable, limitations in section 12(d)(1)(A) and
its Web site the identities and quantities undisclosed or unforeseen delays in the permit the Master Fund, and any
of the Portfolio Holdings that will form actual payment of redemption proceeds. principal underwriter for the Master
the basis for the Fund’s calculation of 7. Applicants request an exemption to Fund, to sell shares of the Master Fund
NAV at the end of the day. permit Funds of Funds to acquire Fund to the Feeder Fund beyond the
3. Shares will be purchased and shares beyond the limits of section limitations in section 12(d)(1)(B).
redeemed in Creation Units and 12(d)(1)(A) of the Act; and the Funds, 10. Section 6(c) of the Act permits the
generally on an in-kind basis. Except and any principal underwriter for the Commission to exempt any persons or
where the purchase or redemption will Funds, and/or any broker or dealer transactions from any provision of the
include cash under the limited registered under the Exchange Act, to Act if such exemption is necessary or
circumstances specified in the sell shares to Funds of Funds beyond appropriate in the public interest and
application, purchasers will be required the limits of section 12(d)(1)(B) of the consistent with the protection of
to purchase Creation Units by Act. The application’s terms and investors and the purposes fairly
depositing specified instruments conditions are designed to, among other intended by the policy and provisions of
(‘‘Deposit Instruments’’), and things, help prevent any potential (i) the Act. Section 12(d)(1)(J) of the Act
shareholders redeeming their shares undue influence over a Fund through provides that the Commission may
will receive specified instruments control or voting power, or in exempt any person, security, or
(‘‘Redemption Instruments’’). The connection with certain services, transaction, or any class or classes of
Deposit Instruments and the transactions, and underwritings, (ii) persons, securities, or transactions, from
Redemption Instruments will each excessive layering of fees, and (iii) any provision of section 12(d)(1) if the
correspond pro rata to the positions in overly complex fund structures, which exemption is consistent with the public
the Fund’s portfolio (including cash are the concerns underlying the limits interest and the protection of investors.
positions) except as specified in the in sections 12(d)(1)(A) and (B) of the Section 17(b) of the Act authorizes the
application. Act. Commission to grant an order
4. Because shares will not be 8. Applicants request an exemption permitting a transaction otherwise
individually redeemable, applicants from sections 17(a)(1) and 17(a)(2) of the prohibited by section 17(a) if it finds
request an exemption from section Act to permit persons that are Affiliated that (a) the terms of the proposed
5(a)(1) and section 2(a)(32) of the Act Persons, or Second Tier Affiliates, of the transaction are fair and reasonable and
that would permit the Funds to register Funds, solely by virtue of certain do not involve overreaching on the part
as open-end management investment ownership interests, to effectuate
of any person concerned; (b) the
companies and issue shares that are purchases and redemptions in-kind. The
proposed transaction is consistent with
redeemable in Creation Units only. deposit procedures for in-kind
5. Applicants also request an the policies of each registered
purchases of Creation Units and the
exemption from section 22(d) of the Act investment company involved; and (c)
redemption procedures for in-kind
and rule 22c-1 under the Act as the proposed transaction is consistent
redemptions of Creation Units will be
secondary market trading in shares will with the general purposes of the Act.
the same for all purchases and
take place at negotiated prices, not at a redemptions and Deposit Instruments For the Commission, by the Division of
current offering price described in a and Redemption Instruments will be Investment Management, under delegated
Fund’s prospectus, and not at a price valued in the same manner as those authority.
based on NAV. Applicants state that (a) Portfolio Holdings currently held by the Eduardo A. Aleman,
secondary market trading in shares does Funds. Applicants also seek relief from Assistant Secretary.
not involve a Fund as a party and will the prohibitions on affiliated [FR Doc. 2017–00226 Filed 1–9–17; 8:45 am]
not result in dilution of an investment transactions in section 17(a) to permit a BILLING CODE 8011–01–P
in shares, and (b) to the extent different Fund to sell its shares to and redeem its
prices exist during a given trading day, shares from a Fund of Funds, and to
or from day to day, such variances occur engage in the accompanying in-kind SECURITIES AND EXCHANGE
as a result of third-party market forces, transactions with the Fund of Funds.2 COMMISSION
such as supply and demand. Therefore, The purchase of Creation Units by a
[Release No. 34–79730; File No. SR–NYSE–
applicants assert that secondary market Fund of Funds directly from a Fund will 2016–92]
transactions in shares will not lead to be accomplished in accordance with the
discrimination or preferential treatment policies of the Fund of Funds and will Self-Regulatory Organizations; New
among purchasers. Finally, applicants be based on the NAVs of the Funds. York Stock Exchange LLC; Notice of
represent that share market prices will 9. Applicants also request relief to Filing and Immediate Effectiveness of
be disciplined by arbitrage permit a Feeder Fund to acquire shares Proposed Rule Change Amending the
opportunities, which should prevent of another registered investment Exchange’s Price List Related to Co-
shares from trading at a material company managed by the Adviser location Services To Increase LCN and
discount or premium from NAV. IP Network Fees and Add a Description
6. With respect to Funds that hold 2 The requested relief would apply to direct sales
of Access To Trading and Execution
pmangrum on DSK3GDR082PROD with NOTICES
non-U.S. Portfolio Holdings and that of shares in Creation Units by a Fund to a Fund of
Funds and redemptions of those shares. Applicants, Services and Connectivity to Included
effect creations and redemptions of moreover, are not seeking relief from section 17(a) Data Products
Creation Units in kind, applicants for, and the requested relief will not apply to,
request relief from the requirement transactions where a Fund could be deemed an January 4, 2017.
imposed by section 22(e) in order to Affiliated Person, or a Second-Tier Affiliate, of a Pursuant to Section 19(b)(1) 1 of the
Fund of Funds because an Adviser or an entity
allow such Funds to pay redemption controlling, controlled by or under common control Securities Exchange Act of 1934 (the
proceeds within fifteen calendar days with an Adviser provides investment advisory
following the tender of Creation Units services to that Fund of Funds. 1 15 U.S.C.78s(b)(1).
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![3052 Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
proposed rule change between the (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 A. Self-Regulatory Organization’s
Commission and any person, other than notice is hereby given that, on December Statement of the Purpose of, and the
those that may be withheld from the 28, 2016, NYSE MKT LLC (‘‘Exchange’’ Statutory Basis for, the Proposed Rule
public in accordance with the or ‘‘NYSE MKT’’) filed with the Change
provisions of 5 U.S.C. 552, will be Securities and Exchange Commission
available for Web site viewing and 1. Purpose
(‘‘Commission’’) the proposed rule
printing in the Commission’s Public change as described in Items I, II, and The purpose of this filing is to modify
Reference Room, 100 F Street NE., III below, which Items have been the Fee Schedule to: (1) Adjust the
Washington, DC 20549 on official prepared by the self-regulatory qualification thresholds and transaction
business days between the hours of fees for electronic transactions by NYSE
organization. The Commission is
10:00 a.m. and 3:00 p.m. Copies of such Amex Options Marker Makers (‘‘Sliding
publishing this notice to solicit
filing also will be available for Scale’’); 4 and (2) modify the
inspection and copying at the principal comments on the proposed rule change
from interested persons. prepayment programs offered by the
office of the Exchange. All comments Exchange, including adding a new
received will be posted without change; I. Self-Regulatory Organization’s prepay option (the ‘‘Prepayment
the Commission does not edit personal Statement of the Terms of Substance of Programs’’).5
identifying information from the Proposed Rule Change
submissions. You should submit only Market Maker Sliding Scale
information that you wish to make The Exchange proposes to modify the Section I.C. of the Fee Schedule sets
available publicly. All submissions NYSE Amex Options Fee Schedule. The forth the Sliding Scale of transaction
should refer to File No. SR–NYSE– proposed change is available on the fees charged to NYSE Amex Options
2016–92, and should be submitted on or Exchange’s Web site at www.nyse.com, Marker Makers (referred to as Market
before January 31, 2017. at the principal office of the Exchange, Makers herein), which per contract fees
For the Commission, by the Division of and at the Commission’s Public decrease as Market Maker trades higher
Trading and Markets, pursuant to delegated Reference Room. monthly volumes.6 Currently, Market
authority.38 Makers that have monthly volume on
Eduardo A. Aleman, II. Self-Regulatory Organization’s
the Exchange of 0.10% or less of total
Assistant Secretary. Statement of the Purpose of, and
ICADV are charged a base rate of $0.25
[FR Doc. 2017–00214 Filed 1–9–17; 8:45 am] Statutory Basis for, the Proposed Rule per contract and, these same market
BILLING CODE 8011–01–P
Change participants, upon reaching certain
In its filing with the Commission, the volume thresholds, or Tiers, receive a
self-regulatory organization included reduction of this per contract rate.7 In
SECURITIES AND EXCHANGE addition, the Exchange charges a lower
COMMISSION statements concerning the purpose of,
and basis for, the proposed rule change per contract rate to Market Makers that
[Release No. 34–79737; File No. SR– participate in one of the Prepayment
and discussed any comments it received
NYSEMKT–2016–127] Programs or that post monthly volume
on the proposed rule change. The text
greater than 0.85% of total ICADV.
Self-Regulatory Organizations; NYSE of those statements may be examined at
the places specified in Item IV below. Effective January 3, 2017, the
MKT LLC; Notice of Filing and Exchange proposes to modify the
Immediate Effectiveness of Proposed The Exchange has prepared summaries,
qualification thresholds and associated
Change Modifying the NYSE Amex set forth in sections A, B, and C below,
transaction fees for all Marker Makers as
Options Fee Schedule of the most significant parts of such
follows (with new rates/thresholds
statements. underlined and deleted rates/thresholds
January 4, 2017.
Pursuant to Section 19(b)(1) 1 of the in brackets):
Securities Exchange Act of 1934 * * * * *
Rate per contract if
monthly volume from
posted volume is more
than .85% of total
Tier Market maker electronic monthly volume as a percentage of ICADV Rate per contract ICADV or for any NYSE
Amex Market Maker par-
ticipating in a prepay-
ment program pursuant
to Section I.D.
1 ........... 0.00% to [0.10%]0.15% .................................................................................................. $0.25 [$0.20]$0.23
2 ........... [>0.10%]>0.15% to 0.60% .............................................................................................. $0.22 [$0.17]$0.18
3 ........... >0.60% to [1.25%]1.10% ................................................................................................ [$0.12]$0.14 [$0.07]$0.08
38 17 CFR 200.30–3(a)(12). 6 See Fee Schedule, supra note 4. The volume equity or ETF security. See OCC Monthly Statistics
thresholds are based on an NYSE Amex Options Reports, available here, http://www.theocc.com/
pmangrum on DSK3GDR082PROD with NOTICES
1 15 U.S.C.78s(b)(1).
2 15 U.S.C. 78a. Market Maker’s volume transacted Electronically as webapps/monthly-volume-reports.
3 17 CFR 240.19b–4.
a percentage of total industry Customer equity and 7 In calculating an NYSE Amex Options Market
ETF options volumes (‘‘ICADV’’) as reported by the Maker Electronic volumes, the Exchange excludes
4 See Fee Schedule, Section I. C. (NYSE Amex
Options Clearing Corporation (the ‘‘OCC’’). Total any volumes attributable to Mini Options, QCC
Options Market Maker Sliding Scale—Electronic), ICADV is comprised of those equity and ETF trades, CUBE Auctions, and Strategy Execution Fee
available here, https://www.nyse.com/publicdocs/ contracts that clear in the Customer account type Caps, as these transactions are subject to separate
nyse/markets/amex-options/NYSE_Amex_Options_ at OCC and does not include contracts that clear in pricing described in Fee Schedule Sections I.B., I.F.,
Fee_Schedule.pdf. either the Firm or Market Maker account type at I.G., and I.J, respectively. See Fee Schedule, Section
5 See id., Section I. D. (Prepayment Program). OCC or contracts overlying security other than an I.C, supra note 4.
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Document Created: 2018-02-01 14:54:07
Document Modified: 2018-02-01 14:54:07
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 3045 |
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