83_FR_28417 83 FR 28300 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges To Extend the Effectiveness of the Decommission Extension Fee Until September 2018

83 FR 28300 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges To Extend the Effectiveness of the Decommission Extension Fee Until September 2018

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 117 (June 18, 2018)

Page Range28300-28302
FR Document2018-12926

Federal Register, Volume 83 Issue 117 (Monday, June 18, 2018)
[Federal Register Volume 83, Number 117 (Monday, June 18, 2018)]
[Notices]
[Pages 28300-28302]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-12926]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83410; File No. SR-NYSEArca-2018-42]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Equities Fees and Charges To Extend the Effectiveness of the 
Decommission Extension Fee Until September 2018

June 12, 2018.
    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 June 1, 2018, 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 Equities Fees and 
Charges (the ``Fee Schedule'') to extend the effectiveness of the 
Decommission Extension Fee until September 2018. The proposed rule 
change is available on the Exchange's website 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.

[[Page 28301]]

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

1. Purpose
    The Exchange currently charges a Decommission Extension Fee that 
applies to ETP Holders for the use of certain ports used to connect to 
NYSE Arca.\4\ The Decommission Extension Fee was adopted for a three-
month period from March 2018 through May 2018 (the ``extension 
period'') at a rate of $2,450 per port per month. The Exchange proposes 
to amend the Fee Schedule to extend the effectiveness of the 
Decommission Extension Fee for an additional four months, until 
September 2018. The Exchange also proposes to charge incrementally 
higher fees for each of the additional months before use of ports 
subject to the proposed fee is decommissioned. The Exchange proposes to 
make the fee change effective June 1, 2018.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 81901 (October 19, 
2017), 82 FR 49426 (October 25, 2017) (SR-NYSEArca-2017-121).
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    ETP Holders enter orders and instructions by using communication 
protocols that map to the order types and modifiers described in 
Exchange rules. The Exchange currently makes ports available that 
provide connectivity to the Exchange's trading systems (i.e., ports for 
the entry of orders and/or quotes (``order/quote entry ports'')) using 
Pillar phase I protocols (``phase I ports'') and Pillar phase II 
protocols (``phase II ports'') and charges $550 per port per month.\5\ 
Phase II ports are part of the Exchange's efforts to upgrade its 
connectivity. Phase I ports are legacy connections used by ETP Holders 
to communicate with the Exchange. The Exchange also currently makes 
ports available for drop copies and charges $550 per port per month.\6\
---------------------------------------------------------------------------

    \5\ Port fees are not applicable to ports used for the 
Exchange's Risk Management Gateway service. Further, no fee applies 
to ports in the backup datacenter that are not utilized during the 
relevant month. No fee applies to ports in the backup datacenter 
that are utilized when the primary datacenter is unavailable. 
However, if a port in the backup datacenter is utilized when the 
primary datacenter is available, then the fee would apply.
    \6\ No fee applies to ports in the backup datacenter if 
configured such that it is duplicative of another drop copy port of 
the same user. Only one fee per drop copy port applies, even if the 
port receives drop copies from multiple order/quote entry ports and/
or drop copies for activity on both NYSE Arca Equities and NYSE Arca 
Options.
---------------------------------------------------------------------------

    On August 21, 2017, the Exchange notified ETP Holders to transition 
all connections to the Exchange through the use of phase II ports by 
the close of trading on February 28, 2018.\7\ Notwithstanding prior 
notice to ETP Holders to migrate fully to phase II ports by the end of 
February 2018, the Exchange determined to continue to make phase I 
ports available through the end of May 2018 to allow ETP Holders 
additional time to transition to phase II ports should an ETP Holder 
choose to do so. ETP Holders that use phase I ports during the 
extension period are currently subject to the Decommission Extension 
Fee.
---------------------------------------------------------------------------

    \7\ See Trader Update at https://www.nyse.com/publicdocs/nyse/markets/nyse/Pillar_Update_NYSE_American_ARCA_NYSE_Tapes_B_and_C.pdf. On June 22, 
2017, the Exchange provided ETP Holders with notice that the phase 
II ports would be available on August 21, 2017. See Trader Update at 
https://www.nyse.com/publicdocs/nyse/notifications/trader-update/Pillar_Phase_II_Update_Native_gateways_June_16_2017.pdf.
---------------------------------------------------------------------------

    The Decommission Extension Fee was adopted by the Exchange as an 
incentive for ETP Holders to fully transition to the phase II ports 
within an initial six-month transition period before the fee became 
effective so the Exchange would not have to maintain and support both 
phase I ports and phase II ports at the end of the transition period. 
In addition, to the extent that ETP Holders did not fully transition to 
phase II ports within the initial six-month transition period, the 
Decommission Extension Fee was intended to cover the Exchange's costs 
associated with continued support of phase I ports, including costs to 
maintain servers and their physical location, monitoring order 
activity, and other support, that are separate from the costs in 
maintaining phase II ports. Because continued support for phase 1 ports 
requires the Exchange to dedicate resources, the Exchange adopted the 
Decommission Extension Fee for the use of such ports during the 
extension period.
    The Exchange now proposes to expand the extension period until the 
close of trading on September 28, 2018, the last trading day of the 
month (the ``new extension period''). A small number of ETP Holders 
have not transitioned to phase II ports and have informed the Exchange 
of their need for additional time to do so. Therefore, during the new 
extension period, ETP Holders that continue to connect to the Exchange 
through phase I ports would be charged the Decommission Extension Fee, 
as follows: $2,450 per port per month for the month of June 2018; 
$2,950 per port per month for the month of July 2018; $3,450 per port 
per month for the month of August 2018; and $3,950 per port per month 
for the month of September 2018. The Decommission Extension Fee would 
be charged in addition to the existing port fees currently set forth in 
the Fee Schedule. The Exchange expects all ETP Holders to transition to 
the use of phase II ports by the end of the new extension period and 
that phase I ports would be fully decommissioned at that time.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Sections 6(b)(4) of the Act,\9\ 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. In particular, the proposed rule change, 
including the adoption of graduated fees, is reasonable because it 
proposes to make a reasonable accommodation by providing ETP Holders 
additional time, at their request, to transition to phase II ports 
while incentivizing such ETP Holders to transition to phase II ports to 
avoid being charged the Decommission Extension Fee. Additionally, the 
Exchange believes that the Decommission Extension Fee for ETP Holders 
that choose to continue to connect to the Exchange through the use of 
phase I ports though the new extension period, which is scheduled to 
end at the close of trading on September 28, 2018, is equitable and not 
unfairly discriminatory because the fee would continue to apply equally 
to all ETP Holders that choose to connect to the Exchange through the 
use of such ports during the new extension period. As noted above, the 
Exchange would continue to incur ongoing costs in maintaining phase I 
ports during the new extension period, including costs to maintain 
servers and their physical location, monitoring order activity, and 
other support, with no real benefit. Due to the fixed costs incurred by 
the Exchange to support phase I ports during the new extension period, 
the Exchange believes that it is fair and reasonable to charge 
increased fees to cover the costs of such support during the new 
extension period because of the small number of ETP Holders that have 
not transitioned to phase II ports.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    In accordance with Section 6(b)(8) of the Act,\10\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance

[[Page 28302]]

of the purposes of the Act in that it is simply designed to set forth 
the Exchange's continued assessment of a fee during the new extension 
period to provide an incentive to ETP Holders to transition to phase II 
ports. The Exchange believes that fees for connectivity are constrained 
by the robust competition for order flow among exchanges and non-
exchange markets. Further, excessive fees for connectivity, including 
port fees, would serve to impair an exchange's ability to compete for 
order flow rather than burdening competition. The Exchange also does 
not believe the proposed rule change would impact intramarket 
competition as it would apply to all ETP Holders equally that connect 
to the Exchange through the use of such ports.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 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 Number SR-NYSEArca-2018-42 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 Number SR-NYSEArca-2018-42. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEArca-2018-42, and should be 
submitted on or before July 9, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-12926 Filed 6-15-18; 8:45 am]
 BILLING CODE 8011-01-P



                                              28300                            Federal Register / Vol. 83, No. 117 / Monday, June 18, 2018 / Notices

                                              efficient trading and hedging vehicles,                   Electronic Comments                                     SECURITIES AND EXCHANGE
                                              to the benefit of investors, market                                                                               COMMISSION
                                              participants, and the marketplace in                        • Use the Commission’s internet
                                              general. The Exchange believes this                       comment form (http://www.sec.gov/
                                                                                                                                                                [Release No. 34–83410; File No. SR–
                                              proposed rule change is necessary to                      rules/sro.shtml); or
                                                                                                                                                                NYSEArca–2018–42]
                                              permit fair competition among the                           • Send an email to rule-comments@
                                              options exchanges and to establish                        sec.gov. Please include File Number SR–                 Self-Regulatory Organizations; NYSE
                                              uniform position limits for additional                    Phlx–2018–44 on the subject line.                       Arca, Inc.; Notice of Filing and
                                              multiply listed option classes.                                                                                   Immediate Effectiveness of Proposed
                                                                                                        Paper Comments
                                              Furthermore, the Exchange believes that                                                                           Rule Change To Amend the NYSE Arca
                                              the other options exchanges will file                       • Send paper comments in triplicate                   Equities Fees and Charges To Extend
                                              similar proposals with the Commission.                    to Brent J. Fields, Secretary, Securities               the Effectiveness of the Decommission
                                              C. Self-Regulatory Organization’s                         and Exchange Commission, 100 F Street                   Extension Fee Until September 2018
                                              Statement on Comments on the                              NE, Washington, DC 20549–1090.
                                                                                                                                                                June 12, 2018.
                                              Proposed Rule Change Received From                        All submissions should refer to File
                                              Members, Participants, or Others                                                                                     Pursuant to Section 19(b)(1) 1 of the
                                                                                                        Number SR–Phlx–2018–44. This file                       Securities Exchange Act of 1934 (the
                                                                                                        number should be included on the                        ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                                No written comments were either
                                                                                                        subject line if email is used. To help the              notice is hereby given that, on June 1,
                                              solicited or received.
                                                                                                        Commission process and review your                      2018, NYSE Arca, Inc. (the ‘‘Exchange’’
                                              III. Date of Effectiveness of the                         comments more efficiently, please use                   or ‘‘NYSE Arca’’) filed with the
                                              Proposed Rule Change and Timing for                       only one method. The Commission will                    Securities and Exchange Commission
                                              Commission Action                                         post all comments on the Commission’s                   (the ‘‘Commission’’) the proposed rule
                                                                                                        internet website (http://www.sec.gov/                   change as described in Items I, II, and
                                                 Because the foregoing proposed rule                    rules/sro.shtml). Copies of the
                                              change does not: (i) Significantly affect                                                                         III below, which Items have been
                                                                                                        submission, all subsequent                              prepared by the self-regulatory
                                              the protection of investors or the public                 amendments, all written statements
                                              interest; (ii) impose any significant                                                                             organization. The Commission is
                                                                                                        with respect to the proposed rule                       publishing this notice to solicit
                                              burden on competition; and (iii) become                   change that are filed with the
                                              operative for 30 days from the date on                                                                            comments on the proposed rule change
                                                                                                        Commission, and all written                             from interested persons.
                                              which it was filed, or such shorter time
                                                                                                        communications relating to the
                                              as the Commission may designate, it has                                                                           I. Self-Regulatory Organization’s
                                                                                                        proposed rule change between the
                                              become effective pursuant to Section                                                                              Statement of the Terms of the Substance
                                                                                                        Commission and any person, other than
                                              19(b)(3)(A)(iii) of the Act 22 and                                                                                of the Proposed Rule Change
                                                                                                        those that may be withheld from the
                                              subparagraph (f)(6) of Rule 19b–4
                                                                                                        public in accordance with the
                                              thereunder.23                                                                                                        The Exchange proposes to amend the
                                                                                                        provisions of 5 U.S.C. 552, will be
                                                 At any time within 60 days of the                      available for website viewing and                       NYSE Arca Equities Fees and Charges
                                              filing of the proposed rule change, the                   printing in the Commission’s Public                     (the ‘‘Fee Schedule’’) to extend the
                                              Commission summarily may                                  Reference Room, 100 F Street NE,                        effectiveness of the Decommission
                                              temporarily suspend such rule change if                   Washington, DC 20549, on official                       Extension Fee until September 2018.
                                              it appears to the Commission that such                    business days between the hours of                      The proposed rule change is available
                                              action is: (i) Necessary or appropriate in                10:00 a.m. and 3:00 p.m. Copies of the                  on the Exchange’s website at
                                              the public interest; (ii) for the protection              filing also will be available for                       www.nyse.com, at the principal office of
                                              of investors; or (iii) otherwise in                       inspection and copying at the principal                 the Exchange, and at the Commission’s
                                              furtherance of the purposes of the Act.                   office of the Exchange. All comments                    Public Reference Room.
                                              If the Commission takes such action, the                  received will be posted without change.                 II. Self-Regulatory Organization’s
                                              Commission shall institute proceedings                    Persons submitting comments are                         Statement of the Purpose of, and
                                              to determine whether the proposed rule                    cautioned that we do not redact or edit                 Statutory Basis for, the Proposed Rule
                                              should be approved or disapproved.                        personal identifying information from                   Change
                                              IV. Solicitation of Comments                              comment submissions. You should
                                                                                                        submit only information that you wish                     In its filing with the Commission, the
                                                Interested persons are invited to                       to make available publicly. All                         self-regulatory organization included
                                              submit written data, views, and                           submissions should refer to File                        statements concerning the purpose of,
                                              arguments concerning the foregoing,                       Number SR–Phlx–2018–44 and should                       and basis for, the proposed rule change
                                              including whether the proposed rule                       be submitted on or before July 9, 2018.                 and discussed any comments it received
                                              change is consistent with the Act.                                                                                on the proposed rule change. The text
                                                                                                          For the Commission, by the Division of
                                              Comments may be submitted by any of                                                                               of those statements may be examined at
                                                                                                        Trading and Markets, pursuant to delegated
                                              the following methods:                                    authority.24
                                                                                                                                                                the places specified in Item IV below.
                                                                                                                                                                The Exchange has prepared summaries,
                                                                                                        Eduardo A. Aleman,
amozie on DSK3GDR082PROD with NOTICES1




                                                22 15  U.S.C. 78s(b)(3)(A)(iii).                                                                                set forth in sections A, B, and C below,
                                                23 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–      Assistant Secretary.                                    of the most significant parts of such
                                              4(f)(6) requires a self-regulatory organization to give   [FR Doc. 2018–12928 Filed 6–15–18; 8:45 am]
                                              the Commission written notice of its intent to file
                                                                                                                                                                statements.
                                                                                                        BILLING CODE 8011–01–P
                                              the proposed rule change at least five business days
                                              prior to the date of filing of the proposed rule
                                                                                                                                                                 1 15 U.S.C. 78s(b)(1).
                                              change, or such shorter time as designated by the
                                                                                                                                                                 2 15 U.S.C. 78a.
                                              Commission. The Exchange has satisfied this
                                              requirement.                                                24 17   CFR 200.30–3(a)(12).                           3 17 CFR 240.19b–4.




                                         VerDate Sep<11>2014    18:00 Jun 15, 2018   Jkt 244001   PO 00000   Frm 00119     Fmt 4703   Sfmt 4703   E:\FR\FM\18JNN1.SGM   18JNN1


                                                                               Federal Register / Vol. 83, No. 117 / Monday, June 18, 2018 / Notices                                             28301

                                              A. Self-Regulatory Organization’s                         Notwithstanding prior notice to ETP                   to transition to the use of phase II ports
                                              Statement of the Purpose of, and                          Holders to migrate fully to phase II ports            by the end of the new extension period
                                              Statutory Basis for, the Proposed Rule                    by the end of February 2018, the                      and that phase I ports would be fully
                                              Change                                                    Exchange determined to continue to                    decommissioned at that time.
                                                                                                        make phase I ports available through the
                                              1. Purpose                                                                                                      2. Statutory Basis
                                                                                                        end of May 2018 to allow ETP Holders
                                                 The Exchange currently charges a                       additional time to transition to phase II                The Exchange believes that the
                                              Decommission Extension Fee that                           ports should an ETP Holder choose to                  proposed rule change is consistent with
                                              applies to ETP Holders for the use of                     do so. ETP Holders that use phase I                   Section 6(b) of the Act,8 in general, and
                                              certain ports used to connect to NYSE                     ports during the extension period are                 furthers the objectives of Sections
                                              Arca.4 The Decommission Extension                         currently subject to the Decommission                 6(b)(4) of the Act,9 in particular, because
                                              Fee was adopted for a three-month                         Extension Fee.                                        it provides for the equitable allocation
                                              period from March 2018 through May                           The Decommission Extension Fee was                 of reasonable dues, fees, and other
                                              2018 (the ‘‘extension period’’) at a rate                 adopted by the Exchange as an incentive               charges among its members, issuers and
                                              of $2,450 per port per month. The                         for ETP Holders to fully transition to the            other persons using its facilities and
                                              Exchange proposes to amend the Fee                        phase II ports within an initial six-                 does not unfairly discriminate between
                                              Schedule to extend the effectiveness of                   month transition period before the fee                customers, issuers, brokers or dealers. In
                                              the Decommission Extension Fee for an                     became effective so the Exchange would                particular, the proposed rule change,
                                              additional four months, until September                   not have to maintain and support both                 including the adoption of graduated
                                              2018. The Exchange also proposes to                       phase I ports and phase II ports at the               fees, is reasonable because it proposes to
                                              charge incrementally higher fees for                      end of the transition period. In addition,            make a reasonable accommodation by
                                              each of the additional months before use                  to the extent that ETP Holders did not                providing ETP Holders additional time,
                                              of ports subject to the proposed fee is                   fully transition to phase II ports within             at their request, to transition to phase II
                                              decommissioned. The Exchange                              the initial six-month transition period,              ports while incentivizing such ETP
                                              proposes to make the fee change                           the Decommission Extension Fee was                    Holders to transition to phase II ports to
                                              effective June 1, 2018.                                   intended to cover the Exchange’s costs                avoid being charged the Decommission
                                                 ETP Holders enter orders and                           associated with continued support of                  Extension Fee. Additionally, the
                                              instructions by using communication                       phase I ports, including costs to                     Exchange believes that the
                                              protocols that map to the order types                     maintain servers and their physical                   Decommission Extension Fee for ETP
                                              and modifiers described in Exchange                       location, monitoring order activity, and              Holders that choose to continue to
                                              rules. The Exchange currently makes                       other support, that are separate from the             connect to the Exchange through the use
                                              ports available that provide connectivity                 costs in maintaining phase II ports.                  of phase I ports though the new
                                              to the Exchange’s trading systems (i.e.,                  Because continued support for phase 1                 extension period, which is scheduled to
                                              ports for the entry of orders and/or                      ports requires the Exchange to dedicate               end at the close of trading on September
                                              quotes (‘‘order/quote entry ports’’))                     resources, the Exchange adopted the                   28, 2018, is equitable and not unfairly
                                              using Pillar phase I protocols (‘‘phase I                 Decommission Extension Fee for the use                discriminatory because the fee would
                                              ports’’) and Pillar phase II protocols                    of such ports during the extension                    continue to apply equally to all ETP
                                              (‘‘phase II ports’’) and charges $550 per                 period.                                               Holders that choose to connect to the
                                              port per month.5 Phase II ports are part                     The Exchange now proposes to                       Exchange through the use of such ports
                                              of the Exchange’s efforts to upgrade its                  expand the extension period until the                 during the new extension period. As
                                              connectivity. Phase I ports are legacy                    close of trading on September 28, 2018,               noted above, the Exchange would
                                              connections used by ETP Holders to                        the last trading day of the month (the                continue to incur ongoing costs in
                                              communicate with the Exchange. The                        ‘‘new extension period’’). A small                    maintaining phase I ports during the
                                              Exchange also currently makes ports                       number of ETP Holders have not                        new extension period, including costs to
                                              available for drop copies and charges                     transitioned to phase II ports and have               maintain servers and their physical
                                              $550 per port per month.6                                 informed the Exchange of their need for               location, monitoring order activity, and
                                                 On August 21, 2017, the Exchange                       additional time to do so. Therefore,                  other support, with no real benefit. Due
                                              notified ETP Holders to transition all                    during the new extension period, ETP                  to the fixed costs incurred by the
                                              connections to the Exchange through                       Holders that continue to connect to the               Exchange to support phase I ports
                                              the use of phase II ports by the close of                 Exchange through phase I ports would                  during the new extension period, the
                                              trading on February 28, 2018.7                            be charged the Decommission Extension                 Exchange believes that it is fair and
                                                                                                        Fee, as follows: $2,450 per port per                  reasonable to charge increased fees to
                                                 4 See Securities Exchange Act Release No. 81901
                                                                                                        month for the month of June 2018;                     cover the costs of such support during
                                              (October 19, 2017), 82 FR 49426 (October 25, 2017)
                                              (SR–NYSEArca–2017–121).                                   $2,950 per port per month for the month               the new extension period because of the
                                                 5 Port fees are not applicable to ports used for the   of July 2018; $3,450 per port per month               small number of ETP Holders that have
                                              Exchange’s Risk Management Gateway service.               for the month of August 2018; and                     not transitioned to phase II ports.
                                              Further, no fee applies to ports in the backup            $3,950 per port per month for the month
                                              datacenter that are not utilized during the relevant                                                            B. Self-Regulatory Organization’s
                                              month. No fee applies to ports in the backup              of September 2018. The Decommission
                                              datacenter that are utilized when the primary             Extension Fee would be charged in                     Statement on Burden on Competition
                                              datacenter is unavailable. However, if a port in the      addition to the existing port fees                      In accordance with Section 6(b)(8) of
                                              backup datacenter is utilized when the primary
                                              datacenter is available, then the fee would apply.
                                                                                                        currently set forth in the Fee Schedule.              the Act,10 the Exchange does not believe
                                                                                                        The Exchange expects all ETP Holders                  that the proposed rule change will
amozie on DSK3GDR082PROD with NOTICES1




                                                 6 No fee applies to ports in the backup datacenter

                                              if configured such that it is duplicative of another                                                            impose any burden on intermarket or
                                              drop copy port of the same user. Only one fee per         NYSE_American_ARCA_NYSE_Tapes_B_and_                  intramarket competition that is not
                                              drop copy port applies, even if the port receives         C.pdf. On June 22, 2017, the Exchange provided        necessary or appropriate in furtherance
                                              drop copies from multiple order/quote entry ports         ETP Holders with notice that the phase II ports
                                              and/or drop copies for activity on both NYSE Arca         would be available on August 21, 2017. See Trader
                                                                                                                                                               8 15 U.S.C. 78f(b).
                                              Equities and NYSE Arca Options.                           Update at https://www.nyse.com/publicdocs/nyse/
                                                                                                                                                               9 15 U.S.C. 78f(b)(4).
                                                 7 See Trader Update at https://www.nyse.com/           notifications/trader-update/Pillar_Phase_II_
                                              publicdocs/nyse/markets/nyse/Pillar_Update_               Update_Native_gateways_June_16_2017.pdf.               10 15 U.S.C. 78f(b)(8).




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                                              28302                          Federal Register / Vol. 83, No. 117 / Monday, June 18, 2018 / Notices

                                              of the purposes of the Act in that it is                Electronic Comments                                     SECURITIES AND EXCHANGE
                                              simply designed to set forth the                                                                                COMMISSION
                                              Exchange’s continued assessment of a                      • Use the Commission’s internet
                                                                                                      comment form (http://www.sec.gov/                       [Release No. 34–83409; File No. SR–C2–
                                              fee during the new extension period to                                                                          2018–012]
                                              provide an incentive to ETP Holders to                  rules/sro.shtml); or
                                              transition to phase II ports. The                         • Send an email to rule-comments@                     Self-Regulatory Organizations; Cboe
                                              Exchange believes that fees for                         sec.gov. Please include File Number SR–                 C2 Exchange, Inc.; Notice of Filing and
                                              connectivity are constrained by the                     NYSEArca–2018–42 on the subject line.                   Immediate Effectiveness of a Proposed
                                              robust competition for order flow among                                                                         Rule Change To Amend the Fees
                                              exchanges and non-exchange markets.                     Paper Comments
                                                                                                                                                              Schedule in Connection With the
                                              Further, excessive fees for connectivity,                 • Send paper comments in triplicate                   Technology Migration of C2 Onto the
                                              including port fees, would serve to                                                                             Options Platform of the Exchange’s
                                                                                                      to Brent J. Fields, Secretary, Securities
                                              impair an exchange’s ability to compete                                                                         Affiliated Options Exchanges, Cboe
                                                                                                      and Exchange Commission, 100 F Street
                                              for order flow rather than burdening                                                                            EDGX Exchange, Inc. and Cboe BZX
                                                                                                      NE, Washington, DC 20549–1090.
                                              competition. The Exchange also does                                                                             Exchange, Inc.
                                              not believe the proposed rule change                    All submissions should refer to File
                                              would impact intramarket competition                    Number SR–NYSEArca–2018–42. This                        June 12, 2018.
                                              as it would apply to all ETP Holders                    file number should be included on the                      Pursuant to Section 19(b)(1) of the
                                              equally that connect to the Exchange                    subject line if email is used. To help the              Securities Exchange Act of 1934
                                              through the use of such ports.                          Commission process and review your                      (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                                                                              notice is hereby given that on May 31,
                                              C. Self-Regulatory Organization’s                       comments more efficiently, please use
                                                                                                                                                              2018, Cboe C2 Exchange, Inc. (the
                                              Statement on Comments on the                            only one method. The Commission will
                                                                                                                                                              ‘‘Exchange’’ or ‘‘C2’’) filed with the
                                              Proposed Rule Change Received From                      post all comments on the Commission’s
                                                                                                                                                              Securities and Exchange Commission
                                              Members, Participants, or Others                        internet website (http://www.sec.gov/                   (‘‘Commission’’) the proposed rule
                                                                                                      rules/sro.shtml). Copies of the                         change as described in Items I and II
                                                No written comments were solicited                    submission, all subsequent                              below, which Items have been prepared
                                              or received with respect to the proposed                amendments, all written statements                      by the Exchange. The Exchange has
                                              rule change.                                            with respect to the proposed rule                       designated this proposal as a ‘‘non-
                                              III. Date of Effectiveness of the                       change that are filed with the                          controversial’’ proposed rule change
                                              Proposed Rule Change and Timing for                     Commission, and all written                             pursuant to Section 19(b)(3)(A) of the
                                              Commission Action                                       communications relating to the                          Act 3 and Rule 19b–4(f)(6)(iii)
                                                                                                      proposed rule change between the                        thereunder,4 which renders it effective
                                                 The foregoing rule change is effective               Commission and any person, other than                   upon filing with the Commission. The
                                              upon filing pursuant to Section                         those that may be withheld from the                     Commission is publishing this notice to
                                              19(b)(3)(A) 11 of the Act and                           public in accordance with the                           solicit comments on the proposed rule
                                              subparagraph (f)(2) of Rule 19b–4 12                    provisions of 5 U.S.C. 552, will be                     change from interested persons.
                                              thereunder, because it establishes a due,               available for website viewing and
                                              fee, or other charge imposed by the                                                                             I. Self-Regulatory Organization’s
                                                                                                      printing in the Commission’s Public                     Statement of the Terms of Substance of
                                              Exchange.                                               Reference Room, 100 F Street NE,                        the Proposed Rule Change
                                                 At any time within 60 days of the                    Washington, DC 20549 on official
                                              filing of such proposed rule change, the                business days between the hours of                         The Exchange proposes to amend its
                                              Commission summarily may                                                                                        Fees Schedule in connection with the
                                                                                                      10:00 a.m. and 3:00 p.m. Copies of such
                                              temporarily suspend such rule change if                                                                         technology migration of C2 onto the
                                                                                                      filing also will be available for
                                              it appears to the Commission that such                                                                          options platform of the Exchange’s
                                                                                                      inspection and copying at the principal
                                              action is necessary or appropriate in the                                                                       affiliated options exchanges, Cboe
                                                                                                      office of the Exchange. All comments                    EDGX Exchange, Inc. (‘‘EDGX’’ or
                                              public interest, for the protection of                  received will be posted without change.
                                              investors, or otherwise in furtherance of                                                                       ‘‘EDGX Options’’) and Cboe BZX
                                                                                                      Persons submitting comments are                         Exchange, Inc. (‘‘BZX’’ or ‘‘BZX
                                              the purposes of the Act. If the                         cautioned that we do not redact or edit
                                              Commission takes such action, the                                                                               Options’’).
                                                                                                      personal identifying information from                      The text of the proposed rule change
                                              Commission shall institute proceedings
                                                                                                      comment submissions. You should                         is available at the Exchange’s website at
                                              under Section 19(b)(2)(B) 13 of the Act to
                                              determine whether the proposed rule                     submit only information that you wish                   www.markets.cboe.com, at the principal
                                              change should be approved or                            to make available publicly. All                         office of the Exchange, and at the
                                              disapproved.                                            submissions should refer to File                        Commission’s Public Reference Room.
                                                                                                      Number SR–NYSEArca–2018–42, and
                                              IV. Solicitation of Comments                                                                                    II. Self-Regulatory Organization’s
                                                                                                      should be submitted on or before July 9,
                                                                                                                                                              Statement of the Purpose of, and
                                                                                                      2018.                                                   Statutory Basis for, the Proposed Rule
                                                Interested persons are invited to
                                              submit written data, views, and                           For the Commission, by the Division of                Change
                                              arguments concerning the foregoing,                     Trading and Markets, pursuant to delegated
                                                                                                                                                                In its filing with the Commission, the
                                              including whether the proposed rule                     authority.14
                                                                                                                                                              Exchange included statements
amozie on DSK3GDR082PROD with NOTICES1




                                              change is consistent with the Act.                      Eduardo A. Aleman,                                      concerning the purpose of and basis for
                                              Comments may be submitted by any of                     Assistant Secretary.                                    the proposed rule change and discussed
                                              the following methods:                                  [FR Doc. 2018–12926 Filed 6–15–18; 8:45 am]
                                                                                                                                                               1 15 U.S.C. 78s(b)(1).
                                                                                                      BILLING CODE 8011–01–P
                                                11 15 U.S.C. 78s(b)(3)(A).                                                                                     2 17 CFR 240.19b–4.
                                                12 17 CFR 240.19b–4(f)(2).                                                                                     3 15 U.S.C. 78s(b)(3)(A).
                                                13 15 U.S.C. 78s(b)(2)(B).                              14 17   CFR 200.30–3(a)(12).                           4 17 CFR 240.19b–4(f)(6)(iii).




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Document Created: 2018-06-18 15:49:56
Document Modified: 2018-06-18 15:49:56
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 Citation83 FR 28300 

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