[Federal Register Volume 83, Number 96 (Thursday, May 17, 2018)]
[Notices]
[Pages 23014-23020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10504]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83221; File No. SR-NYSE-2018-20]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Provide Users With Connectivity to Three Additional Third Party Data 
Feeds and Change Its Price List Related to These Co-Location Services

May 11, 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 April 30, 2018, 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 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to provide Users with connectivity to three 
additional third party data feeds and change its Price List related to 
these co-

[[Page 23015]]

location services. Additionally, the Exchange proposes to make non-
substantive corrections to the Price List. 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.

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 co-location \4\ services offered 
by the Exchange to provide Users \5\ with connectivity to three 
additional third party data feeds and change its Price List related to 
these co-location services. Additionally, the Exchange proposes to make 
non-substantive corrections to the Price List.
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    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Commission in 2010. See Securities 
Exchange Act Release No. 62960 (September 21, 2010), 75 FR 59310 
(September 27, 2010) (SR-NYSE-2010-56). 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 American LLC (``NYSE American'') and NYSE Arca, Inc. 
(``NYSE Arca'' and, together with NYSE American, the ``Affiliate 
SROs''). See Securities Exchange Act Release No. 70206 (August 15, 
2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59).
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Third Party Data Feeds
    The Exchange charges fees for connectivity to data feeds from third 
party markets and other content service providers (``Third Party Data 
Feeds'').\6\ The list of the Third Party Data Feeds and related 
connectivity fees is set forth in the Price List. The Exchange proposes 
to add three ICE Data Services Consolidated Feed Shared Farm feeds (the 
``Additional Third Party Data Feeds'') to the list of Third Party Data 
Feeds.
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    \6\ See Securities Exchange Act Release No. 80311 (March 24, 
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45).
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    The Additional Third Party Data Feeds are produced by an entity 
owned by the Exchange's ultimate parent, Intercontinental Exchange, 
Inc. (``ICE''), and so the Exchange has an indirect interest in the 
Additional Third Party Data Feeds. The Additional Third Party Data 
Feeds include data drawn from the Exchange, the Affiliate SROs, and 
third party exchanges, including stock and futures exchanges. Because 
it includes third party data, the Additional Third Party Data Feeds are 
considered Third Party Data Feeds.\7\
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    \7\ Id., at 15749.
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    The list of available Third Party Data Feeds presently includes 
three ICE Data Services Consolidated Feeds.\8\ The Additional Third 
Party Data Feeds are similar to the previously filed ICE Data Services 
Consolidated Feeds in terms of the underlying content, which, according 
to the content service provider, includes normalized, real-time and 
intraday data feeds from over 600 sources. The difference between them 
lies with what data a User actually receives.
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    \8\ Id.
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    More specifically, when a User requests connectivity to one of the 
previously filed ICE Data Services Consolidated Feeds, it receives 
connectivity to all the data in the relevant ICE Data Services 
Consolidated Feeds. The User uses its processor to narrow down the feed 
to the specific data it wants. In contrast, when a User requests 
connectivity to an Additional Third Party Data Feed, it will specify to 
the content service provider what specific information, out of the data 
from the roughly 600 sources, it wants to receive. The content service 
provider will use its own processor to narrow down the data feeds, so 
that the User will only receive the information it requests. A User may 
choose whether it wants connectivity to one of the previously filed ICE 
Data Services Consolidated Feeds or to one of the Additional Third 
Party Data Feeds based on whether it wants to process the data, and 
what level of control it wants over the processing. In both cases, the 
User will only receive data the relevant third party data provider 
authorizes it to receive.
    As it does with the existing Third Party Data Feeds, the Exchange 
proposes to charge a monthly recurring fee for connectivity to each 
Additional Third Party Data Feed. The monthly recurring fee would vary 
by the bandwidth of the connection. Accordingly, the Exchange proposes 
to revise the Price List to provide that Users may obtain connectivity 
to the Additional Third Party Data Feeds for a monthly fee, as follows:

 
------------------------------------------------------------------------
                                                              Monthly
                                                             recurring
                                                           connectivity
                  Third party data feed                    fee per third
                                                            party data
                                                               feed
------------------------------------------------------------------------
ICE Data Services Consolidated Feed Shared Farm <=100 Mb            $200
ICE Data Services Consolidated Feed Shared Farm >100 Mb              500
 to <=1 Gb..............................................
ICE Data Services Consolidated Feed Shared Farm >1 Gb...           1,000
------------------------------------------------------------------------

    Depending on its needs and bandwidth, a User may opt to receive all 
or some of the feeds or services included in the Additional Third Party 
Data Feeds.
    The Exchange would provide connectivity to the Additional Third 
Party Data Feeds (``Connectivity'') as a convenience to Users. Use of 
Connectivity would be completely voluntary. The Exchange is not aware 
of any impediment to third parties offering Connectivity.
    The Exchange does not have visibility into whether third parties 
currently

[[Page 23016]]

offer, or intend to offer, Users connectivity to the Additional Third 
Party Data Feeds, as such third parties are not required to make that 
information public. However, if one or more third parties presently 
offer, or in the future opt to offer, such Connectivity to Users, a 
User may utilize the Secure Financial Transaction Infrastructure 
(``SFTI'') network, a third party telecommunication network, third 
party wireless network, a cross connect, or a combination thereof to 
access such services and products through a connection to an access 
center outside the data center (which could be a SFTI access center, a 
third-party access center, or both), another User, or a third party 
vendor.
    The Exchange would receive the Additional Third Party Data Feeds 
from the content service provider, at its data center. It would then 
provide connectivity to that data to Users for a fee. Users would 
connect to the Additional Third Party Data Feeds over the internet 
protocol (``IP'') network, a local area network available in the data 
center.
    In order to connect to an Additional Third Party Data Feed, a User 
would enter into a contract with the content service provider, pursuant 
to which the content service provider would charge the User for the 
Third Party Data Feed. The Exchange would receive the Additional Third 
Party Data Feed over its fiber optic network and, after the content 
service provider and User entered into the contract and the Exchange 
received authorization from the content service provider, the Exchange 
would re-transmit the data to the User over the User's port. The 
Exchange would charge the User for the connectivity to the Additional 
Third Party Data Feed. A User would only receive, and would only be 
charged for, connectivity to the Additional Third Party Data Feed for 
which it entered into contracts.
    The Exchange would have no right to use an Additional Third Party 
Data Feed other than as a redistributor of the data. The Additional 
Third Party Data Feeds would not provide access or order entry to the 
Exchange's execution system. The Additional Third Party Data Feeds 
would not provide access or order entry to the execution systems of the 
party generating the feed. The Exchange would receive the Additional 
Third Party Data Feeds via arms-length agreements and it would have no 
inherent advantage over any other distributor of such data.
Additional Changes
    The Exchange proposes to make additional, non-substantive changes 
to add definitions, correct a typographical error, remove obsolete text 
and update third party exchange names (collectively, the ``Non-
Substantive Changes''). The proposed additional changes would have no 
effect on pricing.
General Note 1
    General Note 1 in the Price List references the Affiliate SROs. The 
Exchange proposes to add short-hand definitions of each of the 
Affiliate SROs, which terms are used later in the Price List. The 
revised references would be to ``NYSE American LLC (NYSE American) and 
NYSE Arca, Inc. (NYSE Arca).''
Cabinet Upgrade Fee
    The Exchange offers Users the option of a ``Cabinet Upgrade'' and 
related fee, pursuant to which the Exchange accommodates requests for 
additional power allocation beyond the typical amount that the Exchange 
allocates per dedicated cabinet, at which point the Exchange must 
upgrade the cabinet's power capacity.\9\ The Cabinet Upgrade Fee in the 
Price List has a parenthetical setting forth lower fees for a User that 
submits a written order for a Cabinet Upgrade by January 31, 2014, 
provided that the Cabinet Upgrade becomes fully operational by March 
31, 2014. For the avoidance of confusion, the Exchange proposes to put 
the text in the past tense. Accordingly, the parenthetical would read 
as follows: ``($4,600 for a User that submitted a written order for a 
Cabinet Upgrade by January 31, 2014, provided that the Cabinet Upgrade 
became fully operational by March 31, 2014)''.
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    \9\ See Securities Exchange Act Release No. 71122 (December 18, 
2013), 78 FR 77739 (December 24, 2013) (SR-NYSE-2013-81). Users may 
develop their hardware infrastructure within a particular cabinet in 
such a way that, if expansion of such hardware is needed, it can be 
accomplished within the space constraints of that particular 
cabinet. If this type of User requires additional power allocation, 
it would likely want to modify its existing cabinet in this manner, 
rather than taking an additional dedicated cabinet due to the 
expense of re-developing its infrastructure within such additional 
dedicated cabinet. See id.
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Hosting Fees
    A User may provide hosting services to its customers in the User's 
co-location space at the data center. As stated in the Price List, 
``Hosting User'' means a User that hosts a Hosted Customer in the 
User's co-location space, and ``Hosted Customer'' means a customer of a 
Hosting User that is hosted in a Hosting User's co-location space.\10\
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    \10\ See 80 FR 60190, supra note 5, at 60191.
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    In 2011, the Exchange filed a ``Hosting Fee'' applicable to Hosting 
Users.\11\ In 2015, the Exchange modified such Hosting Fee to provide 
that, effective January 1, 2016, ``the Hosting Fee would be assessed to 
a Hosting User on a per Hosted Customer basis and for each cabinet in 
which the Hosting User hosts the Hosted Customer.'' \12\
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    \11\ See Securities Exchange Act Release No. 65973 (December 15, 
2011), 76 FR 79232 (December 21, 2011) (SR-NYSE-2011-53).
    \12\ See 80 FR 60190, supra note 5, at 60191.
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    The Affiliate SROs submitted substantially the same proposed rule 
change.\13\ However, the Exchange's rule filing included a 
typographical error in the proposed text in its Exhibit 5. 
Specifically, although the descriptions of the fees in the description 
of the fee change were identical in all three filings, unlike the 
filings submitted by the Affiliate SROs, the Exchange's filing omitted 
``per cabinet'' in the proposed text in its Exhibit 5.\14\ The Exchange 
proposes to correct the error by amending the text for the Hosting Fee 
under ``Amount of Charge'' to add ``per cabinet.''
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    \13\ See id., at note 11, and Securities Exchange Act Release 
Nos. 76009 (September 29, 2015), 80 FR 60213 (October 5, 2015) (SR-
NYSEMKT-2015-67); and 76010 (September 29, 2015), 80 FR 60197 
(October 5, 2015) (SR-NYSEArca-2015-82).
    \14\ Compare File No. SR-NYSE-2015-40 (September 18, 2015) 
(initial filing), at 27, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-filings/filings/2015/NYSE-2015-40.pdf;File No. SR-NYSEMKT-2015-67 (September 18, 2015) (initial 
filing), at 27-28, available at https://www.nyse.com/publicdocs/nyse/markets/nyse-american/rule-filings/filings/2015/NYSEMKT-2015-67.pdf; and File No. SR-NYSEArca-2015-82 (September 18, 2015) 
(initial filing), at 28 and 29, available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/rule-filings/filings/2015/NYSEArca-2015-82.pdf.
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    In addition, as noted above, the change in the Hosting Fee was 
effective January 1, 2016. That date has passed, but the Price List 
continues to include both the Hosting Fee that was in effect through 
December 31, 2015 and the date of the change. The Exchange proposes to 
delete the obsolete references to these dates and the amount of the 
previous hosting fee.
    The amended text would be as follows (additional text underscored, 
deletions in strikethrough):

[[Page 23017]]

[GRAPHIC] [TIFF OMITTED] TN17MY18.005

Obsolete Availability Dates and Exchange References
    Certain services in the data center that are described in the Price 
List identify dates by which they were expected to be available. These 
dates have passed. Accordingly, the Exchange proposes to eliminate the 
obsolete references to these dates. In addition, the Exchange proposes 
to update the references to certain exchanges that have changed their 
names.\15\
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    \15\ See Securities Exchange Act Release No. 81962 (October 26, 
2017), 82 FR 50711, 50713 (November 1, 2017) (SR-BatsBZX-2017-70).
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    To that end, the Exchange proposes to make the following changes:
     For the wireless connection of Bats Pitch BZX Gig shaped 
data and Bats Pitch BYX Gig shaped data, the description would be 
revised as follows: (a) The text would read ``Wireless connection of 
Cboe Pitch BZX Gig shaped data and Cboe Pitch BYX Gig shaped data''; 
and (b) the text ``Note: Connection to Bats Pitch BYX Gig shaped data 
is expected to be available no later than December 31, 2016.'' would be 
deleted.
     For the wireless connection of Bats EDGX Gig shaped data 
and Bats EDGA Gig shaped data, the description would be revised as 
follows: (a) The text would read ``Wireless connection of Cboe EDGX Gig 
shaped data and Cboe EDGA Gig shaped data''; and (b) the text ``Note: 
Connection to Bats EDGA Gig shaped data is expected to be available no 
later than December 31, 2016.'' would be deleted.
     For the wireless connection of Toronto Stock Exchange 
(TSX), the text ``Note: Service is expected to be available no later 
than June 30, 2017.'' would be deleted.
     In the table under ``Third Party Data Feeds,'' ``Bats BZX 
Exchange (BZX) and Bats BYX Exchange (BYX)'' and ``Bats EDGX Exchange 
(EDGX) and Bats EDGA Exchange (EDGA)'' and their related monthly 
recurring connectivity fees would be deleted, and lines for ``Cboe BZX 
Exchange (CboeBZX) and Cboe BYX Exchange (CboeBYX)'' and ``Cboe EDGX 
Exchange (CboeEDGX) and Cboe EDGA Exchange (CboeEDGA)'' added with 
their related monthly recurring connectivity fees, which would remain 
unchanged, as follows (additional text underscored, deletions in 
strikethrough):
[GRAPHIC] [TIFF OMITTED] TN17MY18.006


[[Page 23018]]


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; \16\ 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 the Affiliate 
SROs.\17\
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    \16\ As is currently the case, Users that receive co-location 
services from the Exchange will not receive any means of access to 
the Exchange's trading and execution systems that is separate from, 
or superior to, that of other Users. In this regard, all orders sent 
to the Exchange enter the Exchange's trading and execution systems 
through the same order gateway, regardless of whether the sender is 
co-located in the data center or not. In addition, co-located Users 
do not receive any market data or data service product that is not 
available to all Users, although Users that receive co-location 
services normally would expect reduced latencies in sending orders 
to, and receiving market data from, the Exchange.
    \17\ See 78 FR 51765, 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-NYSEAMER-2018-19 and 
SR-NYSEArca-2018-28.
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    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed fee change is consistent 
with Section 6(b) of the Act,\18\ in general, and furthers the 
objectives of Sections 6(b)(5) of the Act,\19\ 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.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed changes 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, by offering additional connectivity to the 
Additional Third Party Data Feeds, the Exchange would give each User 
additional options for addressing its connectivity needs, responding to 
User demand for connectivity options. Providing the connectivity to the 
Additional Third Party Data Feeds would help each User tailor its data 
center operations to the requirements of its business operations by 
allowing it to select the form and latency of connectivity that best 
suits its needs.
    The Exchange would provide Connectivity as a convenience to Users. 
Use of Connectivity would be completely voluntary. The Exchange is not 
aware of any impediment to third parties offering Connectivity. The 
Exchange does not have visibility into whether third parties currently 
offer, or intend to offer, Users connectivity to the Additional Third 
Party Data Feeds. However, if one or more third parties presently 
offer, or in the future opt to offer, such Connectivity to Users, a 
User may utilize the SFTI network, a third party telecommunication 
network, third party wireless network, a cross connect, or a 
combination thereof to access such services and products through a 
connection to an access center outside the data center (which could be 
a SFTI access center, a third-party access center, or both), another 
User, or a third party vendor.
    The Exchange believes that the proposed changes 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, by offering connectivity to the Additional 
Third Party Data Feed to Users, the Exchange would give Users 
additional options for connectivity to new services, responding to User 
demand for connectivity options.
    The Exchange believes that the proposed Non-Substantive Changes 
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 changes would clarify 
Exchange rules and alleviate any possible market participant confusion 
caused by the disparity of the description of the Hosting Fee between 
the Price List and the price lists and fee schedules of the Affiliate 
SROs or by the obsolete dates and exchange names.
    The Exchange also believes that the proposed fee change is 
consistent with Section 6(b)(4) of the Act,\20\ in particular, because 
it provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers.
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    \20\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed fee changes are consistent 
with Section 6(b)(4) of the Act 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 additional follow-on effects 
on the market share and revenue of the affected exchange.
    The Exchange believes that the additional services and fees 
proposed herein would be equitably allocated and not unfairly 
discriminatory because, in addition to the services being completely 
voluntary, they would be available to all Users on an equal basis 
(i.e., the same products and services would be available to all Users). 
All Users that voluntarily selected to receive Connectivity would be 
charged the same amount for the same services. Users that opted to use 
Connectivity would not receive connectivity that is not available to 
all Users, as all market participants that contracted with the relevant 
content provider would receive connectivity.
    The Exchange believes that the proposed charges would be 
reasonable,

[[Page 23019]]

equitably allocated and not unfairly discriminatory because the 
Exchange would offer the Connectivity 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 such services, including by responding to any production 
issues. Since the inception of co-location, the Exchange has made 
numerous improvements to the network hardware and technology 
infrastructure and has established additional administrative controls. 
The Exchange has expanded the network infrastructure to keep pace with 
the increased number of services available to Users, including 
resilient and redundant feeds. In addition, in order to provide 
Connectivity, the Exchange would maintain multiple connections to each 
Additional Third Party Data Feed, allowing the Exchange to provide 
resilient and redundant connections; adapt to any changes made by the 
relevant third party; and cover any applicable fees charged by the 
relevant third party, such as port fees. In addition, Users would not 
be required to use any of their bandwidth for Connectivity unless they 
wish to do so.
    The Exchange believes the proposed fee for connectivity to each 
Additional Third Party Data Feed is reasonable because the proposed 
monthly recurring fee varies by the bandwidth of the connection, and so 
is generally proportional to the bandwidth required. In addition, the 
proposed fees are consistent with the fees for connectivity to the 
previously filed ICE Data Services Consolidated Feeds, which feeds are 
similar to the Additional Third Party Data Feeds in terms of the 
underlying content. The Exchange notes that the proposed monthly 
recurring fees are also generally consistent with the monthly recurring 
fees for connectivity to the SR Labs-SuperFeed Third Party Data Feeds, 
which also vary by bandwidth. The Exchange believes that the proposed 
difference in pricing between the Additional Third Party Data Feeds and 
SR Labs-SuperFeed options is reasonable, equitably allocated and not 
unfairly discriminatory because, although the bandwidth may be similar, 
the competitive considerations and the costs the Exchange incurs in 
providing such connections may differ.
    The Exchange believes the proposed fees for Connectivity would be 
reasonable because they would allow the Exchange to defray or cover the 
costs associated with offering Users connectivity to Additional Third 
Party Data Feeds while providing Users the convenience of receiving 
such Connectivity within co-location, helping them tailor their data 
center operations to the requirements of their business operations.
    The Exchange believes that the proposed Non-Substantive Changes 
would be reasonable because the changes would have no impact on 
pricing. Rather, the changes would remove obsolete text and update 
references, thereby clarifying the Exchange rules and alleviating 
possible market participant confusion.
    For the reasons above, the proposed changes would 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,\21\ 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 all of the proposed services are completely 
voluntary.
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    \21\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that providing Users with additional options 
for connectivity to new services would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because such proposed Connectivity would satisfy 
User demand for connectivity options. The Exchange would provide 
Connectivity as a convenience equally to all Users. All Users that 
voluntarily selected to receive Connectivity would be charged the same 
amount for the same services.
    The Exchange does not have visibility into whether third parties 
currently offer, or intend to offer, Users connectivity to the 
Additional Third Party Data Feeds, as such third parties are not 
required to make that information public. However, if one or more third 
parties presently offer, or in the future opt to offer, such 
Connectivity to Users, a User may utilize the SFTI network, a third 
party telecommunication network, third party wireless network, a cross 
connect, or a combination thereof to access such services and products 
through a connection to an access center outside the data center (which 
could be a SFTI access center, a third-party access center, or both), 
another User, or a third party vendor. Users that opt to use the 
proposed Connectivity would not receive connectivity that is not 
available to all Users, as all market participants that contract with 
the content provider may receive connectivity. In this way, the 
proposed changes would enhance competition by helping Users tailor 
their Connectivity to the needs of their business operations by 
allowing them to select the form and latency of connectivity that best 
suits their needs.
    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.
    Finally, the Exchange believes that the proposed Non-Substantive 
Changes would not impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because the proposed changes are not designed to address any 
competitive issue but rather to remove obsolete text and update 
references, thereby clarifying Exchange rules and alleviating any 
possible market participant confusion caused by the disparity of the 
description between the Price List and the price lists and fee 
schedules of the Affiliate SROs, or by the obsolete dates and exchange 
names.

[[Page 23020]]

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \22\ and Rule 19b-4(f)(6) thereunder.\23\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \24\ and Rule 19b-4(f)(6) 
thereunder.\25\
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    \22\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of its 
intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\27\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange stated its 
belief that immediate implementation of the proposed rule changes would 
allow Users to have the benefit of connectivity to the Additional Third 
Party Data Feed without delay. In so doing, the immediate 
implementation would help Users tailor their data center operations to 
the requirements of their business operations without delay. In 
addition, the Exchange stated that the proposed changes to the Price 
List would provide Users with more complete information regarding their 
Connectivity options and the availability of products and services.
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    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will allow Users to have the benefit of Additional Third Party Feed 
sooner and will allow User additional flexibility in tailoring their 
data center operations. For this reason, the Commission designates the 
proposed rule change to be operative upon filing.\28\
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    \28\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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 to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2018-20 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 Number SR-NYSE-2018-20. 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 the 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-NYSE-2018-20 and should be submitted on 
or before June 7, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12) and (59).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10504 Filed 5-16-18; 8:45 am]
BILLING CODE 8011-01-P


