[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Notices]
[Pages 58778-58794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23862]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87408; File No. SR-NYSECHX-2019-12]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Fee Schedule of NYSE Chicago, Inc.

October 28, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on October 15, 2019 the NYSE Chicago, Inc. (``NYSE Chicago'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 amend the Fee Schedule of NYSE Chicago, 
Inc. to provide for co-location services and fees in connection with 
its expected migration to the NYSE Pillar platform in the fourth 
quarter of 2019. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to provide for co-
location services and fees in connection with its expected migration to 
the NYSE Pillar platform (``Pillar'') in the fourth quarter of 2019.\4\ 
Pillar is an integrated trading technology platform designed to use a 
single specification for connecting to the equities and options markets 
operated by the Exchange's affiliates New York Stock Exchange LLC 
(``NYSE''), NYSE American LLC (``NYSE American''), NYSE Arca, Inc. 
(``NYSE Arca''), and NYSE National, Inc. (``NYSE National'' and, 
together, the ``Affiliate SROs'').\5\ As detailed below, current Users 
\6\ would not incur any new fees and no incremental co-location revenue 
is expected under this proposal.
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    \4\ Subject to rule approvals, the migration to Pillar is 
currently anticipated to be on November 4, 2019. See Exchange Act 
Release Nos. 85297 (March 12, 2019), 84 FR 9854 (March 18, 2019) 
(SR-CHX-2018-03), and 86709 (August 20, 2019), 84 FR 44654 (August 
26, 2019) (SR-CHX-2019-08).
    \5\ In July 2018, the Exchange and its direct parent company 
were acquired by NYSE Group, Inc. As a result, the Exchange and the 
Affiliate SROs are direct or indirect subsidiaries of NYSE Group, 
Inc. and, indirectly, Intercontinental Exchange, Inc. See Exchange 
Act Release No. 83635 (July 13, 2018), 83 FR 34182 (July 19, 2018) 
(SR-CHX-2018-004); see also Exchange Act Release No. 83303 (May 22, 
2018), 83 FR 24517 (May 29, 2018) (SR-CHX-2018-004).
    \6\ Consistent with the Affiliate SRO Price Lists, for purposes 
of the Exchange's co-location services, a ``User'' shall mean any 
market participant that requests to receive co-location services 
directly from the Exchange. See Securities Exchange Act Release Nos. 
76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-
2015-40); 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); and 83351 (May 31, 2018), 
83 FR 26314 (June 6, 2018) (SR-NYSENAT-2018-07) (``NYSE National Co-
location Notice'').
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    The Affiliate SROs offer co-location services.\7\ When a User 
purchases a co-

[[Page 58779]]

location service, it is charged once for the service, despite the 
service being offered by all the Affiliate SROs. Under this proposal, 
Users purchasing co-location services would continue to pay once, even 
though all four Affiliate SROs and the Exchange would offer co-location 
services, and would receive access to the Affiliate SROs and the 
Exchange in the Mahwah, New Jersey data center (the ``data center'').
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    \7\ With the exception of NYSE National, the Affiliate SROs 
initially filed rule changes relating to their co-location services 
and related fees with the Commission in 2010. See Securities 
Exchange Act Release Nos. 62960 (September 21, 2010), 75 FR 59310 
(September 27, 2010) (SR-NYSE-2010-56); 62961 (September 21, 2010), 
75 FR 59299 (September 27, 2010) (SR-NYSEAmex-2010-80); and 63275 
(November 8, 2010), 75 FR 70048 (November 16, 2010) (SR-NYSEArca-
2010-100). NYSE National initially filed rule changes relating to 
its co-location services and related fees with the Commission on May 
18, 2018. See NYSE National Co-location Notice, supra note 6. If any 
change to the Affiliate SROs' colocation services become operative 
after the present filing is made but before it becomes operative, 
the Exchange would make an additional rule filing implementing the 
change, with the intention that the Exchange would offer the same 
co-location services offered by the Affiliate SROs.
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    The Exchange proposes that the additions to the Fee Schedule to 
provide for co-location services would become operative upon the 
Exchange's migration to Pillar.
    Currently, the Exchange's trading and execution systems are not in 
the data center. Once the migration to Pillar is completed, the trading 
of all securities on the Exchange will have moved to the data center. 
As a result of the migration, Users will be able to have low latency 
connections to the Exchange over the Liquidity Center Network 
(``LCN''), a local area network available in the data center, and so 
would be able to co-locate in the data center by ``rent[ing] space on 
premises controlled by the Exchange in order that they may locate their 
electronic servers in close physical proximity to the Exchange's 
trading and execution systems.'' \8\ Absent this proposal to offer co-
location services, market participants' access to the Exchange would 
solely be available outside of co-location, even after the migration of 
the Exchange's trading and execution systems to Pillar, and so they 
would not be able to ``reduce latency in transmitting market data and 
order messages'' to the Exchange.\9\
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    \8\ See 75 FR 59310, supra note 7.
    \9\ See Securities Exchange Act Release No. 61358 (January 14, 
2010), 75 CFR 3594 (January 21, 2010), at 3598 (concept release on 
equity market structure).
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    The Exchange operates in a highly competitive environment. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. Specifically, in Regulation National Market 
System (``NMS''), the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \10\
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    \10\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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Proposed Services and Fees
    The Exchange proposes the same services and fees set forth in the 
price lists and fee schedules of its Affiliate SROs (collectively, the 
``Affiliate SRO Price Lists''),\11\ with the non-substantive 
differences described below. No new or novel services or fees are 
proposed and, as described below, current Users of the Affiliate SROs' 
co-location services would not incur any new fees.
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    \11\ See ``Co-Location Fees'' in ``New York Stock Exchange Price 
List 2019'' (``NYSE Price List'') at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf; ``NYSE American 
Equities Price List'' (``NYSE American Equities Price List'') at 
https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf; ``NYSE American Options Fee 
Schedule'' (``NYSE American Options Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf; ``NYSE Arca Equities Fees 
and Charges'' (``NYSE Arca Equities Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf; ``NYSE Arca Options Fees and 
Charges'' (``NYSE Arca Options Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf; and ``NYSE National, Inc. 
Schedule of Fees and Rebates'' (``NYSE National Fee Schedule'') at 
https://www.nyse.com/publicdocs/nyse/regulation/nyse/NYSE_National_Schedule_of_Fees.pdf.
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Definitions
    The Exchange proposes to adopt the definitions of ``Affiliate,'' 
``Aggregate Cabinet Footprint,'' ``Hosted Customer,'' ``Hosting User,'' 
and ``User'' as set forth in the Affiliate SRO Price Lists. 
Specifically, the Exchange proposes the following definitions:
     An ``Affiliate'' of a User is any other User or Hosted 
Customer that is under 50% or greater common ownership or control of 
the first User.
     ``Aggregate Cabinet Footprint'' of a User or Hosted 
Customer is (a) for a User, the total kW of the User's cabinets, 
including both partial and dedicated cabinets, and (b), for a Hosted 
Customer, the total kW of the portion of the Hosting User's cabinet, 
whether partial or dedicated, allocated to such Hosted Customer.
     A ``Hosted Customer'' means a customer of a Hosting User 
that is hosted in a Hosting User's co-location space.
     A ``Hosting User'' means a User of co-location services 
that hosts a Hosted Customer in the User's co-location space.
     A ``User'' means any market participant that requests to 
receive co-location services directly from the Exchange.
    As in the Affiliate SRO Price Lists, the Exchange would specify 
that the definitions were for purposes of the co-location fees only.
General Notes
    The Exchange proposes to adopt General Notes 1 through 4 as set 
forth in the Affiliate SRO Price Lists, subject to the differences 
discussed below.
    General Note 1: General Note 1 of the Affiliate SRO Price Lists 
provides that a User that incurs co-location fees for a particular co-
location service would not be subject to co-location fees for the same 
co-location service charged by the other Affiliate SROs. The wording of 
General Note 1 differs among the Affiliate SRO Price Lists both where 
it references the relevant price list or fee schedule and where it 
lists the relevant exchange's affiliates.\12\
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    \12\ For example, the NYSE Arca Options Fee Schedule provides 
that ``[a] User that incurs co-location fees for a particular co-
location service pursuant to this Fee Schedule shall not be subject 
to co-location fees for the same co-location service charged 
pursuant to the NYSE Arca Equities Fee Schedule or by the Exchange's 
affiliates NYSE American LLC (NYSE American), New York Stock 
Exchange LLC (NYSE) and NYSE National, Inc. (NYSE National)'' 
(emphasis added) while the NYSE Price List provides that ``[a] User 
that incurs co-location fees for a particular co-location service 
pursuant to this Price List shall 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 NYSE National, Inc. (NYSE National).'' (emphasis 
added) The Exchange's proposed text for General Note 1 is consistent 
with the wording of General Note 1 in the NYSE Price List, with the 
exception that it will use ``this Fee Schedule'' instead of ``this 
Price List.''
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    The Exchange proposes to adopt the following General Note 1: \13\
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    \13\ The Exchange expects that each Affiliate SRO will submit a 
proposed rule change to update General Note 1 to include NYSE 
Chicago as a provider of co-location services and to remove the 
definition of NYSE Chicago from General Note 4.
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    A User that incurs co-location fees for a particular co-location 
service pursuant to this Fee Schedule shall not be subject to co-
location fees for the same co-location service charged by the 
Exchange's affiliates the New York Stock Exchange LLC (NYSE), NYSE 
American LLC (NYSE American), NYSE Arca, Inc. (NYSE Arca) and NYSE 
National (NYSE National).
    General Note 2: The Exchange proposes the same General Note 2 as in 
the Affiliate SRO Price Lists, setting forth the requirements for 
qualifying for a ``Partial Cabinet Solution'' bundle.\14\ The proposed 
text is as follows:
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    \14\ See Securities Exchange Act Release Nos. 77072 (February 5, 
2016), 81 FR 7394 (February 11, 2016) (SR-NYSE-2015-53); 77071 
(February 5, 2016), 81 FR 7382 (February 11, 2016) (SR-NYSEMKT-2015-
89); and 77070 (February 5, 2016), 81 FR 7401 (February 11, 2016) 
(SR-NYSEArca-2015-102); and NYSE National Co-location Notice, supra 
note 6, at 26315.
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    To qualify for a Partial Cabinet Solution bundle, a User must meet 
the following conditions: (1) It must purchase only one Partial Cabinet

[[Page 58780]]

Solution bundle; (2) the User and its Affiliates must not currently 
have a Partial Cabinet Solution bundle; and (3) after the purchase of 
the Partial Cabinet Solution bundle, the User, together with its 
Affiliates, will have an Aggregate Cabinet Footprint of no more than 2 
kW.
     A User requesting a Partial Cabinet Solution bundle will 
be required to certify to the Exchange (a) whether any other Users or 
Hosted Customers are Affiliates of the certificating User, and (b) that 
after the purchase of the Partial Cabinet Solution bundle, the User, 
together with its Affiliates, would have an Aggregate Cabinet Footprint 
of no more than 2 kW. The certificating User will be required to inform 
the Exchange immediately of any event that causes another User or 
Hosted Customer to become an Affiliate. The Exchange shall review 
available information regarding the entities and may request additional 
information to verify the Affiliate status of a User or Hosted 
Customer. The Exchange shall approve a request for a Partial Cabinet 
Solution bundle unless it determines that the certification is not 
accurate.
     If a User that has purchased a Partial Cabinet Solution 
bundle becomes affiliated with one or more other Users or Hosted 
Customers and thereby no longer meets the conditions for access to the 
Partial Cabinet Solution bundle, or if the User otherwise ceases to 
meet the conditions for access to the Partial Cabinet Solution bundle, 
the Exchange will no longer offer it to such User and the User will be 
charged for each of the services individually, at the price for each 
such service set out in the Fee Schedule. Such price change would be 
effective as of the date that the User ceased to meet the conditions.
    In addition, a User that changes its Partial Cabinet Solution 
bundle from one option to another will not be subject to a second 
initial charge, but will be required to pay the difference, if any, 
between the bundles' initial charges.
    General Note 3: The Exchange proposes the same General Note 3 as in 
the Affiliate SRO Price Lists, setting forth the provisions relating to 
the use of a waitlist.\15\ The proposed text is as follows:
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    \15\ See Securities Exchange Act Release Nos. 77681 (April 21, 
2016), 81 FR 24915 (April 27, 2016 (SR-NYSE-2016-13); 77680 (April 
21, 2016), 81 FR 24905 (April 27, 2016) (NYSEMKT-2016-17); and 77682 
(April 21, 2016), 81 FR 24913 (April 27, 2016 (NYSEArca-2016-21); 
and NYSE National Co-location Notice, supra note 6, at 26315.
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    The initial and monthly charge for 2 bundles of 24 cross connects 
will be waived for a User that is waitlisted for a cage for the 
duration of the waitlist period, provided that the cross connects may 
only be used to connect the User's non-contiguous cabinets. The charge 
will no longer be waived once a User is removed from the waitlist.
     If a waitlist is created, a User seeking a new cage will 
be placed on the waitlist based on the date a signed order for the cage 
is received.
     A User that turns down a cage because it is not the 
correct size will remain on the waitlist. A User that requests to be 
removed or that turns down a cage that is the size that it requested 
will be removed from the waitlist.
     A User that is removed from the waitlist but subsequently 
requests a cage will be added back to the bottom of the waitlist, 
provided that, if the User was removed from the waitlist because it 
turned down a cage that is the size that it requested, it will not 
receive a second waiver of the charge.
    General Note 4: Proposed General Note 4 would establish that, when 
a User purchases access to the Liquidity Center Network (``LCN'') or 
the internet protocol (``IP'') network, the two local area networks 
available in the data center,\16\ a User would receive (a) the ability 
to access the trading and execution systems of the Exchange and 
Affiliate SROs (``Exchange Systems'') as well as of Global OTC (the 
``Global OTC System'') and (b) connectivity to any of the listed data 
products (``Included Data Products'') that it selects. The proposed 
General Note 4 would be the same as the General Note 4 in the Affiliate 
SRO Price Lists.\17\
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    \16\ See Securities Exchange Act Release Nos. 79730 (January 4, 
2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-2016-92); 79728 
(January 4, 2017), 82 FR 3035 (January 10, 2017) (SR-NYSEMKT-2016-
126); and 79729 (January 4, 2017), 82 FR 3061 (January 10, 2017) 
(SR-NYSEArca-2016-172); and NYSE National Co-location Notice, supra 
note 6, at 26316.
    \17\ See Securities Exchange Act Release Nos. 85952 (May 29, 
2019), 84 FR 25880 (June 4, 2019) (SR-NYSE-2019-31); 85960 (May 29, 
2019), 84 FR 25848 (June 4, 2019) (SR-NYSEAmer-2019-21); 85958 (May 
29, 2019), 84 FR 25858 (June 4, 2019) (SR-NYSEArca-2019-40); and 
85959 (May 29, 2019), 84 FR 25887 (June 4, 2019) (SR-NYSENat-2019-
13); see also Securities Exchange Act Release Nos. 85300 (March 13, 
2019), 84 FR 10152 (March 19, 2019) (SR-NYSE-2019-11); 85302 (March 
13, 2019), 84 FR 10164 (March 19, 2019) (SR-NYSEAmer-2019-02); 85306 
(March 13, 2019), 84 FR 10159 (March 19, 2019) (SR-NYSEArca-2019-
11); 85305 (March 13, 2019), 84 FR 10154 (March 19, 2019) (SR-
NYSENat-2019-05; 83404 (June 11, 2018), 83 FR 28048 (June 15, 2018) 
(SR-NYSE-2018-23); 83402 (June 11, 2018), 83 FR 28041 (June 15, 
2018) (SR-NYSEAmer-2018-23); and 83403 (June 11, 2018), 83 FR 28053 
(June 15, 2018) (SR-NYSEArca-2018-36).
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    The Exchange proposes to adopt the following General Note 4:
    When a User purchases access to the LCN or IP network, it receives 
the ability to access the trading and execution systems of the NYSE, 
NYSE American, NYSE Arca, NYSE Chicago, Inc. (NYSE Chicago), and NYSE 
National (together, the Exchange Systems) as well as of Global OTC (the 
``Global OTC System''), subject, in each case, to authorization by the 
NYSE, NYSE American, NYSE Arca, NYSE Chicago, NYSE National or Global 
OTC, as applicable. Such access includes access to the customer 
gateways that provide for order entry, order receipt (i.e. confirmation 
that an order has been received), receipt of drop copies and trade 
reporting (i.e. whether a trade is executed or cancelled), as well as 
for sending information to shared data services for clearing and 
settlement. A User can change the access it receives at any time, 
subject to authorization by NYSE, NYSE American, NYSE Arca, NYSE 
Chicago, NYSE National or Global OTC. NYSE, NYSE American, NYSE Arca, 
NYSE Chicago and NYSE National also offer access to Exchange Systems to 
their members, such that a User does not have to purchase access to the 
LCN or IP network to obtain access to Exchange Systems. Global OTC 
offers access to the Global OTC System to its subscribers, such that a 
User does not have to purchase access to the LCN or IP network to 
obtain access to the Global OTC System.
    When a User purchases access to the LCN or IP network it receives 
connectivity to any of the Included Data Products that it selects, 
subject to any technical provisioning requirements and authorization 
from the provider of the data feed. Market data fees for the Included 
Data Products are charged by the provider of the data feed. A User can 
change the Included Data Products to which it receives connectivity at 
any time, subject to authorization from the provider of the data feed. 
The Exchange is not the exclusive method to connect to the Included 
Data Products.
    The Included Data Products are as follows:
NMS feeds
    NYSE:

NYSE Alerts
NYSE BBO
NYSE Integrated Feed
NYSE OpenBook
NYSE Order Imbalances
NYSE Trades

    NYSE American:

NYSE American Alerts
NYSE American BBO
NYSE American Integrated Feed
NYSE American OpenBook
NYSE American Order Imbalances
NYSE American Trades

[[Page 58781]]

NYSE American Options
    NYSE Arca:

NYSE ArcaBook
NYSE Arca BBO
NYSE Arca Integrated Feed
NYSE Arca Order Imbalances
NYSE Arca Trades
NYSE Arca Options
NYSE Best Quote and Trades (BQT)
NYSE Bonds
NYSE Chicago
NYSE National
Cabinet-Related Fees
    The Exchange proposes the same services and fees set forth in the 
Affiliate SRO Price Lists under ``Initial Fee per Cabinet''; ``Monthly 
Fee per Cabinet''; ``Cabinet Upgrade Fee''; ``PNU Cabinet''; and ``Cage 
Fees'' (collectively, the ``Cabinet-Related Fees'').
    Initial Fee per Cabinet and Monthly Fee per Cabinet: As in the 
Affiliate SRO Price Lists, the Exchange proposes that, to house its 
servers and other equipment in the data center, a User have the option 
of an entire cabinet dedicated solely to that User (``dedicated 
cabinet'') or a partial cabinet alternative (``partial cabinet'').\18\ 
Partial cabinets would be made available in increments of eight-rack 
units of space. Users would pay an initial fee and a monthly fee based 
on the number of kilowatts (``kW'').
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    \18\ See Securities Exchange Act Release Nos. 71122 (December 
18, 2013), 78 FR 77739 (December 24, 2013) (SR-NYSE-2013-81); 71131 
(December 18, 2013), 78 FR 77750 (December 24, 2013) (SR-NYSEMKT-
2013-103); and 71130 (December 18, 2013), 78 FR 77765 (December 24, 
2013) (SR-NYSEArca-2013-143) and NYSE National Co-location Notice, 
supra note 6, at 26316.
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    Cabinet Upgrade Fee: Users that require additional power allocation 
may prefer to maintain their hardware within one of their existing 
cabinets rather than add an additional cabinet. Specifically, 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. 
Accordingly, as in the Affiliate SRO Price Lists, the Exchange would 
offer Users the option of a ``Cabinet Upgrade'' and related fee, 
pursuant to which the Exchange would accommodate 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.\19\
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    \19\ See id.
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    The Exchange notes that the Cabinet Upgrade Fees in the Affiliate 
SRO Price Lists have a parenthetical setting forth lower fees 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. Because a User that incurs co-location fees for a 
particular co-location service would not be subject to co-location fees 
for the same co-location service charged by the Affiliate SROs and such 
Users may already be subject to this different charge based on the 
Price List of an Affiliate SRO, the Exchange proposes to maintain the 
information regarding the lower price on its Fee Schedule.
    PNU Fee: As in the Affiliate SRO Price Lists, the Exchange proposes 
to offer Users the option of an unused cabinet for which power is not 
utilized (``PNU cabinet'') and charge a monthly fee.\20\ A User may 
wish to have a PNU cabinet it reserves for future use. Although PNU 
cabinets do not use power, when the Exchange establishes a PNU cabinet, 
it would include wiring, circuitry, and hardware and allocate kWs of 
unused power capacity. This would allow the PNU cabinet to be powered 
and used promptly upon the User's request.
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    \20\ See Securities Exchange Act Release Nos. 70913 (November 
21, 2013), 78 FR 70987 (November 27, 2013 (SR-NYSE-2013-74); 70914 
(November 21, 2013), 78 FR 71000 (November 27, 2013) (SR-NYSEMKT-
2013-93); and 70916 (November 21, 2013), 78 FR 70989 (November 21, 
2013) (SR-NYSEArca-2013-124) and NYSE National Co-location Notice, 
supra note 6, at 26316.
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    Cage Fee: As in the Affiliate SRO Price Lists, the Exchange 
proposes to offer Users the use of cages to house their cabinets within 
the data center, with initial and monthly charges based on the size of 
the cage.\21\ A cage would typically be purchased by a User that has 
several cabinets within the data center and that wishes to enhance 
privacy around its cabinets, e.g., so that other Users cannot see what 
type of hardware is being utilized.
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    \21\ See Securities Exchange Act Release Nos. 67666 (August 15, 
2012), 77 FR 50742 (August 22, 2012) (SR-NYSE-2012-18); 67665 
(August 15, 2012), 77 FR 50734 (August 22, 2012) (SR-NYSEMKT-2012-
11); 67669 (August 15, 2012), 77 FR 50746 (August 22, 2012) (SR-
NYSEArca-2012-62); and 67667 (August 15, 2012), 77 FR 50743 (August 
22, 2012) (SR-NYSEArca-2012-63); and NYSE National Co-location 
Notice, supra note 6, at 26316.
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    The Exchange proposes to add the following fees and language to its 
Fee Schedule:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
                         Initial Fee per Cabinet
------------------------------------------------------------------------
Dedicated Cabinet......................  $5,000
8-Rack Unit of a Partial Cabinet.......  $2,500
------------------------------------------------------------------------
                         Monthly Fee per Cabinet
------------------------------------------------------------------------
Dedicated Cabinet:
    Number of kWs                           Per kW Fee Monthly
        4-8                                   $1,200
        9-20                                  $1,050
        21-40                                 $950
        41+                                   $900
8-Rack Unit of a Partial Cabinet:
    Number of kWs                           Total Fee Monthly
        1                                     $1,500
        2                                     $2,700
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                           Cabinet Upgrade Fee
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Dedicated Cabinet......................  $9,200 ($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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[[Page 58782]]

 
PNU Cabinet............................  monthly charge of $360 per kW
                                          allocated to PNU Cabinet.
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                                Cage Fees
------------------------------------------------------------------------
2-14 Cabinets..........................  $5,000 initial charge plus
                                          $2,700 monthly charge.
15-28 Cabinets.........................  $10,000 initial charge plus
                                          $4,100 monthly charge.
29+ Cabinets...........................  $15,000 initial charge plus
                                          $5,500 monthly charge.
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Access and Service Fees
    The Exchange proposes to adopt the same services and fees set forth 
in the Affiliate SRO Price Lists under ``LCN Access''; ``Bundled 
Network Access''; ``Partial Cabinet Solution bundles''; ``IP Network 
Access''; ``Testing and Certification IP Network Access''; ``Wireless 
Connections for Third Party Data''; ``Virtual Control Circuit between 
two Users''; ``Hosting Fee''; ``Data Center Fiber Cross Connect''; 
``Connection to Time Protocol Feed'' and ``Expedite Fee'' 
(collectively, the ``Access and Service Fees'').
    LCN Access: As in the Affiliate SRO Price Lists, the Exchange 
proposes to offer Users the option to purchase 1 Gb, 10 Gb, 40 Gb, and 
10 Gb LX LCN circuits, with initial and monthly charges.\22\ As in the 
Affiliate SRO Price Lists, the Exchange proposes that a User that 
purchases five 10 Gb LCN connections would only be charged the initial 
fee for a sixth 10 Gb LCN connection and would not be charged the 
monthly fee that would otherwise be applicable. This would apply to a 
User that purchases six 10 Gb LCN connections at one time as well as to 
a User that purchases six 10 Gb LCN connections at separate times.\23\
---------------------------------------------------------------------------

    \22\ See note 16, supra.
    \23\ See note 21, supra.
---------------------------------------------------------------------------

    Bundled Network Access: As in the Affiliate SRO Price Lists, the 
Exchange proposes to offer Users two ``Bundled Network Access'' 
options, with initial and monthly charges.\24\ Both bundles would 
include two LCN connections, two IP network connections, and two optic 
connections to outside access centers. One bundle would have 1 Gb 
connections, and the other 10 Gb connections.
---------------------------------------------------------------------------

    \24\ See note 16, supra.
---------------------------------------------------------------------------

    Partial Cabinet Solution Bundles: As in the Affiliate SRO Price 
Lists, the Exchange proposes to offer Users four ``Partial Cabinet 
Solution'' bundles.\25\ Each Partial Cabinet Solution bundle option 
would include a one or two kW partial cabinet, one LCN connection, one 
IP network connection, two fiber cross connections, and connectivity to 
either the Network Time Protocol (``NTP'') or Precision Timing Protocol 
(``PTP'') time feed. The power of the partial cabinet and Gb of the 
network connections would vary by bundle.\26\ A User and its Affiliates 
would be limited to one Partial Cabinet Solution bundle at a time, and 
must have an Aggregate Cabinet Footprint of 2 kW or less to qualify. As 
noted above, such requirements would be set forth in General Note 
2.\27\ Finally, a User purchasing a Partial Cabinet Solution bundle 
would be subject to a 90-day minimum commitment, after which period it 
would be subject to the 60-day rolling time period.
---------------------------------------------------------------------------

    \25\ See note 14, supra; Securities Exchange Act Release Nos. 
84893 (December 20, 2018), 83 FR 67455 (December 28, 2018) (SR-NYSE-
2018-63); 84925 (December 21, 2018), 83 FR 67754 (December 31, 2018) 
(SR-NYSEAmer-2018-55); 84893 (December 20, 2018), 83 FR 67455 
(December 28, 2018) (SR-NYSEArca-2018-93); and 84895 (December 20, 
2018), 83 FR 67405 (December 28, 2018) (SR-NYSENat-2018-26).
    \26\ The Affiliate SROs have filed to amend two of the Partial 
Cabinet Solution bundles by replacing the 10 Gb LCN connection with 
a LCN 10 Gb LX connection. According to the Affiliate SROs, the 
change is expected to become operative during the fourth quarter of 
2019, and the implementation date will be announced through a 
customer notice. See Securities Exchange Act Release Nos. 86550 
(August 1, 2019), 84 FR 38696 (August 7, 2019) (SR-NYSE-2019-41); 
86548 (August 1, 2019), 84 FR 38704 (August 7, 2019) (SR-NYSEAmer-
2019-28); 86547 (August 1, 2019), 84 FR 38708 (August 7, 2019) (SR-
NYSEArca-2019-54); and 86549 (August 1, 2019), 84 FR 38700 (August 
7, 2019) (SR-NYSENat-2019-17). The Exchange proposes to include 
notes to the Partial Cabinet Solution bundles in the Fee Schedule 
indicating the expected change.
    \27\ See text accompanying note 14, supra.
---------------------------------------------------------------------------

    IP Network Access: As in the Affiliate SRO Price Lists, the 
Exchange proposes to offer Users the option to purchase 1 Gb, 10 Gb, 
and 40 Gb IP network circuits, with initial and monthly charges.\28\
---------------------------------------------------------------------------

    \28\ See note 16, supra. See also Securities Exchange Act 
Release Nos. 74222 (February 6, 2015), 80 FR 7888 (February 12, 2015 
(SR-NYSE-2015-05); 74220 (February 6, 2015), 80 FR 7894 (February 
12, 2015) (SR-NYSEMKT-2015-08); and 74219 (February 6, 2015), 80 FR 
7899 (February 12, 2015) (SR-NYSEArca-2015-03) and NYSE National Co-
location Notice, supra note 6, at 26317.
---------------------------------------------------------------------------

    Testing and Certification IP Network Access: As in the Affiliate 
SRO Price Lists, the Exchange proposes to offer Users access to an IP 
network circuit for testing and certification at no charge.\29\ The 
circuit could only be used for testing and certification, and the 
testing and certification period would be limited to three months.
---------------------------------------------------------------------------

    \29\ See id. 80 FR at 7888, 80 FR at 7894, 80 FR at 7899, and 
NYSE National Co-location Notice, supra note 6, at 26318.
---------------------------------------------------------------------------

    Wireless Connections for Third Party Data: As in the Affiliate SRO 
Price Lists, the Exchange proposes to offer Users a means to receive 
market data feeds from third party markets (``Wireless Third Party 
Data'') through a wireless connection, for an initial and monthly 
fee.\30\ Fees would be subject to a 30-day testing period, during which 
the monthly charge per connection would be waived. The wireless 
connections would include the use of one port for connectivity to the 
Wireless Third Party Data. If a User that has more than one wireless 
connection wishes to use more than one port to connect to the Wireless 
Third Party Data, the Exchange proposes to make such additional ports 
available for a monthly fee per port.\31\
---------------------------------------------------------------------------

    \30\ See Securities Exchange Act Release Nos. 76748 (December 
23, 2015), 80 FR 81609 (December 30, 2015) (SR-NYSE-2015-52); 76750 
(December 23, 2015), 80 FR 81648 (December 30, 2015) (SR-NYSEMKT-
2015-85); and 76749 (December 23, 2015), 80 FR 81640 (December 30, 
2015) (SR-NYSEArca-2015-99); and NYSE National Co-location Notice, 
supra note 6, at 26318.
    \31\ Id.
---------------------------------------------------------------------------

    Virtual Control Circuit between two Users: As in the Affiliate SRO 
Price Lists, the Exchange proposes to offer Users ``Virtual Control 
Circuits'' (``VCCs'') between two Users for a monthly charge based on 
the size of the VCC. \32\ VCCs are connections between two points over 
dedicated bandwidth using the IP network. A VCC is a two-way connection 
which the two participants can use for any purpose. The Exchange would 
bill the User requesting the VCC, but would not set up a VCC until the 
other User confirmed that it wishes to have the VCC set up.
---------------------------------------------------------------------------

    \32\ See Securities Exchange Act Release Nos. 80311 (March 24, 
2017), 82 FR 15749 (March 30, 2017) (SR-NYSE-2016-45); 80309 (March 
24, 2017), 82 FR 15725 (March 30, 2017) (SR-NYSEMKT-2016-63); and 
80310 (March 24, 2017), 82 FR 15763 (March 30, 2017) (SR-NYSEArca-
2016-89); and NYSE National Co-location Notice, supra note 6, at 
26318.
---------------------------------------------------------------------------

    Hosting Fee: As in the Affiliate SRO Price Lists, the Exchange 
proposes to offer Users a hosting service for a monthly fee per cabinet 
per Hosted Customer for each cabinet in which such Hosted Customer is 
hosted.\33\ ``Hosting'' would be a service offered by a User to another 
entity in the User's

[[Page 58783]]

space within the data center and could include, for example, a User 
supporting such other entity's technology, whether hardware or 
software, through the User's co-location space. A Hosting User would be 
required to be a User pursuant to the definition of User proposed 
above. Since only Users could be Hosting Users, a Hosted Customer would 
not be able to provide hosting services to any other entities in the 
space in which it is hosted.
---------------------------------------------------------------------------

    \33\ See note 6, supra.
---------------------------------------------------------------------------

    Data Center Fiber Cross Connect: As in the Affiliate SRO Price 
Lists, the Exchange proposes to offer Users fiber cross connects for an 
initial and monthly charge.\34\ A User would be able to use cross 
connects between its cabinets or between its cabinet(s) and the 
cabinets of separate Users within the data center. A cross connect 
would be used to connect cabinets of separate Users when, for example, 
a User receives technical support, order routing, and/or market data 
delivery services from another User in the data center. Cross connects 
may be bundled (i.e., multiple cross connects within a single sheath) 
such that a single sheath can hold either one cross connect or several 
cross connects in multiples of six (e.g., six or 12 cross connects). 
The Exchange is proposing fees for bundled cross connects[thinsp]that 
correspond to the number of cross connects in the bundle.
---------------------------------------------------------------------------

    \34\ See note 21, supra.
---------------------------------------------------------------------------

    Connection to Time Protocol Feed: As in the Affiliate SRO Price 
Lists, the Exchange proposes to offer Users the option to purchase 
connectivity to one or more of three time feeds, with monthly and 
initial charges.\35\ Each proposed time feed would provide a feed with 
the current time of day using one of three different time protocols: 
GPS Time Source, the Network Time Protocol Feed (``NTP''), and the 
Precision Time Protocol (``PTP''). Users may make use of time feeds to 
receive time and to synchronize clocks between computer systems or 
throughout a computer network, and time feeds may assist Users in other 
functions, including record keeping or measuring response times. Only 
the NTP and PTP time feeds would be available to partial cabinet Users, 
whereas dedicated cabinet Users would have access to all three time 
feeds. The NTP feed would only be available on the LCN.
---------------------------------------------------------------------------

    \35\ See note 14, supra.
---------------------------------------------------------------------------

    Expedite Fee: As in the Affiliate SRO Price Lists, the Exchange 
proposes to offer Users the option to expedite the completion of co-
location services purchased or ordered by the User, for which the 
Exchange would charge an ``Expedite Fee.'' \36\
---------------------------------------------------------------------------

    \36\ See note 21, supra.
---------------------------------------------------------------------------

    The Exchange proposes to add the following fees and language to its 
Fee Schedule:

------------------------------------------------------------------------
       Type of service             Description        Amount of charge
------------------------------------------------------------------------
LCN Access..................  1 Gb Circuit........  $6,000 per
                                                     connection initial
                                                     charge plus $5,000
                                                     monthly per
                                                     connection.
LCN Access..................  10 Gb Circuit.......  $10,000 per
                                                     connection initial
                                                     charge plus $14,000
                                                     monthly per
                                                     connection. A User
                                                     that purchases 5 10
                                                     GB LCN Circuits
                                                     will receive the
                                                     6th 10 GB LCN
                                                     Circuit without an
                                                     additional monthly
                                                     charge.
LCN Access..................  10 Gb LX Circuit....  $15,000 per
                                                     connection initial
                                                     charge plus $22,000
                                                     monthly per
                                                     connection.
LCN Access..................  40 Gb Circuit.......  $15,000 per
                                                     connection initial
                                                     charge plus $22,000
                                                     monthly per
                                                     connection.
Bundled Network Access (2     1 Gb Bundle.........  $25,000 initial
 LCN connections, 2 IP        ....................   charge plus $13,000
 network connections, and 2   10 Gb Bundle........   monthly charge.
 optic connections to                               $50,000 initial
 outside access center).                             charge plus $53,000
                                                     monthly charge.
Partial Cabinet Solution      Option A: 1 kW        $7,500 initial
 bundles.                      partial cabinet, 1    charge per bundle
Note: A User and its           LCN connection (1     plus monthly charge
 Affiliates are limited to     Gb), 1 IP network     per bundle as
 one Partial Cabinet           connection (1 Gb),    follows:
 Solution bundle at a time.    2 fiber cross         For Users
 A User and its Affiliates     connections and       that order on or
 must have an Aggregate        either the Network    before December 31,
 Cabinet Footprint of 2 kW     Time Protocol Feed    2019: $3,000
 or less to qualify for a      or Precision Timing   monthly for first
 Partial Cabinet Solution      Protocol.             24 months of
 bundle. See Note 2 under     ....................   service, and $6,000
 ``General Notes.''.          ....................   monthly thereafter.
                              ....................   For Users
                              Option B: 2 kW         that order after
                               partial cabinet, 1    December 31, 2019:
                               LCN connection (1     $6,000 monthly.
                               Gb), 1 IP network    $7,500 initial
                               connection (1 Gb),    charge per bundle
                               2 fiber cross         plus monthly charge
                               connections and       per bundle as
                               either the Network    follows:
                               Time Protocol Feed    For Users
                               or Precision Timing   that order on or
                               Protocol.             before December 31,
                                                     2019: $3,500
                                                     monthly for first
                                                     24 months of
                                                     service, and $7,000
                                                     monthly thereafter.
                                                     For Users
                                                     that order after
                                                     December 31, 2019:
                                                     $7,000 monthly.

[[Page 58784]]

 
                              Option C: 1 kW        $10,000 initial
                               partial cabinet, 1    charge per bundle
                               LCN connection (10    plus monthly charge
                               Gb),* 1 IP network    per bundle as
                               connection (10 Gb),   follows:
                               2 fiber cross         For Users
                               connections and       that order on or
                               either the Network    before December 31,
                               Time Protocol Feed    2019: $7,000
                               or Precision Timing   monthly for first
                               Protocol.             24 months of
                              * The LCN connection   service, and
                               (10 Gb) will be       $14,000 monthly
                               replaced with an      thereafter.
                               LCN connection (10    For Users
                               Gb LX) on a date to   that order after
                               be announced by       December 31, 2019:
                               customer notice,      $14,000 monthly.
                               expected to be       $10,000 initial
                               during the fourth     charge per bundle
                               quarter of 2019.      plus monthly charge
                                                     per bundle as
                                                     follows:
                                                     For Users
                                                     that order on or
                                                     before December 31,
                                                     2019: $7,000
                                                     monthly for first
                                                     24 months of
                                                     service, and
                                                     $14,000 monthly
                                                     thereafter.
                                                     For Users
                                                     that order after
                                                     December 31, 2019:
                                                     $14,000 monthly.
                              Option D: 2 kW        $10,000 initial
                               partial cabinet, 1    charge per bundle
                               LCN connection (10    plus monthly charge
                               Gb),* 1 IP network    per bundle as
                               connection (10 Gb),   follows:
                               2 fiber cross         For Users
                               connections and       that order on or
                               either the Network    before December 31,
                               Time Protocol Feed    2019: $7,500
                               or Precision Timing   monthly for first
                               Protocol.             24 months of
                              * The LCN connection   service, and
                               (10 Gb) will be       $15,000 monthly
                               replaced with an      thereafter.
                               LCN connection (10    For Users
                               Gb LX) on a date to   that order after
                               be announced by       December 31, 2019:
                               customer notice,      $15,000 monthly.
                               expected to be
                               during the fourth
                               quarter of 2019.
IP Network Access...........  1 Gb Circuit........  $2,500 per
                                                     connection initial
                                                     charge plus $2,500
                                                     monthly per
                                                     connection.
IP Network Access...........  10 Gb Circuit.......  $10,000 per
                                                     connection initial
                                                     charge plus $11,000
                                                     monthly per
                                                     connection.
IP Network Access...........  40 Gb Circuit.......  $10,000 per
                                                     connection initial
                                                     charge plus $18,000
                                                     monthly per
                                                     connection.
Testing and certification IP  IP network circuit    No charge.
 Network Access.               for testing and
                               certification.
                               Circuit can only be
                               used for testing
                               and certification
                               and testing and
                               certification
                               period is limited
                               to three months.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of Cboe Pitch BZX     connection initial
                               Gig shaped data and   charge plus monthly
                               Cboe Pitch BYX Gig    charge per
                               shaped data.          connection of
                                                     $6,000.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of Cboe EDGX Gig      connection initial
                               shaped data and       charge plus monthly
                               Cboe EDGA Gig         charge per
                               shaped data.          connection of
                                                     $6,000.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of NASDAQ Totalview-  connection initial
                               ITCH data.            charge plus monthly
                                                     charge per
                                                     connection of
                                                     $8,500.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of NASDAQ BX          connection initial
                               Totalview-ITCH data.  charge plus monthly
                                                     charge per
                                                     connection of
                                                     $6,000.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of NASDAQ Totalview   connection initial
                               Ultra (FPGA).         charge plus monthly
                                                     charge per
                                                     connection of
                                                     $11,000.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of NASDAQ Totalview-  connection initial
                               ITCH and BX           charge plus monthly
                               Totalview-ITCH data.  charge per
                                                     connection of
                                                     $12,000.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of NASDAQ Totalview   connection initial
                               Ultra (FPGA) and BX   charge plus monthly
                               Totalview-ITCH data.  charge per
                                                     connection of
                                                     $14,500.
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Wireless connection   $5,000 per
 Third Party Data.             of Toronto Stock      connection initial
                               Exchange (TSX).       charge plus monthly
                                                     charge per
                                                     connection of
                                                     $8,500.

[[Page 58785]]

 
                                                    Fees are subject to
                                                     a 30-day testing
                                                     period, during
                                                     which the monthly
                                                     charge per
                                                     connection is
                                                     waived.
Wireless Connection for       Port for wireless     $3,000 monthly
 Third Party Data.             connection.           charge per port,
                                                     excluding first
                                                     port.
Virtual Control Circuit       1Mb.................  $200 monthly charge.
 between two Users.
                              3Mb.................  $400 monthly charge.
                              5Mb.................  $500 monthly charge.
                              10Mb................  $800 monthly charge.
                              25Mb................  $1,200 monthly
                                                     charge.
                              50Mb................  $1,800 monthly
                                                     charge.
                              100Mb...............  $2,500 monthly
                                                     charge.
Hosting Fee.................  ....................  $1,000 monthly
                                                     charge per cabinet
                                                     per Hosted Customer
                                                     for each cabinet in
                                                     which such Hosted
                                                     Customer is hosted.
Data Center Fiber Cross       Furnish and install   $500 initial charge
 Connect.                      1 cross connect.      plus $600 monthly
                                                     charge.
                              Furnish and install   $500 initial charge
                               bundle of 6 cross     plus $1,800 monthly
                               connects.             charge.
                              Furnish and install   $500 initial charge
                               bundle of 12 cross    plus $3,000 monthly
                               connects.             charge.
                              Furnish and install   $500 initial charge
                               bundle of 18 cross    plus $3,840 monthly
                               connects.             charge.
                              Furnish and install   $500 initial charge
                               bundle of 24 cross    plus $4,680 monthly
                               connects.             charge
                                                    See General Note 3.
Connection to Time Protocol   Network Time          $300 initial charge
 Feed.                         Protocol Feed         plus $100 monthly
                               (Note: LCN only).     charge.
                              Precision Time        $1,000 initial
                               Protocol.             charge plus $250
                                                     monthly charge.
                              GPS Time Source       $3,000 initial
                               (Note: dedicated      charge plus $400
                               cabinets only).       monthly charge.
Expedite Fee................  Expedited             $4,000 per request.
                               installation/
                               completion of a
                               User's co-location
                               service.
------------------------------------------------------------------------

Service-Related Fees
    The Exchange proposes to adopt the same services and fees set forth 
in the Affiliate SRO Price Lists under ``Change Fee''; ``Initial 
Install Services''; ``Hot Hands Service''; ``Shipping and Receiving''; 
``Badge Request''; ``External Cabinet Cable Tray''; ``Custom External 
Cabinet Cable Tray'' and ``Visitor Security Escort'' (collectively, the 
``Service-related Fees'') and related note, as follows.
    Change Fee: As in the Affiliate SRO Price Lists, the Exchange 
proposes to charge a User a ``Change Fee'' if the User requests a 
change to one or more existing co-location services that the Exchange 
has already established or completed for the User.\37\ The Change Fee 
would be charged per order. If a User ordered two or more services at 
one time (for example, through submitting an order form requesting 
multiple services) the User would be charged a one-time Change Fee, 
which would cover the multiple services.
---------------------------------------------------------------------------

    \37\ See id.
---------------------------------------------------------------------------

    Initial Install Services: As in the Affiliate SRO Price Lists, the 
Exchange proposes to charge a User an ``Initial Install Services'' fee 
for the installation of a dedicated or partial cabinet.\38\ The 
proposed fee would be lower for a partial cabinet. The Initial Install 
Services fee would include initial racking of equipment in the cabinet, 
provision of cables and labor. The number of hours would depend on 
whether the cabinet was partial or dedicated.
---------------------------------------------------------------------------

    \38\ See note 18, supra.
---------------------------------------------------------------------------

    Hot Hands Service: As in the Affiliate SRO Price Lists, the 
Exchange proposes to offer Users a ``Hot Hands'' service, which would 
allow Users to use on-site data center personnel to maintain User 
equipment, support network troubleshooting, rack and stack a server in 
a User's cabinet; power recycling; and install and document the fitting 
of cable in a User's cabinet(s).\39\ The Hot Hands fee would be charged 
per half hour.
---------------------------------------------------------------------------

    \39\ See Securities Exchange Act Release Nos. 72721 (July 30, 
2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-37); 72719 (July 
30, 2014), 79 FR 45502 (August 5, 2014) (SR-NYSEMKT-2014-61); and 
72720 (July 30, 2014), 79 FR 45577 (August 5, 2014) (SR-NYSEArca-
2014-81); and NYSE National Co-location Notice, supra note 6, at 
26320.
---------------------------------------------------------------------------

    Shipping and Receiving: As in the Affiliate SRO Price Lists, the 
Exchange proposes to offer Users shipping and receiving services, with 
a per shipment fee for the receipt of one shipment of goods at the data 
center from the User or supplier.\40\
---------------------------------------------------------------------------

    \40\ See note 7, supra.
---------------------------------------------------------------------------

    Badge Request: As in the Affiliate SRO Price Lists, the Exchange 
proposes to offer Users the option to obtain a permanent data center 
site access badge for a User representative. \41\
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

    External Cabinet Cable Tray: As in the Affiliate SRO Price Lists, 
the Exchange proposes to offer to engineer, furnish and install a 
Rittal 5''H x 12''W cable tray on a cabinet for a flat fee per 
tray.\42\
---------------------------------------------------------------------------

    \42\ Id.
---------------------------------------------------------------------------

    Custom External Cabinet Cable Tray: As in the Affiliate SRO Price 
Lists, the Exchange proposes to offer to engineer, furnish and install 
4'' H x 24'' W custom basket cable tray above a client's cabinet rows 
for a fee per linear foot. \43\
---------------------------------------------------------------------------

    \43\ Id.
---------------------------------------------------------------------------

    Visitor Security Escort: As in the Affiliate SRO Price Lists, the 
Exchange proposes that User representatives be required to be 
accompanied by a visitor security escort during visits to the data 
center, unless visiting the User's cage. A fee per visit would be 
charged.\44\ The proposed requirement would include User 
representatives who have a permanent data center site access badge.
---------------------------------------------------------------------------

    \44\ See note 15, supra.
---------------------------------------------------------------------------

    In order to be able to meet its obligation to accommodate demand, 
and in particular to make available more contiguous, larger spaces for 
new and existing Users, if necessary, the Exchange would exercise its 
right to move some Users' equipment within the

[[Page 58786]]

data center (``Migration''). To manage the process for a future 
Migration, the Exchange proposes to put the same Migration procedures 
in place as the Affiliate SROs, as follow: \45\
---------------------------------------------------------------------------

    \45\ See Securities Exchange Act Release Nos. 76269 (October 26, 
2015), 80 FR 66942 (October 30, 2015) (SR-NYSE-2015-42); 76268 
(October 26, 2015), 80 FR 66944 (October 30, 2015) (SR-NYSEMKT-2015-
70); and 76270 (October 26, 2015), 80 FR 66958 (October 30, 2015) 
(SR-NYSEArca-2015-85); and NYSE National Co-location Notice, supra 
note 6, at 26321.
---------------------------------------------------------------------------

     First, the Exchange would identify Users that would be 
required to move in the Migration based on (a) the current location of 
the User and its current equipment and power requirements and (b) the 
availability of another location in the Data Center that would 
accommodate the equipment and power requirements for which such User 
currently subscribes. No User would be required to move more than once 
within any 12-month period.
     Second, the Exchange would notify a User in writing (the 
``Notice'') that the User's equipment and network connections in the 
Data Center were to be moved as part of the Migration. The Notice would 
identify the 90-day period during which the User must move its 
equipment, which period would commence at least 60 days from the date 
of the Notice. The exact date or dates for the move for each User would 
be agreed upon between the User and the Exchange. If a move date or 
dates cannot be agreed on, the Exchange would schedule the move for a 
date or dates no later than 180 days after the date of the Notice.
     Third, each User's move would be facilitated by the 
Exchange in cooperation with the User, including the un-racking and re-
racking of all of the User's equipment, and the re-installation of the 
User's networking connections, and the Exchange would make reasonable 
efforts to ensure that the moves take place outside of the Exchange's 
hours for business.
     Fourth, in connection with facilitating each User's move, 
the Exchange proposes to waive certain fees. Specifically, the Exchange 
proposes to waive:
    [cir] The monthly recurring fees for the User's existing space, 
based on the rate of the monthly recurring fees that the User is paying 
as of the date of the Notice, for the month during which the User's 
move takes place. This waiver of the monthly recurring fees would mean 
that the User would not incur these fees for the period of overlapping 
use of the equipment and services in the old and the new locations, as 
long as the move is completed within one month.
    [cir] all Service-Related Fees that the User would incur if such a 
move were to take place at a User's request with respect to the User's 
existing services and equipment.
    [cir] for the month following the completion of a User's move, the 
monthly recurring charges for that User, based on the rate of the 
monthly recurring fees that the User is paying as of the date of the 
Notice, in consideration for the Migration.
    The Exchange proposes to add a note to each Service-Related Fee 
outlining the Migration process, as in the Affiliate SRO Price 
Lists.\46\ The Exchange proposes to add the following fees and note to 
its Fee Schedule:
---------------------------------------------------------------------------

    \46\ The Exchange notes that, while the other Affiliate SRO 
Price Lists use three asterisks to identify the Service-Related Fees 
and the corresponding note, the NYSE Amex Options Fee Schedule uses 
the numeral ``1''. The Exchange proposes to use three asterisks.

------------------------------------------------------------------------
        Type of service               Description       Amount of charge
------------------------------------------------------------------------
Change Fee ***................  Change to a co-         $950 per
                                 location service that   request.
                                 has already been
                                 installed/completed
                                 for a User.
Initial Install Services ***    Dedicated Cabinet:      $800 per
 (Required per cabinet).         Includes initial        dedicated
                                 racking of equipment    cabinet.
                                 in cabinet and
                                 provision of cables
                                 (4 hrs)..
                                Partial Cabinet:        $400 per eight-
                                 Includes initial        rack unit in a
                                 racking of equipment    partial
                                 in cabinet and          cabinet.
                                 provision of cables
                                 (2 hrs)..
Hot Hands Service ***.........  Allows Users to use on- $100 per half
                                 site data center        hour.
                                 personnel to maintain
                                 User equipment,
                                 support network
                                 troubleshooting, rack
                                 and stack, power
                                 recycling, and
                                 install and document
                                 cable..
Shipping and Receiving ***....  Receipt of one          $100 per
                                 shipment of goods at    shipment.
                                 data center from User/
                                 supplier. Includes
                                 coordination of
                                 shipping and
                                 receiving..
Badge Request ***.............  Request for provision   $50 per badge.
                                 of a permanent data
                                 center site access
                                 badge for a User
                                 representative..
External Cabinet Cable Tray     Engineer, furnish and   $400 per tray.
 ***.                            install Rittal 5``H x
                                 12``W cable tray on
                                 cabinet..
Custom External Cabinet Cable   Engineer, furnish and   $100 per linear
 Tray ***.                       install 4'' H x 24''    foot.
                                 W custom basket cable
                                 tray above client's
                                 cabinet rows..
Visitor Security Escort ***...  All User                $75 per visit.
                                 representatives are
                                 required to be
                                 accompanied by a
                                 visitor security
                                 escort during visits
                                 to the data center,
                                 unless visiting the
                                 User's cage.
                                 Requirement includes
                                 User representatives
                                 who have a permanent
                                 data center site
                                 access badge..
------------------------------------------------------------------------
*** These fees are waived for the move of a User's equipment within the
  Data Center when incurred in connection with such a move required by
  the Exchange (``Migration Move''). A User selected by the Exchange for
  a Migration Move will receive written notice (the ``Notice''). The
  Notice will identify the 90-day period during which a User must move
  its equipment, which period would commence at least 60 days from the
  date of the Notice. Monthly recurring fees for the User's existing
  space based on the rate of the monthly recurring fees that the User
  was paying as of the date of the Notice are also waived for the month
  during which a User's Migration Move takes place, so the User would
  not incur these fees for the period of overlapping use of equipment
  and services in the old and new locations. In addition, the monthly
  recurring charges are waived for the month following the completion of
  a User's Migration Move, based on the rate of the monthly recurring
  fees that the User was paying as of the date of the Notice. No User
  will be required to move more than once within any 12-month period.

Connectivity to Third Party Systems, Data Feeds, Testing and 
Certification Feeds, and DTCC
    The Exchange proposes to adopt the same services and fees set forth 
in the Affiliate SRO Price Lists under ``Connectivity to Third Party 
Systems, Data Feeds, Testing and Certification Feeds, and DTCC.'' \47\
---------------------------------------------------------------------------

    \47\ See note 32, supra.
---------------------------------------------------------------------------

    Connectivity to Third Party Systems: As in the Affiliate SRO Price 
Lists, the Exchange proposes to provide that Users may obtain access to 
the trading and execution services of Third Party markets and other 
content service providers (``Third Party Systems'') of multiple third 
party markets and other

[[Page 58787]]

content service providers for a fee.\48\ Users would connect to Third 
Party Systems over the IP network.
---------------------------------------------------------------------------

    \48\ See id. See also Securities Exchange Release Nos. 83706 
(July 25, 2018), 83 FR 37033 (July 31, 2018) (SR-NYSE-2018-32; 83707 
(July 25, 2018), 83 FR 36985 (July 31, 2018) (SR-NYSEAmer-2018-35); 
83708 (July 25, 2018), 83 FR 36980 (July 31, 2018) (SR-NYSEArca-
2018-52); and 83709 (July 25, 2018), 83 FR 37028 (July 31, 2018) 
(SR-NYSENat-2018-15).
---------------------------------------------------------------------------

    In order to obtain access to a Third Party System, a User would 
enter into an agreement with the relevant third party content service 
provider, pursuant to which the third party content service provider 
would charge the User for access to the Third Party System. The 
Exchange would then establish a unicast connection between the User and 
the relevant third party content service provider over the IP network. 
The Exchange would charge the User for the connectivity to the Third 
Party System. A User would only receive, and would only be charged for, 
access to Third Party Systems for which it enters into agreements with 
the third party content service provider.
    With the exception of the ICE feed, the Exchange would have no 
ownership interest in the Third Party Systems. Establishing a User's 
access to a Third Party System would not give the Exchange any right to 
use the Third Party Systems. Connectivity to a Third Party System would 
not provide access or order entry to the Exchange's execution system, 
and a User's connection to a Third Party System would not be through 
the Exchange's execution system.
    The Exchange would charge a monthly recurring fee for connectivity 
to a Third Party System. Specifically, when a User requested access to 
a Third Party System, it would identify the applicable third party 
market or other content service provider and what bandwidth connection 
it required.
    The Exchange proposes to add the following fees and language to its 
Fee Schedule:
Connectivity to Third Party Systems
    Pricing for access to the execution systems of third party markets 
and other service providers (Third Party Systems) is for connectivity 
only. Connectivity to Third Party Systems is subject to any technical 
provisioning requirements and authorization from the provider of the 
data feed. Connectivity to Third Party Systems is over the IP network. 
Any applicable fees are charged independently by the relevant third 
party content service provider. The Exchange is not the exclusive 
method to connect to Third Party Systems.

------------------------------------------------------------------------
                                             Monthly  recurring  fee per
  Bandwidth of connection to Third Party     connection  to Third  Party
                  System                               System
------------------------------------------------------------------------
1 Mb......................................  $200
3 Mb......................................  400
5 Mb......................................  500
10 Mb.....................................  800
25 Mb.....................................  1,200
50 Mb.....................................  1,800
100 Mb....................................  2,500
200 Mb....................................  3,000
1 Gb......................................  3,500
------------------------------------------------------------------------

Third Party Systems
Americas Trading Group (ATG)
BM&F Bovespa
Boston Options Exchange (BOX)
Canadian Securities Exchange (CSE)
Cboe BYX Exchange (CboeBYX), Cboe BZX Exchange (CboeBZX), Cboe EDGA 
Exchange (CboeEDGA), and Cboe EDGX Exchange (CboeEDGX)
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2)
Chicago Mercantile Exchange (CME Group)
Credit Suisse
Euronext Optiq Cash and Derivatives Unicast (EUA)
Euronext Optiq Cash and Derivatives Unicast (Production)
Investors Exchange (IEX)
ITG TriAct Matchnow
Miami International Securities Exchange
MIAX PEARL
Nasdaq
NASDAQ Canada (CXC, CXD, CX2)
NASDAQ ISE
Neo Aequitas
NYFIX Marketplace
Omega
OneChicago
OTC Markets Group
TMX Group

    Connectivity to Third Party Data Feeds: As in the Affiliate SRO 
Price Lists, the Exchange proposes to provide that Users may obtain 
connectivity to data feeds from third party markets and other content 
service providers (``Third Party Data Feeds'') for a fee.\49\ The 
Exchange would receive Third Party Data Feeds from multiple national 
securities exchanges and other content service providers at its data 
center. It would then provide connectivity to that data to Users for a 
fee. With the exceptions of Global OTC and ICE Data Global Index, Users 
would connect to Third Party Data Feeds over the IP network.
---------------------------------------------------------------------------

    \49\ Id.
---------------------------------------------------------------------------

    In order to connect to a Third Party Data Feed, a User would enter 
into a contract with the relevant third party market or other 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 Third Party Data Feed over its fiber optic network and, 
after the data provider and User enter into the contract and the 
Exchange receives authorization from the data 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 Third Party 
Data Feed. A User would only receive, and would only be charged for, 
connectivity to the Third Party Data Feeds for which it entered into 
contracts.
    With the exception of the ICE Data Services, ICE and Global OTC 
feeds, the Exchange would have no affiliation with the sellers of the 
Third Party Data Feeds. It would have no right to use the Third Party 
Data Feeds other than as a redistributor of the data. The Third Party 
Data Feeds would not provide access or order entry to the Exchange's 
execution system. With the exception of the ICE feeds, the Third Party 
Data Feeds would not provide access or order entry to the execution 
systems of the third party generating the feed. The Exchange would 
receive Third Party Data Feeds via arms-length agreements and would 
have no inherent advantage over any other distributor of such data.
    The Exchange would charge a monthly recurring fee for connectivity 
to each Third Party Data Feed. The monthly recurring fee would be per 
Third Party Data Feed, with the exception that the monthly recurring 
fee for the ICE Data Services Consolidated Feeds (including the ICE 
Data Services Consolidated FeedsShared Farm feeds), SR Labs-SuperFeeds 
and MSCI feeds would vary by the bandwidth of the connection. Depending 
on its needs and bandwidth, a User may opt to receive all or some of 
the feeds or services included in a Third Party Data Feed.
    Third Party Data Feed providers may charge redistribution fees. The 
Exchange proposes that, when it receives a redistribution fee, it pass 
through the charge to the User, without change to the fee. The fee 
would be labeled as a pass-through of a redistribution fee on the 
User's invoice. As in the Affiliate SRO Price Lists, the Exchange 
proposes to add language to the Fee Schedule accordingly.
    The Exchange proposes that it not charge Users that are third party 
markets or content providers for connectivity to their own feeds, as it 
understands that such parties generally receive their own feeds for 
purposes of diagnostics and

[[Page 58788]]

testing. As in the Affiliate SRO Price Lists, the Exchange proposes to 
add language to the Fee Schedule accordingly.
    The Exchange proposes to add the following fees and language to its 
Fee Schedule:
Connectivity to Third Party Data Feeds
    Pricing for data feeds from third party markets and other content 
service providers (Third Party Data Feeds) is for connectivity only. 
Connectivity to Third Party Data Feeds is subject to any technical 
provisioning requirements and authorization from the provider of the 
data feed. Connectivity to Third Party Data Fees is over the IP 
network, with the exception that Users can connect to Global OTC and 
ICE Data Global Index over the IP network or LCN. Market data fees are 
charged independently by the relevant third party market or content 
service provider. The Exchange is not the exclusive method to connect 
to Third Party Data Feeds.
    Third Party Data Feed providers may charge redistribution fees. 
When the Exchange receives a redistribution fee, it passes through the 
charge to the User, without change to the fee. The fee is labeled as a 
pass-through of a redistribution fee on the User's invoice. The 
Exchange does not charge third party markets or content providers for 
connectivity to their own feeds.

------------------------------------------------------------------------
                                                              Monthly
                                                             recurring
                                                           connectivity
                  Third party data feed                   fee per  third
                                                            party  data
                                                               feed
------------------------------------------------------------------------
BM&F Bovespa............................................          $3,000
Boston Options Exchange (BOX)...........................           1,000
Canadian Securities Exchange (CSE)......................           1,000
Cboe BZX Exchange (CboeBZX) and Cboe BYX Exchange                  2,000
 (CboeBYX)..............................................
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange               2,000
 (CboeEDGA).............................................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2)..........           2,000
CME Group...............................................           3,000
Euronext Optiq Compressed Cash..........................             900
Euronext Optiq Compressed Derivatives...................             600
Euronext Optiq Shaped Cash..............................           1,200
Euronext Optiq Shaped Derivatives.......................             900
Financial Industry Regulatory Authority (FINRA).........             500
Global OTC..............................................             100
ICE Data Global Index...................................             100
ICE Data Services Consolidated Feed <=100 Mb............             200
ICE Data Services Consolidated Feed >100 Mb to <=1 Gb...             500
ICE Data Services Consolidated Feed >1 Gb...............           1,000
ICE Data Services Consolidated Feed Shared Farm <=100Mb.             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
ICE Data Services PRD...................................             200
ICE Data Services PRD CEP...............................             400
Intercontinental Exchange (ICE).........................           1,500
Investors Exchange (IEX)................................           1,000
ITG TriAct Matchnow.....................................           1,000
Miami International Securities Exchange/MIAX PEARL......           2,000
Montr[eacute]al Exchange (MX)...........................           1,000
MSCI 5 Mb...............................................             500
MSCI 25 Mb..............................................           1,200
NASDAQ Stock Market.....................................           2,000
NASDAQ OMX Global Index Data Service....................             100
NASDAQ OMDF.............................................             100
NASDAQ UQDF & UTDF......................................             500
NASDAQ Canada (CXC, CXD, CX2)...........................           1,500
NASDAQ ISE..............................................           1,000
Neo Aequitas............................................           1,200
Omega...................................................           1,000
OneChicago..............................................           1,000
OTC Markets Group.......................................           1,000
SR Labs--SuperFeed <500 Mb..............................             250
SR Labs--SuperFeed >500 Mb to <1.25 Gb..................             800
SR Labs--SuperFeed >1.25 Gb.............................           1,000
TMX Group...............................................           2,500
------------------------------------------------------------------------

    Connectivity to Third Party Testing and Certification Feeds: As in 
the Affiliate SRO Price Lists, the Exchange proposes to provide that 
Users may obtain connectivity to third party testing and certification 
feeds.\50\ Certification feeds would be used to certify that a User 
conforms to any of the relevant content service provider's requirements 
for accessing Third Party Systems or receiving Third Party Data, while 
testing feeds would provide Users an environment in which to conduct 
tests with non-live data. Such feeds, which would solely be used for 
certification and testing and do not carry live production data, would 
be available over the IP network.
---------------------------------------------------------------------------

    \50\ Id.
---------------------------------------------------------------------------

    The Exchange proposes to add the following fees and language to its 
Fee Schedule:

[[Page 58789]]

Connectivity to Third Party Testing and Certification Feeds
    The Exchange provides connectivity to third party testing and 
certification feeds provided by third party markets and other content 
service providers. Pricing for third party testing and certification 
feeds is for connectivity only. Connectivity to third party testing and 
certification feeds is subject to any technical provisioning 
requirements and authorization from the provider of the data feed. 
Connectivity to third party testing and certification feeds is over the 
IP network. Any applicable fees are charged independently by the 
relevant third party market or content service provider. The Exchange 
is not the exclusive method to connect to third party testing and 
certification feeds.

Connectivity to third party certification   $100 monthly recurring fee
 and testing feeds.                          per feed.
 

    Connectivity to DTCC: As in the Affiliate SRO Price Lists, the 
Exchange proposes to provide Users connectivity to Depository Trust & 
Clearing Corporation (``DTCC'') for clearing, fund transfer, insurance, 
and settlement services.\51\
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

    In order to connect to DTCC, a User would enter into a contract 
with DTCC, pursuant to which DTCC would charge the User for the 
services provided. The Exchange would receive the DTCC feed over its 
fiber optic network and, after DTCC and the User entered into the 
services contract and the Exchange received authorization from DTCC, 
the Exchange would provide connectivity to DTCC to the User over the 
User's IP network port. The Exchange would charge the User for the 
connectivity to DTCC.
    Connectivity to DTCC would not provide access or order entry to the 
Exchange's execution system, and a User's connection to DTCC would not 
be through the Exchange's execution system.
    The Exchange proposes to add the following fees and language to its 
Fee Schedule:
    Connectivity to DTCC
    Pricing for connectivity to DTCC feeds is for connectivity only. 
Connectivity to DTCC feeds is subject to any technical provisioning 
requirements and authorization from DTCC. Connectivity to DTCC feeds is 
over the IP network. Any applicable fees are charged independently by 
DTCC. The Exchange is not the exclusive method to connect to DTCC 
feeds.

5 Mb connection to DTCC...................  $500 monthly recurring fee.
50 Mb connection to DTCC..................  $2,500 monthly recurring
                                             fee.
 

Application of Proposed Change
    As noted above, none of the proposed services and fees are new or 
novel. Current Users would not incur any new fees and the Exchange does 
not expect to attract any new Users as a result of the proposed change, 
for the following reasons.
    First, as stated in the proposed Fee Schedule, a User that incurs 
co-location fees for a particular co-location service would not be 
subject to fees for the same service charged by the Affiliate SROs.\52\ 
In other words, even though all four Affiliate SROs and the Exchange 
would offer co-location services, a User that purchased services would 
only be charged once. This would be true irrespective of whether the 
User were a member of all, some, or none of the Affiliate SROs and the 
Exchange.
---------------------------------------------------------------------------

    \52\ Co-location fees already work in this manner. See 
Securities Exchange Act Release Nos. 70206 (August 15, 2013), 78 FR 
51765 (August 21, 2013) (SR-NYSE-2013-59); 70176 (August 13, 2013), 
78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-67); and 70173 
(August 13, 2013), 78 FR 50459 (August 19, 2013) (SR-NYSEArca-2013-
80); and NYSE National Co-location Notice, supra note 6, at 26314.
---------------------------------------------------------------------------

    Second, the Exchange expects that a current User that starts to 
trade on the Exchange or connect to its market data as a result of the 
proposed change would not incur any new fees. Access to trade on the 
Exchange and connectivity to its data products comes with connections 
to the local area networks in the data center for no additional fee 
\53\--and Users that trade or connect to market data would already have 
a connection to the local area networks, either directly or through 
another User.
---------------------------------------------------------------------------

    \53\ See 84 FR 10152, 84 FR 10164, 84 FR 10159, and 84 FR 10154, 
supra note 17.
---------------------------------------------------------------------------

    Third, the Exchange does not expect any market participants to 
become Users in order to connect to the Exchange's data feed. Under the 
proposed change any authorized User would be able to obtain a lower 
latency connection to the Exchange's data feeds. However, in the first 
eight months of 2019, the Exchange averaged less than 0.6% market share 
of executed volume of non-auction equity trading.\54\ Given the small 
volume of trades on the Exchange and the fact that the NMS feeds 
include NYSE Chicago data, the Exchange does not believe that a lower 
latency connection to Exchange data would be sufficient reason for a 
firm to become a User.
---------------------------------------------------------------------------

    \54\ Based on Cboe U.S. Equities Market Volume Summary, the 
Exchange's market share of intraday trading (excluding auctions) for 
the months of January 2019, February 2019, March 2019, April 2019, 
May 2019, June 2019, July 2019 and August 2019 was 0.52%, 0.52%, 
0.56%, 0.50%, 0.50%, 0.48%, 0.46% and 0.43%, respectively. See 
http://markets.cboe.com/us/equities/market_share/.
---------------------------------------------------------------------------

    Finally, the Exchange believes that, as a practical matter, only 
Participants \55\ would be interested in becoming new Users in order to 
trade on the Exchange, as non-Participants cannot trade on the 
Exchange. The pool of relevant Participants is small: Only nine 
Participants are not also members of one or more of the Affiliate 
SROs.\56\ Of those nine Participants, two are already Users, and 
therefore, as explained above, would not be subject to any new or 
different fees as a result of this filing. The Exchange does not expect 
that any of the remaining seven Participants would opt to become Users 
in order to trade on the Exchange.\57\ Simply put, the Exchange does 
not expect that low latency access to such a small market would be 
sufficient reason for a firm to become a User.
---------------------------------------------------------------------------

    \55\ A ``Participant'' is, except as otherwise described in the 
Rules of the Exchange, ``any Participant Firm that holds a valid 
Trading Permit and any person associated with a Participant Firm who 
is registered with the Exchange under Articles 16 and 17 as a Market 
Maker Authorized Trader or Institutional Broker Representative, 
respectively.'' Article I, Rule 1(s). A Participant is considered a 
``member'' of the Exchange for purposes of the Act. ``Institutional 
Broker'' means a member of the Exchange who is registered as an 
Institutional Broker pursuant to the provisions of Article 17 and 
has satisfied all Exchange requirements to operate as an 
Institutional Broker on the Exchange. Article 1, Rule 1(n). See 84 
FR 44654, note 6, supra, at notes 7 and 11.
    \56\ The other Participants are a member of one or more of the 
Affiliate SROs. The Exchange believes that if such a Participant's 
business model required co-location, that Participant would already 
be co-located, given its membership in one or more Affiliate SROs.
    \57\ The seven Participants are all either Institutional Brokers 
or trade through a third party clearing firm. Institutional Brokers' 
usage of the Exchange is largely conducted in a non-automated 
fashion through manual tools such as the Exchange's Brokerplex 
interface. See Article 17, Rule 3, Interpretations and Policies .01 
(``Institutional Brokers essentially are order-entry firms that act 
primarily as brokers for other broker-dealers or institutional 
customers''); and 84 FR 44654, note 6, supra, at 44661-44662 and 
44666. The remaining Participants trade through a third party, which 
increases latency, suggesting that co-location is not a priority for 
their business model. For these reasons, the Exchange does not 
expect the seven Participants to opt to become Users in order to 
trade on the Exchange.
---------------------------------------------------------------------------

    The proposed change is not targeted at, or expected to be limited 
in applicability to, a specific segment of market participant, as co-
location is available to any market participant that wishes to be a 
User. If, contrary to the Exchange's beliefs, a market participant 
elects to co-locate in response to the proposed change, that new User 
would be subject to the same fees as all other Users--the same fees it 
would be subject to today, irrespective of what type or size of market 
participant it is.

[[Page 58790]]

    As with the Affiliate SROs' co-location services, Users that 
receive co-location services from the Exchange would not receive any 
means of access to the Exchange's trading and execution systems that is 
separate from or superior to that of Users that do not receive co-
location services.\58\ All orders sent to the Exchange would enter the 
Exchange's trading and execution systems through the same order gateway 
regardless of whether the sender is co-located in the Exchange's data 
center or not. In addition, co-located Users would not receive any 
market data or data service product that is not available to all Users. 
However, Users that receive co-location services normally would expect 
reduced latencies in sending orders to the Exchange and receiving 
market data from the Exchange.
---------------------------------------------------------------------------

    \58\ See note 52, supra.
---------------------------------------------------------------------------

    As with the co-location services of the Affiliate SROs, (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 
proposed co-location services would be completely voluntary and 
available to all Users on a non-discriminatory basis; 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 more of the Affiliate SROs.\59\
---------------------------------------------------------------------------

    \59\ Id.
---------------------------------------------------------------------------

    The proposed changes are not otherwise intended to address any 
other issues, and the Exchange is not aware of any problems that member 
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\60\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\61\ 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 addition, it is designed 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.
---------------------------------------------------------------------------

    \60\ 15 U.S.C. 78f(b).
    \61\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposed Rule Change Is Reasonable
    The Exchange believes that the proposed rule change is reasonable 
for the following reasons.
    As noted above, the Exchange operates in a highly competitive 
market. The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Specifically, in 
Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \62\
---------------------------------------------------------------------------

    \62\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------

    With respect to co-location, 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 would be 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 colocation 
services, affected market participants will opt to terminate their 
colocation 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.
    Importantly, with respect to co-location services and fees, all 
market participants can be Users, irrespective of whether or not they 
are Participants or members of any of the Affiliate SROs.\63\ In 
addition, the proposed changes are neither new nor novel, as the 
Exchange proposes to adopt the same services and fees set forth in the 
Affiliate SRO Price Lists, with the non-substantive differences 
described above. As a result, the proposed rule change would simply 
offer market participants the same services and fees to which they 
already have access. The sole substantive change that would result from 
the Exchange offering co-location services would be that Users would be 
able to have low latency connections to the Exchange. In other words, 
the sole change would be a benefit to market participants, with no 
change in the related costs. If the proposed rule change is not 
operative, the Exchange will not offer co-location, and market 
participants will not be able to receive that benefit.
---------------------------------------------------------------------------

    \63\ See note 6, supra.
---------------------------------------------------------------------------

    In addition, the Exchange believes that the proposed rule change is 
reasonable because, for the reasons discussed above, current Users 
would not incur any new fees and the Exchange does not expect to 
attract any new Users as a result of the proposed change. Even though 
all four Affiliate SROs and the Exchange would offer co-location 
services, a User that purchased services would only be charged once. 
This would be true irrespective of whether the User were a member of 
all, some, or none of the Affiliate SROs and the Exchange. As noted 
above, the Exchange expects that a current User that starts to trade on 
the Exchange or connects to its market data as a result of the proposed 
change would not incur any new fees. With respect to market 
participants that are not current Users, the Exchange does not expect 
any of them to become Users in order to connect to the Exchange's data 
feed or trade on the Exchange.
    The Exchange believes that the proposed co-location services and 
fees are reasonable because under the proposed change the Exchange 
would provide market participants with the option to co-locate, but 
would not require it. The co-location services, including various 
options for cabinets, LCN and IP network access, connectivity to 
Included Data Products, Third Party Data Feeds, third party testing and 
certification feeds, DTCC and Wireless Third Party Data (collectively, 
``Connectivity''), access to Exchange Systems and Third Party Systems 
(together, ``Access''), hosting, and services, would be provided as 
conveniences to Users.

[[Page 58791]]

    As is true now, use of any co-location service would be completely 
voluntary, and each market participant would be able to determine 
whether to use co-location services based on the requirements of its 
business operations. If it chose to co-locate, it would be able to 
determine what size of cabinet, form, and latency of network, would 
best suit its needs. Users would not be required to use any of their 
bandwidth for Access or Connectivity unless they wished to do so. 
Rather, a User would only receive the services it selected, and a User 
could change what services it receives at any time, subject, in the 
case of Access and Connectivity, to authorization from the relevant 
third party system or data provider, Affiliate SRO or the Exchange.
    As alternatives to using co-location, a market participant would be 
able to access or connect to Exchange Systems, Third Party Systems, 
Included Data Products, Third Party Data Feeds, third party testing and 
certification feeds, DTCC and Wireless Third Party Data through a 
Hosting User or a connection to an Exchange access center outside the 
data center, third party access center, or third party vendor. The 
market participant could make such connection through a third party 
telecommunication provider, third party wireless network, the Secure 
Financial Transaction Infrastructure (``SFTI'') network, or a 
combination thereof.
    The proposed Fee Schedule would set forth: (a) The relevant 
definitions and General Notes, including a detailed description of the 
Access and Connectivity Users receive with their purchase of access to 
the LCN or IP network; (b) the Cabinet-Related Fees; (c) the Access and 
Service Fees; (d) the Service-related Fees; (e) a description of the 
Migration; and (f) information regarding connectivity to Third Party 
Systems, Third Party Data Feeds, third party testing and certification 
feeds, and DTCC. Such Fee Schedule text would make the description of 
co-location services and fees accessible and transparent, providing 
market participants with clarity as to what services were offered 
within co-location and what the related fees would be.
    The Exchange believes that charging distinct fees for different co-
location services would be reasonable because not all Users would need, 
or wish, to utilize the same co-location services. The proposed variety 
of services would allow Users to select which co-location services to 
use, based on their business needs, and Users would only be charged for 
the services that they selected. By charging only those Users that 
utilize a co-location service the related fee, those Users that 
directly benefit from a service would support its cost.
    Similarly, the Exchange believes the proposed fees are reasonable 
because they would allow the Exchange to defray or cover the costs 
associated with offering different co-location services while providing 
Users the benefit of such services, including the benefits of, among 
other things, choosing among the array of different options for 
cabinets, power, LCN and IP network access, Connectivity, Access, 
hosting and services; having an efficient connection to clearing, fund 
transfer, insurance, and settlement services; and having an environment 
in which to conduct tests with nonlive data and to certify conformance 
to any applicable technical requirements.
    The Exchange believes that the proposed charges are reasonable 
because the Exchange would offer co-location services as conveniences 
to Users, but in order to do so would have to provide, maintain and 
operate the data center facility hardware and technology 
infrastructure. The Exchange would need to expand the network 
infrastructure to keep pace with the number of services available to 
Users, including any increasing demand for bandwidth, and to establish 
any additional administrative controls. The Exchange would have to 
handle the installation, administration, monitoring, support and 
maintenance of such services, including by responding to any production 
issues. In addition, in order to provide connectivity to Third Party 
Data Feeds, Third Party Systems, third party testing and certification 
feeds and DTCC, the Exchange would have to maintain multiple 
connections to each Third Party Data Feed, Third Party System, and 
DTCC, allowing the Exchange to provide resilient and redundant 
connections; adapt to any changes made by the relevant third party; and 
cover any applicable fees (other than redistribution fees) charged by 
the relevant third party, such as port fees.
    The Exchange believes it is reasonable that redistribution fees 
charged by providers of Third Party Data Feeds would be passed through 
to the User, without change to the fee. If not passed through, the cost 
of the re-distribution fees would be factored into the proposed fees 
for connectivity to Third Party Data Feeds. The Exchange believes that 
passing through the fees makes them more transparent to the User, 
allowing the User to better assess the cost of the connectivity to a 
Third Party Data Feed by seeing the individual components of the cost, 
i.e., the Exchange's fee and the redistribution fee.
    The Exchange believes that it is reasonable to not charge third 
party markets or content providers for connectivity to their own Third 
Party Data Feeds, as the Exchange understands that such parties 
generally receive their own feeds for purposes of diagnostics and 
testing. The Exchange believes that facilitating such diagnostics and 
testing 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.
The Proposed Rule Change Is Equitable
    The Exchange believes the proposed rule change is an equitable 
allocation of its fees and credits for the following reasons.
    The Exchange believes that the proposed co-location services and 
fees are reasonable because under the proposed change the Exchange 
would provide market participants with the option to co-locate, but 
would not require it. The co-location services, including various 
options for cabinets, LCN and IP network access, Connectivity, Access, 
hosting, and services, would be provided as conveniences to Users.
    As is true now, use of any co-location service would be completely 
voluntary, and each market participant would be able to determine 
whether to use co-location services based on the requirements of its 
business operations. If it chose to co-locate, it would be able to 
determine what size of cabinet, form, and latency of network, would 
best suit its needs. Users would not be required to use any of their 
bandwidth for Access or Connectivity unless they wished to do so. 
Rather, a User would only receive the services it selected, and a User 
could change what services it receives at any time, subject, in the 
case of Access and Connectivity, to authorization from the relevant 
third party system or data provider, Affiliate SRO or the Exchange.
    In addition to the co-location services being completely voluntary, 
they would be available to all Users on an equal basis (i.e., the same 
co-location services would be available to all Users). All Users that 
voluntarily elected to receive a co-location service would be charged 
the same amount for the same service.
    Further, by having the Fee Schedule set forth the same co-location 
services and fees offered by the Affiliate SROs, with only non-
substantive differences from the Affiliate SRO Price Lists, Users would 
benefit from having consistent products and pricing across the

[[Page 58792]]

Exchange and the four Affiliate SROs. As is true for the Affiliate SROs 
and as specified in the proposed Fee Schedule, a User that incurred 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 Affiliate SROs.
    The Exchange believes that the proposal to establish procedures and 
waive certain fees in connection with the movement of equipment at the 
data center in a Migration would provide for the equitable allocation 
of reasonable fees because, pursuant to the proposed procedures for 
selecting which Users would be required to move within the data center, 
a User would be required to move only if the Exchange would be able to 
accommodate such User's current space and power requirements at the new 
location, so as to minimize the disruption to the User. The Exchange 
believes that the waiver of overlapping monthly recurring charges, the 
waiver of the Service-Related Fees, and the waiver of one month of 
monthly recurring charges in a Migration would be reasonable because 
Users would be moving at the Exchange's request and the waivers would 
help to alleviate the burden on the Users that are required to move.
The Proposed Rule Change Is Not Unfairly Discriminatory
    The Exchange believes that the proposed change is not unfairly 
discriminatory for the following reasons.
    As is true now, use of any co-location service would be completely 
voluntary, and each market participant would be able to determine 
whether to use co-location services based on the requirements of its 
business operations. In addition to the co-location services being 
completely voluntary, they would be available to all Users on an equal 
basis (i.e., the same co-location services would be available to all 
Users). All Users that voluntarily elected to receive a co-location 
service would be charged the same amount for the same service.
    The Exchange believes that charging distinct fees for different co-
location services is not unfairly discriminatory because not all Users 
would need, or wish, to utilize the same co-location services. The 
proposed variety of services would allow Users to select which co-
location services to use, based on their business needs, and Users 
would only be charged for the services that they selected. By charging 
only those Users that utilize a co-location service the related fee, 
those Users that directly benefit from a service would support its 
cost.
    The Exchange believes that the proposed charges are not unfairly 
discriminatory because the Exchange would offer co-location services as 
conveniences to Users, but in order to do so would have to provide, 
maintain and operate the data center facility hardware and technology 
infrastructure. The Exchange would need to expand the network 
infrastructure to keep pace with the number of services available to 
Users, including any increasing demand for bandwidth, and to establish 
any additional administrative controls. The Exchange would have to 
handle the installation, administration, monitoring, support and 
maintenance of such services, including by responding to any production 
issues. In addition, in order to provide connectivity to Third Party 
Data Feeds, Third Party Systems, third party testing and certification 
feeds and DTCC, the Exchange would have to maintain multiple 
connections to each Third Party Data Feed, Third Party System, and 
DTCC, allowing the Exchange to provide resilient and redundant 
connections; adapt to any changes made by the relevant third party; and 
cover any applicable fees (other than redistribution fees) charged by 
the relevant third party, such as port fees.
The Proposed Rule Change Would Protect Investors and the Public 
Interest
    The Exchange believes that the proposed rule change relating to co-
location would perfect the mechanisms of a free and open market and a 
national market system and, in general, protect investors and the 
public interest for the following reasons.
    The proposed Fee Schedule would set forth: (a) The relevant 
definitions and General Notes, including a detailed description of the 
Access and Connectivity Users receive with their purchase of access to 
the LCN or IP network; (b) the Cabinet-Related Fees; (c) the Access and 
Service Fees; (d) the Service-related Fees; (e) a description of the 
Migration; and (f) information regarding connectivity to Third Party 
Systems, Third Party Data Feeds, third party testing and certification 
feeds, and DTCC. Such Fee Schedule text would make the description of 
co-location services and fees accessible and transparent, providing 
market participants with clarity as to what services were offered 
within co-location and what the related fees would be.
    Providing connectivity to testing and certification feeds would 
provide Users an environment in which to conduct tests with non-live 
data, including testing for upcoming releases and product enhancements 
or the User's own software development, and allow Users to certify 
conformance to any applicable technical requirements.
    The Exchange believes that it is reasonable to not charge third 
party markets or content providers for connectivity to their own Third 
Party Data Feeds, as the Exchange understands that such parties 
generally receive their own feeds for purposes of diagnostics and 
testing. Similarly, providing connectivity to DTCC would provide 
efficient connection to clearing, fund transfer, insurance, and 
settlement services.
    Finally, the Exchange believes that the proposal to establish 
procedures and waive certain fees in connection with the movement of 
equipment at the data center in a Migration would allow the Exchange to 
have sufficient space in the data center to accommodate demand on an 
equitable basis for the foreseeable future. The Exchange believes that 
the waiver of overlapping monthly recurring charges, the waiver of the 
Service-Related Fees, and the waiver of one month of monthly recurring 
charges in a Migration would be reasonable because Users would be 
moving at the Exchange's request and the waivers would help to 
alleviate the burden on the Users that are required to move.
* * * * *
    For the foregoing 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,\64\ the Exchange 
believes that the proposed rule change would 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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    \64\ 15 U.S.C. 78f(b)(8).
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    In accordance with Section 6(b)(8) of the Act,\65\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
---------------------------------------------------------------------------

    \65\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

Intramarket Competition
    The Exchange believes that the proposed rule change would not have 
an impact on intramarket competition because the proposed rule change 
would simply offer market participants the same services and fees to 
which they already have access. The sole substantive change that would 
result from the Exchange offering co-location services would be that 
Users would be

[[Page 58793]]

able to have low latency connections to the Exchange. In other words, 
the only change would be a benefit to market participants, with no 
change in the related costs. If the proposed rule change is not 
operative, the Exchange will not offer co-location, and market 
participants will not be able to receive that benefit.
    Further, current Users would not incur any new fees and the 
Exchange does not expect to attract any new Users as a result of the 
proposed change. Accordingly, the proposed rule change would not have 
an impact on intramarket competition. Even though all four Affiliate 
SROs and the Exchange would offer co-location services, a User that 
purchased services would only be charged once. This would be true 
irrespective of whether the User were a member of all, some, or none of 
the Affiliate SROs and the Exchange. As noted above, the Exchange 
expects that a current User that starts to trade on the Exchange or 
connects to its market data as a result of the proposed change would 
not incur any new fees. With respect to market participants that are 
not current Users, the Exchange does not expect any of them to become 
Users in order to connect to the Exchange's data feed or trade on the 
Exchange. Finally, as noted above, the Exchange believes that, as a 
practical matter, only Participants would be interested in becoming new 
Users in order to trade on the Exchange, as non-Participants cannot 
trade on the Exchange. The pool of relevant Participants is small: Only 
nine Participants are not also members of one or more of the Affiliate 
SROs.\66\ Of those nine Participants, two are already Users, and 
therefore, as explained above, would not be subject to any new or 
different fees as a result of this filing. The Exchange does not expect 
that any of the remaining seven Participants would opt to become Users 
in order to trade on the Exchange.\67\ Simply put, the Exchange does 
not expect that low latency access to such a small market would be 
sufficient reason for a firm to become a User.
---------------------------------------------------------------------------

    \66\ See note 56, supra.
    \67\ See note 57, supra.
---------------------------------------------------------------------------

    The proposed co-location services would be available to all Users 
on an equal basis. All Users that voluntarily selected to receive co-
location services, including cabinets, LCN and IP network access, 
Connectivity, Access and other services, would be charged the same 
amount for the same services. In the case of a Migration, all Users 
would be subject to the same proposed procedures for selecting which 
Users would be required to move within the data center and what fees 
would be affected.
    The proposed co-location services would provide market participants 
with the option to co-locate, but would not require it. Use of any co-
location services would be completely voluntary, and each market 
participant would be able to determine whether to use co-location 
services based on the requirements of its business operations. In this 
way, the proposed changes would enhance competition by providing market 
participants with additional options for their business operations.
Intermarket Competition
    As noted above, the proposed rule change would simply offer market 
participants the same services and fees to which they already have 
access, as currently a User that purchases access to the LCN or IP 
network receives the ability to access the trading and execution 
systems of the Exchange and connectivity to the Included Data Products 
of the Exchange. The sole substantive change that would result from the 
Exchange offering co-location services would be that Users would be 
able to have low latency connections to the Exchange. As a result, 
there would be no material burden on competition with respect to other 
national securities exchanges.
    In addition, there would be no material burden on intermarket 
competition because, for the reasons discussed above, current Users 
would not incur any new fees and the Exchange does not expect to 
attract any new Users as a result of the proposed change. In the first 
eight months of 2019, the Exchange averaged less than 0.6% market share 
of executed volume of non-auction equity trading.\68\ Given the small 
market share of the Exchange, it does not believe that the proposed 
rule change would affect the competitive landscape among the national 
securities exchanges.
---------------------------------------------------------------------------

    \68\ See note 54, supra.
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market in which 
exchanges offer co-location services as a means to facilitate the 
trading and other market activities of those market participants who 
believe that co-location enhances the efficiency of their operations. 
Accordingly, fees charged for co-location services are constrained by 
the active competition for the order flow of, and other business from, 
such market participants. If a particular exchange charges excessive 
fees for co-location services, affected market participants will opt to 
terminate their co-location arrangements with that exchange, and adopt 
a possible range of alternative strategies, including placing their 
servers in a physically proximate location outside the exchange's data 
center (which could be a competing exchange), or pursuing strategies 
less dependent upon the lower exchange-to- participant latency 
associated with co-location. Accordingly, the exchange charging 
excessive fees would stand to lose not only co-location revenues but 
also the liquidity of the formerly co-located trading firms, which 
could have additional follow-on effects on the market share and revenue 
of the affected exchange.
    For the reasons described above, the Exchange believes that the 
proposed rule change reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \69\ and Rule 19b-4(f)(6) thereunder.\70\ 
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 prior to 
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 and Rule 19b-
4(f)(6)(iii) thereunder.\71\
---------------------------------------------------------------------------

    \69\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \70\ 17 CFR 240.19b-4(f)(6).
    \71\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \72\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\73\ the

[[Page 58794]]

Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay. The 
Exchange asserts that waiver of the operative delay would be consistent 
with the protection of investors and the public interest because it 
would allow the Exchange to provide the proposed co-location services 
immediately upon the Exchange's migration to Pillar. For the same 
reason, the Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Accordingly, the Commission waives the 30-day operative delay and 
designates the proposed rule change operative upon filing.\74\
---------------------------------------------------------------------------

    \72\ 17 CFR 240.19b-4(f)(6).
    \73\ 17 CFR 240.19b-4(f)(6)(iii).
    \74\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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) \75\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \75\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSECHX-2019-12 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-NYSECHX-2019-12. 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-NYSECHX-2019-12 and should be submitted 
on or before November 22, 2019.
---------------------------------------------------------------------------

    \76\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\76\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23862 Filed 10-31-19; 8:45 am]
 BILLING CODE 8011-01-P


