[Federal Register Volume 85, Number 56 (Monday, March 23, 2020)]
[Notices]
[Pages 16434-16436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06002]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88400; File No. SR-NYSECHX-2020-07]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change of a 
Temporary Waiver of the Co-Location Hot Hands Fee

March 17, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on March 16, 2020 the NYSE Chicago, Inc. (``NYSE Chicago'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes a temporary waiver of the co-location ``Hot 
Hands'' fee beginning on March 16, 2020 through March 29, 2020. 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 a temporary suspension of the co-location \4\ 
``Hot Hands'' fee beginning on March 16, 2020 through March 29, 2020, 
after which the Mahwah, New Jersey data center (``Data Center'') is 
scheduled to reopen to third parties.
---------------------------------------------------------------------------

    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in October 2019. See Securities Exchange Act 
Release No. 87408 (October 28, 2019), 84 FR 58778 (November 1, 2019) 
(SR-NYSECHX-2019-27).
---------------------------------------------------------------------------

    The Exchange is an indirect subsidiary of Intercontinental 
Exchange, Inc. (``ICE''). Through its ICE Data Services (``IDS'') 
business, ICE operates the Data Center, from which the Exchange 
provides co-location services to Users.\5\
---------------------------------------------------------------------------

    \5\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See id. at note 6. As 
specified in the Fee Schedule of NYSE Chicago, Inc. (``Fee 
Schedule''), a User that incurs co-location fees for a particular 
co-location service pursuant thereto would not be subject to co-
location fees for the same co-location service charged by the 
Exchange's affiliates the 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''). See id. at 58779. Each Affiliate SRO has 
submitted substantially the same proposed rule change to propose the 
changes described herein. See SR-NYSE-2020-18, SR-NYSEAmer-2020-19, 
SR-NYSEArca-2020-22, and SR-NYSENAT-2020-10.
---------------------------------------------------------------------------

    Among those services is a ``Hot Hands'' service, which allows 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).\6\ The Hot Hands fee is $100 per half hour.
---------------------------------------------------------------------------

    \6\ See 84 FR 58778, supra note 4.
---------------------------------------------------------------------------

    ICE has announced to each User that, starting March 16, 2020, the 
Data Center will be closed to third parties through March 29, 2020. 
Pursuant to the ICE contingency plan, the Data Center is being closed 
to third parties to help avoid the spread of COVID-19, which could 
negatively impact Data Center functions. The Chief Executive Officer of 
the Exchange has taken the actions required under NYSE Chicago Rule 7.1 
to close the co-location facility of the Exchange to third parties.\7\ 
While the Rule 7.1 closure is in effect, User representatives will not 
be allowed access to the Data Center.
---------------------------------------------------------------------------

    \7\ See NYSE Chicago Rule 7.1 (c) through (e). See also NYSE 
Rule 7.1, NYSE Arca Rules 7.1-E and 7.1-O, NYSE American Rules 7.1E 
and 901NY, and NYSE National Rule 7.1.
---------------------------------------------------------------------------

    If a User's equipment requires work while the Rule 7.1 closure is 
in effect, the User will have no option but to use the Hot Hands 
service and, absent the proposed waiver, would incur Hot Hands fees for 
the work. Given that, the Exchange proposes to waive all Hot Hands fees 
from the date of the closing through March 29, 2020, and to add text to 
the Hot Hands Fee in the Fee Schedule noting the waiver. The Exchange 
believes that there will be sufficient Data Center staff on-site to 
comply with User requests for Hot Hands service.
    The proposed waiver would apply equally to all Users. The proposed 
fee waiver would not apply differently to distinct types or sizes of 
market participants. Rather, it would apply uniformly to all Users.
    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\9\ in particular, 
because it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members, issuers and other persons 
using its facilities and does not unfairly discriminate between 
customers,

[[Page 16435]]

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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 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.
    While the Rule 7.1 closure is in effect, User representatives will 
not be allowed access to the Data Center. If a User's equipment 
requires work during such period, the User will have to use the Hot 
Hands service and, absent a waiver, would incur Hot Hands fees for the 
work. The Exchange believes that it is reasonable to grant the proposed 
waiver because Users would have no option other than using the Hot 
Hands service.
    The proposed relief would allow a User to have work carried out on 
its equipment notwithstanding the closure of the Data Center without 
incurring Hot Hands fees.
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 proposed waiver would apply equally to all Users. The proposed 
fee waiver would not apply differently to distinct types or sizes of 
market participants. Rather, it would apply uniformly to all Users.
    The Exchange believes that the proposal is equitable because all 
similarly-situated Users would not be charged a fee to use the Hot 
Hands service that the User would have to use because of the Data 
Center closure.
The Proposed Change Is Not Unfairly Discriminatory and Would Protect 
Investors and the Public Interest
    The Exchange believes that the proposed change is not unfairly 
discriminatory for the following reasons.
    The proposed waiver would not apply differently to distinct types 
or sizes of market participants. Rather, all Users whose equipment 
requires work during the Data Center closure would have the resulting 
fees waived, and the waiver would apply uniformly to all Users from 
March 16, 2020 through March 29, 2020. For the reasons above, the 
proposed changes do not unfairly discriminate between or among market 
participants.
    In addition, the Exchange believes that the proposed rule change 
would perfect the mechanisms of a free and open market and a national 
market system and, in general, protect investors and the public 
interest because it would allow a User to have work carried out on its 
equipment notwithstanding the closure of the Data Center pursuant to 
Rule 7.1 without incurring Hot Hands fees. Accordingly, the Exchange 
believes that the requested relief is designed to perfect the 
mechanisms of a free and open market and a national market system and, 
in general, protect investors and the public interest by facilitating 
the uninterrupted availability of Users' equipment.
    For all of the above 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,\10\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
---------------------------------------------------------------------------

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

Intramarket Competition
    The Exchange does not believe that the proposed change would place 
any burden on intramarket competition that is not necessary or 
appropriate.
    The proposal it is not designed to affect competition, but rather 
to provide relief to Users that, while the Rule 7.1 closure is in 
effect, have no option but to use the Hot Hands service.
    The proposed waiver would not apply differently to distinct types 
or sizes of market participants. All Users who use the Hot Hands 
service from March 16, 2020 through March 29, 2020 would have the 
resulting fees waived.
Intermarket Competition
    The Exchange does not believe that the proposed change would impose 
any burden on intermarket competition that is not necessary or 
appropriate.
    The Exchange believes that the proposed change would not affect the 
competitive landscape among the national securities exchanges, as the 
Hot Hands service is solely charged within co-location to existing 
Users, and would be temporary.
    For the reasons described above, the Exchange believes that the 
proposed rule change reflects this competitive environment.

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

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

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSECHX-2020-07 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-2020-07. 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

[[Page 16436]]

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-2020-07 and should be submitted 
on or before April 13, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06002 Filed 3-20-20; 8:45 am]
BILLING CODE 8011-01-P


