8424 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

21Rule 19b–4(e)(1) under the Act states that ‘‘[t]he 

listing and trading of a new derivative securities 

product by a self-regulatory organization shall not 

be deemed a proposed rule change, pursuant to 

paragraph (c)(1) of this section, if the Commission 

has approved, pursuant to section 19(b) of the Act 

(15 U.S.C. 78s(b)), the self-regulatory organization’s 

trading rules, procedures and listing standards for 

the product class that would include the new 

derivative securities product and the self-regulatory 

organization has a surveillance program for the 

product class.’’ 17 CFR 240.19b–4(e)(1). ‘‘New 

derivative securities product’’ is defined as ‘‘any 

type of option, warrant, hybrid securities product 

or any other security, other than a single equity 

option or a security futures product, whose value 

is based, in whole or in part, upon the performance 

of, or interest in, an underlying instrument.’’ 17 

CFR 240.19b–4(e). 

22See supra note 9 and accompanying text. 

23See Securities Exchange Act Release Nos. 

88625 (April 13, 2020), 85 FR 21479 (April 17, 

2020) (SR–NYSEArca–2019–81); 88566 (April 6, 

2020), 85 FR 20312 (April 10, 2020) (SR–CboeBZX– 

2019–097); and 88561 (April 3, 2020), 85 FR 19984 

(April 9, 2020) (SR–NASDAQ–2019–090). These 

releases are referred to collectively as the ‘‘Prior 

Rule 6c–11 Generic Listing Orders.’’ 

24 15 U.S.C. 78f(b)(5). 

25When relying on Rule 19b–4(e) under the Act 

to list and trade a new derivative securities product, 

the Commission notes that NYSE must submit Form 

19b–4(e) (17 CFR 249.820) to the Commission 

within five business days after commencement of 

trading the new derivative securities product. See 

17 CFR 240.19b–4(e)(2)(ii). See also 17 CFR 

240.19b–4(e)(2)(i) (setting forth NYSE’s 

recordkeeping requirements relating to all relevant 

records and information pertaining to each new 

derivative securities product traded pursuant to 

Rule 19b–4(e)). 

26 15 U.S.C. 78f(b)(5). 

27See supra note 17 and accompanying text. See 

also supra note 21 (citing to Rule 19b–4(e)(1) under 

the Act requiring the self-regulatory organization to 

have a surveillance program for the product class 

of a new derivative securities product). 

28 15 U.S.C. 78f(b)(5). 

29 15 U.S.C. 78f(b)(2). 

30 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

requires, among other things, that the 

Exchange’s rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Exchange proposes to adopt new 

NYSE Rule 5.2(j)(8) to establish generic 

listing standards pursuant to Rule 19b– 

4(e) under the Act 21 that would permit 

the Exchange to list and trade ExchangeTraded Fund Shares in a manner 

consistent with Rule 6c–11 under the 

1940 Act. The Exchange represents that 

proposed NYSE Rule 5.2(j)(8) is based 

on recently adopted NYSE Arca Rule 

5.2–E(j)(8).22 The Commission believes 

that NYSE’s proposed Rule 5.2(j)(8) is 

substantively identical to proposals that 

the Commission has previously 

approved relating to the listing and 

trading of Exchange-Traded Fund 

Shares that are permitted to operate in 

reliance on Rule 6c–11 under the 1940 

Act.23 Accordingly, for the reasons 

discussed in the Prior Rule 6c–11 

Generic Listing Orders, the Commission 

finds that this proposed rule change is 

consistent with Section 6(b)(5) of the 

Act 24 and the rules and regulations 

thereunder applicable to a national 

securities exchange.25

In addition, as stated above, the 

Exchange represents that proposed 

NYSE Rule 7.18(d)(2) governing trading 

halts for NYSE-listed ETPs (which 

would include Exchange-Traded Fund 

Shares), is based on NYSE Arca Rule 

7.18–E(d)(2). The Commission believes 

that NYSE’s proposed Rule 7.18(d)(2) is 

substantively identical to NYSE Arca 

Rule 7.18–E(d)(2) and concludes that 

this proposed rule does not present any 

novel or unique regulatory issues. The 

Commission therefore finds that this 

proposed rule change relating to trading 

halts is consistent with Section 6(b)(5) 

of the Act 26 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice, including the Exchange’s 

representations relating to its 

surveillance procedures. Specifically, 

the Exchange represents, among other 

things, that its surveillance procedures 

are adequate to properly monitor the 

trading of the Exchange-Traded Fund 

Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules, and that the Exchange will 

implement and maintain written 

surveillance procedures to monitor 

trading in Exchange-Traded Fund 

Shares on the NYSE.27

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 28 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,29 that the 

proposed rule change (SR–NYSE–2020– 

86) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02397 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91037; File No. SR– 

NYSENAT–2021–01] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing of 

Proposed Rule Change To Amend its 

Schedule of Fees and Rebates Related 

to Co-Location Services 

February 1, 2021. 

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 January 

19, 2021, NYSE National, Inc. (‘‘NYSE 

National’’ 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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Schedule of Fees and Rebates (‘‘Fee 

Schedule’’) related to co-location 

services to add two Partial Cabinet 

Solution bundles. 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. 


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Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 8425 

4The Exchange initially filed rule changes 

relating to its co-location services with the 

Securities and Exchange Commission 

(‘‘Commission’’) in 2018. See Securities Exchange 

Act Release No. 83351 (May 31, 2018), 83 FR 26314 

(June 6, 2018) (SR–NYSENAT–2018–07) (‘‘NYSE 

National Co-location Notice’’). 

5For 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., supra note 4, at 26314 

n.9. As specified in the Fee Schedule, a User that 

incurs co-location fees for a particular co-location 

service pursuant thereto would not be subject to colocation fees for the same co-location service 

charged by the Exchange’s affiliates New York 

Stock Exchange LLC (‘‘NYSE’’), NYSE American 

LLC, NYSE Arca, Inc., and NYSE Chicago, Inc. 

(together, the ‘‘Affiliate SROs’’). See id. at 26314 

n.11. Each Affiliate SRO has submitted 

substantially the same proposed rule change to 

propose the changes described herein. See SR– 

NYSE–2021–05, SR–NYSEAMER–2021–04, SR– 

NYSEArca–2021–07, and SR–NYSECHX–2021–01. 

6See id. at 26315. 

7See id. 

8See id. The definitions of ‘‘Affiliate’’ and 

‘‘Aggregate Cabinet Footprint’’ were added to the 

Fee Schedule at the same time. 

9See Securities Exchange Act Release Nos. 88837 

(May 7, 2020), 85 FR 28671 (May 13, 2020) (SR– 

NYSE–2019–46, SR–NYSEAMER–2019–34, SR– 

NYSEArca–2019–61, SR–NYSENAT–2019–19) 

(‘‘NMS Network Approval Order’’) and 88972 (May 

29, 2020), 85 FR 34472 (June 4, 2020) (‘‘NYSE 

Chicago NMS Network Approval Order’’). 

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 its 

Fee Schedule related to co-location 4

services to add two Partial Cabinet 

Solution (‘‘PCS’’) bundles that would be 

offered to Users.5

Proposed Addition of Option E and 

Option F PCS Bundles 

The Fee Schedule currently lists four 

PCS bundles, Options A through D. As 

originally formulated, each PCS bundle 

option included a partial cabinet 

powered to a maximum of 2 kilowatts 

(‘‘kW’’); access to the liquidity center 

network (‘‘LCN’’) and internet protocol 

(‘‘IP’’) networks, the local area networks 

available in the data center; two fiber 

cross connections; and connectivity to 

one of two time feeds.6 The PCS 

bundles are designed to attract smaller 

Users, including those with minimal 

power or cabinet space demands or 

those for which the costs attendant with 

having a dedicated cabinet are too 

burdensome.7 Users are only eligible to 

purchase PCS bundles if they meet 

specified requirements, set forth in 

General Note 2 of the Fee Schedule.8

In May 2020, the Exchange amended 

PCS bundle Options C and D to each 

include two 10 Gb connections to the 

NMS Network, an alternate dedicated 

network connection that Users could 

use to access the NMS feeds for which 

the Securities Industry Automation 

Corporation (‘‘SIAC’’) is engaged as the 

securities information processor 

(‘‘SIP’’).9 These two 10 Gb NMS 

Network connections were added to the 

Option C and D bundles at no additional 

cost. 

In response to customer interest, the 

Exchange now proposes to add two new 

PCS bundles to the Fee Schedule. 

Proposed Options E and F would be 

substantially similar to Options C and 

D, respectively, with the difference that 

each connection included in the 

proposed bundles would be upgraded to 

40 Gb from 10 Gb: That is, proposed 

Options E and F would include a 1 kw 

(Option E) or 2 kw (Option F) partial 

cabinet, one 40 Gb LCN connection, one 

40 Gb IP network connection, two 40 Gb 

NMS Network connections, and either 

the Network Time Protocol Feed or the 

Precision Timing Protocol. Users 

selecting an Option E or F bundle would 

be charged the same initial charge of 

$10,000 that currently applies to 

Options C and D. In addition, Users 

would be charged monthly recurring 

charges (‘‘MRC’’) of $18,000 for an 

Option E bundle and $19,000 for an 

Option F bundle. The Exchange 

proposes that Users that purchase 

Option E or F bundles on or before 

December 31, 2021 would receive a 50% 

reduction in the MRC for the first 12 

months. 

The amended portion of the Fee 

Schedule would read as follows 

(proposed additions italicized): 

Type of service Description Amount of charge 

Partial Cabinet Solution bundles Note: A User 

and its Affiliates are limited to one Partial 

Cabinet Solution bundle at a time. A User 

and its Affiliates must have an Aggregate 

Cabinet Footprint of 2 kW or less to qualify 

for a Partial Cabinet Solution bundle. See 

Note 2 under ‘‘General Notes.’’.

Option E: 1 kW partial cabinet, 1 LCN connection (40 Gb), 1 IP network connection 

(40 Gb), 2 NMS Network connections (40 

Gb each), 2 fiber cross connections and either the Network Time Protocol Feed or 

Precision Timing Protocol.

$10,000 initial charge per bundle plus monthly 

charge per bundle as follows: 

• For Users that order on or before December 31, 2021: $9,000 monthly for first 12 

months of service, and $18,000 monthly 

thereafter. 

• For Users that order after December 31, 

2021: $18,000 monthly. 

Option F: 2 kW partial cabinet, 1 LCN connection (40 Gb), 1 IP network connection 

(40 Gb), 2 NMS Network connections (40 

Gb each), 2 fiber cross connections and either the Network Time Protocol Feed or 

Precision Timing Protocol.

$10,000 initial charge per bundle plus monthly 

charge per bundle as follows: 

• For Users that order on or before December 31, 2021: $9,500 monthly for first 12 

months of service, and $19,000 monthly 

thereafter 

• For Users that order after December 31, 

2021: $19,000 monthly 

The Exchange proposes that General 

Note 2 of the Fee Schedule—which 

currently applies to PCS bundle Options 

A through D—would also apply to 

proposed Option E and F bundles, 

without alteration. Specifically, a User 

and its Affiliates would be limited to 

one PCS bundle at a time, and a User 

and its Affiliates must have an 

Aggregate Cabinet Footprint of 2 kW or 

less to qualify for a PCS bundle. 

The Exchange is not proposing any 

changes to PCS bundle Options A 

through D. 

Application and Impact of the Proposed 

Changes 

The proposed changes would not 

apply differently to distinct types or 

sizes of market participants. Rather, 

they would apply to all Users equally. 

Users that require other sizes or 

combinations of cabinets, network 

connections, and cross connects could 

still request them. As is currently the 

case, the purchase of any co-location 

service, including PCS bundles, is 

completely voluntary and the Fee 

Schedule is applied uniformly to all 

Users. 

Competitive Environment 

A User may host another entity in its 

space within the data center. Such Users 


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8426 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

10A Hosting User is required to be a User, but 

because only Users can be Hosting Users, a Hosted 

Customer is not able to provide hosting services to 

any other entities in the space in which it is hosted. 

The Exchange allows Users to act as Hosting Users 

for a monthly fee. See NYSE National Co-location 

Notice, supra note 4, at 26318. 

11Because Hosting Users’ services are not 

regulated, they may offer differentiated pricing and 

are not required to make their pricing public or 

disclose it to the Exchange. The Exchange therefore 

does not have direct visibility into the specific 

range of options, or cost thereof, offered by Hosting 

Users, and relies on third parties for information. 

12See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78f(b)(4). 

are called ‘‘Hosting Users,’’ and their 

customers are ‘‘Hosted Customers.’’ 10

Based on conversations with Users 

and potential customers, the Exchange 

believes that Hosting Users offer 

bundles (‘‘Hosting User Bundles’’) that 

include cabinet space and space on 

shared LCN, IP, and NMS network 

connections, and that the Hosting User 

Bundles provide their end users with a 

service similar to that of the PCS 

bundles.11

The Exchange operates in a highly 

competitive market in which exchanges 

and other vendors (e.g., Hosting Users) 

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. 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.’’ 12

The proposed changes are 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,13 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,14 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism 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. The 

Exchange further believes that the 

proposed rule change is consistent with 

Section 6(b)(4) of the Act,15 because it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using its facilities and 

does not unfairly discriminate between 

customers, issuers, brokers, or dealers. 

The Proposed Change Is Reasonable 

The Exchange believes that the 

proposed rule change is reasonable and 

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 Exchange believes that it is 

reasonable to expand its PCS bundle 

options by offering the proposed Option 

E and F bundles. Currently, the 

Exchange offers Users the ability to 

purchase connectivity to the LCN/NMS 

and IP/NMS networks in 10 Gb and 40 

Gb bandwidths, but within the 

Exchange’s existing PCS bundle options, 

40 Gb connections are not available. 

This means that at present, Users 

interested in the PCS bundled 

services—either because they have 

minimal power and cabinet space 

demands or because the costs attendant 

with having a dedicated cabinet are too 

burdensome—cannot access 40 Gb 

connections and are limited to the 10 Gb 

connections offered as part of the 

Option C and D bundles. Users and 

potential customers have requested that 

the Exchange provide them the 

opportunity to purchase PCS bundles 

that include 40 Gb connections, which 

would enable them to connect to more 

of the Included Data Products and Third 

Party Data Feeds or have the same size 

connection in co-location that they have 

everywhere. The Exchange believes that 

it is reasonable to offer the proposed 

Option E and F bundles to satisfy this 

customer demand, while continuing to 

offer the existing bundle offerings, in 

order to provide potential Users of the 

PCS bundled services an additional 40 

Gb option for their network connection 

requirements. 

Additionally, the Exchange believes 

that the proposed change may make PCS 

bundles more competitive with the 

services that Hosting Users offer. 

Without this proposed rule change, 

potential Users choosing between a PCS 

bundle and a Hosting User Bundle 

would have fewer options. 

The Exchange believes that the 

proposed charges for the Option E and 

F bundles are reasonable. The Exchange 

proposes that Users choosing the Option 

E or F bundles would pay the same 

$10,000 initial charge that Users 

currently pay when choosing the Option 

C or D bundles, which reflects the fact 

that setting up each of these four cabinet 

options involves a similar amount of 

work for the Exchange. It is also 

reasonable for the Exchange to set MRC 

charges of $18,000 for an Option E 

bundle (a $4,000 increase over Option 

C) and $19,000 for an Option F bundle 

(a $4,000 increase over Option D) which 

reflects the fact that the Exchange will 

have to supply multiple 40 Gb 

connections in the Option E and F 

bundles, as opposed to the 10 Gb 

connections included in the Option C 

and D bundles. 

The Exchange believes that it is 

reasonable to provide a period of 

eligibility for a 50% MRC reduction as 

an incentive to Users to utilize the 

Option E and F bundles. Similar 50% 

MRC reductions were proposed and 

approved for Options A through D when 

those product offerings were added to 

the Fee Schedule. 

The Proposed Change Is Not Unfairly 

Discriminatory 

The Exchange believes its proposal is 

not unfairly discriminatory. The 

proposed change would not apply 

differently to distinct types or sizes of 

market participants. Rather, it would 

apply to all Users equally. The 

Exchange would continue to offer the 

four existing PCS bundles (Options A 

through D) with different cabinet 

footprints and network connection 

options, in addition to the proposed 

Option E and F bundles. Users that 

require other sizes or combinations of 

cabinets, network connections, and 

cross connects could still request them. 

As is currently the case, the purchase of 

any co-location service, including PCS 

bundles, would be completely 

voluntary. 

The Exchange believes that the 

proposed charges for Option E and F 

bundles are not unfairly discriminatory. 

The proposed initial charges and MRCs 

for Options E and F would apply 

equally to all Users that purchase an 

Option E or F bundle, and the proposed 

50% reduction of MRC for the first 12 


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Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 8427 

16 15 U.S.C. 78f(b)(8). 

17See Regulation NMS Adopting Release, supra 

note 12, at 37499. 

months would apply to any User that 

orders an Option E or F bundle on or 

before December 31, 2021. 

The Proposed Change Is an Equitable 

Allocation of Fees and Credits 

The Exchange believes that its 

proposal equitably allocates its fees 

among its market participants. 

The proposed change would not 

apply differently to distinct types or 

sizes of market participants. Rather, it 

would apply to all Users equally. 

Specifically, the proposed initial 

charges and MRCs for Options E and F 

would apply equally to all Users that 

purchase an Option E or F bundle, and 

the proposed 50% reduction of MRC for 

the first 12 months would apply to any 

User that orders an Option E or F 

bundle on or before December 31, 2021. 

The Exchange would continue to offer 

the four existing PCS bundles (Options 

A through D) with different cabinet 

footprints and network connection 

options, in addition to the proposed 

Option E and F bundles. Users that 

require other sizes or combinations of 

cabinets, network connections, and 

cross connects could still request them. 

As is currently the case, the purchase of 

any co-location service, including PCS 

bundles, would be completely 

voluntary. 

Without this proposed rule change, 

potential Users choosing between a PCS 

bundle and a Hosting User Bundle 

would have fewer options. Potential 

Users could benefit from having an 

additional 40 Gb option for their 

network connection requirements, 

which would allow them to connect to 

more of the Included Data Products and 

Third Party Data Feeds or have the same 

size connection in co-location that they 

have elsewhere. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

For the reasons above, the proposed 

changes do not unfairly discriminate 

between or among market participants 

that are otherwise capable of satisfying 

any applicable co-location fees, 

requirements, terms, and conditions 

established from time to time by the 

Exchange. 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposal will not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of Section 6(b)(8) of the Act.16

Intramarket Competition 

The Exchange believes that the 

proposed changes would not place any 

burden on intramarket competition that 

is not necessary or appropriate. 

The Exchange’s offering of the 

proposed Option E and F bundles 

would provide potential Users of PCS 

bundles a wider range of choices, which 

would be especially beneficial for 

potential Users with minimal power and 

cabinet space demands, but which 

could nevertheless benefit from an 

additional 40 Gb option for their 

network connection requirements. The 

Exchange believes that the proposed 

change may make PCS bundles more 

attractive to potential Users who might 

otherwise opt to become Hosted 

Customers, and thus would enhance the 

competitive environment for potential 

Users, who would then have more 

options from which to select. At the 

same time, however, no potential User 

would be obligated to purchase a PCS 

bundle, and it would still have the 

options offered by Hosting Users. 

Intermarket Competition 

The Exchange believes that the 

proposed changes will not impose any 

burden on intermarket competition that 

is not necessary or appropriate. The 

proposed change is not meant to affect 

competition among national securities 

exchanges. Rather, the Exchange 

believes that the proposed change is a 

reasonable attempt to maintain a more 

level playing field between the 

Exchange and the Hosting Users, who 

compete for Hosted Customer business. 

Because Hosting Users’ services are not 

regulated, they may offer differentiated 

pricing and are not required to make 

their pricing public. The Exchange 

believes that the proposed change may 

make PCS bundles more attractive to 

potential users who might otherwise opt 

to become Hosted Customers. 

The Exchange operates in a highly 

competitive market in which exchanges 

and other vendors (i.e., Hosting Users) 

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 colocation 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-toparticipant latency associated with colocation. Accordingly, an exchange 

charging excessive fees would stand to 

lose not only co-location revenues but 

also the liquidity of the formerly colocated trading firms, which could have 

additional follow-on effects on the 

market share and revenue of the affected 

exchange. In such an environment, the 

Exchange must continually review, and 

consider adjusting, its services and 

related fees and credits to remain 

competitive with other exchanges. 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining price, 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, 

recognizing 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.’’ 17

For these reasons, the Exchange 

believes that the proposed rule change 

reflects this competitive environment 

and does not impose any undue burden 

on intermarket competition. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 


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8428 Federal Register / Vol. 86, No. 23 / Friday, February 5, 2021 / Notices 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 4 ‘‘Waiver Period’’ means, for each applicable fee, 

the period of time from the initial effective date of 

the MIAX Emerald Fee Schedule until such time 

that the Exchange has an effective fee filing 

establishing the applicable fee. The Exchange will 

issue a Regulatory Circular announcing the 

establishment of an applicable fee that was subject 

to a Waiver Period at least fifteen (15) days prior 

to the termination of the Waiver Period and 

effective date of any such applicable fee. See the 

Definitions Section of the Fee Schedule. 

5See MIAX Emerald Regulatory Circular 2020–41 

available at https://www.miaxoptions.com/sites/ 

default/files/circular-files/MIAX_Emerald_RC_

2020_41.pdf. 

6See Securities Exchange Act Release No. 90184 

(October 14, 2020), 85 FR 66636 (October 20, 2020) 

(SR–EMERALD–2020–12) (the ‘‘First Proposed Rule 

Change’’). 

7See id. 

8See Comment Letter from Joseph Ferraro, SVP, 

Deputy General Counsel, the Exchange, dated 

November 20, 2020, notifying the Commission that 

the Exchange would withdraw the First Proposed 

Rule Change. 

9See Securities Exchange Act Release No. 90600 

(December 8, 2020), 85 FR 80831 (December 14, 

2020) (SR–EMERALD–2020–17) (the ‘‘Second 

Proposed Rule Change’’). 

10See id. 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSENAT–2021–01 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to: Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSENAT–2021–01. 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–NYSENAT–2021–01 and 

should be submitted on or before 

February 26, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02409 Filed 2–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91032; File No. SR– 

EMERALD–2021–02] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fee 

Schedule To Adopt Port Fees and 

Increase Certain Network Connectivity 

Fees 

February 1, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

22, 2021, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’), filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Emerald Fee Schedule 

(the ‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal 

office, 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 

Exchange 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 these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule to: (1) Adopt Port fees; 

and (2) increase the Exchange’s network 

connectivity fees for its 10 gigabit 

(‘‘Gb’’) ultra-low latency (‘‘ULL’’) fiber 

connection for Members 3 and nonMembers (collectively, the ‘‘Proposed 

Access Fees’’). On September 15, 2020, 

the Exchange issued a Regulatory 

Circular which announced, among other 

things, that the Exchange would adopt 

Port fees, thereby terminating the 

Waiver Period 4 for such fees, and 

increase the fees for its 10Gb ULL 

connection for Members and nonMembers, beginning October 1, 2020.5

The Exchange initially filed this 

proposal on October 1, 2020.6 The First 

Proposed Rule Change was published 

for comment in the Federal Register on 

October 20, 2020.7 The Exchange notes 

that the First Proposed Rule Change did 

not receive any comment letters. 

Nonetheless, the Exchange withdrew 

the First Proposed Rule Change on 

November 25, 2020 8 and resubmitted a 

replacement proposal.9 The Second 

Proposed Rule Change was published 

for comment in the Federal Register on 

December 14, 2020.10 The Exchange 

notes that the Second Proposed Rule 


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