Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Notices 28053 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange initially filed rule changes 

relating to its co-location services with the 

Commission in 2010. See Securities Exchange Act 

Release No. 63275 (November 8, 2010), 75 FR 70048 

(November 16, 2010) (SR–NYSEArca–2010–100). 

The Exchange operates a data center in Mahwah, 

New Jersey (the ‘‘data center’’) from which it 

provides co-location services to Users. 

5See Securities Exchange Act Release No. 79902 

(January 30, 2017), 82 FR 9258 (February 3, 2017) 

(SR–NSX–2016–16). Prior to its acquisition, NYSE 

National was named ‘‘National Stock Exchange, 

Inc.’’ 

6See Securities Exchange Act Release No. 80018 

(February 10, 2017), 82 FR 10947 (February 16, 

2017) (SR–NSX–2017–04). 

7See Securities Exchange Act Release No. 83289 

(May 17, 2018) (notice of filing of Amendment No. 

1 and order granting accelerated approval of a 

proposed rule change, as amended by Amendment 

No. 1, to support the re-launch of NYSE National, 

Inc. on the Pillar Trading Platform) (‘‘NYSE 

National Trading Rules Approval’’). See also 

Securities Exchange Act Release No. 82819 (March 

7, 2018), 83 FR 11098 (March 13, 2018) (SR– 

NYSENat–2018–02). 

8See SR–NYSENat–2018–07 (May 18, 2018). 

9See NYSE National Trading Rules Approval, 

supra note 7. 

10For purposes of the Exchange’s co-location 

services, a ‘‘User’’ means any market participant 

that requests to receive co-location services directly 

from the Exchange. See Securities Exchange Act 

Release No. 76010 (September 29, 2015), 80 FR 

60197 (October 5, 2015) (SR–NYSEArca–2015–82). 

11See Securities Exchange Act Release No. 70173 

(August 13, 2013), 78 FR 50459 (August 19, 2013) 

(SR–NYSEArca–2013–80). Some Users do not 

connect to the Exchange or the Affiliate SROs, but 

rather provide services to other Users co-located at 

the data center. Id. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83403; File No. SR– 

NYSEARCA–2018–36] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Options Fees and Charges and the 

NYSE Arca Equities Fees and Charges 

Related to Co-Location Services in 

Connection With the Re-Launch of 

Trading on NYSE National, Inc. and 

Proposed NYSE National Co-Location 

Services 

June 11, 2018. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on May 30, 

2018, NYSE Arca, Inc. (the ‘‘Exchange’’ 

or ‘‘NYSE Arca’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Arca Options Fees and Charges 

(the ‘‘Options Fee Schedule’’) and the 

NYSE Arca Equities Fees and Charges 

(the ‘‘Equities Fee Schedule’’ and, 

together with the Options Fee Schedule, 

the ‘‘Fee Schedules’’) related to colocation services in connection with the 

re-launch of trading on NYSE National, 

Inc. (‘‘NYSE National’’) and proposed 

NYSE National co-location services. The 

Exchange also proposes to make a nonsubstantive change to remove obsolete 

text from the Fee Schedules. 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 Schedules related to co-location 4

services in connection with the relaunch of trading on NYSE National and 

proposed NYSE National co-location 

services. Specifically, the Exchange 

proposes to make changes to General 

Note 1 and General Note 4 of the Fee 

Schedules to add references to NYSE 

National. The Exchange also proposes to 

make a non-substantive change to 

remove obsolete text from the Fee 

Schedules, with respect to the wireless 

connection to third party data provided 

by the Toronto Stock Exchange (‘‘TSX’’). 

On January 31, 2017, Intercontinental 

Exchange, Inc. (‘‘ICE’’), the indirect 

parent of the Exchange, acquired all of 

the outstanding capital stock of NYSE 

National through its wholly-owned 

subsidiary NYSE Group.5 As a result, 

NYSE National is an affiliate of the 

Exchange. On February 1, 2017, NYSE 

National ceased trading operations.6

NYSE National filed proposed rule 

changes to re-launch trading 

operations.7 NYSE National has stated 

that it anticipates re-launching trading 

operations in the second quarter of 

2018. In connection with the anticipated 

re-launch of NYSE National’s trading 

operations, NYSE National has filed a 

proposed rule change to offer the same 

co-location services and fees offered by 

the Exchange, the New York Stock 

Exchange LLC (‘‘NYSE LLC’’), and 

NYSE American LLC (‘‘NYSE 

American’’ and, together with the NYSE 

LLC, the ‘‘Affiliate SROs’’), which are its 

affiliates.8

The Exchange requests that the 

proposed rule change become both 

effective and operative immediately 

upon filing.9

General Note 1 

General Note 1 of the Fee Schedules 

provides that a User 10 that incurs colocation fees for a particular co-location 

service shall not be subject to colocation fees for the same co-location 

service charged by the other Affiliate 

SROs.11 The Exchange proposes to add 

NYSE National to General Note 1 to the 

Options Fee Schedule, as follows 

(additions underlined, deletions in 

brackets): 


sradovich on DSK3GMQ082PROD with NOTICES
28054 Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Notices 

12See Securities Exchange Act Release No. 79729 

(January 4, 2017), 82 FR 3061 (January 10, 2017) 

(SR–NYSEArca–2016–172). 

The Exchange proposes to add NYSE 

National to General Note 1 to the 

Equities Fee Schedule, as follows 

(additions underlined, deletions in 

brackets): 

By including the proposed reference 

to NYSE National, General Note 1 

would provide that the fees a User pays 

for co-location services would not 

depend on whether the User connects to 

none, one, some, or all of the Exchange, 

the Affiliate SROs, and NYSE National. 

General Note 4 

General Note 4 of the Fee Schedules 

provides 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,12 a User 

receives (a) the ability to access the 

trading and execution systems of the 

Exchange and Affiliate SROs, and (b) 

connectivity to any of the listed data 

products (‘‘Included Data Products’’) 

that it selects. 

The Exchange proposes to add NYSE 

National to the list of trading and 

execution system providers in the first 

sentence of the first paragraph, thereby 

expanding the definition of ‘‘Exchange 

Systems’’ which Users may access to 

include NYSE National. It also proposes 

to add NYSE National to the lists of 

affiliated entities in the first, third and 

fourth sentences. The proposed changes 

are as follows (additions underlined, 

deletions in brackets): 


sradovich on DSK3GMQ082PROD with NOTICESEN15JN18.014</GPH> EN15JN18.015</GPH>
Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Notices 28055 

13As is currently the case, Users that receive colocation services from the Exchange will not receive 

any means of access to the Exchange’s trading and 

execution systems that is separate from, or superior 

to, that of other Users. In this regard, all orders sent 

to the Exchange enter the Exchange’s trading and 

execution systems through the same order gateway, 

regardless of whether the sender is co-located in the 

data center or not. In addition, co-located Users do 

not receive any market data or data service product 

that is not available to all Users, although Users that 

receive co-location services normally would expect 

reduced latencies in sending orders to, and 

receiving market data from, the Exchange. 

14See 78 FR 50459, supra note 11, at 50459. The 

Affiliate SROs have also submitted substantially the 

same proposed rule change to propose the changes 

described herein. See SR–NYSE–2018–23 and SR– 

NYSEAMER–2018–23. 

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

16 15 U.S.C. 78f(b)(5). 

In addition, the Exchange proposes to 

add NYSE National to the table of 

Included Data Products set forth in 

General Note 4. 

Toronto Stock Exchange 

The Exchange offers Users the option 

to receive certain market data feeds from 

third party markets through a wireless 

connection. The description of the 

charge for the TSX wireless connection 

in the Fee Schedules states that 

‘‘[c]ustomers with an existing wireless 

connection to TSX at the time the 

Exchange makes the service available 

will not be subject to an initial charge 

or receive 30-day testing period.’’ 

Because the wireless connection to the 

TSX has become effective, the statement 

is obsolete. Accordingly, the Exchange 

proposes to delete the statement from 

the Fee Schedules. 

General 

As is the case with all Exchange colocation arrangements, (i) neither a User 

nor any of the User’s customers would 

be permitted to submit orders directly to 

the Exchange unless such User or 

customer is a member organization, a 

Sponsored Participant or an agent 

thereof (e.g., a service bureau providing 

order entry services); (ii) use of the colocation services proposed herein would 

be completely voluntary and available 

to all Users on a non-discriminatory 

basis; 13 and (iii) a User would only 

incur one charge for the particular colocation service described herein, 

regardless of whether the User connects 

only to the Exchange or to the Exchange, 

one or both of its Affiliate SROs, or 

NYSE National.14

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 

proposal is consistent with Section 6(b) 

of the Act,15 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,16

in particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to, 

and perfect the mechanisms of, a free 

and open market and a national market 

system and, in general, to protect 


sradovich on DSK3GMQ082PROD with NOTICESEN15JN18.016</GPH>
28056 Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Notices 

17 15 U.S.C. 78f(b)(4). 18 15 U.S.C. 78f(b)(8). 

investors and the public interest and 

because it is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed change would remove 

impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest because the amendments would 

update General Note 1 to reflect NYSE 

National’s provision of co-location 

services. By including the proposed 

reference to NYSE National, General 

Note 1 would provide that the fees a 

User pays for co-location services would 

not depend on whether the User 

connects to none, one, some, or all of 

the Exchange, the Affiliate SROs, and 

NYSE National. For example, to charge 

one User three times for a cage because 

that User connects to the Exchange, 

NYSE National, and an Affiliate SRO, 

when another User that buys the same 

size cage and only connects to the 

Exchange only pays once, would not 

promote just and equitable principles of 

trade. The Exchange also believes that 

the proposed amendments to General 

Note 1 are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers because 

charging a User for co-location services 

based on how many markets to which 

a User connects could result in the 

Exchange, NYSE National and the 

Affiliate SROs receiving the proceeds 

from multiple fees despite only 

providing a service once. 

The Exchange believes that the 

proposed amendments would remove 

impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest because the amendments would 

update General Note 4 to reflect NYSE 

National’s provision of co-location 

services. By expanding the definition of 

‘‘Exchange Systems’’ to include the 

NYSE National trading and execution 

system, incorporating references to 

NYSE National, and adding NYSE 

National to the list of Included Data 

Products, the Exchange would provide 

market participants with clarity as to 

what access and connectivity a User 

receives when it purchases access to the 

LCN or IP network, thereby making the 

description more accessible and 

transparent. 

Further, the Exchange believes that 

revising General Note 4 to provide a 

more detailed description of the access 

and connectivity to NYSE National that 

Users would receive with their purchase 

of access to the LCN or IP network 

would promote just and equitable 

principles of trade and remove 

impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system as it 

would make clear that all Users that 

voluntarily select to access the LCN or 

IP network would receive the same 

access to the NYSE National trading and 

execution systems and connectivity to 

NYSE National data and would not be 

subject to a charge above and beyond 

the fee paid for the relevant LCN or IP 

network access. In addition, a User 

would not be required to use any of its 

bandwidth to access the NYSE National 

trading and execution system or connect 

to NYSE National data unless it wishes 

to do so. A User only receives the access 

to Exchange Systems and connectivity 

to Included Data Products that it selects, 

and a User can change such access or 

connectivity it receives at any time, 

subject to authorization from the data 

provider or relevant Exchange or 

Affiliate SRO. 

The Exchange believes that the nonsubstantive change to remove obsolete 

text with respect to the wireless 

connection to TSX data would remove 

impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest because the amendment would 

clarify Exchange rules and alleviate any 

possible market participant confusion 

caused by the obsolete reference. 

The Exchange also believes that the 

proposed fee change is consistent with 

Section 6(b)(4) of the Act,17 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. 

The Exchange believes that the 

proposed change 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, because the 

change would result in the Exchange 

offering co-location services related to 

access and connectivity to NYSE 

National, an affiliate of the Exchange, on 

the same terms and in the same manner 

as it offers access and connectivity to 

the Exchange and the Affiliate SROs. By 

adding NYSE National to General Notes 

1 and 4, the proposed change would 

ensure that the fees a User pays for colocation services would not depend on 

whether the User connects to none, one 

or more of the Exchange, the SRO 

Affiliates and NYSE National. For 

example, a User that connects to the 

Exchange, NYSE National, and an 

Affiliate SRO, and another User that 

only connects to the Exchange, would 

both receive the same services for the 

same fee, including the same access and 

connectivity with their purchase of 

access to the LCN or IP network. 

The Exchange believes that the 

proposed non-substantive change to 

remove obsolete text with respect to the 

wireless connection to TSX data would 

be reasonable because the change would 

have no impact on pricing. Rather, the 

change would remove obsolete 

information from the description of the 

pricing for the service, alleviating 

possible market participant confusion. 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,18 the Exchange believes that the 

proposed rule change will not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because, in 

addition to the use of co-location 

services being completely voluntary, 

they are available to all Users on an 

equal basis (i.e., the same range of 

products and services are available to all 

Users). 

The Exchange believes that the 

proposed change would not impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

change would result in the Exchange 

offering co-location services related to 

access and connectivity to NYSE 

National, an affiliate of the Exchange, on 

the same terms and in the same manner 

as it offers access and connectivity to 

the Exchange and the Affiliate SROs. By 

adding NYSE National to General Notes 

1 and 4, the proposed change would 

ensure that the fees a User pays for colocation services would not depend on 

whether the User connects only to none, 

one or more of the Exchange, the SRO 

Affiliates and NYSE National. Further, 

the Exchange believes that revising 

General Note 4 to provide a more 

detailed description of the access and 

connectivity to NYSE National that 

Users would receive with their purchase 

of access to the LCN or IP network 

would make clear that all Users that 

voluntarily select to access the LCN or 

IP network would receive the same 

access to the NYSE National trading and 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Notices 28057 

19 15 U.S.C. 78s(b)(3)(A)(iii). 

20 17 CFR 240.19b–4(f)(6). 

21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires the Exchange to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 

22 17 CFR 240.19b–4(f)(6). 

23 17 CFR 240.19b–4(f)(6)(iii). 

24For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

25 15 U.S.C. 78s(b)(2)(B). 26 17 CFR 200.30–3(a)(12). 

execution systems and connectivity to 

NYSE National data and would not be 

subject to a charge above and beyond 

the fee paid for the relevant LCN or IP 

network access. 

In addition, a User would not be 

required to use any of its bandwidth to 

access the NYSE National trading and 

execution system or connect to NYSE 

National data unless it wishes to do so. 

The Exchange believes that the nonsubstantive change to remove obsolete 

text with respect to the wireless 

connection to TSX data would not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because it would have no impact on 

pricing or existing services. Rather, the 

change would remove obsolete 

information from the description of the 

pricing for the service, alleviating 

possible market participant confusion. 

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 19 and Rule 

19b–4(f)(6) thereunder.20 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.21

A proposed rule change filed under 

Rule 19b–4(f)(6) 22 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),23 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange requests that the 

Commission waive the 30-day operative 

delay so that the proposed rule changes 

may become operative immediately 

upon filing. The Exchange believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because it would allow the Exchange to 

offer co-location services related to 

access and connectivity to NYSE 

National to coincide with the relaunch 

of the NYSE National and its proposed 

co-location services. The Exchange also 

notes that waiver would alleviate the 

possibility of confusion that could be 

caused by inconsistencies between the 

Exchange’s Price List and NYSE 

National co-location services that are to 

be included in NYSE National’s price 

list. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest as it 

would allow the Exchange to offer colocations services in the form of access 

and connectivity to NYSE National 

without undue delay. Accordingly, the 

Commission waives the 30-day 

operative delay and designates the 

proposed rule change operative upon 

filing.24

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) 25 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEARCA–2018–36 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEARCA–2018–36. 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–NYSEARCA–2018–36 and 

should be submitted on or before July 6, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12852 Filed 6–14–18; 8:45 am] 

BILLING CODE 8011–01–P 


sradovich on DSK3GMQ082PROD with NOTICES