Federal Register / Vol. 89, No. 179 / Monday, September 16, 2024 / Notices 75603 

29See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

30 Id. 31 15 U.S.C. 78s(b)(3)(A)(ii). 

32 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

As such, the Exchange must set its 

fees, including its fees for connectivity 

and co-location services and products, 

competitively. If not, customers may 

move to other venues or reduce use of 

the Exchange’s services. ‘‘If competitive 

forces are operative, the self-interest of 

the exchanges themselves will work 

powerfully to constrain unreasonable or 

unfair behavior.’’ 29 Accordingly, ‘‘the 

existence of significant competition 

provides a substantial basis for finding 

that the terms of an exchange’s fee 

proposal are equitable, fair, reasonable, 

and not unreasonably or unfairly 

discriminatory.’’ 30 Disincentivizing 

market participants from purchasing 

Exchange connectivity would only serve 

to discourage participation on the 

Exchange, which ultimately does not 

benefit the Exchange. Moreover, if the 

Exchange charges excessive fees, it may 

stand to lose not only connectivity 

revenues but also other revenues, 

including revenues associated with the 

execution of orders. 

In summary, the proposal represents 

an equitable allocation of reasonable 

dues, fees and other charges because 

Exchange fees have fallen in real terms 

and customers have a choice in trading 

venue and will exercise that choice and 

trade at another venue if exchange fees 

are not set competitively. 

No Unfair Discrimination 

The Exchange believes that the 

proposed fee changes are not unfairly 

discriminatory because the fees are 

assessed uniformly across all market 

participants that voluntarily subscribe 

to or purchase connectivity and colocation services or products, which are 

available to all customers. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Nothing in the proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

proposal does not impose any burden 

on the ability of other exchanges to 

compete. The Exchange operates in a 

highly competitive market in which 

market participants can determine 

whether or not to connect to the 

Exchange based on the value received 

compared to the cost of doing so. 

Indeed, market participants have 

numerous alternative exchanges that 

they may participate on and direct their 

order flow, as well as off-exchange 

venues, where competitive products are 

available for trading. 

Nothing in the proposal burdens 

intra-market competition (the 

competition among consumers) because 

the Exchange’s connectivity and colocation services are available to any 

customer under the same fee schedule 

as any other customer, and any market 

participant that wishes to purchase such 

services can do so on a nondiscriminatory basis. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.31 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is: (i) 

necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

ISE–2024–44 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–ISE–2024–44. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–ISE–2024–44 and should be 

submitted on or before October 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–20908 Filed 9–13–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–100986; File No. SR–BX– 

2024–033] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its Fees for 

Connectivity and Co-Location Services 

September 10, 2024. 

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

Securities Exchange Act of 1934 

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


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75604 Federal Register / Vol. 89, No. 179 / Monday, September 16, 2024 / Notices 

3The Exchange initially filed the proposed 

pricing change on March 1, 2024 (SR–BX–2024– 

008). On April 29, 2024, the Exchange withdrew 

that filing and submitted SR–BX–2024–014. The 

Exchange withdrew BX–2024–14 and replaced it 

with SR–BX–2024–20. The instant filing replaces 

SR–BX–2024–20, which was withdrawn on August 

26, 2024. 

4The Exchange proposes to exclude the GPS 

Antenna fees from the proposed fee increase 

because, unlike the other fees in General 8, the 

Exchange recently increased its GPS Antenna fees. 

See Securities Exchange Act Release No. 34–99124 

(December 8, 2023), 88 FR 86715 (December 14, 

2023) (SR–BX–2023–033). The Exchange also 

proposes to exclude the Cabinet Proximity Option 

Fee for cabinets with power density >10kW from 

the proposed fee increase because the Exchange 

recently established such fee. See Securities 

Exchange Act Release No. 34–100195 (May 21, 

2024), 89 FR 46180 (May 28, 2024) (SR–BX–2024– 

017). 

5The term ‘‘Remote Hands Services’’ refers to the 

use of Nasdaq engineers to perform on-site 

technical support tasks in its Data Center on behalf 

of its co-located customers, including the following: 

(1) power cycling of equipment; (2) patching and 

plugging in cabling and circuits; (3) observing, 

describing or reporting on display indicators; (4) 

configuration of hardware components instructed 

by the customer; (5) diagnosis and repairs as 

instructed by the customer; (6) swapping hardware 

components with customer-supplied spares or 

upgrades; (7) troubleshooting heat related issues as 

instructed by the Customer; and (8) returning 

defective equipment to the manufacturer or 

customer. 

6Remote MITCH Wave Ports are for clients colocated at other third-party data centers, through 

which NASDAQ TotalView ITCH market data is 

distributed after delivery to those data centers via 

wireless network. 

7The Consumer Price Index (‘‘CPI’’) is a measure 

of the average change over time in the prices paid 

by urban consumers for a market basket of 

consumer goods and services. The CPI represents 

all goods and services purchased for consumption 

by the reference population (U or W). BLS has 

classified all expenditure items into more than 200 

categories, arranged into eight major groups (food 

and beverages, housing, apparel, transportation, 

medical care, recreation, education and 

communication, and other goods and services). 

Included within these major groups are various 

government-charged user fees, such as water and 

sewerage charges, auto registration fees, and vehicle 

tolls.. See https://www.bls.gov/cpi/questions-andanswers.htm. 

8See https://www.officialdata.org/us/inflation/ 

2010?amount=1 (Last updated August 21, 2024). 

9The PPI is a family of indexes that measures the 

average change over time in selling prices received 

by domestic producers of goods and services. PPIs 

measure price change from the perspective of the 

seller. This contrasts with other measures, such as 

the Consumer Price Index (CPI), that measure price 

change from the purchaser’s perspective. See 

https://www.bls.gov/ppi/overview.htm. 

10See U.S. Bureau of Labor Statistics (‘‘BLS’’), 

Producer Price Index by Commodity: Final Demand 

[PPIFIS], retrieved from FRED, Federal Reserve 

Bank of St. Louis; https://fred.stlouisfed.org/series/ 

PPIFIS (last updated August 22, 2024). 

notice is hereby given that on August 

26, 2024, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the 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 proposes to amend the 

Exchange’s fees for connectivity and colocation services, as described further 

below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, 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 

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 purpose of the proposed rule 

change is to amend the Exchange’s fees 

relating to connectivity and co-location 

services.3 Specifically, the Exchange 

proposes to raise its fees for 

connectivity and co-location services in 

General 8, fees assessed for remote 

multi-cast ITCH (‘‘MITCH’’) Wave Ports 

in Equity 7, Section 115, and certain 

fees related to its Testing Facilities in 

Equity 7, Section 130 by 5.5%, with 

certain exceptions. 

General 8, Section 1 includes the 

Exchange’s fees that relate to 

connectivity, including fees for cabinets, 

external telco/inter-cabinet connectivity 

fees, fees for connectivity to the 

Exchange, fees for connectivity to third 

party services, fees for market data 

connectivity, fees for cabinet power 

install, and fees for additional charges 

and services. General 8, Section 2 

includes the Exchange’s fees for direct 

connectivity services, including fees for 

direct circuit connection to the 

Exchange, fees for direct circuit 

connection to third party services, and 

fees for point of presence connectivity. 

With the exception of the Exchange’s 

GPS Antenna fees and the Cabinet 

Proximity Option Fee for cabinets with 

power density >10kW,4 the Exchange 

proposes to increase its fees throughout 

General 8 by 5.5%. For Remote Hands 

Services, at General 8, Section 1, the 

Exchange proposes to increase its fee by 

1%, from $150 to $151.50 per hour.5

In addition to increasing fees in 

General 8, the Exchange also proposes 

to increase certain fees in Equity 7. 

First, the Exchange proposes to increase 

the installation and recurring monthly 

fees assessed for remote MITCH Wave 

Ports 6 in Equity 7, Section 115(g)(1) by 

5.5%. In addition, the Exchange 

proposes to increase certain fees in 

Section 130(d), which relate to the 

Nasdaq Testing Facility. Equity 7, 

Section 130(d)(1)(C) provides that 

subscribers to the Nasdaq Testing 

Facility (‘‘NTF’’) located in Carteret, 

New Jersey shall pay a fee of $1,000 per 

hand-off, per month for connection to 

the NTF. The hand-off fee includes 

either a 1Gb or 10Gb switch port and a 

cross connect to the NTF. In addition, 

Equity 7, Section 130(d)(1)(C) provides 

that subscribers shall also pay a onetime installation fee of $1,000 per handoff. The Exchange proposes to increase 

these aforementioned fees by 5.5% to 

require that subscribers to the NTF shall 

pay a fee of $1,055 per hand-off, per 

month for connection to the NTF and a 

one-time installation fee of $1,055 per 

hand-off. 

The proposed increases in fees would 

enable the Exchange to maintain and 

improve its market technology and 

services. With the exception of fees that 

were established as part of a new service 

in 2017 (and have remained unchanged 

since their adoption), the Exchange has 

not increased any of the fees included 

in the proposal since 2015, and many of 

the fees date back to between 2010 and 

2014. However, since 2010, there has 

been notable inflation by various 

measures. 

Between January 2010 and August 

2024, the dollar had an average inflation 

rate of 2.65% per year, as measured by 

the Consumer Price Index,7 producing a 

cumulative price increase of 44.25%.8

Said otherwise, the value of a dollar of 

revenue collected today is worth only 

69.444% of what it was worth in 2010. 

Additionally, as measured by another 

gauge of inflation, the Producer Price 

Index (‘‘PPI’’),9 inflation has increased 

by roughly 43% during the same time 

period.10

Meanwhile, a more granular version 

of the PPI exists which measures 


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Federal Register / Vol. 89, No. 179 / Monday, September 16, 2024 / Notices 75605 

11As noted by the BLS, the ‘‘Producer Price Index 

for an industry is a measure of changes in prices 

received for the industry’s output sold outside the 

industry (that is, its net output).’’ See id. 

12Among the industry-specific PPIs is for North 

American Industry Classification System (‘‘NAICS’’) 

Code 518210: ‘‘Data Processing, Hosting and 

Related Services: Hosting, Active Server Pages 

(ASP), and Other Information Technology (IT) 

Infrastructure Provisioning Services,’’ NAICS index 

codes categorize products and services that are 

common to particular industries. According to BLS, 

these codes ‘‘provide comparability with a wide 

assortment of industry-based data for other 

economic programs, including productivity, 

production, employment, wages, and earnings.’’ See 

https://www.bls.gov/ppi/overview.htm. BLS 

describes NAICS 51820 as follows: ‘‘The primary 

output of NAICS 518210 is the provision of 

electronic data processing services. In the broadest 

sense, computer services companies help their 

customers efficiently use technology. The 

processing services market consists of vendors who 

use their own computer systems—often utilizing 

proprietary software—to process customers’ 

transactions and data. Companies that offer 

processing services collect, organize, and store a 

customer’s transactions and other data for recordkeeping purposes.’’ 

13See U.S. Bureau of Labor Statistics, Producer 

Price Index by Industry: Data Processing, Hosting 

and Related Services: Hosting, Active Server Pages 

(ASP), and Other Information Technology (IT) 

Infrastructure Provisioning Services 

[PCU5182105182105], retrieved from FRED, Federal 

Reserve Bank of St. Louis; https://

fred.stlouisfed.org/series/PCU5182105182105 (last 

updated August 22, 2024). 

14See https://www.bls.gov/web/empsit/ 

ceseeb3a.htm (Last updated July 5, 2024); https:// 

www.bls.gov/web/empsit/ceseeb8a.htm (Last 

updated July 5, 2024). 

15Unregulated competitors providing 

connectivity and co-location services often have 

annual price increases written into their agreements 

with customers to account for inflation and rising 

costs. 16See https://www.officialdata.org/us/inflation/ 

2022?endYear=2023&amount=1; see also https://

fred.stlouisfed.org/series/PPIFIS#0. 17See, e.g., Securities Exchange Act Release No. 

34–100004 (April 22, 2024), 89 FR 32465 (April 26, 

2024) (SR–CboeBYX–2024–012). 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(4) and (5). 

20See https://www.officialdata.org/us/inflation/ 

2010?amount=1 (Last updated August 21, 2024). 

21See U.S. Bureau of Labor Statistics (‘‘BLS’’), 

Producer Price Index by Commodity: Final Demand 

[PPIFIS], retrieved from FRED, Federal Reserve 

Bank of St. Louis; https://fred.stlouisfed.org/series/ 

PPIFIS (last updated August 22, 2024). 

inflation by category of industry.11 The 

most apt of these industry 

categorizations measures inflation for 

the provision of data processing, hosting 

and related services as well as other 

information technology infrastructure 

provisioning services.12 The Exchange 

believes that this measure of inflation is 

particularly apt because many of the 

colocation and connectivity services 

that the Exchange offers to customers 

involve hosting and providing 

connections for its customers’ 

telecommunications and information 

technology equipment colocated in its 

Data Center. Between January 2010 and 

July 2024, the inflation rate for hosting, 

ASP, and other IT infrastructure 

provisioning services was 17.4%.13

Finally, yet another gauge of 

inflation—average hourly earnings 

(‘‘AHE’’) growth for Computing 

Infrastructure—increased 77% for nonmanagers and 81% for all employees 

from 2010 to 2024.14 This gauge of 

inflation is apt to the extent that the 

Exchange proposes to increase its fees 

for remote hands services, which are 

services performed by engineers and 

other technical personnel to support 

customer connectivity and colocation in 

the Exchange’s Data Center. 

Notwithstanding inflation, the 

Exchange historically has not increased 

its fees every year.15 The proposed fees 

represent a 5.5% increase (and for 

Remote Hands, a 1% increase) from the 

current fees, which is far below any of 

the above-described gauges of inflation 

since 2010. In addition to being far 

below cumulative inflation rates since 

2010, the Exchange also believes that 

the proposed 5.5%/1% increase is 

reasonable because it is comparable to 

recent inflation rates even for one-year 

periods. For example, in 2022, the 

inflation rate, as measured by the CPI, 

was 8.00% and it was 9.47%, as 

measured by the PPI.16 The Exchange is 

sensitive to the sticker shock that would 

occur if the Exchange raised its fees by 

17% or more than 40% and therefore 

proposes a more modest increase, 

similar to that of inflation in recent oneyear periods. 

The Exchange believes that it is 

reasonable to increase its fees to 

compensate for inflation because, over 

time, inflation has degraded the value of 

each dollar that the Exchange collects in 

fees, such that the real revenue collected 

today is considerably less than that 

same revenue collected in 2010. The 

Exchange notes that this inflationary 

effect is a general phenomenon that is 

independent of any change in the 

Exchange’s costs in providing its goods 

and services. The Exchange believes 

that it is reasonable for it to offset, in 

part, this erosion in the value of the 

revenues it collects. The Exchange notes 

that other exchanges have filed for 

comparable or higher increases in 

certain connectivity-related fees, based 

in part on similar rationale.17

In addition, the Exchange continues 

to invest in maintaining, improving, and 

enhancing its connectivity and colocation products, services, and 

facilities—for the benefit and often at 

the behest of its customers. Such 

enhancements include refreshing 

hardware and expanding Nasdaq’s 

existing co-location facility to offer 

customers additional space and power. 

These investments, and the value they 

provide to customers, far exceed the 

amount of the proposed price increases. 

It is reasonable and consistent with the 

Act for the Commission to allow the 

Exchange to recoup these investments 

by charging fees, lest the Commission 

will disincentivize the Exchange to 

make similar investments in the 

future—a result that would be 

detrimental to the Exchange’s 

competitiveness as well as the interests 

of market participants and investors. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,18 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,19 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

This belief is based on several factors. 

First, the current fees do not properly 

reflect the value of the services and 

products, as fees for the services and 

products in question have been static in 

nominal terms, and therefore falling in 

real terms due to inflation. Second, 

exchange fees are constrained by the 

fact that market participants can choose 

among 16 different venues for equities 

trading and 17 different venues for 

options trading, and therefore no single 

venue can charge excessive fees for its 

products without losing customers and 

market share. 

Real Exchange Fees Have Fallen 

As explained above, with the 

exception of fees that were established 

as part of a new service in 2017 (and 

have remained unchanged since their 

adoption), the Exchange has not 

increased any of the fees included in the 

proposal since 2015, and many of the 

fees date back to between 2010 and 

2014. This means that such fees have 

fallen in real terms due to inflation, 

which has been notable by various 

measures. 

Between January 2010 and August 

2024, the dollar had an average inflation 

rate of 2.65% per year, as measured by 

the CPI, producing a cumulative price 

increase of 44.25%.20 Said otherwise, 

the value of a dollar of revenue 

collected today is worth only 69.444% 

of what it was worth in 2010. 

Additionally, as measured by another 

gauge of inflation, the PPI has increased 

by roughly 43% during the same time 

period.21


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75606 Federal Register / Vol. 89, No. 179 / Monday, September 16, 2024 / Notices 

22See U.S. Bureau of Labor Statistics, Producer 

Price Index by Industry: Data Processing, Hosting 

and Related Services: Hosting, Active Server Pages 

(ASP), and Other Information Technology (IT) 

Infrastructure Provisioning Services 

[PCU5182105182105], retrieved from FRED, Federal 

Reserve Bank of St. Louis; https://

fred.stlouisfed.org/series/PCU5182105182105 (last 

updated August 22, 2024). 

23See https://www.bls.gov/web/empsit/ 

ceseeb3a.htm (Last updated July 5, 2024); https:// 

www.bls.gov/web/empsit/ceseeb8a.htm (Last 

updated July 5, 2024). 

24As noted above, unregulated competitors 

providing connectivity and co-location services 

often have annual price increases written into their 

agreements with customers to account for inflation 

and rising costs. 

25See https://www.officialdata.org/us/inflation/ 

2022?endYear=2023&amount=1; see also https://

fred.stlouisfed.org/series/PPIFIS#0. 

26See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (Last updated 

January 11, 2024), available at https://

www.cboe.com/us/equities/market_statistics/. 

27See Nasdaq, Options Market Statistics (Last 

updated January 11, 2024), available at https://

www.nasdaqtrader.com/ 

Trader.aspx?id=OptionsVolumeSummary. 

28See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74,770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

29 Id. 

Meanwhile, a more granular version 

of the PPI exists which measures 

inflation by category of industry. The 

most apt of these industry 

categorizations measures inflation for 

the provision of data processing, hosting 

and related services as well as other 

information technology infrastructure 

provisioning services. The Exchange 

believes that this measure of inflation is 

particularly apt because many of the 

colocation and connectivity services 

that the Exchange offers to customers 

involve hosting and providing 

connections for its customers’ 

telecommunications and information 

technology equipment collocated in its 

Data Center. Between January 2010 and 

July 2024, the inflation rate for hosting, 

ASP, and other IT infrastructure 

provisioning services was 17.4%.22

Finally, yet another gauge of 

inflation—AHE growth for Computing 

Infrastructure—increased 77% for nonmanagers and 81% for all employees 

from 2010 to 2024.23 This gauge of 

inflation is apt to the extent that the 

Exchange proposes to increase its fees 

for remote hands services, which are 

services performed by engineers and 

other technical personnel to support 

customer connectivity and colocation in 

the Exchange’s Data Center. 

Notwithstanding inflation, the 

Exchange historically has not increased 

its fees every year.24 As noted above, the 

Exchange has not increased the fees in 

this proposal for over 8 years (or in the 

case of services introduced in 2017, for 

over 6 years since the services were 

introduced). Accordingly, the Exchange 

believes that the proposed fees are 

reasonable as they represent a 5.5% 

increase (and for Remote Hands, a 1% 

increase) from the current fees, which is 

far below inflation since 2010, however 

measured. In addition to being far below 

the inflation rate since 2010, the 

Exchange also believes that the 

proposed 5.5%/1% increase is 

reasonable because it is comparable to 

recent inflation rates for one-year 

periods. For example, in 2022, the 

inflation rate, as measured by the CPI, 

was 8.00% and it was 9.47%, as 

measured by the PPI.25 The Exchange is 

sensitive to the sticker shock that would 

occur if the Exchange raised its fees by 

17% or more than 40% and therefore 

proposes a more modest increase, 

similar to that of inflation in recent oneyear periods. 

The Exchange believes that it is 

reasonable to increase its fees to 

compensate for inflation because, over 

time, inflation has degraded the value of 

each dollar that the Exchange collects in 

fees, such that the real revenue collected 

today is considerably less than that 

same revenue collected in 2010. The 

Exchange notes that this inflationary 

effect is a general phenomenon that is 

independent of any change in the 

Exchange’s costs in providing its goods 

and services. The Exchange believes 

that it is reasonable for it to offset, in 

part, this erosion in the value of the 

revenues it collects. 

In addition, the Exchange continues 

to invest in maintaining, improving, and 

enhancing its connectivity and colocation products, services, and 

facilities—for the benefit and often at 

the behest of its customers. Such 

enhancements include refreshing 

hardware and expanding Nasdaq’s 

existing co-location facility to offer 

customers additional space and power. 

Again, these investments, and the value 

they provide to customers, far exceed 

the amount of the proposed price 

increases. It is reasonable and consistent 

with the Act for the Commission to 

allow the Exchange to recoup these 

investments by charging fees, lest the 

Commission will disincentivize the 

Exchange to make similar investments 

in the future—a result that would be 

detrimental to the Exchange’s 

competitiveness as well as the interests 

of market participants and investors. 

Customers Have a Choice in Trading 

Venue 

Customers face many choices in 

where to trade both equities and 

options. Market participants will 

continue to choose trading venues and 

the method of connectivity based on 

their specific needs. No broker-dealer is 

required to become a Member of the 

Exchange. There is no regulatory 

requirement that any market participant 

connect to any one exchange, nor that 

any market participant connect at a 

particular connection speed or act in a 

particular capacity on the Exchange, or 

trade any particular product offered on 

an exchange. Moreover, membership is 

not a requirement to participate on the 

Exchange. Indeed, the Exchange is 

unaware of any one exchange whose 

membership includes every registered 

broker-dealer. The Exchange also 

believes substitutable products and 

services are available to market 

participants, including, among other 

things, other equities and options 

exchanges that a market participant may 

connect to in lieu of the Exchange, 

indirect connectivity to the Exchange 

via a third-party reseller of connectivity, 

and/or trading of equities or options 

products within markets which do not 

require connectivity to the Exchange, 

such as the Over-the-Counter markets. 

There are currently 16 registered 

equities exchanges that trade equities 

and 17 exchanges offering options 

trading services. No single equities 

exchange has more than 15% of the 

market share.26 No single options 

exchange trades more than 14% of the 

options market by volume and only one 

of the 17 options exchanges has a 

market share over 10 percent.27 This 

broad dispersion of market share 

demonstrates that market participants 

can and do exercise choice in trading 

venues. Further, low barriers to entry 

mean that new exchanges may rapidly 

enter the market and offer additional 

substitute platforms to further compete 

with the Exchange and the products it 

offers. 

As such, the Exchange must set its 

fees, including its fees for connectivity 

and co-location services and products, 

competitively. If not, customers may 

move to other venues or reduce use of 

the Exchange’s services. ‘‘If competitive 

forces are operative, the self-interest of 

the exchanges themselves will work 

powerfully to constrain unreasonable or 

unfair behavior.’’ 28 Accordingly, ‘‘the 

existence of significant competition 

provides a substantial basis for finding 

that the terms of an exchange’s fee 

proposal are equitable, fair, reasonable, 

and not unreasonably or unfairly 

discriminatory.’’ 29 Disincentivizing 

market participants from purchasing 

Exchange connectivity would only serve 

to discourage participation on the 

Exchange, which ultimately does not 

benefit the Exchange. Moreover, if the 


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Federal Register / Vol. 89, No. 179 / Monday, September 16, 2024 / Notices 75607 

30 15 U.S.C. 78s(b)(3)(A)(ii). 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100609 

(July 26, 2024), 89 FR 62815 (Aug. 1, 2024). 

4 15 U.S.C. 78s(b)(2). 

Exchange charges excessive fees, it may 

stand to lose not only connectivity 

revenues but also other revenues, 

including revenues associated with the 

execution of orders. 

In summary, the proposal represents 

an equitable allocation of reasonable 

dues, fees and other charges because 

Exchange fees have fallen in real terms 

and customers have a choice in trading 

venue and will exercise that choice and 

trade at another venue if exchange fees 

are not set competitively. 

No Unfair Discrimination 

The Exchange believes that the 

proposed fee changes are not unfairly 

discriminatory because the fees are 

assessed uniformly across all market 

participants that voluntarily subscribe 

to or purchase connectivity and colocation services or products, which are 

available to all customers. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Nothing in the proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

proposal does not impose any burden 

on the ability of other exchanges to 

compete. The Exchange operates in a 

highly competitive market in which 

market participants can determine 

whether or not to connect to the 

Exchange based on the value received 

compared to the cost of doing so. 

Indeed, market participants have 

numerous alternative exchanges that 

they may participate on and direct their 

order flow, as well as off-exchange 

venues, where competitive products are 

available for trading. 

Nothing in the proposal burdens 

intra-market competition (the 

competition among consumers) because 

the Exchange’s connectivity and colocation services are available to any 

customer under the same fee schedule 

as any other customer, and any market 

participant that wishes to purchase such 

services can do so on a nondiscriminatory basis. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.30

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BX–2024–033 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–BX–2024–033. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–BX–2024–033 and should be 

submitted on or before October 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–20904 Filed 9–13–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–100982; File No. SR–NYSE– 

2024–40] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change To Amend Rule 7.31(f)(1) 

September 10, 2024. 

On July 16, 2024, New York Stock 

Exchange LLC filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend NYSE Rule 7.31(f)(1) to permit 

Directed Orders to route to a brokerdealer algorithm with which the 

Exchange has established connectivity. 

The proposed rule change was 

published for comment in the Federal 

Register on August 1, 2024.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 


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