Document ID: SEC-2014-1118-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2014-07-08T04:00Z

[Federal Register Volume 79, Number 130 (Tuesday, July 8, 2014)]
[Notices]
[Pages 38616-38618]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15815]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72510; File No. SR-NYSEMKT-2014-53]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending the Price List 
To Add Certain Charges for Hosting Equipment To Support Internet 
Connections for Member Organizations Operating on the Floor of the 
Exchange Starting January 1, 2015

July 1, 2014.
    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 June 24, 2014, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'') 
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 self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Price List to add certain 
charges for hosting equipment to support Internet connections for 
member organizations operating on the Floor of the Exchange. The text 
of the proposed rule change is available on the Exchange's Web site 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 Price List to add certain 
charges for hosting equipment to support Internet connections for 
member organizations operating on the Floor of the Exchange.
    Currently, a member organization that operates on the Floor must 
arrange for its own access to an Internet service provider (``ISP''). 
To provide the service, an ISP must place certain equipment on the 
Exchange's premises at 11 Wall Street. Currently there is no separate 
charge related to the Exchange's hosting of such equipment. The 
Exchange does charge fees for installing and removing data jacks and 
lines, and member organizations are responsible for paying the ISP's 
fees.
    The Exchange believes that these hosting arrangements are not an 
efficient use of its space or an efficient or robust way to provide 
Internet service to member organizations operating on the Floor. As 
such, the Exchange proposes to provide member organizations operating 
on the Floor with connections to ISPs at no charge via the Exchange's 
Secure Financial Transaction Infrastructure (``SFTI''). For

[[Page 38617]]

such member organizations that choose to use SFTI to connect to their 
ISP, it will no longer be necessary to host separate ISP equipment at 
11 Wall Street and such equipment can be removed. Using SFTI to connect 
to ISPs also would help avoid the consequences of a service disruption 
at a single carrier or access point. For example, for a period 
beginning in October 2013, the Exchange had to temporarily suspend 
certain rules restricting the use of personal portable phone devices by 
Floor brokers on the Trading Floor because the third-party carrier that 
provided service for the Exchange-provided cell phones experienced an 
issue that caused a service outage.\3\ The proposed rule change would 
help to avoid such an issue with respect to Internet services because 
SFTI can connect to multiple ISPs at multiple access points, providing 
redundancy and resilience in service and improving member 
organizations' and the Exchange's disaster recovery capabilities.
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    \3\ See Securities Exchange Act Release No. 70696 (October 16, 
2013), 78 FR 62802 (October 22, 2013) (SR-NYSEMKT-2013-82).
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    The Exchange will make the connections to ISPs available via SFTI 
immediately and provide member organizations with a transition period 
until December 31, 2014 to have their ISP equipment located at 11 Wall 
Street removed. If a member organization has not done so by that time, 
then the Exchange will begin charging $1,000 per month per member 
organization per rack for continuing to host the member organization's 
ISP equipment at 11 Wall Street, or $600 per month for a half rack or 
$400 per month for a quarter rack.\4\ The Exchange believes that the 
proposed charges will incent all member organizations to transition 
over to the free, more robust service while leaving them the option of 
maintaining their current service arrangement if they so choose. The 
Exchange will continue to charge fees for installing and removing data 
jacks and lines as set forth in the current Price List, and member 
organizations will remain responsible for paying any fees charged by 
the ISP.
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    \4\ All NYSE MKT members [sic] organizations are New York Stock 
Exchange LLC (``NYSE'') member organizations. See Supplementary 
Material .10 to Rule 2--Equities. NYSE has submitted substantially 
the same proposed fee change. See SR-NYSE-2014-30. However, because 
the ISP connection will support a member organization's operations 
for both SROs, the fee will only be assessed once.
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    The proposed change is not otherwise intended to address any other 
issues, and the Exchange is not aware of any problems member 
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\6\ 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed rule change is reasonable 
because it will result in a more efficient use in the Exchange's 
premises and increase the redundancy and resilience in Internet service 
to member organizations operating on the Floor, thereby improving those 
member organizations' and the Exchange's disaster recovery 
capabilities. The proposed change is equitable and not unfairly 
discriminatory because there would continue to be an option, as there 
is today, for all member organizations operating on the Floor to obtain 
a free connection to an ISP. The proposed fees would only apply if, 
after the transition period, the member organization elected to have a 
separate ISP connection that would require separate equipment hosting 
on the Exchange's premises at 11 Wall Street.
    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 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,\7\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. The proposed rule change is not intended to 
address any competitive issues among exchanges or broker-dealers but 
rather to more efficiently use the Exchange's premises and help to 
prevent Internet service disruptions from affecting the Floor, thereby 
improving disaster preparedness.
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    \7\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

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

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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    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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEMKT-2014-53 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-NYSEMKT-2014-53. 
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

[[Page 38618]]

Internet Web site (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 Web site 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 such filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2014-53 and should 
be submitted on or before July 29, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-15815 Filed 7-7-14; 8:45 am]
BILLING CODE 8011-01-P