Document ID: SEC-2015-1773-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2015-10-30T04:00Z

[Federal Register Volume 80, Number 210 (Friday, October 30, 2015)]
[Notices]
[Pages 66944-66947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27655]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76268; File No. SR-NYSEMKT-2015-70]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Establishing Procedures 
and Credits in Connection With the Re-Location of Equipment in the 
Exchange's Data Center

October 26, 2015.
    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 October 22, 2015, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 establish procedures and credits in 
connection with the re-location of equipment in the Exchange's Data 
Center. 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.

[[Page 66945]]

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 operates a data center in Mahwah, New Jersey, from 
which it provides co-location services to Users.\4\ The Exchange's co-
location services allow Users to rent space in the Data Center so they 
may locate their electronic servers in close physical proximity to the 
Exchange's trading and execution system.\5\ The Exchange proposes to 
establish procedures and waive certain fees in connection with the 
Exchange's re-location of Users' equipment in the Exchange's Data 
Center, operative beginning November 1, 2015.\6\
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    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in 2010. See Securities Exchange Act Release No. 
62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR-
NYSEAmex-2010-80) (``2010 Release'').
    \5\ See id. at 59299.
    \6\ As specified in the NYSE MKT Equities Price List and the 
NYSE Amex Options Fee Schedule, a User that incurs co-location fees 
for a particular co-location service pursuant thereto would not be 
subject to co-location fees for the same co-location service charged 
by the Exchange's affiliates New York Stock Exchange LLC and NYSE 
Arca, Inc. See Securities Exchange Act Release No. 70176 (August 13, 
2013), 78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-67). The 
Exchange's affiliates have also submitted substantially the same 
proposed rule change to propose the changes described herein. See 
SR-NYSE-2015-42 and SR-NYSEArca-2015-85.
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    The Data Center opened in 2010, and at that time, the Exchange 
represented that it offers co-location space based on availability and 
that it had sufficient space in the Data Center to accommodate demand 
on an equitable basis for the foreseeable future.\7\ The Exchange 
continues to believe that there is sufficient space in the Data Center 
to accommodate demand. However, much of the space available now is 
available in smaller segments, resulting from an increasing number of 
Users, multiple moves within the Data Center, and changes to Users' 
space requirements--both increases and decreases--since 2010. At this 
time, the Exchange has determined that, in order to continue to be able 
to meet its obligation to accommodate demand, and in particular to make 
available more contiguous, larger spaces for new and existing Users, 
the Exchange must exercise its right to move some Users' equipment 
within the Data Center (the ``Migration'').
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    \7\ See supra note 4 at 59299.
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    The Exchange proposes to put the following procedures in place to 
manage the process for the Migration.
    First, the Exchange would identify Users that would be required to 
move in the Migration based on (a) the current location of the User and 
its current equipment and power requirements and (b) the availability 
of another location in the Data Center that would accommodate the 
equipment and power requirements for which such User currently 
subscribes. No User would be required to move more than once within any 
12-month period.
    Second, the Exchange would notify a User in writing (the 
``Notice'') that the User's equipment and network connections in the 
Data Center are to be moved as part of the Migration. The Notice would 
identify the 90-day period during which the User must move its 
equipment, which period would commence at least 60 days from the date 
of the Notice. The exact date or dates for the move for each User would 
be agreed upon between the User and the Exchange. If a move date or 
dates cannot be agreed on, the Exchange would schedule the move for a 
date or dates no later than 180 days after the date of the Notice.
    Third, each User's move would be facilitated by the Exchange in 
cooperation with the User, including the un-racking and re-racking of 
all of the User's equipment, and the re-installation of the User's 
networking connections, and the Exchange would make reasonable efforts 
to ensure that the moves take place outside of the Exchange's hours for 
business.\8\
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    \8\ See NYSE MKT Equities Rule 51 and NYSE Amex Options Rule 
900.2NY(15).
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    Fourth, in connection with facilitating each User's move, the 
Exchange proposes to waive certain fees. Specifically, the Exchange 
proposes to waive the monthly recurring fees incurred in connection 
with the User's new space for the month during which the User's move 
commences. This waiver of the monthly recurring fees would mean that 
the User would not incur these fees for the period of overlapping use 
of the equipment and services in the old and the new locations, as long 
as the move is completed within one month.
    In addition, the Exchange proposes to waive all service-related 
charges that the User would incur if such a move were to take place at 
a User's request with respect to the User's existing services and 
equipment. The service-related charges to be waived would be: (a) The 
Change Fee, Initial Install Services and Hot Hands Services; (b) the 
External Cabinet Cable Tray fee and the Custom External Cabinet Cable 
Tray fee, if the User has such equipment installed in its current 
location; (c) Shipping and Receiving fees relating to duplicate 
equipment for the User's new space; and (d) the Badge Request Fee and 
Visitor Security Escort fee with respect to User representative visits 
during the User's Migration Period (together, the ``Service-Related 
Fees'').
    Finally, in consideration for the Migration, the Exchange proposes 
to waive, for the month following the completion of a User's move, the 
monthly recurring charges for that User, based on the rate of the 
monthly recurring fees that the User is paying as of the date of the 
Notice.
    The Exchange proposes to modify the NYSE MKT Equities Price List 
and the NYSE Amex Options Fee Schedule to reflect the fee waivers in 
connection with the Migration.
    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. The representations that the 
Exchange made in the 2010 Release to the effect that any difference 
among the positions of a User's equipment within the Data Center does 
not create any material difference to Users in terms of access to the 
Exchange continue to apply.\9\
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    \9\ See supra note 4 at 59299.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(5) of the Act,\11\ in particular, because 
it provides for the equitable allocation of reasonable dues, fees and 
other charges among members and other persons using any facility or 
system which the Exchange operates or controls and is designed to 
prevent fraudulent

[[Page 66946]]

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 investors and the public interest and because it is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    Additionally, the proposed changes would be applied uniformly by 
the Exchange to comparable Users and would not unfairly discriminate 
between similarly situated Users of co-location services.
    The Exchange believes that the proposal to establish procedures and 
waive certain fees in connection with the movement of equipment at the 
Exchange's Data Center 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 it would 
allow the Exchange to have sufficient space in the Data Center to 
accommodate demand on an equitable basis for the foreseeable future. 
The Exchange believes that the waiver of overlapping monthly recurring 
charges, the waiver of the Service-Related Fees, and the waiver of one 
month of monthly recurring charges is reasonable because Users would be 
moving at the Exchange's request and the waivers would help to 
alleviate the burden on the Users that are required to move.
    The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\12\ 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. Pursuant to the proposed procedures for 
selecting which Users would be required to move within the Data Center, 
a User would be required to move only if the Exchange would be able to 
accommodate such User's current space and power requirements at the new 
location, so as to minimize the disruption to the User.
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    \12\ 15 U.S.C. 78f(b)(4).
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    For the reasons above, the proposed change would 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.
    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,\13\ 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 Exchange believes that the proposed procedures 
for identifying the Users that would be moved and the proposed fee 
waivers are pro-competitive because they facilitate the Migration, 
which would in turn facilitate use of the Exchange's Data Center, and 
provide access to the Data Center to current and additional market 
participants.
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    \13\ 15 U.S.C. 78f(b)(8).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if, for example, they deem fee levels at a particular 
venue to be excessive or if they determine that another venue's 
products and services are more competitive than on the Exchange. In 
such an environment, the Exchange must continually review, and consider 
adjusting, the services it offers as well as any corresponding fees and 
credits to remain competitive with other exchanges. For the reasons 
described above, the Exchange believes that the proposed rule change 
reflects this competitive environment.

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

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

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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-2015-70 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-NYSEMKT-2015-70. 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 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 Section, 100 F Street 
NE., Washington, DC 20549-1090. Copies of the filing will also be 
available for inspection and copying at the NYSE's

[[Page 66947]]

principal office and on its Internet Web site at www.nyse.com. 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-2015-70 and should 
be submitted on or before November 20, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27655 Filed 10-29-15; 8:45 am]
BILLING CODE 8011-01-P