Document ID: SEC-2012-1033-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2012-07-02T04:00Z

[Federal Register Volume 77, Number 127 (Monday, July 2, 2012)]
[Notices]
[Pages 39305-39309]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16133]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67263; File No. SR-NYSEArca-2012-62]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Amending the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services To Provide for Additional Co-
location Services and Establish Related fees

June 26, 2012.
    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 June 13, 2012, 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, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Schedule of 
Fees and Charges for Exchange Services (``Fee Schedule'') to provide 
for additional co-location services and establish related fees. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Fee Schedule to provide for 
additional co-location services and establish related fees.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 63275 (November 8, 
2010), 75 FR 70048 (November 16, 2010) (SR-NYSEArca-2010-100) (the 
``Original Co-location Notice''). See also Securities Exchange Act 
Release No. 65970 (December 15, 2011), 76 FR 79242 (December 21, 
2011) (SR-NYSEArca-2011-74). The Exchange operates a data center in 
Mahwah, New Jersey (``data center'') from which it provides co-
location services to Users. The Exchange's co-location services 
allow Users to rent space in the data center in order that they may 
locate their electronic servers in close physical proximity to the 
Exchange's trading and execution system. See Original Co-location 
Notice at 70049. For purposes of its co-location services, the term 
``User'' includes (i) ETP Holders and Sponsored Participants who are 
authorized to obtain access to the NYSE Arca Marketplace pursuant to 
Rule 7.29 (see Rule 1.1(yy)); and (ii) non-ETP Holder broker-dealers 
and vendors that request to receive co-location services directly 
from the Exchange.
---------------------------------------------------------------------------

Cabinet Cross Connects
    A User that has more than one cabinet within the data center is 
currently able to purchase one or more fiber cross connects between its 
cabinets. Currently, a $500 initial fee and a $500 monthly fee are 
charged per cross connect. The Exchange proposes that each User be 
permitted to purchase cross connects between its own cabinets, as is 
currently permitted, as well as between its cabinet(s) and the cabinets 
of separate Users within the data center.\5\ A cross connect would be 
used to connect cabinets of separate Users when, for example, a User 
receives technical support, order routing and/or market data delivery 
services from another User in the data center.
---------------------------------------------------------------------------

    \5\ The Exchange notes that fees for a cross connect would be 
the same, regardless of whether the cross connect is between the 
cabinets of a single User or between the cabinets of separate Users 
within the data center. The Exchange further notes that only the 
User requesting the cross connect would be charged the related 
initial and monthly fees; the other User would simply be required to 
give permission for the cross connection. This proposed change would 
require that the existing cross connect fee in the Fee Schedule be 
amended to reflect that it is no longer applicable only to cross 
connects between a single User's cabinets.
---------------------------------------------------------------------------

    Cross connects may be bundled (i.e., multiple cross connects within 
a single sheath) such that a single sheath can hold either one cross 
connect or several cross connects in multiples of six (e.g., six or 12 
cross connects). The Exchange is proposing fees for bundled cross 
connects \6\ that correspond to the number of cross connects in the 
bundle, as follows: \7\
---------------------------------------------------------------------------

    \6\ All multiple cross connects within the bundle would be 
installed at once and only in multiples of six, regardless of the 
number of cross connects the User utilizes. This proposed change 
would require that the existing cross connect fee in the Fee 
Schedule be amended to reflect that it is applicable only for a 
single cross connect (i.e., not for bundled cross connects). A User 
could still elect to purchase individual cross connects, but once 
the User anticipates utilizing four cross connects, it would be more 
economical to purchase a bundle of six (with two unused) for a $500 
initial charge plus a $1,500 monthly charge, which would be less 
than the $500 initial charge and $2,000 monthly charge for 
purchasing four cross connects individually. The additional unused 
cross connects in the bundle would not result in any additional 
internal costs or Exchange fees for the User.
    \7\ The Exchange has made bundled cross connects available for a 
User to connect its cabinets within the data center beginning with 
the availability of co-location services in the data center in 
September 2010. In certain circumstances, the Exchange charged 
certain Users that purchased bundled cross connects a monthly per 
cross connect fee that was equal to the monthly fees proposed herein 
and therefore less than the $500 fee per cross connect that is 
currently reflected within the Fee Schedule. The Exchange has 
granted credits to the other Users that purchased bundled cross 
connects such that all Users have been charged the monthly fees 
proposed herein.

 
 
 
6 Cross Connects......................  $500 initial charge plus $1,500 monthly charge.
12 Cross Connects.....................  $500 initial charge plus $2,500 monthly charge.
18 Cross Connects.....................  $500 initial charge plus $3,200 monthly charge.
24 Cross Connects.....................  $500 initial charge plus $3,900 monthly charge.
 

[[Page 39306]]

    The Exchange's initial cost for installing bundled cross connects 
is generally consistent with the cost of installing a single cross 
connect. The Exchange therefore proposes that the same $500 initial fee 
apply to install bundled cross connects as is currently applicable to a 
single cross connect. However, the Exchange's cost for ongoing 
maintenance of cross connects decreases on a per cross connect basis as 
the number of cross connects within a sheath increases. Accordingly, 
the monthly fees proposed for bundled cross connects would likewise 
decrease on a per cross connect basis as the number of cross connects 
within a sheath increases, as reflected in the amended Fee Schedule.\8\
---------------------------------------------------------------------------

    \8\ For example, a single cross connect currently has a 
corresponding monthly fee of $500. However, as proposed, a bundle of 
6 cross connects would have a monthly fee of $1,500 ($250 monthly 
fee per cross connect), a bundle of 12 cross connects would have a 
monthly fee of $2,500 ($208 monthly fee per cross connect), a bundle 
of 18 cross connects would have a monthly fee of $3,200 ($178 
monthly fee per cross connect), and a bundle of 24 cross connects 
would have a monthly fee of $3,900 ($162 monthly fee per cross 
connect). Because the cross connects are bundled, the proposed 
change would not apply to incremental cross connects.
---------------------------------------------------------------------------

10 Gb LCN Connections
    Users are currently able to purchase access to the Exchange's 
Liquidity Center Network (``LCN''), a local area network that is 
available in the data center. LCN access is available in either one or 
10 gigabit (``Gb'') capacities, for which Users incur an initial and 
monthly fee per connection. The Exchange proposes that a User that 
purchases five 10 Gb LCN connections would only be charged the initial 
fee for a sixth 10 Gb LCN connection and would not be charged the 
monthly fee that would otherwise be applicable.\9\ This would apply to 
a User that purchases six 10 Gb LCN connections at one time as well as 
to a User that purchases six 10 Gb LCN connections at separate 
times.\10\
---------------------------------------------------------------------------

    \9\ Beginning with the availability of co-location services in 
the data center in September 2010, the Exchange charged certain 
Users that purchased a sixth LCN connection as proposed herein, 
i.e., the Exchange charged the initial fee but not the monthly fee. 
The Exchange has granted credits to those other Users that purchased 
a sixth LCN connection and were charged the monthly fee for such 
connection.
    \10\ A User would be charged an initial and monthly fee 
according to the Fee Schedule for any additional 10 Gb LCN 
connections it purchases (e.g., a seventh or eighth 10 Gb LCN 
connection). Additionally, a User that cancels a 10 Gb LCN 
connection, such that the User is no longer paying for at least five 
10 Gb LCN connections, would thereafter be charged the monthly fee 
for what had been its free sixth 10 Gb LCN connection.
---------------------------------------------------------------------------

LCN CSP Connections
    A User is currently able to act as a content service provider (a 
``CSP'' User) and deliver services to another User in the data center 
(a ``Subscribing'' User). These services could include, for example, 
order routing/brokerage services and/or market data delivery services. 
Many of these services can be provided via direct cross connect between 
the User providing a service and the User receiving it. However, using 
direct cross connects would require the User providing the service to 
have a direct cross connect with each User receiving it and would 
require the User providing the service to send the same data multiple 
times, i.e., once per receiving User.
    LCN CSP connections address this issue by allowing the CSP User to 
send data to, and communicate with, all the properly authorized 
Subscribing Users at once, via a specific, dedicated LCN connection (an 
``LCN CSP'' connection); \11\ the Subscribing User must also have an 
LCN connection in order to communicate with the LCN CSP.\12\ The LCN 
CSP connection used by the CSP User may only be used for providing 
services to, and communicating with, Subscribing Users and is separate 
and distinct from any LCN connection used by the CSP User to access the 
Exchange.\13\ Conversely, the Subscribing User receives the services 
via its standard LCN connection \14\ and is charged an initial and 
monthly fee that reflects the benefit of receiving services from the 
CSP User in the data center in this manner. Accordingly, the Exchange 
proposes the following fees for LCN CSP connections and Subscribing 
Users: \15\
---------------------------------------------------------------------------

    \11\ A single LCN CSP connection may be used to provide services 
to more than one Subscribing User. A CSP User's LCN CSP connection 
may be used to receive data or communications from a Subscribing 
User.
    \12\ The Subscribing User's LCN connection is the standard LCN 
connection that is described in the preceding section.
    \13\ Thus, in order to access the Exchange, the CSP User is 
required to maintain an existing standard LCN connection. As above, 
the current fees in the Fee Schedule are applicable to such 
connection, e.g., a $10,000 initial fee and $12,000 monthly fee for 
a 10 Gb LCN connection.
    \14\ The current fees in the Fee Schedule are applicable, e.g., 
a $10,000 initial fee and $12,000 monthly fee for a 10 Gb LCN 
connection. If the Subscribing User does not have an existing LCN 
connection, it is required to purchase one in order to receive 
services from a CSP User over the LCN.
    \15\ The Exchange has made LCN CSP connections available to 
Users beginning with the availability of co-location services in the 
data center in September 2010. During this time, three Users have 
purchased LCN CSP connections and have been charged the related LCN 
CSP fee proposed herein. Also, one User has become a Subscribing 
User and has been charged the CSP subscriber fee proposed herein.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
LCN CSP Access................  1 Gb Circuit.....  $6,000 per connection
                                                    initial charge plus
                                                    $500 monthly per
                                                    connection.
LCN CSP Access................  10 Gb Circuit....  $10,000 per
                                                    connection initial
                                                    charge plus $5,000
                                                    monthly per
                                                    connection.
CSP Subscriber................  .................  $950 per LCN CSP
                                                    initial charge plus
                                                    $300 monthly per LCN
                                                    CSP.
------------------------------------------------------------------------

    The Exchange notes that the proposed initial fee for an LCN CSP 
connection is the same as the existing fee for a standard LCN 
connection, both for the 1 Gb and 10 Gb capacities. This is because an 
LCN CSP connection is physically the same as a standard LCN connection. 
However, the proposed monthly fee for an LCN CSP connection is less 
than the existing monthly fee for a standard LCN connection, both for 
the 1 Gb and 10 Gb capacities. This is because an LCN CSP connection is 
functionally limited as compared to a standard LCN connection--as noted 
above, an LCN CSP connection may only be used for providing services to 
Subscribing Users and may not be used for accessing the Exchange or for 
other purposes.
Cages
    A User is currently able to purchase a cage to house its cabinets 
within the data center.\16\ A cage would typically be purchased by a 
User that has several cabinets within the data center and that wishes 
to enhance privacy around its cabinets, e.g., so that other Users 
cannot see what type of hardware is being utilized. The Exchange 
charges fees for cages based on the size of the cage, which directly 
corresponds to the number of cabinets housed therein. The Exchange is 
proposing the following fees for cages: \17\
---------------------------------------------------------------------------

    \16\ The Exchange has made cages available to Users beginning 
with the availability of co-location services in the data center in 
September 2010.
    \17\ The Exchange currently charges cage fees to Users at the 
levels proposed herein.

[[Page 39307]]

 
 
 
1-14 Cabinets.......................  $5,000 initial charge plus $2,700 monthly charge.
15-28 Cabinets......................  $10,000 initial charge plus $4,100 monthly charge.
29+ Cabinets........................  $15,000 initial charge plus $5,500 monthly charge.
 

    The Exchange's initial cost to construct a cage is directly related 
to the size of the cage, which is determined by the number of the 
User's cabinets that are to be housed therein. The initial fees 
proposed for a cage would accordingly increase on a proportional basis 
as the number of cabinets housed in the cage increases, as reflected in 
the amended Fee Schedule.\18\ The monthly fee would reflect the 
opportunity cost to the Exchange of giving up floor space in the data 
center for the cage's physical footprint and the value of such space to 
the User; such floor space otherwise could be utilized for additional 
cabinets for the same or other Users or other Exchange purposes. 
Accordingly, the monthly fees proposed for a cage would increase on a 
marginal basis as the number of cabinets housed in the cage increases, 
as reflected in the amended Fee Schedule.\19\
---------------------------------------------------------------------------

    \18\ For example, a cage housing between one and 14 cabinets 
would have a corresponding initial fee of $5,000. However, a cage 
housing between 15 and 28 cabinets--as many as twice the number of 
cabinets--would have a corresponding initial fee of $10,000. 
Similarly, a cage housing 29 or more cabinets--possibly as many as 
three times the number of cabinets as the lowest tier--would have a 
corresponding initial fee of $15,000.
    \19\ For example, a cage housing between one and 14 cabinets 
would have a corresponding monthly fee of $2,700 ($193 per cabinet 
when housing 14 cabinets). However, a cage housing between 15 and 28 
cabinets--as many as twice the number of cabinets--would have a 
corresponding monthly fee of $4,100 (an additional monthly cost that 
is slightly greater than 150% of the lowest tier and $146 per 
cabinet when housing 28 cabinets). Similarly, a cage housing 29 or 
more cabinets--which could be as many as three times the number of 
cabinets as the lowest tier--would have a corresponding monthly fee 
of $5,500 (an additional monthly cost that is slightly greater than 
200% of the lowest tier and $131 per cabinet when housing, for 
example, 42 cabinets). As the cage size increases, its physical 
footprint on the data center floor correspondingly increases.
---------------------------------------------------------------------------

Change Fee
    A User is currently able to arrange for the Exchange to 
reconfigure, modify, or otherwise change a co-location service that the 
Exchange has already established and completed for the User. In this 
regard, the Exchange notes that the Fee Schedule includes several co-
location services for which an initial fee is applicable in addition to 
an ongoing monthly fee.\20\ These initial fees are related to the 
Exchange's initial cost of establishing or installing the particular 
co-location service for the User. The Exchange proposes to charge a 
User a fee of $950 per order if the User requests a change to one or 
more existing co-location services that the Exchange has already 
established or completed for the User (``Change Fee'').\21\ For 
example, the initial installation of an LCN connection would include 
establishing and configuring market data services requested by the 
User, which would be covered by the initial install fee. However, if a 
User requests that the Exchange establish and configure additional 
market data services for its LCN connection, the User would be charged 
a one-time Change Fee of $950 for that request. If a User orders two or 
more services at one time (for example, through submitting an order 
form requesting multiple services) the User would be charged a one-time 
Change Fee of $950, which would cover the multiple services.
---------------------------------------------------------------------------

    \20\ For example, the initial 1 Gb LCN Access fee is $6,000 per 
connection and the ongoing monthly fee is $5,000.
    \21\ The Exchange has uniformly charged this $950 Change Fee to 
Users beginning with the availability of co-location services at the 
data center in September 2010.
---------------------------------------------------------------------------

Expedite Fee
    A User is currently able to request that the Exchange expedite the 
completion of co-location services purchased or ordered by the User. 
The Exchange proposes to charge Users $4,000 for expedited completion 
of co-location services (``Expedite Fee'').\22\ At the time that 
services are ordered, the Exchange informs the User of the expected 
completion date; if a User wishes to obtain the services on an 
expedited basis, the Exchange would inform the User of the earlier 
completion date that could be expected with payment of the Expedite 
Fee. The time saved would vary depending on the type(s) of service(s) 
being ordered, but the Expedite Fee would always be a flat $4,000, 
allowing the User to determine if the expected time savings warrants 
payment of the fee. The Expedite Fee relates to the Exchange's cost of 
expediting the services. For example, the expedited service may require 
that work be completed on the weekend or after normal business hours, 
thereby resulting in the Exchange providing overtime compensation to 
data center staff.\23\
---------------------------------------------------------------------------

    \22\ The Exchange has made the option of expedited services 
available to Users beginning with the availability of co-location 
services in the data center in September 2010. Three Users have 
requested expedited services and have been charged the $4,000 
Expedite Fee, beginning in April 2011.
    \23\ Offering expedited services would not have any impact on 
the normal delivery time for all other pending co-location work 
orders. In other words, Users that do not elect to pay the Expedite 
Fee would not be disadvantaged by those who do. The Exchange does 
not guarantee that any work is completed by a specific date under 
either normal or expedited delivery time, but rather does all work 
on a best efforts basis.
---------------------------------------------------------------------------

Power Not Utilized Fee
    A User is currently able to obtain space in the data center for 
future use of currently available, unused cabinet space in proximity to 
the User's existing cabinet space--i.e., space that the User does not 
anticipate using until some point in the future and therefore is 
reserved but not currently utilized. The applicable fee for this space 
in which power is not utilized (``PNU Fee'') was described within the 
Original Co-location Notice.\24\ Such description provided that the PNU 
Fee would be 40% of the applicable monthly per kilowatt (``kW'') fee. 
The Exchange now proposes to provide for the PNU Fee within the Fee 
Schedule as $360 per month, which is 40% of the lowest per kW monthly 
cabinet fee that is specified in the Fee Schedule.
---------------------------------------------------------------------------

    \24\ See Original Co-location Notice at 70049, note 7. Except 
for the PNU Fee, Users are not charged for PNU cabinets until power 
is activated, at which point the fees applicable to other cabinets 
are charged (i.e., the $5,000 initial fee per cabinet and the per 
kilowatt fee).
---------------------------------------------------------------------------

General
    As is the case with all Exchange co-location arrangements, 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 an ETP 
Holder, a Sponsored Participant or an agent thereof (e.g., a service 
bureau providing order entry services). Additionally, as is the case 
with existing co-location services, use of the co-location services 
proposed herein would be completely voluntary and would be available to 
all Users on a non-discriminatory basis.\25\
---------------------------------------------------------------------------

    \25\ As is currently the case, Users that receive co-location 
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.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed change is consistent with

[[Page 39308]]

Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\26\ 
in general, and furthers the objectives of Section 6(b)(4) of the 
Act,\27\ 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.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange proposes to offer the additional services described 
herein as a convenience to Users, but in doing so will incur certain 
costs, including costs related to the data center facility, hardware 
and equipment and costs related to personnel required for initial 
installation and ongoing monitoring, support and maintenance of such 
services. As with fees for existing co-location services, the fees 
proposed herein would be charged only to those Users that voluntarily 
select the related services, which would be available to all Users. 
Accordingly, the Exchange believes that the proposed change is 
equitable because it will result in fees being charged only to Users 
that voluntarily select to receive the corresponding services and 
because those services will be available to all Users.
    The Exchange believes that the proposed fees are reasonable 
because, for example, where the Exchange anticipates incurring a lower 
marginal monthly cost per cross connect or with respect to cages, the 
Exchange has proposed to apply a corresponding lower marginal monthly 
fee. Additionally, the Exchange believes that the Change Fee is 
reasonable because it would permit the Exchange to offset the expense 
of completing changes to co-location services that the Exchange has 
previously already established/completed for a User. Furthermore, the 
Exchange believes that the Expedite Fee is reasonable because it would 
permit the Exchange to charge a User for the expedited completion of 
the delivery of a co-location service, which could require that the 
Exchange expend increased resources (e.g., overtime labor costs) above 
what would otherwise be required for non-expedited service. Users that 
do not elect expedited service would not be disadvantaged by the 
offering of that service as it would not affect normal delivery times 
for services. The Exchange also believes that the proposed change 
regarding the sixth 10 Gb LCN connection is reasonable because it would 
incentivize Users to request at least five connections. The Exchange 
understands that other exchanges and self-regulatory organizations 
charge their members for certain similar co-location services.\28\ 
Additionally, the Exchange believes that the fees for LCN CSP Access 
and CSP Subscribing Users are reasonable because they directly relate 
to how Users are permitted to utilize these connections and the value 
to each party to get the benefit of this service in the data center 
without having to set up individual cross connections or experience the 
latency that could be present if the service were only offered outside 
the data center. The Exchange also believes that listing the PNU Fee 
within the Fee Schedule at $360 per month, rather than as a formula, 
will add clarity to the Fee Schedule.
---------------------------------------------------------------------------

    \28\ For example, similar to cross connects between cabinets of 
different Users in the data center, NASDAQ Stock Market LLC 
(``NASDAQ'') Rule 7034 (Co-location Services) provides for 
``External Telco/Inter-Cabinet Connectivity'' and includes charges 
corresponding thereto. See Securities Exchange Act Release No. 64060 
(March 8, 2011), 76 FR 13686 (March 14, 2011) (SR-NASDAQ-2011-035). 
Additionally, similar to the proposed Expedite Fee, NASDAQ Rule 7034 
provides for a ``Telco Connectivity Expedite Fee.'' See Securities 
Exchange Act Release No. 62397 (June 28, 2010), 75 FR 38860 (July 6, 
2010) (SR-NASDAQ-2010-019). Also, similar to the proposed fees for 
cages, NASDAQ Rule 7034 provides for ``Cabinet Caging.'' See 
Securities Exchange Act Release No. 63189 (October 27, 2010), 75 FR 
67414 (November 2, 2010) (SR-NASDAQ-2010-135). NASDAQ Rule 7034 also 
provides for discounts for NASDAQ's co-location customers that 
receive more than one unit of a particular service.
---------------------------------------------------------------------------

    The Exchange believes that the services and fees proposed herein 
are not unfairly discriminatory and are equitably allocated because, in 
addition to the 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 and there is no differentiation 
among Users with regard to the fees charged for a particular product, 
service, or piece of equipment). In this regard, 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.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2012-62 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2012-62. 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

[[Page 39309]]

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 Streetm 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. 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-NYSEArca-2012-62 and should be submitted on or before 
July 23, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-16133 Filed 6-29-12; 8:45 am]
BILLING CODE 8011-01-P