[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69722-69725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28607]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63274; File No. SR-NYSEAmex-2010-101]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its 
Options Fee Schedule To Reflect Fees Charged for Co-location Services

November 8, 2010.
    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 26, 2010, NYSE Amex LLC (``NYSE Amex'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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 amend its Options Fee Schedule to reflect 
fees charged for co-location services, as described more fully herein. 
The text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, on the Commission's Web site at 
http://www.sec.gov, and http://www.nyse.com.

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 its Options Fee Schedule to identify 
fees pertaining to co-location services, which allow Users \4\ of the 
Exchange to rent space on premises controlled by the Exchange in order 
that they may locate their electronic servers in close physical 
proximity to the Exchange's trading and execution systems.\5\ The 
Exchange plans to offer these co-location services beginning in January 
2011 at its data center in Mahwah New Jersey.\6\ The Exchange will 
offer space at the data center in cabinets with power usage capability 
of either four or eight kilowatts (kW).\7\ In addition, the Exchange 
will offer Users services related to co-location, including cross 
connections, equipment and cable installation, and remote ``hot-hands'' 
services.
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    \4\ For the purposes of this filing, the term ``Users'' includes 
any ``ATP Holder,'' as that term is defined in NYSE Amex (Options) 
Rule 900.2NY(4) and any ``Sponsored Participant,'' as that term is 
defined in NYSE Amex (Options) Rule 900.2NY(77).
    \5\ The Commission has approved proposed rule filings submitted 
by the Exchange (with respect to its equities business) and the 
Exchange's affiliate, the New York Stock Exchange LLC to offer the 
same co-location services from the Mahwah data center at the same 
prices. See Securities Exchange Act Release No. 62961 (September 21, 
2010), 75 FR 59299 (September 27, 2010) (SR-NYSE-2010-56); 
Securities Exchange Act Release No. 62960 (September 21, 2010) 75 FR 
59310 (September 27, 2010) (SR-NYSEAmex-2010-80).
    \6\ The Exchange will announce the effective date of the fees 
set forth in this proposed rule change through a notice to Users.
    \7\ The Exchange also allows Users, for a monthly fee (i.e., 40% 
of the applicable monthly per kW fee), to obtain an option for 
future use on available, unused cabinet space in proximity to their 
existing cabinet space. Specifically, Users may reserve cabinet 
space of up to 30% of the cabinet space under contract, which the 
Exchange will endeavor to provide as close as reasonably possible to 
the User's existing cabinet space, taking into consideration power 
availability within segments of the data center and the overall 
efficiency of use of data center resources as determined by the 
Exchange. (If the 30% measurement results in a fractional cabinet, 
the cabinet count is adjusted up to the next increment.) If reserved 
cabinet space becomes needed for use, the reserving User will have 
30 business days to formally contract with the Exchange for full 
payment for the reserved cabinet space needed or the space will be 
reassigned.
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    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 Users that do not 
receive co-location services. 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 Exchange's 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. 
However, Users that receive co-location services normally would expect 
reduced latencies in sending orders to the Exchange and receiving 
market data from the Exchange. In addition, co-located Users have the 
option of obtaining access to the Exchange's Liquidity Center Network 
(``LCN''), a local area network available in the data center.\8\ Co-
located Users have the option of using either the LCN or the Exchange's 
Secure Financial Transaction Infrastructure (``SFTI'') network, to 
which all Users have access. Because it operates as a local area 
network within the data center, the LCN provides reduced latencies in 
comparison with SFTI. Other than the

[[Page 69723]]

reduced latencies, the Exchange believes that there are no material 
differences in terms of access to the Exchange between Users that 
choose to co-locate and those that do not. SFTI and LCN both provide 
Users with access to the Exchange's trading and execution systems and 
to the Exchange's proprietary market data products. User access to non-
proprietary market data products is available through SFTI and not 
through LCN.
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    \8\ As set forth below, pricing for LCN access is provided on a 
stand-alone basis and on a bundled basis in combination with SFTI 
connections and optic connections to outside access centers and 
within the data center. The SFTI and optic connections are not 
related to the co-location services.
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    The Exchange offers co-location space based on availability and the 
Exchange believes that it has sufficient space in the Mahwah data 
center to accommodate current demand on an equitable basis for the 
foreseeable future. In addition, the Exchange believes that any 
difference among the positions of the cabinets within the data center 
does not create any material difference to co-location Users in terms 
of access to the Exchange.
    The following charts identify the proposed tiered fees for co-
location and the proposed fees for related services.

------------------------------------------------------------------------
      Initial fee per cabinet                       $5,000
------------------------------------------------------------------------
           Number of kWs                      Per kW fee monthly
------------------------------------------------------------------------
                      4-8                               $1,200
                    12-20                                1,050
                    24-40                                  950
                     44 +                                  900
------------------------------------------------------------------------


------------------------------------------------------------------------
       Type of service             Description        Amount of charge
------------------------------------------------------------------------
LCN Access..................  1 GB Circuit........  $6,000 per
                                                     connection initial
                                                     charge plus $5,000
                                                     monthly per
                                                     connection.
LCN Access..................  10 GB Circuit.......  $10,000 per
                                                     connection.
Bundled Network Access,       1 GB Bundle.........  $25,000 initial
 Option 1 (2 LCN                                     charge plus $13,000
 connections, 2 SFTI                                 monthly charge.
 connections, and 2 optic
 connections to outside
 access center).
                              10 GB Bundle........  $50,000 initial
                                                     charge plus $47,000
                                                     monthly charge.
Bundled Network Access,       1 GB Bundle.........  $26,000 initial
 Option 2 (2 LCN                                     charge plus $16,000
 connections, 2 SFTI                                 monthly charge.
 connections, 1 optic
 connection to outside
 access center, and 1 optic
 connection in data center).
                              10 GB Bundle........  $50,000 initial
                                                     charge plus $54,250
                                                     monthly charge.
Bundled Network Access,       1 GB Bundle.........  $27,500 initial
 Option 3 (2 LCN                                     charge plus $19,000
 Connections, 2 SFTI                                 monthly charge.
 connections, and 2 optic
 connections in data center).
                              10 GB Bundle........  $50,000 initial
                                                     charge plus $61,500
                                                     monthly charge.
Data Center Fiber Cross       Cross connect         $500 per unit
 Connect.                      between a single      initial charge plus
                               User's cabinets       $500 monthly per
                               within the data       unit.
                               center.
Initial Install Services      Includes initial      $800 per cabinet.
 (Required per cabinet).       racking of
                               equipment in
                               cabinet and
                               provision of up to
                               10 cables (4 hrs).
Hot Hands Service: Normal     Applies on non-NYSE   $200 per hour.
 Business Hours, Scheduled     Amex holidays,
 (Note: Hot Hands Service      Monday to Friday, 9
 allows Users to use on-site   am to 5 pm if
 data center personnel to      scheduled at least
 maintain User equipment.).    1 day in advance.
Hot Hands Service: Extended   Applies Monday to     $275 per hour.
 Business Hours, Scheduled.    Friday 5 pm to 9
                               am, NYSE Amex
                               holidays, and
                               weekends if
                               scheduled at least
                               1 day in advance.
Hot Hands Service: Normal     Applies on non-NYSE   $250 per hour.
 Business Hours, Expedited.    Amex holidays,
                               Monday to Friday, 9
                               am to 5 pm if NOT
                               scheduled at least
                               1 day in advance.
Hot Hands Service: Extended   Applies Monday to     $325 per hour.
 Business Hours, Expedited.    Friday 5 pm to 9
                               am, NYSE Amex
                               holidays, and
                               weekends if NOT
                               scheduled at least
                               1 day in advance.
Rack and Stack..............  Installation of one   $200 per server.
                               server in User's
                               cabinet. Service
                               encompasses
                               handling,
                               unpacking, tagging,
                               and installation of
                               the server as well
                               as 1 network
                               connection within
                               the User rack.
Power Recycling.............  Reboot of power on    $50 per reset.
                               one server or
                               switch as well as
                               observing and
                               reporting on the
                               status of the
                               reboot back to the
                               User.
Shipping and Receiving......  Receipt of one        $100 per shipment.
                               shipment of goods
                               at data center from
                               User/supplier.
                               Includes
                               coordination of
                               shipping and
                               receiving.
Badge Request...............  Request for           $50 per badge.
                               provision of a
                               permanent data
                               center site access
                               badge for a User
                               representative.
External Cabinet Cable Tray.  Engineer, furnish     $400 per tray.
                               and install Rittal
                               5'' H X 12'' W
                               cable tray on
                               cabinet.
Custom External Cabinet       Engineer, furnish     $100 per linear
 Cable Tray.                   and install 4'' H V   foot.
                               24'' W custom
                               basket cable tray
                               above client's
                               cabinet rows.
Install and Document Cable..  Labor charges to      $200 per hour.
                               install and
                               document the
                               fitting of a
                               cable(s) in a
                               User's cabinet(s)
                               in excess of the 10
                               copper cables
                               included in the
                               cabinet
                               installation fee.

[[Page 69724]]

 
Equipment Maintenance Call    Hardware maintenance- $100 per call.
 Escalation.                   break fix services
                               available through
                               NYSE arrangement
                               with Delta Computer
                               Group.
Visitor Security Escort.....  NYSE employee         $75 per hour.
                               escort, which is
                               required during
                               User visits to the
                               data center. (Note:
                               all User
                               representatives are
                               required to have a
                               visitor security
                               escort during
                               visits to the data
                               center, including
                               User
                               representatives who
                               have a permanent
                               data center site
                               access badge.).
Technician Support Service--  Network technician    $200 per hour.
 Non Emergency.                equipped to support
                               User network
                               troubleshooting
                               activity and to
                               provide all
                               necessary testing
                               instruments to
                               support the User
                               request. Prior day
                               notice is required.
Technician Support Service--  Network technician    $325 per hour.
 Emergency.                    equipped to support
                               User network
                               troubleshooting
                               activity and to
                               provide all
                               necessary testing
                               instruments to
                               support the User
                               request. Two hour
                               notice is required.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\9\ in general, and Sections 6(b)(4) and 6(b)(5), of the 
Act,\10\ in particular, in that it is designed to (i) provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities, and (ii) prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system. The Exchange believes that the 
proposed changes to the Schedule are equitable in that they apply fees 
for comparable co-location services uniformly to our Users. Moreover, 
the Exchange believes that, as described herein, access to its market 
is offered on fair and non-discriminatory terms.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and 15 U.S.C. 78f(b)(5).
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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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Commission notes that the Exchange satisfied this five-day pre-
filing requirement.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. The Commission notes that the co-location fees sought 
to be codified here are based on filings by the Exchange and the 
Exchange's affiliate, the New York Stock Exchange LLC, which have 
already been approved by the Commission, and that accelerated approval 
of the co-location fees will ensure that the co-location services and 
fees are made available to all interested parties without delay. For 
this reason, the Commission designates the proposed rule change as 
operative upon filing.\13\
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    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 e-mail to [email protected]. Please include 
File Number SR-NYSEAmex-2010-101 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 69725]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-1090.

All submissions should refer to File Number SR-NYSEAmex-2010-101. This 
file number should be included on the subject line if e-mail 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 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 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-
NYSEAmex-2010-101 and should be submitted on or before December 6, 
2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28607 Filed 11-12-10; 8:45 am]
BILLING CODE 8011-01-P