[Federal Register Volume 85, Number 66 (Monday, April 6, 2020)]
[Notices]
[Pages 19187-19190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07073]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88518; File No. SR-NYSE-2020-25]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
for an Extension of the Temporary Waiver of the Co-Location ``Hot
Hands'' Fee
March 31, 2020.
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 March 27, 2020, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') 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.
---------------------------------------------------------------------------
[[Page 19188]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes an extension of the temporary waiver of the
co-location ``Hot Hands'' fee. The proposed rule change is available on
the Exchange's website 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 an extension of the temporary waiver of the
co-location \4\ ``Hot Hands'' fee through the earlier of the reopening
of the Mahwah, New Jersey data center (``Data Center'') or May 15,
2020. The waiver of the Hot Hands fee was originally through March 29,
2020.\5\
---------------------------------------------------------------------------
\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.
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56).
\5\ See Securities Exchange Act Release No. 88397 (March 17,
2020), 85 FR 16406 (March 23, 2020) (SR-NYSE-2020-18).
---------------------------------------------------------------------------
The Exchange is an indirect subsidiary of Intercontinental
Exchange, Inc. (``ICE''). Through its ICE Data Services (``IDS'')
business, ICE operates the Mahwah, New Jersey data center (``Data
Center''), from which the Exchange provides co-location services to
Users.\6\ Among those services is a ``Hot Hands'' service, which allows
Users to use on-site Data Center personnel to maintain User equipment,
support network troubleshooting, rack and stack a server in a User's
cabinet; power recycling; and install and document the fitting of cable
in a User's cabinet(s).\7\ The Hot Hands fee is $100 per half hour.
---------------------------------------------------------------------------
\6\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List,
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 NYSE American LLC (``NYSE American''), NYSE Arca, Inc.
(``NYSE Arca''), NYSE Chicago, Inc. (``NYSE Chicago''), and NYSE
National, Inc. (``NYSE National'' and together, the ``Affiliate
SROs''). See Securities Exchange Act Release No. 70206 (August 15,
2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59). Each
Affiliate SRO has submitted substantially the same proposed rule
change to propose the changes described herein. See SR-NYSEAmer-
2020-23, SR-NYSEArca-2020-26, SR-NYSECHX-2020-10, and SR-NYSENAT-
2020-14.
\7\ See Securities Exchange Act Release No. 72721 (July 30,
2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-37).
---------------------------------------------------------------------------
ICE originally announced that the Data Center would be closed to
third parties for the period from March 16, 2020 through March 29, 2020
(the ``Initial Closure''), to help avoid the spread of COVID-19, which
could negatively impact Data Center functions. Prior to the closure of
the Data Center, the Chief Executive Officer of the Exchange took the
actions required under NYSE Rule 7.1 to close the co-location facility
of the Exchange to third parties.
ICE has now announced to Users that, because the concerns that led
to the Initial Closure still apply, the closure of the Data Center will
be extended to the earlier of the reopening of the Mahwah, New Jersey
data center (``Data Center'') or May 15, 2020. The date will be
announced through a customer notice.
If a User's equipment requires work while a Rule 7.1 closure is in
effect, the User has to use the Hot Hands service and, absent a waiver,
incurs Hot Hands fees for the work. Given that, the Exchange waived all
Hot Hands fees for the duration of the Initial Closure.\8\ Because the
period has been extended, the Exchange proposes to extend the waiver of
the Hot Hands Fee for the length of the period. To that end, the
Exchange proposes to revise the footnote to the Hot Hands Fee in the
Price List as follows (deletions bracketed, additions italicized):
---------------------------------------------------------------------------
\8\ See 85 FR 16406, supra note 5.
---------------------------------------------------------------------------
[dagger] Fees for Hot Hands Services will be waived beginning on
March 16, 2020 through [March 29, 2020]the earlier of the reopening of
the Mahwah, New Jersey data center or May 15, 2020.
The Exchange believes that there will be sufficient Data Center
staff on-site to comply with User requests for Hot Hands service.
The proposed extension of the waiver would apply equally to all
Users. The proposed extension of the fee waiver would not apply
differently to distinct types or sizes of market participants. Rather,
it would continue to apply uniformly to all Users.
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.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\10\ 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. In addition, it is designed 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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposed Rule Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable
for the following reasons.
Given that the closure of the Data Center has been extended, the
Exchange believes that it is reasonable to grant the proposed
corresponding extension of the waiver of the Hot Hands Fee. While a
Rule 7.1 closure is in effect, User representatives are not allowed
access to the Data Center. If a User's equipment requires work during
such period, the User has to use the Hot Hands service. Absent a
waiver, the User would incur Hot Hands fees for the work.
The proposed extension of the waiver would allow a User to have
work carried out on its equipment notwithstanding the closure of the
Data Center without incurring Hot Hands fees.
The Proposed Rule Change Is Equitable
The Exchange believes the proposed rule change is an equitable
allocation of
[[Page 19189]]
its fees and credits for the following reasons.
The proposed extension of the waiver would apply equally to all
Users. The proposed extension would not apply differently to distinct
types or sizes of market participants. Rather, it would apply uniformly
to all Users.
The Exchange believes that the proposal is equitable because the
extension of the waiver would mean that for the duration of the closure
of the Data Center all similarly-situated Users would not be charged a
fee to use the Hot Hands service.
The Proposed Change Is Not Unfairly Discriminatory and Would Protect
Investors and the Public Interest
The Exchange believes that the proposed change is not unfairly
discriminatory for the following reasons.
The proposed extension of the waiver would not apply differently to
distinct types or sizes of market participants. Rather, all Users whose
equipment requires work during the extension of the Data Center closure
would have the resulting fees waived, and the extension of the waiver
would apply uniformly to all Users during the period. For the reasons
above, the proposed changes do not unfairly discriminate between or
among market participants.
In addition, the Exchange believes that the proposed rule change
would 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 a User to have work carried out on its
equipment notwithstanding a Rule 7.1 closure without incurring Hot
Hands fees. Accordingly, the Exchange believes that the requested
extension of the waiver is designed to perfect the mechanisms of a free
and open market and a national market system and, in general, protect
investors and the public interest by facilitating the uninterrupted
availability of Users' equipment.
For all of the above 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,\11\ the Exchange
believes that the proposed rule change will not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
Intramarket Competition
The Exchange does not believe that the proposed change would place
any burden on intramarket competition that is not necessary or
appropriate.
The proposed extension of the waiver is not designed to affect
competition, but rather to provide relief to Users that, while a Rule
7.1 closure is in effect, have no option but to use the Hot Hands
service.
The proposed extension of the waiver would not apply differently to
distinct types or sizes of market participants. Rather, all Users whose
equipment requires work during the extension of the Data Center closure
would have the resulting fees waived, and the extension of the waiver
would apply uniformly to all Users during the period.
Intermarket Competition
The Exchange does not believe that the proposed change would impose
any burden on intermarket competition that is not necessary or
appropriate.
The Exchange believes that the proposed change would not affect the
competitive landscape among the national securities exchanges, as the
Hot Hands service is solely charged within co-location to existing
Users, and would be temporary.
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) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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 [email protected]. Please include
File Number SR-NYSE-2020-25 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-NYSE-2020-25. 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 (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 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 10:00 a.m. and
3:00 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2020-25 and should
[[Page 19190]]
be submitted on or before April 27, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07073 Filed 4-3-20; 8:45 am]
BILLING CODE 8011-01-P