[Federal Register Volume 86, Number 100 (Wednesday, May 26, 2021)]
[Notices]
[Pages 28427-28430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10384]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91862; File No. SR-NYSECHX-2021-10]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Continue 
Offering Certain Connectivity Services That Have Been Suspended by the 
Securities and Exchange Commission

May 12, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on May 7, 2021, NYSE Chicago, Inc. (``NYSE Chicago'' 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\ 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 continue offering certain connectivity 
services that have been suspended by the Securities and Exchange 
Commission (``Commission'') at no charge, for a period of 14 days, in 
order to provide affected Users time to acquire substitute services 
before their connectivity is terminated. 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.

[[Page 28428]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to continue offering certain connectivity 
services that have been suspended by the Commission at no charge, for a 
period of 14 days, in order to provide affected Users \3\ time to 
acquire substitute services before their connectivity is terminated.
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    \3\ For purposes of the Exchange's colocation services, a 
``User'' means any market participant that requests to receive 
colocation services directly from the Exchange. See Securities 
Exchange Act Release No. 87408 (October 28, 2019), 84 FR 58778 
(November 1, 2019) (SR-NYSECHX-2019-12). As specified in the NYSE 
Chicago Fee Schedule (``Fee Schedule''), a User that incurs 
colocation fees for a particular colocation service pursuant thereto 
would not be subject to colocation fees for the same colocation 
service charged by the Exchange's affiliates New York Stock Exchange 
LLC (``NYSE''), NYSE American LLC, NYSE Arca, Inc., and NYSE 
National, Inc. (together, the ``Affiliate SROs''). See id. at 58779. 
Each Affiliate SRO has submitted substantially the same proposed 
rule change to propose the changes described herein. See SR-NYSE-
2021-31, SR-NYSEAMER-2021-26, SR-NYSEArca-2021-38, and SR-NYSENAT-
2021-13.
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    As background, on March 10, 2021, the Exchange filed with the 
Commission a proposed rule change for immediate effectiveness (the 
``Filing'') that amended the colocation services offered by the 
Exchange to provide Users the option to access to the systems and data 
feeds of various additional third parties.\4\ The proposed rule change 
became operative on April 9, 2021. Since then, five Users have 
contracted to receive the services that were added in the Filing.
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    \4\ See Securities Exchange Act Release No. 91390 (March 23, 
2021), 86 FR 16424 (March 29, 2021) (SR-NYSECHX-2021-04).
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    On May 7, 2021, the Commission suspended the Filing and instituted 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.\5\ Such action suspended the Exchange's 
ability to offer access to Third Party Systems from Long Term Stock 
Exchange, Members Exchange, MIAX Emerald, MIAX PEARL Equities, Morgan 
Stanley, and TD Ameritrade, and to offer connectivity to Third Party 
Data Feeds from ICE Data Services--ICE TMC, Members Exchange, MIAX 
Emerald, and MIAX PEARL Equities (together, the ``Suspended 
Services'').
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    \5\ See Securities Exchange Act Release No. 91790 (May 7, 2021) 
(SR-NYSE-2021-15, SR-NYSEAMER-2021-13, SR-NYSEArca-2021-15, SR-
NYSECHX-2021-04, SR-NYSENAT-2021-05).
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    The Commission's suspension of such services is likely to cause 
disruption to the current Users of such services, who must now acquire 
substitutes for the Suspended Services. As an accommodation to such 
current Users, the Exchange now proposes to provide the Suspended 
Services to all Users, at no charge, for a period of 14 days from the 
date of filing (``Transition Period''), to enable current Users to 
maintain their connectivity while establishing alternate connectivity.
    Specifically, the Exchange proposes to amend its Fee Schedule 
relating to colocation to provide:
Connectivity to Suspended Third Party Systems and Suspended Third Party 
Data Feeds
    Connectivity to the Third Party Systems and Third Party Data Feeds 
listed below (``Suspended Services'') is available until May 24, 2021 
(``Transition Period''). During the Transition Period, the Exchange 
will not charge any fees for the Suspended Services. At the conclusion 
of the Transition Period, any remaining customers of Suspended Services 
will have their Suspended Services terminated.
Suspended Third Party Systems
Long Term Stock Exchange (LTSE)
Members Exchange (MEMX)
MIAX Emerald
MIAX PEARL Equities
Morgan Stanley
TD Ameritrade
Suspended Third Party Data Feeds
ICE Data Services--ICE TMC
Members Exchange (MEMX)
MIAX Emerald
MIAX PEARL Equities
Application and Impact of the Proposed Changes
    The proposed rule change would apply to all Users, each of which 
would be eligible to receive the Suspended Services, at no charge, for 
a period of up to 14 days.
Competitive Environment
    The proposed changes are not intended to address any other issues 
relating to colocation 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,\6\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\7\ in particular, because it 
is designed to prevent fraudulent 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 mechanism 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and would further the protection of investors 
and the public interest. Without the proposed rule change, the 
Suspended Services would be terminated immediately, leaving the current 
Users without access and connectivity to the Suspended Services. As a 
result, the Commission's suspension of the services at issue is likely 
to cause disruption to the current Users of the Suspended Services, who 
must now acquire substitute services. The Exchange's proposal to 
provide the Suspended Services, at no charge, to all Users during the 
Transition Period would give such current Users an opportunity to 
transition to substitute services without a gap in their service, which 
would mitigate the disruption and lessen the burden on such current 
Users.
    Further, the Exchange believes that providing a 14-day Transition 
Period would remove impediments to and perfect the mechanism of a free 
and open market and a national market system and would protect 
investors and the public interest. Current Users that wish to replace 
the Suspended Services will have to investigate their other options, 
negotiate new terms, and establish and test their new connections. The 
proposed Transition Period gives current Users time to complete all the 
steps required to make the transition without having a gap in their 
connectivity to the Suspended Services.
    The Exchange believes that its proposed rule change would perfect 
the mechanism of a free and open market and a national market system 
and, in general, protect investors and the public interest because it 
would highlight that the Suspended Services are only available during 
the Transition Period, that no fee will be charged for the Suspended 
Services during the Transition Period. At the end of the

[[Page 28429]]

Transition Period, all Users will have their Suspended Services 
terminated. It would thereby reduce any potential ambiguity and provide 
current Users and other market participants with clarity concerning the 
terms and period of availability of the Suspended Services.
    In addition, the Exchange believes that the proposed rule change 
would promote just and equitable principles of trade. In light of the 
Commission's suspension, the current Users of the affected services are 
faced with an unexpected, immediate disruption of their connectivity, 
while market participants that opted to obtain similar connectivity 
from alternate providers are is not. The Exchange's proposal to allow 
all Users to receive the Suspended Services at no charge during the 
Transition Period would help equalize the treatment of these two groups 
of market participants by providing the same 14 day prospective period 
to both groups and giving current Users time to make the transition 
without having a gap in their connectivity to the third party systems 
and data feeds at issue.
    Finally, the proposed rule change is not designed to permit unfair 
discrimination between market participants. The proposed rule change 
would apply equally to all Users. All Users would be entitled to 
receive the Suspended Services at no charge during the Transition 
Period. At the conclusion of the Transition Period, any remaining 
customers of Suspended Services would have their Suspended Services 
terminated.
    For all 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,\8\ 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.
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    \8\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that the proposed rule change would not place 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change is not 
designed to address any competitive issues but rather is designed to 
give current Users time to make a fair and orderly transition to 
substitute services without the disruptions to their operations and, 
potentially, to the markets that would be caused by an immediate 
termination of the Suspended Services.

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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will allow the 14 day period to take effect immediately. For this 
reason, the Commission designates the proposed rule change to be 
operative upon filing.\13\
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    \13\ For purposes only of waiving the operative delay for this 
proposal, 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 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.
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    \14\ 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 [email protected]. Please include 
File Number SR-NYSECHX-2021-10 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-NYSECHX-2021-10. 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

[[Page 28430]]

Number SR-NYSECHX-2021-10, and should be submitted on or before June 
16, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10384 Filed 5-25-21; 8:45 am]
BILLING CODE 8011-01-P