[Federal Register Volume 87, Number 195 (Tuesday, October 11, 2022)]
[Notices]
[Pages 61374-61376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21987]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95971; File No. SR-NYSECHX-2022-22]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Connectivity Fee Schedule

October 4, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on September 21, 2022, the 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, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is

[[Page 61375]]

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 the Connectivity Fee Schedule 
related to colocation to remove obsolete text. 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 to amend the Connectivity Fee Schedule 
related to colocation to remove Partial Cabinet Solution bundles 
Options A and B as obsolete.\4\
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    \4\ The Exchange is an indirect subsidiary of Intercontinental 
Exchange, Inc. (``ICE''). Each of the Exchange's affiliates New York 
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., and NYSE 
National, Inc. (the ``Affiliate SROs'') has submitted substantially 
the same proposed rule change to propose the changes described 
herein. See SR-NYSE-2022-45, SR-NYSEAMER-2022-43, SR-NYSEARCA-2022-
64, and SR-NYSENAT-2022-22.
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    The Exchange recently deleted the service ``LCN Access--1 Gb 
Circuit'' from the list of types of services available in colocation, 
due to the lack of User demand for 1 Gb LCN ports.\5\ In making that 
change, the Exchange explained that the number of 1 Gb LCN ports 
purchased by Users had steadily declined from 4 in 2017, to 2 in 2018, 
to 1 in 2021, to zero in 2022. The Exchange understands that this fall-
off in demand for the 1 Gb LCN port is due to the fact that market data 
feeds continue to increase in bandwidth, such that Users prefer to 
purchase larger port sizes. Based on this trend, the Exchange explained 
that it believes that there is no remaining User demand for the 1 Gb 
LCN port, and discontinued the service as obsolete.
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    \5\ See Securities Exchange Act Release No. 95361 (July 25, 
2022), 87 FR 45811 (July 29, 2022) (SR-NYSECHX-2022-17).
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    The same rationale applies equally to two of the Exchange's Partial 
Cabinet Solution (``PCS'') bundles: Options A and B. Options A and B 
each include various bundled services, including, among other things, a 
1 Gb LCN connection. Although Options A and B have been offered by the 
Exchange and its Affiliate SROs since 2016,\6\ no Users ever purchased 
an Option B bundle, and only one User purchased an Option A bundle, 
which it canceled in July 2021. There are currently no Users purchasing 
either an Option A or B bundle. Accordingly, the Exchange believes that 
there is no remaining User demand for Options A or B, and proposes to 
discontinue them as obsolete.
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    \6\ See, e.g., Securities Exchange Act Release No. 77072 
(February 5, 2016), 81 FR 7394 (Feb. 11, 2016) (SR-NYSE-2015-53).
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Application and Impact of the Proposed Changes
    The Exchange does not expect that the proposed changes would have 
any impact. As noted above, there was only ever one User that purchased 
either an Option A or B bundle, and that User canceled its bundled 
service over a year ago, in July 2021. There are currently no 
purchasers of either Option A or B bundles.
    The proposed changes would not have any affect on the two remaining 
PCS bundles, Options C and D, which include 10 Gb ports.
    In addition, the proposed changes would not apply differently to 
distinct types or sizes of market participants. Rather, they would 
apply to all Users \7\ equally. As is currently the case, the purchase 
of any colocation service is completely voluntary and the Connectivity 
Fee Schedule is applied uniformly to all Users.
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    \7\ 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 at 
n.6 (November 1, 2019) (SR-NYSECHX-2019-12). As specified in the 
Connectivity 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 
Affiliate SROs.
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Competitive Environment
    The proposed changes are not otherwise 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,\8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\9\ 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that discontinuing offering the Option A and 
B PCS bundles would perfect the mechanisms of a free and open market 
and a national market system and, in general, protect investors and the 
public interest. There was only ever one User that purchased either an 
Option A or B bundle, and that User canceled its bundled service over a 
year ago, in July 2021. There are currently no purchasers of either 
Option A or B bundles. The Exchange does not expect demand for Options 
A and B to rebound given Users' overall preference for larger port 
sizes to accommodate larger market data feeds. Removing references to 
the fees for these obsolete options from the Connectivity Fee Schedule 
would make the Connectivity Fee Schedule easier to read, understand, 
and administer.
    The Exchange believes that the proposed rule change does not 
significantly affect the protection of investors or the public 
interest. The proposed rule change would delete obsolete services from 
the Connectivity Fee Schedule in order to enhance transparency and 
alleviate potential customer confusion.
    The Exchange believes that deleting obsolete services from the 
Connectivity Fee Schedule would not permit unfair discrimination 
between customers, issuers, brokers, or dealers. The proposed changes 
would apply equally to all Users.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

[[Page 61376]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\10\ 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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    \10\ 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 
enhance the clarity and transparency of the Connectivity Fee Schedule 
and alleviate possible customer confusion that may arise from the 
inclusion of obsolete 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 \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).
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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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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-2022-22 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-2022-22. 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-NYSECHX-2022-22 and should be submitted 
on or before November 1, 2022.

    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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21987 Filed 10-7-22; 8:45 am]
BILLING CODE 8011-01-P