[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Notices]
[Pages 21050-21055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06345]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99810; File No. SR-NYSENAT-2024-09]


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

March 20, 2024.
    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 March 8, 2024, NYSE National, Inc. (``NYSE National'' 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.
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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 (``Fee 
Schedule'') regarding colocation services and fees to provide Users 
with wireless connectivity to MEMX market data. 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 (``Fee 
Schedule'') regarding colocation services and fees to provide Users \4\ 
with wireless connectivity to MEMX LLC (``MEMX'') market data.
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    \4\ 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. 83351 (May 31, 2018), 83 FR 26314 at n.9 
(June 6, 2018) (SR-NYSENAT-2018-07). As specified in the 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 the New York Stock Exchange LLC, NYSE American 
LLC, NYSE Arca, Inc., and NYSE Chicago, Inc. (together, the 
``Affiliate SROs''). Each Affiliate SRO has submitted substantially 
the same proposed rule change to propose the changes described 
herein. See SR-NYSE-2024-15, SR-NYSEAMER-2024-18, SR-NYSEARCA-2024-
26, and SR-NYSECHX-2024-11.
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    The Exchange currently provides Users with wireless connections to 
nine market data feeds or combinations of feeds from third-party 
markets (the ``Existing Third Party Data''),\5\ and wired connections 
to more than 45 market data feeds or combinations of feeds.\6\ The 
Exchange proposes to add to the Fee Schedule wireless connections to 
the MEMX Memoir Depth market data feed \7\ (``MEMX Data'' and, together 
with the Existing Third Party Data, the ``Third Party Data''). Users 
would be offered the proposed wireless connection to the MEMX Data 
through connections into the colocation center

[[Page 21051]]

in the Mahwah, New Jersey data center (``MDC'').\8\
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    \5\ See 83 FR 26314, supra note 4, at 26319-20.
    \6\ See id. at 26322-23.
    \7\ MEMX Data would also include the test feed for MEMX Memoir 
market data.
    \8\ Through its Fixed Income and Data Services (``FIDS'') 
(previously ICE Data Services) business, Intercontinental Exchange, 
Inc. (``ICE'') operates the MDC. The Exchange and the Affiliate SROs 
are indirect subsidiaries of ICE. The proposed service would be 
provided by FIDS pursuant to an agreement with a non-ICE entity. 
FIDS does not own the wireless network that would be used to provide 
the service.
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    The Exchange expects that the proposed rule change would become 
operative in the second quarter of 2024. The Exchange will announce the 
date that the wireless connection to the MEMX Data will be available 
through a customer notice.
    As requested by Users, the Exchange's proposed wireless 
connectivity to MEMX Data would be to the MEMX Memoir Depth market data 
feed. As described by MEMX, ``[t]he MEMOIR Depth feed is a MEMX-only 
market data feed that contains all displayed orders for securities 
trading on the Exchange (i.e., top and depth-of-book order data), order 
executions (i.e., last sale data), order cancellations, order 
modifications, order identification numbers, and administrative 
messages.'' \9\
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    \9\ Securities Exchange Act Release No. 97130 (March 13, 2023), 
88 FR 16491, 16492 (March 17, 2023) (SR-MEMX-2023-04).
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    To receive MEMX Data, the User would enter into an agreement with a 
third party for permission to receive the data, if required. The User 
would pay this third party any fees for the data content.
    The Exchange proposes to revise the Fee Schedule to reflect fees 
related to the wireless connection to MEMX Data. For each wireless 
connection to MEMX Data, a User would be charged a $5,000 non-recurring 
initial charge and a monthly recurring charge of $6,000. If a User were 
to purchase more than one wireless connection to MEMX Data, it would 
pay more than one non-recurring initial charge.
    Each proposed wireless connection to MEMX Data would include the 
use of one wireless connection port, and a User would not pay a 
separate fee for the use of such port, provided that if a User already 
had a port for Existing Third Party Data other than Toronto Stock 
Exchange data or CME Group data (``Single Port Third Party Data''), it 
would not receive an additional port for the MEMX Data, as one would 
not be needed.\10\ Rather, the User would be able to connect to MEMX 
Data using the same port that it already had, as a User would only 
require one port to connect to MEMX Data and Single Port Third Party 
Data, irrespective of how many of the wireless connections it orders.
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    \10\ Similarly, if a User connected to MEMX Data on a port for 
which it did not pay a separate fee for its use, it would not 
receive a new port if it subsequently connected to Single Port Third 
Party Data. Connection to Toronto Stock Exchange data and CME Group 
data are excepted because they each require their own port. See 
Securities Exchange Act Release Nos. 80215 (February 28, 2017), 82 
FR 12658 (March 6, 2017) (SR-NYSE-2017-05); and 98966 (November 16, 
2023), 88 FR 81476 (November 22, 2023) (SR-NYSENAT-2023-26).
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Application and Impact of the Proposed Changes
    The proposed changes would not apply differently to distinct types 
or sizes of market participants. Rather, they would apply to all Users 
equally.
    As is currently the case, the purchase of any colocation service, 
including connectivity to Third Party Data, is completely voluntary and 
the Fee Schedule is applied uniformly to all Users.
Competitive Environment
    The Exchange operates in a highly competitive market in which other 
vendors offer colocation services as a means to facilitate the trading 
and other market activities of those market participants who believe 
that colocation enhances the efficiency of their operations. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. Specifically, in Regulation NMS, the 
Commission highlighted the importance of market forces in determining 
prices and SRO revenues and, also, recognized that current regulation 
of the market system ``has been remarkably successful in promoting 
market competition in its broader forms that are most important to 
investors and listed companies.'' \11\
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    \11\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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    The Exchange understands that the third party Quincy Data LLC 
(``Quincy'') \12\ already provides wireless connectivity to MEMX market 
data in the MDC. As explained below in this filing, the Exchange's 
proposed wireless connection to MEMX Data would compete with the 
wireless connection to MEMX market data provided by Quincy. Third-party 
vendors such as Quincy are not at any competitive disadvantage created 
by the Exchange.
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    \12\ The Exchange understands that Quincy is an affiliate of 
McKay Brothers LLC.
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    The proposed change is not otherwise intended to address any other 
issues relating to colocation services 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,\13\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\14\ 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. The Exchange further believes 
that the proposed rule change is consistent with Section 6(b)(4) of the 
Act,\15\ because it provides for the equitable allocation of reasonable 
dues, fees, and other charges among its members and issuers and other 
persons using its facilities and does not unfairly discriminate between 
customers, issuers, brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78f(b)(4).
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The Proposed Change Is Reasonable
    The Exchange believes that the proposed rule change is reasonable. 
In considering the reasonableness of proposed services and fees, the 
Commission's market-based test considers ``whether the exchange was 
subject to significant competitive forces in setting the terms of its 
proposal . . . , including the level of any fees.'' \16\ If the 
Exchange meets that burden, ``the Commission will find that its 
proposal is consistent with the Act unless `there is a substantial 
countervailing basis to find that the terms' of the proposal violate 
the Act or the rules thereunder.'' \17\ Here, the

[[Page 21052]]

Exchange is subject to significant competitive forces in setting the 
terms on which it offers its proposal, in particular because 
substantially similar substitutes are available, and the Exchange has 
not placed the third party vendors at a competitive disadvantage 
created by the Exchange.
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    \16\ See Securities Exchange Act Release No. 90209 (October 15, 
2020), 85 FR 67044, 67049 (October 21, 2020) (Order Granting 
Accelerated Approval to Establish a Wireless Fee Schedule Setting 
Forth Available Wireless Bandwidth Connections and Wireless Market 
Data Connections) (SR-NYSE-2020-05, SR-NYSEAMER-2020-05, SR-
NYSEARCA-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-03, SR-NYSE-
2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-NYSECHX-2020-
05, SR-NYSENAT-2020-08) (``Wireless Approval Order''), citing 
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 
74770, 74781 (December 9, 2008) (``2008 ArcaBook Approval Order''). 
See NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \17\ See Wireless Approval Order, supra note 16, at 67049, 
citing 2008 ArcaBook Approval Order, supra note 16, at 74781.
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Substantially Similar Substitutes Are Available
    The Exchange's proposed wireless connection to MEMX Data would 
compete with other methods by which both the Exchange and various third 
parties already provide connectivity to MEMX market data to Users.
    Quincy already provides wireless connectivity to MEMX market data 
in the MDC. The Exchange believes that the Quincy wireless connection 
to MEMX market data is to the same MEMX data feed, and at a same or 
similar speed as the Exchange's proposed connection.\18\ Accordingly, 
the Quincy wireless connection to MEMX market data would compete with 
the Exchange's proposed wireless connection and would exert significant 
competitive forces on the Exchange in setting the terms of its 
proposal, including the level of the Exchange's proposed fees.\19\ If 
the Exchange were to set its proposed fees too high, Users could 
respond by instead selecting Quincy's substantially similar wireless 
connectivity to MEMX market data.\20\
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    \18\ Because Quincy is not a regulated entity, it is not 
obligated to make its fees publicly available or make latency or 
fees the same for all entities. The Exchange believes that Quincy 
may offer connectivity to MEMX data in the MDC, Carteret data 
center, and Secaucus data center as a bundle.
    \19\ See 2008 ArcaBook Approval Order, supra note 16, at 74789 
and n.295 (recognizing that products need not be identical to be 
substitutable).
    \20\ The Exchange believes that at least three third-party 
market participants offer fiber connections to MEMX market data in 
colocation.
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Third Party Competitors Are Not at a Competitive Disadvantage Created 
by the Exchange
    The Exchange does not believe that FIDS would have any competitive 
advantage over either the existing third-party provider or any future 
providers of wireless connectivity to MEMX market data. The Exchange's 
proposed service for connectivity to MEMX Data does not have any 
special access to or advantage within the MDC. More specifically, the 
Exchange's proposed wireless connection would lead to the data center 
pole, from which a fiber connection would lead into the MDC. The data 
center pole is on the grounds of the MDC, but pursuant to Exchange rule 
the distance from such pole to the patch panel where fiber connections 
for wireless services connect to the network row in the space used for 
co-location in the MDC (the ``Patch Panel Point'') is normalized \21\ 
Exchange rules also require that the distance from the Patch Panel 
Point to each User cabinet in colocation be the same.\22\ Further, all 
distances in the MDC are normalized. Every provider of wireless 
connectivity to Users, including FIDS, is connected to the Patch Panel 
Point, and the length of the fiber path from the Patch Panel Point to 
each User cabinet in colocation is the same.
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    \21\ See NYSE Rule 3.13, NYSE American Rule 3.13E, NYSE Arca 
Rule 3.13, NYSE Chicago Rule 3.13, and NYSE National Rule 3.13 (Data 
Center Pole Restrictions--Connectivity to Co-Location Space) 
(placing restrictions on use of the data center pole designed to 
address any advantage that the wireless connections have by virtue 
of a data center pole).
    \22\ Id.
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    Nor does the Exchange have a competitive advantage over the third-
party competitors offering wireless connectivity to MEMX market data by 
virtue of the fact that it owns and operates the MDC's meet-me-rooms. 
Users purchasing wireless connectivity to MEMX market data--like Users 
of any other colocation service--would require a circuit connecting out 
of the MDC, and in most cases, such circuits are provided by third-
party telecommunications service providers that have installed their 
equipment in the MDC's two meet-me-rooms (``Telecoms'').\23\ Currently, 
16 Telecoms operate in the meet-me-rooms and provide a variety of 
circuit choices. It is in the Exchange's best interest to set the fees 
that Telecoms pay to operate in the meet-me-rooms at a reasonable level 
\24\ so that market participants, including Telecoms, will maximize 
their use of the MDC. By setting the meet-me-room fees at a reasonable 
level, the Exchange encourages Telecoms to participate in the meet-me-
rooms and to sell circuits to Users for connecting into and out of the 
MDC. These Telecoms then compete with each other by pricing such 
circuits at competitive rates. These competitive rates for circuits 
help draw in more Users and Hosted Customers to the MDC, which directly 
benefits the Exchange by increasing the customer base to whom the 
Exchange can sell its colocation services, which include cabinets, 
power, ports, and connectivity to many third-party data feeds, and 
because having more Users and Hosted Customers leads, in many cases, to 
greater participation on the Exchange. In this way, by setting the 
meet-me-room fees at a level attractive to telecommunications firms, 
the Exchange spurs demand for all of the services it sells at the MDC, 
while setting the meet-me-room fees too high would negatively affect 
the Exchange's ability to sell its services at the MDC.\25\ 
Accordingly, there are real constraints on the meet-me-room fees the 
Exchange charges, such that the Exchange does not have an advantage in 
terms of costs when compared to third parties that enter the MDC 
through the meet-me-rooms to provide services to compete with the 
Exchange's services.
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    \23\ Note that in the case of wireless connectivity, a User in 
colocation still requires a fiber circuit to transport data. If a 
Telecom is used, the data is transmitted wirelessly to the relevant 
pole, and then from the pole to the meet-me-room using a fiber 
circuit.
    \24\ See Securities Exchange Act Release No. 98002 (July 26, 
2023), 88 FR 50232 (August 1, 2023) (SR-NYSENAT-2023-12) (``MMR 
Notice'').
    \25\ See id. at 50235. Importantly, the Exchange is prevented 
from making any alteration to its meet-me-room services or fees 
without filing a proposal for such changes with the Commission.
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    If anything, the Exchange is subject to a competitive disadvantage 
vis-[agrave]-vis third-party competitors offering wireless connectivity 
to MEMX market data. Third-party competitors are not subject to the 
Commission's filing requirements, and therefore can freely change their 
services and pricing in response to competitive forces. In contrast, 
the Exchange's service and pricing would be standardized as set out in 
this filing, and the Exchange would be unable to respond to pricing 
pressure from its competitors without seeking a formal fee change in a 
filing before the Commission.
    In sum, because the Exchange is subject to significant competitive 
forces in setting the terms on which it offers its proposal, in 
particular because a substantially similar substitute is available, and 
the Exchange has not placed third-party vendors at a competitive 
disadvantage created by the Exchange, the proposed fees for the 
Exchange's wireless connectivity to MEMX Data are reasonable.\26\ If 
the Exchange were to set its prices for wireless connectivity to MEMX 
Data at a level that Users found to be too high, Users could easily 
choose to connect to MEMX market data in colocation at the MDC through 
the competing Quincy wireless connection, as detailed above.
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    \26\ See Wireless Approval Order, supra note 16.
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Additional Considerations
    The Exchange believes it is reasonable that if a User already had a 
wireless connection port for Single Port Third Party Data, it would not 
receive an additional port for the MEMX Data. In such a case, no 
additional port would be needed, as the User would be able to connect 
to MEMX Data using the port it already had. Similarly, the Exchange

[[Page 21053]]

believes it is reasonable that if a User connected to MEMX Data on a 
port for which it did not pay a separate fee for its use, it would not 
receive a new port if it subsequently connected to Single Port Third 
Party Data. This is because a User would only require one port to 
connect to MEMX and Single Port Third Party Data, irrespective of how 
many of the wireless connections it orders.
    The Exchange believes it is reasonable for the MEMX Data to include 
the MEMX Memoir Depth feed and its related test feed, as that is 
responsive to User requests. The Exchange believes that it is the same 
feed that the competing Quincy wireless connection offers.
The Proposed Change Is an Equitable Allocation of Fees and Credits
    The Exchange believes that its proposal equitably allocates its 
fees among Users. Without this proposed rule change, Users would have 
fewer options for connectivity to MEMX market data. The proposed change 
would provide Users with an additional choice with respect to the form 
and optimal latency of the connectivity they use to receive MEMX market 
data, allowing a User to select the connectivity that better suits its 
needs, helping it tailor its colocation operations to the requirements 
of its business operations. Users that do not opt to utilize the 
Exchange's proposed wireless connection would still be able to obtain 
MEMX market data wirelessly using Quincy's wireless connection.
    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. Furthermore, the Exchange believes that 
the services and fees proposed herein 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 products and 
services are available to all Users). All Users that voluntarily select 
the Exchange's proposed wireless connections to MEMX Data would be 
charged the same amount for the same services.
    The Exchange believes that it is equitable that if a User already 
had a port for Single Port Third Party Data, it would not receive an 
additional port for the MEMX Data. Similarly, the Exchange believes it 
is equitable that if a User connected to MEMX Data on a port for which 
it did not pay a separate fee for its use, it would not receive a new 
port if it subsequently connected to Single Port Third Party Data. This 
is because a User would only require one port to connect to MEMX and 
Single Port Third Party Data, irrespective of how many of the wireless 
connections it orders.
The Proposed Change Is Not Unfairly Discriminatory
    The Exchange believes that the proposed rule change is not unfairly 
discriminatory, for the following reasons. Without this proposed rule 
change, Users would have fewer options for connectivity to MEMX Data. 
The proposed change would provide Users with an additional choice with 
respect to the form and optimal latency of the connectivity they use to 
receive MEMX market data, allowing a User to select the connectivity 
that better suits its needs, helping it tailor its colocation 
operations to the requirements of its business operations. Users that 
do not opt to utilize the Exchange's proposed wireless connection would 
still be able to obtain MEMX market data wirelessly using Quincy's 
wireless connection.
    The Exchange believes that the proposed change is not unfairly 
discriminatory 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. Furthermore, the 
Exchange believes that the services and fees proposed herein are not 
unfairly discriminatory because, in addition to the services being 
completely voluntary, they are available to all Users on an equal basis 
(i.e., the same products and services are available to all Users). All 
Users that voluntarily select wireless connections to MEMX Data would 
be charged the same amount for the same services. Users that opt to use 
wireless connections to MEMX Data would receive the MEMX Data that is 
available to all Users, as all market participants that contract with 
MEMX or its affiliate for MEMX Data, as required, may receive it.
    The Exchange believes that it is not unfairly discriminatory that 
if a User already had a port for Single Port Third Party Data, it would 
not receive an additional port for the MEMX Data. Similarly, the 
Exchange believes it is not unfairly discriminatory that if a User 
connected to MEMX Data on a port for which it did not pay a separate 
fee for its use, it would not receive a new port if it subsequently 
connected to Single Port Third Party Data. This is because a User would 
only require one port to connect to MEMX and Single Port Third Party 
Data, irrespective of how many of the wireless connections it orders.
    For the reasons above, the proposed changes do not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable colocation 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 believes that the proposal will not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of Section 6(b)(8) of the Act.\27\
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    \27\ 15 U.S.C. 78f(b)(8).
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    The proposed change would not affect competition among national 
securities exchanges or among members of the Exchange, but rather 
between FIDS and its commercial competitors. The proposed wireless 
connection would provide Users with an alternative means of 
connectivity to MEMX Data. The proposed change would provide Users with 
an additional choice with respect to the form and optimal latency of 
the connectivity they use to receive MEMX market data, allowing a User 
to select the connectivity that better suits its needs, helping it 
tailor its colocation operations to the requirements of its business 
operations.
    Users that do not opt to utilize the Exchange's proposed wireless 
connection would still be able to obtain MEMX market data wirelessly 
using Quincy's wireless connection. The Exchange's proposed wireless 
connection and the existing Quincy wireless connection to MEMX market 
data are sufficiently similar substitutes and thus provide market 
participants with choices to meet their wireless connectivity needs.
    In addition, the Exchange does not believe that FIDS would have any 
competitive advantage over either the existing third-party provider or 
any future providers of wireless connectivity to MEMX market data. The 
Exchange's proposed service for connectivity to MEMX Data does not have 
any special access to or advantage within the MDC. More specifically, 
the Exchange's proposed wireless connection would lead to the data 
center pole, from which a fiber connection would lead into the MDC. The 
data center pole is on the grounds of the MDC, but pursuant to Exchange 
rule, the distance from such pole to the Patch Panel Point is 
normalized.\28\ Exchange rules also require that the distance from the 
Patch Panel Point to each User cabinet in

[[Page 21054]]

colocation be the same.\29\ Further, all distances in the MDC are 
normalized. Every provider of wireless connectivity to Users, including 
FIDS, is connected to the Patch Panel Point, and the length of the 
fiber path from the Patch Panel Point to each User cabinet in 
colocation is the same.
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    \28\ See supra note 21.
    \29\ See id.
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    Nor does the Exchange have a competitive advantage over the third-
party competitors offering wireless connectivity to MEMX market data by 
virtue of the fact that it owns and operates the MDC's meet-me-rooms. 
Users purchasing wireless connectivity to MEMX market data--like Users 
of any other colocation service--would require a circuit connecting out 
of the MDC, and in most cases, such circuits are provided by third-
party Telecoms that have installed their equipment in the MDC's two 
meet-me-rooms.\30\ Currently, 16 Telecoms operate in the meet-me-rooms 
and provide a variety of circuit choices. It is in the Exchange's best 
interest to set the fees that Telecoms pay to operate in the meet-me-
rooms at a reasonable level \31\ so that market participants, including 
Telecoms, will maximize their use of the MDC. By setting the meet-me-
room fees at a reasonable level, the Exchange encourages Telecoms to 
participate in the meet-me-rooms and to sell circuits to Users for 
connecting into and out of the MDC. These Telecoms then compete with 
each other by pricing such circuits at competitive rates. These 
competitive rates for circuits help draw in more Users and Hosted 
Customers to the MDC, which directly benefits the Exchange by 
increasing the customer base to whom the Exchange can sell its 
colocation services, which include cabinets, power, ports, and 
connectivity to many third-party data feeds, and because having more 
Users and Hosted Customers leads, in many cases, to greater 
participation on the Exchange. In this way, by setting the meet-me-room 
fees at a level attractive to telecommunications firms, the Exchange 
spurs demand for all of the services it sells at the MDC, while setting 
the meet-me-room fees too high would negatively affect the Exchange's 
ability to sell its services at the MDC.\32\ Accordingly, there are 
real constraints on the meet-me-room fees the Exchange charges, such 
that the Exchange does not have an advantage in terms of costs when 
compared to third parties that enter the MDC through the meet-me-rooms 
to provide services to compete with the Exchange's services.
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    \30\ See supra note 23.
    \31\ See MMR Notice, supra note 24.
    \32\ See supra note 25.
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    If anything, the Exchange is subject to a competitive disadvantage 
vis-[agrave]-vis third party competitors offering wireless connectivity 
to MEMX market data. Third-party competitors are not subject to the 
Commission's filing requirements, and therefore can freely change their 
services and pricing in response to competitive forces. In contrast, 
the Exchange's service and pricing would be standardized as set out in 
this filing, and the Exchange would be unable to respond to pricing 
pressure from its competitors without seeking a formal fee change in a 
filing before the Commission.

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 \33\ and Rule 19b-4(f)(6) thereunder.\34\ 
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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    \33\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \34\ 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) \35\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \35\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSENAT-2024-09 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-NYSENAT-2024-09. 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 (https://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 
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. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSENAT-2024-09 and should 
be submitted on or before April 16, 2024.


[[Page 21055]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06345 Filed 3-25-24; 8:45 am]
BILLING CODE 8011-01-P