[Federal Register Volume 89, Number 120 (Friday, June 21, 2024)]
[Notices]
[Pages 52177-52182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13550]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100348; File No. SR-NYSENAT-2024-18]


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

June 14, 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 June 3, 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 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 the Connectivity Fee Schedule (``Fee 
Schedule'') regarding colocation services and fees to provide Users 
with wireless connectivity to an additional market data feed. 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 Fee Schedule regarding 
colocation services and fees to provide Users \4\ with wireless 
connectivity to an additional market data feed.
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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-2024-33, SR-NYSEAMER-2024-38, SR-NYSEARCA-2024-
49, and SR-NYSECHX-2024-21.
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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''), and wired connections to 
more than 45 market data feeds or combinations of feeds.\5\
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    \5\ See Securities Exchange Act Release No. 99810 (March 20, 
2024), 89 FR 21050 (March 26, 2024) (SR-NYSENAT-2024-09).
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    The Exchange proposes to add to the Fee Schedule wireless 
connections (``Connectivity'') to the Nasdaq CXC and Nasdaq CX2 market 
data feeds.\6\ As there would be limited bandwidth available on the 
wireless network from the TR2 data center in Toronto, Canada, where the 
two feeds are generated, the Exchange would not transport information 
for all the symbols included in the Nasdaq CXC and Nasdaq CX2 market 
data feeds. Rather, FIDS would provide connectivity to a selection of 
symbols from the two market data feeds,
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    \6\ According to the Nasdaq Canada website, ``CXC is a lit book 
providing clients with a reliable platform for trading Canadian 
equities, offering the benefits of anonymous or attributed trading 
and price/broker/time priority'' and ``[t]he CX2 trading book is 
designed to provide additional cost savings and trading 
efficiencies. Through a unique pricing model and broker preferencing 
functionality, this lit book helps to improve investment performance 
and to drive positive market structure change.'' https://www.nasdaq.com/solutions/nasdaq-canada

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[[Page 52178]]

which would include those symbols for which there is demand (the 
``Proposed Third Party Data'').\7\
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    \7\ When a User requested a wireless connection to Nasdaq CXC or 
Nasdaq CX2 market data feeds, it would receive connectivity to the 
Proposed Market Data. The User would then determine the symbols for 
which it would receive data. The Exchange would not have visibility 
into which portions of the Proposed Market Data a given customer 
chooses to receive.
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    As with most other Existing Third Party Data,\8\ the monthly charge 
for the Connectivity to Proposed Third Party Data would be subject to a 
30-day testing period, during which the monthly charge per connection 
would be waived. Consistent with that fact, the Exchange proposes to 
amend the Fee Schedule to clarify that this provision is applicable to 
wireless connections to the Proposed Third Party Data.
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    \8\ See 83 FR 26314, supra note 4, at 26319-20.
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    The Exchange expects that the proposed Connectivity to Proposed 
Third Party Data would become operative by the end of 2024. The 
Exchange will announce the date or dates that Connectivity to Proposed 
Third Party Data will be available through a customer notice.
    Users would be offered Connectivity to the Proposed Third Party 
Data through connections into the colocation center in the Mahwah, New 
Jersey data center (``MDC'').\9\ To receive either market data feed in 
the Proposed Third Party 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.
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    \9\ 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 services 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 services.
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    In order to implement the proposed change, the Exchange proposes to 
add the following item to the Connectivity Fee Schedule under ``A. Co-
Location Fees'':

------------------------------------------------------------------------
        Type of service            Description        Amount of charge
------------------------------------------------------------------------
Wireless Connection for Third   Wireless           $5,000 per connection
 Party Data.                     connection of      initial charge plus
                                 Nasdaq CXC and     monthly charge per
                                 Nasdaq CX2 data.   connection of $5,000
                                                   Fees are subject to a
                                                    30-day testing
                                                    period, during which
                                                    the monthly charge
                                                    per connection is
                                                    waived.
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    If a User were to purchase more than one wireless connection to 
Proposed Third Party Data, it would pay more than one non-recurring 
initial charge. Unless the User already had a port for Toronto Stock 
Exchange data, a proposed wireless connection would include the use of 
one port for Connectivity to Proposed Third Party Data, and a User 
would not pay a separate fee for the use of such port.\10\
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    \10\ Toronto Stock Exchange data and CME Group Data each require 
their own port. The remaining Existing Third Party Data requires one 
port. Accordingly, a User would not be able to connect to the 
Proposed Third Party Data using the same port that it uses for 
connectivity to CME Group Data.
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    If a User already had a port for Toronto Stock Exchange data, it 
would not need an additional port for the Proposed Third Party Data. 
Rather, the User would be able to connect to the Proposed Third Party 
Data using the same port that it already had.
    The proposed Connectivity would not utilize the pole on the grounds 
of the MDC.
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 is completely voluntary and the Fee Schedule is applied 
uniformly to all Users.
    The Exchange believes that it would not obtain new Users due to the 
proposed change.
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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    A third party has created a wireless connection between the 
Markham, Canada data center and the MDC. The Exchange believes it 
intends to expand its offering to connect to the TR2. If so, Users 
could use the third-party wireless connection to transport the Proposed 
Market Data. Third-party vendors are not at any competitive 
disadvantage created by the Exchange.
    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,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ 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,\14\ 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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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b)(4).

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[[Page 52179]]

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.'' \15\ 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.'' \16\ Here, the Exchange is subject 
to significant competitive forces in setting the terms on which it 
offers its proposal, in particular because the Exchange has not placed 
third party vendors at a competitive disadvantage created by the 
Exchange.
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    \15\ 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).
    \16\ See Wireless Approval Order, supra note 15, at 67049, 
citing 2008 ArcaBook Approval Order, supra note 15, at 74781.
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    The Exchange's proposed Connectivity to Proposed Third Party Data 
would compete with other methods by which both the Exchange and various 
third parties already provide, or could provide, Users with 
connectivity to the Proposed Third Party Data.
    Under the proposed rule, for the first time, a User also would be 
able to connect to the Proposed Market Data wirelessly, increasing the 
options available to it. Without this proposed rule change, Users would 
not have wireless access to the Proposed Third Party Data.
    Moreover, a third party created a wireless connection between the 
Markham, Canada data center and the MDC. The Exchange believes it 
intends to expand its offering to connect to the TR2. If so, Users 
could use the third-party wireless connection to transport the Proposed 
Market Data.
    Accordingly, the wireless connections would compete with the 
Exchange's proposed Connectivity 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.\17\ If 
the Exchange were to set its proposed fees too high, Users could 
respond by instead selecting the telecoms' substantially similar 
wireless connectivity.
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    \17\ See 2008 ArcaBook Approval Order, supra note 15, at 74789 
and n.295 (recognizing that products need not be identical to be 
substitutable).
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    In addition, the Exchange believes that at least three third-party 
market participants offer fiber connections to Nasdaq CXC and Nasdaq 
CX2 market data, including the Proposed Third Party Data, in 
colocation.\18\ FIDS offers connectivity to the Proposed Third Party 
Data as part of its connectivity to Nasdaq Canada data feeds.\19\
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    \18\ Because the providers of such connectivity are not 
regulated entities, they are not obligated to make the availability 
of connections, latency figures or fees publicly available or the 
same for all entities.
    \19\ See Securities Exchange Act Release No. 83709 (July 25, 
2018), 83 FR 37028 (July 31, 2018) (SR-NYSENAT-2018-15).
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The Exchange Would Not Preclude Other Connections to Proposed Market 
Data in TR2
    The Exchange is not aware of any other public, commercially 
available wireless connections to the Proposed Third Party Data in 
colocation.
    Additional third party competitors could offer fiber or wireless 
connectivity to the Proposed Third Party Data in colocation by 
obtaining the market data and sending it over a fiber or wireless 
network to the MDC. A User also may create a proprietary market data 
connection, whether fiber or wireless; connect through another market 
participant; utilize the existing or potential fiber connections 
offered by third parties; or utilize the existing fiber connections 
offered by FIDS. The Exchange could not impose any impediments to a 
third party seeking to offer a similar service, including by placing 
them at a latency or other competitive disadvantage with respect to the 
Exchange. Indeed, as noted above, the Exchange believes that in the 
future a third party may offer a wireless connection to TR2, which may 
compete with Connectivity, as customers could use the third-party 
wireless connection to transport the Proposed Third Party Data.
    Wireless connections and fiber connections to the Proposed Third 
Party Data in the MDC would compete with each other. Given the various 
advantages and disadvantages of both wireless and fiber connections, a 
User interested in purchasing a connection to the Proposed Third Party 
Data is likely to consider a variety of factors in deciding whether to 
use a wireless versus fiber connection, including latency; the amount 
of network uptime; the equipment the network uses; the cost of the 
connection; and the applicable contractual provisions. Indeed, fiber 
network connections may be more attractive to some market participants 
as they are more reliable and less susceptible to weather conditions.
Third Party Competitors Would Not Be at a Competitive Disadvantage 
Created by the Exchange
    The Exchange does not believe that FIDS would have any competitive 
advantage over any future providers of connectivity to the Proposed 
Third Party Data in the MDC. The Exchange's proposed service for 
Connectivity to Proposed Third Party Data does not have any special 
access to or advantage within the MDC. FIDS would collect the Proposed 
Third Party Data, then send it over a wireless connection from the TR2 
data center to the MDC via a pole, connecting to equipment in a MDC 
meet-me-room. The pole is owned by a third party and is not on the 
grounds of the MDC, and the path into the MDC through a meet-me-room is 
available to any telecommunications provider. Further, all distances in 
the MDC are normalized.
    Nor does the Exchange have a competitive advantage over any third-
party competitors offering wireless connectivity to the Proposed Third 
Party Data by virtue of the fact that it owns and operates the MDC's 
meet-me-rooms. Users purchasing wireless connectivity to the Proposed 
Third Party 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'').\20\ 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 \21\ so that market 
participants, including Telecoms, will maximize their use of the MDC. 
By setting the

[[Page 52180]]

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.\22\ 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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    \20\ 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.
    \21\ See Securities Exchange Act Release No. 98002 (July 26, 
2023), 88 FR 50232 (August 1, 2023) (SR-NYSENat--2023-12) (``MMR 
Notice'').
    \22\ 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 would be subject to a competitive 
disadvantage vis-[agrave]-vis third-party competitors offering wireless 
connectivity to the Proposed Third Party 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 Connectivity to Proposed Third Party Data are 
reasonable.\23\ If the Exchange were to set its prices for Connectivity 
to Proposed Third Party Data at a level that Users found to be too 
high, Users could easily choose to connect to Proposed Third Party Data 
in colocation at the MDC through the competing wireless connections, as 
detailed above.
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    \23\ See Wireless Approval Order, supra note 15.
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Additional Considerations
    The Exchange believes that it is reasonable to add text to the Fee 
Schedule indicating that the monthly charge for Connectivity to the 
Proposed Third Party Data is subject to a 30-day testing period, during 
which the monthly charge per connection would be waived. The change 
would clarify that the terms on which the Connectivity to Proposed 
Third Party Data is offered are the same as those of most connections 
to Existing Third Party Data.
    The Exchange believes that, unless a User connects to Toronto Stock 
Exchange data, it is reasonable that each proposed service would 
include the use of a wireless connection port, and a User would not pay 
a separate fee for the use of such port. If a User already had a port 
for Toronto Stock Exchange data, it would not need an additional port 
for the Proposed Third Party Data, because the User would be able to 
connect to the Proposed Third Party Data using the same port that it 
already had.
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 Proposed Third Party 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 Proposed 
Third Party 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 Connectivity would still be 
able to connect to Proposed Third Party Data over fiber connections.
    Additional third party competitors could offer fiber or wireless 
connectivity to the Proposed Third Party Data in colocation by 
obtaining the market data and sending it over a fiber or wireless 
network to the MDC. A User also may create a proprietary market data 
connection, whether fiber or wireless; connect through another market 
participant; utilize the existing or potential fiber connections 
offered by third parties; or utilize the existing fiber connections 
offered by FIDS. The Exchange could not impose any impediments to a 
third party seeking to offer a similar service, including by placing 
them at a latency or other competitive disadvantage with respect to the 
Exchange. Indeed, as noted above, the Exchange believes that in the 
future a third party may offer a wireless connection to TR2, which may 
compete with Connectivity, as customers could use the third-party 
wireless connection to transport the Proposed Third Party Data.
    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 Connectivity to Proposed Third Party Data would 
be charged the same amount for the same services.
The Proposed Change Is Not Unfairly Discriminatory
    The Exchange believes that the proposed rule change is not unfairly 
discriminatory, for the following reasons.
    The Exchange believes that it is not unfairly discriminatory to 
make wireless Connectivity to the Proposed Third Party Data available 
to Users. The proposed rule change would provide Users with an 
additional choice with respect to the form and optimal latency of the 
connectivity they use to receive Proposed Third Party 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 Connectivity would still be able to connect to Proposed Third 
Party Data over third party fiber connections.
    Given the limitation on bandwidth, the Exchange believes that it is 
not unfairly discriminatory not to transport information for all the 
symbols included in the Nasdaq CXC and Nasdaq CX2 market data feeds, 
but rather that the Proposed Market Data include a subset of that data.
    The Exchange believes that the proposed change is not unfairly

[[Page 52181]]

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 the Exchange's proposed Connectivity to 
Proposed Third Party Data would be charged the same amount for the same 
services.

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.\24\
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    \24\ 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 Connectivity would provide Users with an 
alternative means of connectivity to Proposed Third Party Data. For the 
first time, a User would be able to connect wirelessly to the Proposed 
Third Party 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 Proposed Third Party 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 
Connectivity would still be able to connect to Proposed Third Party 
Data wirelessly using third party fiber connections.
    Additional third party competitors could offer fiber or wireless 
connectivity to the Proposed Third Party Data in colocation by 
obtaining the market data and sending it over a fiber or wireless 
network to the MDC. A User also may create a proprietary market data 
connection, whether fiber or wireless; connect through another market 
participant; utilize the existing or potential fiber connections 
offered by third parties; or utilize the existing fiber connections 
offered by FIDS. The Exchange could not impose any impediments to a 
third party seeking to offer a similar service, including by placing 
them at a latency or other competitive disadvantage with respect to the 
Exchange. Indeed, as noted above, the Exchange believes that in the 
future a third party may offer a wireless connection to TR2, which may 
compete with Connectivity, as customers could use the third-party 
wireless connection to transport the Proposed Third Party Data.
    Adding text to the Fee Schedule indicating that the monthly charge 
for Connectivity to the Proposed Third Party Data to is subject to a 
30-day testing period, during which the monthly charge per connection 
would be waived, is not designed to address any competitive issues, but 
rather to enhance the clarity and transparency of the Fee Schedule and 
alleviate possible customer confusion that may arise.
    The Exchange does not believe that FIDS would have any competitive 
advantage over any future providers of connectivity to the Proposed 
Third Party Data in the MDC. The Exchange's proposed service for 
Connectivity to Proposed Third Party Data does not have any special 
access to or advantage within the MDC. FIDS would collect the Proposed 
Third Party Data, then send it over a wireless connection from the TR2 
data center to the MDC via a pole, connecting to equipment in a MDC 
meet-me-room. The pole is owned by a third party and is not on the 
grounds of the MDC, and the path into the MDC through a meet-me-room is 
available to any telecommunications provider. Further, all distances in 
the MDC are normalized.
    Nor does the Exchange have a competitive advantage over any third-
party competitors offering wireless connectivity to the Proposed Third 
Party Data by virtue of the fact that it owns and operates the MDC's 
meet-me-rooms. Users purchasing wireless connectivity to the Proposed 
Third Party 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.\25\ 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 \26\ 
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.\27\ 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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    \25\ See supra note 20.
    \26\ See MMR Notice, supra note 21.
    \27\ See id. at 50235.
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    If anything, the Exchange would be subject to a competitive 
disadvantage vis-[agrave]-vis third-party competitors offering wireless 
connectivity to the Proposed Third Party 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.
    Given the limitation on bandwidth, the Exchange believes that it 
will not impose any burden on competition that is not necessary or 
appropriate to not transport information for all the symbols included 
in the Nasdaq CXC and Nasdaq CX2 market data feeds, but rather that the 
Proposed Market Data include a subset of that data.

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.

[[Page 52182]]

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 \28\ and Rule 19b-4(f)(6) thereunder.\29\ 
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.\30\
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    \28\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \29\ 17 CFR 240.19b-4(f)(6).
    \30\ 17 CFR 240.19b-4(f)(6)(iii). 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 Exchange has satisfied this requirement.
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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) \31\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \31\ 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-2024-18 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-2024-18. 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-2024-18 and should 
be submitted on or before July 12, 2024.
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    \32\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13550 Filed 6-20-24; 8:45 am]
BILLING CODE 8011-01-P