[Federal Register Volume 89, Number 126 (Monday, July 1, 2024)]
[Notices]
[Pages 54585-54590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14382]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100423; File No. SR-NYSEARCA-2024-54]


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

June 25, 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 12, 2024, NYSE Arca, Inc. (``NYSE Arca'' 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 additional market data feeds. 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 additional market data feeds.
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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. 76010 (September 29, 2015), 80 FR 60197 
(October 5, 2015) (SR-NYSEArca-2015-82). 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 Chicago, Inc., and NYSE National, 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-2024-37, SR-NYSEAMER-2024-40, SR-NYSECHX-2024-
24, and SR-NYSENAT-2024-20.
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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. 99808 (March 20, 
2024), 89 FR 21151 (March 26, 2024) (SR NYSEArca-2024-26).
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    The Exchange proposes to add to the Fee Schedule wireless 
connections (``Connectivity'') to four additional market data feeds 
(together, the ``Proposed Third Party Data''):
     MIAX Pearl Equities Depth of Market Feed (``MIAX 
DoM''),\6\
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    \6\ As described by MIAX PEARL, LCC, ``[t]he [MIAX] DoM feed is 
a data feed that contains the displayed price and size of each order 
entered on MIAX PEARL Equities, as well as order execution 
information, order cancellations, order modifications, order 
identification numbers, and administrative messages.'' Securities 
Exchange Act Release No. 91073 (February 5, 2021), 86 FR 9096, 9100 
(February 11, 2021) (SR-PEARL-2021-02).
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     Nasdaq BX TotalView-ITCH FPGA,\7\
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    \7\ The difference between the Nasdaq BX TotalView feed and the 
Nasdaq BX TotalView-ITCH feed, which is part of the Existing Third 
Party Data, is the delivery mechanism: the data is the same. As 
described by Nasdaq BX, Inc., ``BX TotalView is a real-time market 
data product that provides full order depth using a series of order 
messages to track the life of customer orders in the BX market, as 
well as trade data for BX executions and administrative messages 
such as Trading Action messages, Symbol Directory, and Event Control 
messages.'' Securities Exchange Act Release No. 98158 (August 17, 
2023), 88 FR 57505 (August 23, 2023) (SR-BX-2023-020), at 57506.
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     Nasdaq PSX TotalView, and
     Nasdaq PSX TotalView-ITCH FPGA.\8\
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    \8\ According to Nasdaq PHLX LLC, ``PSX TotalView is a real-time 
market data product that provides full order depth using a series of 
order messages to track the life of customer orders in the PSX 
market, as well as trade data for PSX executions and administrative 
messages such as Trading Action messages, Symbol Directory, and 
Event Control messages.'' Securities Exchange Act Release No. 95195 
(August 21, 2023), 88 FR 58324 (August 25, 2023) (SR-Phlx-2023-37), 
at 58325. The difference between the two PSX TotalView feeds is the 
delivery mechanism: the data is the same. Id.

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[[Page 54586]]

    As with most other Existing Third Party Data,\9\ the monthly charge 
for 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 
Connectivity to the Proposed Third Party Data.
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    \9\ See Securities Exchange Act Release No. 76749 (December 23, 
2015), 80 FR 81640 (December 30, 2015) (SR-NYSEArca-2015-99).
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    Users would be offered Connectivity to Proposed Third Party Data 
through connections into the colocation center in the Mahwah, New 
Jersey data center (``MDC'').\10\
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    \10\ 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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    The Exchange expects that the proposed Connectivity to Proposed 
Third Party Data would become operative during 2024. The Exchange will 
announce the date or dates that Connectivity to Proposed Third Party 
Data will be available through a customer notice.
    The Exchange proposes to add the following to the Fee Schedule to 
reflect fees for Connectivity to Proposed Third Party Data:

------------------------------------------------------------------------
        Type of service            Description        Amount of charge
------------------------------------------------------------------------
Wireless Connection for Third   Wireless           $5,000 per connection
 Party Data.                     connection of      initial charge plus
                                 MIAX Pearl         monthly charge per
                                 Equities Depth     connection of
                                 of Market Feed     $6,000.
                                 (DoM) data.       Fees are subject to a
                                                    30-day testing
                                                    period, during which
                                                    the monthly charge
                                                    per connection is
                                                    waived.
Wireless Connection for Third   Wireless           $5,000 per connection
 Party Data.                     connection of      initial charge plus
                                 Nasdaq BX          monthly charge per
                                 TotalView-ITCH     connection of
                                 FPGA data.         $7,500.
                                                   Fees are subject to a
                                                    30-day testing
                                                    period, during which
                                                    the monthly charge
                                                    per connection is
                                                    waived.
Wireless Connection for Third   Wireless           $5,000 per connection
 Party Data.                     connection of      initial charge plus
                                 Nasdaq PSX         monthly charge per
                                 TotalView data.    connection of
                                                    $6,000.
                                                   Fees are subject to a
                                                    30-day testing
                                                    period, during which
                                                    the monthly charge
                                                    per connection is
                                                    waived.
Wireless Connection for Third   Wireless           $5,000 per connection
 Party Data.                     connection of      initial charge plus
                                 Nasdaq PSX         monthly charge per
                                 TotalView-ITCH     connection of
                                 FPGA data.         $7,500.
                                                   Fees are subject to a
                                                    30-day testing
                                                    period, during which
                                                    the monthly charge
                                                    per connection is
                                                    waived.
------------------------------------------------------------------------

    Each proposed Connectivity service 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 Proposed Third Party Data, as one would not be 
needed.\11\ Rather, the User would be able to connect to Proposed Third 
Party Data using the same port that it already had, as a User would 
only require one port to connect to the Proposed Third Party Data and 
Single Port Third Party Data, irrespective of how many of the wireless 
connections it orders.
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    \11\ Similarly, if a User connected to Proposed Third Party 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. 80116 (February 28, 
2017), 82 FR 12663 (March 6, 2017) (SR-NYSEArca-2017-18), and 98964 
(November 16, 2023), 88 FR 81449 (November 22, 2023) (SR-NYSEArca-
2023-79).
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    To receive a 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. 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.
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 Connectivity to Proposed Third Party Data was requested by 
Users, but the Exchange believes that it would obtain less than a 
handful of new customers 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.'' \12\
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    \12\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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    As explained below in this filing, the Exchange's proposed 
Connectivity to Proposed Third Party Data would compete with the 
wireless connections provided by at least two third parties. 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

[[Page 54587]]

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 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 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.
    At least two telecoms provide wireless connectivity in the MDC. A 
User could use such connectivity to connect to the Proposed Third Party 
Data. The Exchange believes that these wireless connections are at a 
same or similar speed as the Exchange's proposed Connectivity, and at a 
similar price.\18\
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    \18\ Because the telecoms are not regulated entities, they are 
not obligated to make its latency figures or fees publicly available 
or the same for all entities.
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    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.\19\ If 
the Exchange were to set its proposed fees too high, Users could 
respond by instead selecting the telecoms' substantially similar 
wireless connectivity.\20\
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    \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\ In addition, the Exchange believes that at least three 
third-party market participants, as well as FIDS, offer fiber 
connections to the Proposed Third Party Data in colocation. See 
Securities Exchange Act Release No. 82617 (February 1, 2018), 83 FR 
5500 (February 7, 2018) (SR-NYSEArca-2018-06).
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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 telecom connections or 
any future providers of wireless connectivity to Proposed Third Party 
Data. The Exchange's proposed service for connectivity to Proposed 
Third Party 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\
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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).
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    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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    \22\ See id.
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    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'').\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

[[Page 54588]]

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. 98000 (July 26, 
2023), 88 FR 50244 (August 1, 2023) (SR-NYSEARCA-2023-47) (``MMR 
Notice'').
    \25\ See id. at 50246. 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.\26\ 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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    \26\ See Wireless Approval Order, supra note 16.
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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 the proposed 
Connectivity 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 it is reasonable that if a User already had a 
port for Single Port Third Party Data, it would not receive an 
additional port for the Proposed Third Party Data. In such a case, no 
additional port would be needed, as the User would be able to connect 
to Proposed Third Party Data using the port it already had. Similarly, 
the Exchange believes it is reasonable that if a User connected to 
Proposed Third Party 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 Proposed Third Party Data and 
Single Port Third Party Data, irrespective of how many of the wireless 
connections it orders.
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 wirelessly using third party wireless connections.
    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 Exchange believes 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 Proposed Third Party Data. Similarly, the 
Exchange believes it is equitable that if a User connected to Proposed 
Third Party 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 Proposed Third Party Data 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 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 wireless connections.
    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 the Exchange's proposed Connectivity to 
Proposed Third Party Data would be

[[Page 54589]]

charged the same amount for the same services.
    The Exchange believes 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 Proposed Third Party Data. 
Similarly, the Exchange believes that it is not unfairly discriminatory 
that if a User connected to Proposed Third Party 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 
Proposed Third Party Data and Single Port Third Party Data, 
irrespective of how many of the wireless connections it orders.

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 
Connectivity would provide Users with an alternative means of 
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 wirelessly using third party wireless connections.
    The Exchange does not believe that FIDS would have any competitive 
advantage over either the existing third-party telecom connections or 
any future providers of wireless connectivity to Proposed Third Party 
Data. The proposed Connectivity to Proposed Third Party 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 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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    Adding 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, 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. 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.\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 id. at 50246.
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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.

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.\35\
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    \33\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \34\ 17 CFR 240.19b-4(f)(6).
    \35\ 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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[[Page 54590]]

    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) \36\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \36\ 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-NYSEARCA-2024-54 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-NYSEARCA-2024-54. 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-SR-NYSEARCA-2024-54 and 
should be submitted on or before July 22, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14382 Filed 6-28-24; 8:45 am]
BILLING CODE 8011-01-P