[Federal Register Volume 90, Number 104 (Monday, June 2, 2025)]
[Notices]
[Pages 23409-23412]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09851]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103127; File No. SR-NYSENAT-2025-10]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing of a Proposed Rule Change To Amend the Connectivity Fee Schedule
May 27, 2025.
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 May 13, 2025, NYSE National, Inc. (``NYSE National'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. 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 to add
hardware procurement services and managed services at the Mahwah Data
Center. The proposed 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 to add
hardware procurement services and managed services in the colocation
halls at the Mahwah Data Center (``MDC'').\4\
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\4\ Through its Fixed Income and Data Services (``FIDS'')
business, Intercontinental Exchange, Inc. (``ICE'') operates the
MDC. The Exchange and its affiliates New York Stock Exchange LLC,
NYSE American LLC, NYSE Arca, Inc., and NYSE Texas, Inc. (the
``Affiliate SROs'') are indirect subsidiaries of ICE. Each of the
Exchange's Affiliate SROs has submitted substantially the same
proposed rule change to propose the changes described herein. See
SR-NYSE-2025-17, SR-NYSEAMER-2025-28, SR-NYSEARCA-2025-35, and SR-
NYSETEX-2025-07.
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Hardware Procurement Services
The Exchange has recently received requests from several Users \5\
and
[[Page 23410]]
prospective Users for the Exchange to start providing hardware
procurement services in the colocation halls at the MDC. Under such
services, FIDS \6\ would engage a third-party procurement specialist to
procure, purchase, integrate and deliver hardware for the User to use
in the colocation halls at the MDC based on specifications provided by
the User. FIDS would charge the User the procurement specialist's fees
for procuring such hardware plus a 10% service fee to be retained by
FIDS.
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\5\ 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
Connectivity Fee Schedule, a User that incurs colocation fees for a
particular colocation service pursuant thereto would not be subject
to colocation fees for the same colocation service charged by the
Affiliate SROs.
\6\ In this proposal, the term ``FIDS'' includes FIDS and any
ICE subsidiaries that are successors-in-interest to FIDS.
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The Exchange understands that some Users would find such an
arrangement desirable because it would allow them to obtain all
necessary hardware from FIDS, with whom the User already has a
contractual relationship, as opposed to having to contract directly
with a procurement specialist or with multiple third-party hardware
vendors. These Users have explained that contracting with FIDS to
obtain hardware would allow the Users to avoid the onerous process of
onboarding the hardware vendors as approved sellers in their
procurement systems. It is the Exchange's understanding that such
onboarding generally requires Users to, among other things: evaluate
each vendor's financial and credit history; check their service track
record; evaluate their sustainability credentials; assess their
compliance with regulations; obtain their agreement to an ethical code
of conduct; and establish ordering processes, payment terms, and
delivery processes with each vendor. By contrast, the proposed
arrangement would permit the User to obtain necessary hardware by
contracting only with FIDS--a vendor already established in the User's
systems--in exchange for paying FIDS a service fee equal to 10% of the
procurement specialist's fees for procuring such hardware.
Managed Services
Similarly, some Users and prospective Users have also requested
that the Exchange begin providing ``managed services'' in the
colocation halls at the MDC. The term ``managed services'' typically
refers to a customer's hiring a third-party vendor to provide
information technology (``IT'') support for the customer's hardware in
a data center, so that the customer can focus its own IT resources
elsewhere. A vendor providing managed services typically monitors the
customer's servers and other hardware in the data center, diagnoses
solutions for configuration challenges, works with the data center's
operations team regarding any changes to such configurations, and
provides around-the-clock monitoring, trouble-shooting, and remediation
of any problems concerning the customer's hardware in the data center.
As with hardware procurement, Users and prospective Users have
asked the Exchange to add a service in the colocation halls at the MDC
that would permit FIDS to contract with a third-party managed services
provider on the User's or prospective User's behalf. This would allow
the Users and prospective Users to benefit from managed services within
the colocation halls at the MDC while avoiding the many challenges
(listed above) with onboarding a new vendor as an approved seller in
their procurement systems. Under the proposed arrangement, a User could
purchase managed services by contracting with FIDS, which would charge
the User the specialist's fees for performing the services plus a fee
to FIDS equal to 10% of the managed services provider's fees for
providing such services.
Proposed Amendment
Accordingly, FIDS proposes to amend Section A of the Connectivity
Fee Schedule regarding Co-Location Fees to add hardware procurement
services and managed services, as follows:
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Type of service Description Amount of charge
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Hardware Procurement FIDS' engaging a Procurement
Services. hardware specialist's fees
procurement (which FIDS passes
specialist to through to the
obtain hardware on procurement
User's behalf. specialist) plus
10% service fee
payable to FIDS.
Managed Services............ FIDS' engaging a Managed services
managed services provider's fees
provider on User's (which FIDS passes
behalf. through to the
managed services
provider) plus 10%
service fee payable
to FIDS.
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Application and Impact of the Proposed Changes
The proposed changes are not targeted at, or expected to be limited
in applicability to, a specific segment of market participant. The
proposed services would be available to any potential User on a
completely voluntary and non-discriminatory basis. The proposed changes
would not apply differently to distinct types or sizes of Users.
Rather, they would apply to all Users equally. The Exchange anticipates
that some of the Users currently requesting the services from FIDS
would use the service.
The proposed changes are not otherwise intended to address any
other issues relating to services related to the MDC and/or related
fees, and the Exchange is not aware of any problems that market
participants 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,\7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\8\ 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,\9\ because it provides for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and
[[Page 23411]]
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 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.
First, with respect to the fees charged by the hardware procurement
specialists and the managed services specialists, it is reasonable that
the Exchange would pass any payments it receives from the User for such
services on to the specialist who performed the services.
Second, the Exchange believes it is reasonable for FIDS to charge
and retain a 10% fee for performing the service of contracting with the
hardware procurement specialist or managed service specialist on the
User's behalf and handling the User's payments of such specialists'
fees. The proposed 10% service fee is a nominal amount that would
compensate FIDS for its work contracting and handling payments on
behalf of the User.
Moreover, the proposed 10% service fee is reasonable because any
Users who do not wish to pay it can instead contract directly with any
number of hardware procurement specialists and managed services
specialists. There are numerous third parties that currently provide
hardware procurement and managed services in the colocation halls at
the MDC without the involvement of FIDS or the Exchange, and Users and
potential Users could continue to obtain such services from these third
parties in the future. The Exchange would not take any actions to block
or prevent such third parties from providing their services.
In addition, there is no requirement that any User or potential
User purchase the services proposed in this filing. As noted above, the
Exchange is proposing such services as a convenience to Users and
potential Users who have specifically indicated their preference to buy
such services from FIDS instead of from a different vendor, and to pay
FIDS a fee for facilitating that arrangement. If a User believes the
10% service fee is too high, it has the option of acquiring the
services it needs directly from the specialists instead.
The Proposed Change Is an Equitable Allocation of Fees and Credits
The Exchange believes that its proposal equitably allocates its
fees among Users. The Exchange believes that the proposed fees are
equitable because they would not apply differently to distinct types or
sizes of Users. Rather, it would apply equally to any Users who opted
to purchase the proposed services.
In addition, the Exchange believes that the proposal is equitable
because only market participants that voluntarily select to use the
proposed hardware procurement services or the managed services would be
charged for them. The proposed services would be available to all Users
on an equal basis, and all Users that voluntarily choose to use the
proposed services would be charged the fees incurred on their behalf by
the hardware procurement specialist or the managed services specialist,
plus the same 10% service fee payable to FIDS.
The Proposed Change Is Not Unfairly Discriminatory
The Exchange believes its proposal is not unfairly discriminatory.
The proposed change does not apply differently to different types or
sizes of Users. Rather, it would apply to all Users equally.
In addition, the Exchange believes that the proposal is not
unfairly discriminatory because only Users that voluntarily select to
receive the proposed services would be charged for them. The proposed
services would be available to all Users on an equal basis, and all
Users that voluntarily choose to use the service would be charged the
fees incurred on their behalf by the hardware procurement specialist or
the managed services specialist, plus the same 10% service fee payable
to FIDS.
For all these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\10\ the Exchange
believes that the proposed rule change will not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed change would not affect competition
among national securities exchanges or among members of the Exchange.
Rather, the Exchange believes that by offering the proposed services,
it will provide an alternate, non-exclusive method for Users who wish
to purchase hardware procurement services or managed services to obtain
such services in the MDC, in addition to the numerous third-party
specialists from whom Users can obtain such services directly.
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\10\ 15 U.S.C. 78f(b)(8).
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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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2025-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSENAT-2025-10. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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
[[Page 23412]]
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-2025-10 and should
be submitted on or before June 23, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2025-09851 Filed 5-30-25; 8:45 am]
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