[Federal Register Volume 90, Number 188 (Wednesday, October 1, 2025)]
[Notices]
[Pages 47371-47373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19179]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104121; File No. SR-NYSE-2025-36]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Ordering Window Deposit Requirement in Colocation Note 8
September 29, 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 September 25, 2025, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Ordering Window deposit
requirement in Colocation Note 8 of the Connectivity Fee Schedule. 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 Ordering Window deposit
requirement in Colocation Note 8 of the Connectivity Fee Schedule.
Background
In November 2023, the Commission approved the Exchange's proposal
to amend the Connectivity Fee Schedule to provide, in Colocation Note
8, an alternative procedure by which the Exchange can allocate power in
the colocation hall at the Mahwah Data Center (``MDC'') \4\ via
deposit-guaranteed orders from Users made within a 90-day ``Ordering
Window.'' \5\ Under that procedure, during an Ordering Window, each
User may submit a single order for its anticipated power needs, without
regard to the provision of Colocation Note 7 that prohibits the
Exchange from accepting orders for more than four dedicated cabinets
and/or 32 kW of power. Orders submitted during the Ordering Window are
currently subject to deposits equal to two months' worth of the monthly
recurring costs of the amount of power ordered, and such orders are not
finalized until the User's signed order form and deposit are received
by the Exchange. After the Ordering Window closes, space and power are
allocated by the Exchange according to a formula described in
Colocation Note 8.
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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 NYSE American LLC, NYSE Arca,
Inc., NYSE National, 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-NYSEAMER-
2025-59, SR-NYSEARCA-2025-70, SR-NYSENAT-2025-22, and SR-NYSETEX-
2025-33.
\5\ See Securities Exchange Act Release No. 98937 (November 14,
2023), 88 FR 80793 (November 20, 2023) (SR-NYSE-2023-29, SR-
NYSEAMER-2023-39, SR-NYSEARCA-2023-53, SR-NYSECHX-2023-16, SR-
NYSENAT-2023-18).
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As the Exchange explained in its original proposal, the purpose of
the Ordering Window procedure is to permit the Exchange to obtain a
real indication of Users' true demands for power both now and in the
future. At the time of the original proposal, ICE was in the process of
developing a new colocation hall--Hall 5--at the MDC, yet lacked any
way to gauge Users' true demand for space and power given Users'
inability to place orders for more than four dedicated cabinets and/or
32
[[Page 47372]]
kW of power. In addition, ICE sought firm, guaranteed commitments from
Users that they would actually purchase the additional space and power
if it was offered to them, thereby justifying ICE's investment in
building out additional colocation halls. The Exchange developed the
Ordering Window procedure to address these issues.
To date, the Exchange has used the Ordering Window procedure once,
in early 2024, before the opening of the MDC's Hall 5. While the
procedure worked as intended, the Exchange did observe behavior on the
part of some Users that impacted the allocation of space and power.
Seven Users submitted orders for 32 kW or less, and were all allocated
the full amount of their orders under ``Step 2'' of the allocation
procedure in Colocation Note 8. An additional nine Users ordered more
than 32 kW. The Exchange has learned from discussions with those nine
firms that five of them placed orders for the amount of power they
actually wished to receive, while the other four firms placed orders
for three to six times their desired amount of power--and, in some
cases, more than all the power that was actually available in all of
Hall 5.\6\ When power was allocated to these nine firms pursuant to
``Step 3'' of the allocation procedure in Colocation Note 8, the result
was that the five firms that ordered their actual desired amount of
power received approximately 60% of their requested amounts, while the
four firms that ordered several times more power than they actually
wanted received an amount of power closer to their actual desired
amount.
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\6\ One User submitted an order for 2,700 kW, which was more
than the total amount of power available in all of Hall 5 during the
Ordering Window, while another User submitted an order for 5,500 kW,
nearly double that amount.
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Proposed Change
ICE is currently developing an additional colocation hall at the
MDC--Hall 6--and seeks to evaluate customer demand for the space and
power in that Hall, as well as whether customer demand would support
additional expansion projects beyond Hall 6. The Exchange plans to use
the Ordering Window procedure to assist in evaluating these issues, but
proposes one change to the procedure before doing so.
Specifically, the Exchange proposes to increase the deposit that
Users must provide when submitting orders for more than 32 kW during
the Ordering Window to six months' worth of the monthly recurring costs
of the amount of power ordered, up from two months' worth. There would
be no change to the deposit requirement for Users ordering 32 kW or
less, who would continue to provide a deposit equal to two months'
worth of the monthly recurring costs of the amount of power ordered.
Similarly, there would be no change to the use of the deposit: it would
continue to be applied to the User's first and subsequent months'
invoices after the power is delivered until it is completely depleted.
If the User withdraws its order during the Ordering Window, the deposit
will be returned.
The Exchange believes that increasing the deposit requirement for
orders of more than 32 kW during the Ordering Window would discourage
Users seeking more than 32 kW of power from acting opportunistically
and placing orders for amounts of power several times their actual
desired amount. The Exchange believes that increasing the deposit
amount for orders exceeding 32 kW by a multiple of three will have a
material effect on the ordering behavior of these Users, since ordering
several times more power than their actual desired amount would tie up
sizeable amounts of capital as deposits. By way of example, during the
Ordering Window in early 2024, the four firms that placed orders for
significantly more power than they needed paid deposits totaling $17
million; under the proposed rule change, similar orders would require
deposits of $51 million. The Exchange believes from discussions with
several Users that such a deposit requirement would dissuade Users from
submitting such inflated orders for power.
The Exchange believes that increasing the deposit requirement to
six months from two months for orders more than 32 kW is the best way
to meet the goals of the Ordering Window procedure while dissuading
certain Users' opportunistic ordering behavior. In addition, the
proposal would have no impact on Users ordering less than 32 kW of
power, whose deposit requirement would not change and who would
continue to be allocated power in ``Step 2'' of the allocation
procedure, before any orders larger than 32 kW are considered.
Application and Impact of the Proposed Changes
The proposed change is not targeted at, or expected to be limited
in applicability to, market participants of any specific type or size.
Rather, the proposed change would apply equally to any User ordering
more than 32 kW of power during an Ordering Window.
Users with more modest power needs would not be disadvantaged by
the proposed change. This proposal would not change the deposit
requirement for Users finalizing orders during the Ordering Window of
32 kW or less. Nor would this proposal change the fact that in ``Step
2,'' each User that finalized an order during the Ordering Window would
be allocated up to 32 kW of power (subject to sufficient power being
available) before any User's order for more than 32 kW would be filled.
The proposed changes are not otherwise intended to address any
other issues relating to colocation services and/or related fees, and
the Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\8\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities, is designed to prevent fraudulent and
manipulative acts and practices and to promote just and equitable
principles of trade, 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)(4) and (5).
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The proposed rule change is designed to mitigate the opportunistic
behavior of Users who submitted Ordering Window orders for
significantly more power than their actual desired amounts. The
Exchange believes that increasing the deposit requirement for orders of
more than 32 kW during the Ordering Window to six months' worth of the
monthly recurring costs of the amount of power ordered, up from two
months' worth, would discourage Users seeking more than 32 kW of power
from acting opportunistically and placing orders for amounts of power
several times their actual desired amount. The Exchange believes that
increasing the deposit amount for orders exceeding 32 kW by a multiple
of three will have a material effect on the ordering behavior of these
Users, since ordering several times more power than their actual
desired amount would tie up sizeable amounts of capital as deposits. By
way of example, during the Ordering Window in early 2024, the four
firms that placed orders for significantly more power than they needed
paid deposits totaling $17 million; under the proposed rule change,
similar orders would require deposits of $51 million. The Exchange
[[Page 47373]]
believes from discussions with several Users that such a deposit
requirement would dissuade Users from submitting such inflated orders
for power.
The Exchange believes that increasing the deposit requirement to
six months from two months for orders more than 32 kW is the best way
to meet the goals of the Ordering Window procedure while dissuading
certain Users' opportunistic ordering behavior. In addition, the
proposal would have no impact on Users ordering less than 32 kW of
power, whose deposit requirement would not change and who would
continue to be allocated power in ``Step 2'' of the allocation
procedure, before any orders larger than 32 kW are considered. The
Exchange's proposal is thus specifically tailored to dissuade Users
from submitting orders for significantly more power than their actual
desired amounts.
The proposed rule change would protect investors and the public
interest in that it would provide the Exchange with more accurate
insight into Users' true power requirements. It is in the public
interest for the Exchange to take User demand into account and to make
reasoned, informed decisions about whether and how to expand the MDC.
At the same time, there would be no change to the use of the
deposit: it would continue to be applied to the User's first and
subsequent months' invoices after the power is delivered until it is
completely depleted. If the User withdraws its order during the
Ordering Window, the deposit will be returned. Accordingly, a User
would continue to benefit from the deposit.
The proposed rule change provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers. The
proposed change is not targeted at, or expected to be limited in
applicability to, market participants of any specific type or size.
Rather, the proposed change would apply equally to any User ordering
more than 32 kW of power during an Ordering Window. Users with more
modest power needs would not be disadvantaged by the proposed change.
This proposal would not change the deposit requirement for Users
finalizing orders during the Ordering Window of 32 kW or less. Nor
would this proposal change the fact that in ``Step 2,'' each User that
finalized an order during the Ordering Window would be allocated up to
32 kW of power (subject to sufficient power being available) before any
User's order for more than 32 kW would be filled.
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, 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 rule change would increase the
deposit requirement for orders for more than 32 kW submitted during an
Ordering Window in order to mitigate the opportunistic behavior of
Users ordering significantly more power than their actual desired
amounts. The Exchange does not expect the proposed rule change to
impact intra-market or intermarket competition between exchanges,
Users, or any other market participants.
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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\9\ and Rule 19b-
4(f)(2) thereunder \10\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed on any
person, whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing. At any time within 60 days of the filing of the 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.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4.
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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-NYSE-2025-36 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-NYSE-2025-36. 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 filing 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-NYSE-2025-36 and should be submitted on
or before October 22, 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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19179 Filed 9-30-25; 8:45 am]
BILLING CODE 8011-01-P