[Federal Register Volume 85, Number 56 (Monday, March 23, 2020)]
[Notices]
[Pages 16398-16400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06000]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88398; File No. SR-NYSEARCA-2020-22]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change of a Temporary
Waiver of the Co-Location Hot Hands Fee
March 17, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 16, 2020, 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, 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 a temporary waiver of the co-location ``Hot
Hands'' fee beginning on March 16, 2020 through March 29, 2020. 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 a temporary suspension of the co-location \4\
``Hot Hands'' fee beginning on March 16, 2020 through March 29, 2020,
after which the Mahwah, New Jersey data center (``Data Center'') is
scheduled to reopen to third parties.
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\4\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') in 2010. See Securities Exchange Act Release No.
63275 (November 8, 2010), 75 FR 70048 (November 16, 2010) (SR-
NYSEArca-2010-100).
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The Exchange is an indirect subsidiary of Intercontinental
Exchange, Inc. (``ICE''). Through its ICE Data Services (``IDS'')
business, ICE operates the Data Center, from which the Exchange
provides co-location services to Users.\5\
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\5\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location 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 NYSE
Arca Options Fees and Charges and the NYSE Arca Equities Fees and
Charges (together, the ``Fee Schedules''), a User that incurs co-
location fees for a particular co-location service pursuant thereto
would not be subject to co-location fees for the same co-location
service charged by the Exchange's affiliates the New York Stock
Exchange LLC (``NYSE''), NYSE American LLC (``NYSE American''), NYSE
Chicago, Inc. (``NYSE Chicago''), and NYSE National, Inc. (``NYSE
National'' and together, the ``Affiliate SROs''). See Securities
Exchange Act Release No. 70173 (August 13, 2013), 78 FR 50459
(August 19, 2013) (SR-NYSEArca-2013-80). Each Affiliate SRO has
submitted substantially the same proposed rule change to propose the
changes described herein. See SR-NYSE-2020-18, SR-NYSEAmer-2020-19,
SR-NYSECHX-2020-07, and SR-NYSENAT-2020-10.
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[[Page 16399]]
Among those services is a ``Hot Hands'' service, which allows Users
to use on-site Data Center personnel to maintain User equipment,
support network troubleshooting, rack and stack a server in a User's
cabinet; power recycling; and install and document the fitting of cable
in a User's cabinet(s).\6\ The Hot Hands fee is $100 per half hour.
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\6\ See Securities Exchange Act Release No. 72720 (July 30,
2014), 79 FR 45577 (August 5, 2014) (SR-NYSEArca-2014-81).
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ICE has announced to each User that, starting March 16, 2020, the
Data Center will be closed to third parties through March 29, 2020.
Pursuant to the ICE contingency plan, the Data Center is being closed
to third parties to help avoid the spread of COVID-19, which could
negatively impact Data Center functions. The President of the Exchange
has taken the actions required under NYSE Arca Rules 7.1-E and 7.1-O to
close the co-location facility of the Exchange to third parties.\7\
While the Rules 7.1-E and 7.1-O closures are in effect, User
representatives will not be allowed access to the Data Center.
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\7\ See NYSE Arca Rules 7.1-E(c) through (e) and 7.1-O(c)
through (e). See also NYSE Rule 7.1, NYSE American Rules 7.1E and
901NY, NYSE Chicago Rule 7.1, and NYSE National Rule 7.1.
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If a User's equipment requires work while the Rules 7.1-E and 7.1-O
closures are in effect, the User will have no option but to use the Hot
Hands service and, absent the proposed waiver, would incur Hot Hands
fees for the work. Given that, the Exchange proposes to waive all Hot
Hands fees from the date of the closing through March 29, 2020, and to
add text to the Hot Hands Fee in the Fee Schedules noting the waiver.
The Exchange believes that there will be sufficient Data Center staff
on-site to comply with User requests for Hot Hands service.
The proposed waiver would apply equally to all Users. The proposed
fee waiver would not apply differently to distinct types or sizes of
market participants. Rather, it would apply uniformly to all Users.
The proposed change is not otherwise intended to address any other
issues relating to co-location 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,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ 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 and does not unfairly discriminate between
customers, issuers, brokers or dealers. In addition, it is designed 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 mechanisms 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.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposed Rule Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable
for the following reasons.
While the Rules 7.1-E and 7.1-O closures are in effect, User
representatives will not be allowed access to the Data Center. If a
User's equipment requires work during such period, the User will have
to use the Hot Hands service and, absent a waiver, would incur Hot
Hands fees for the work. The Exchange believes that it is reasonable to
grant the proposed waiver because Users would have no option other than
using the Hot Hands service.
The proposed relief would allow a User to have work carried out on
its equipment notwithstanding the closure of the Data Center without
incurring Hot Hands fees.
The Proposed Rule Change Is Equitable
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits for the following reasons.
The proposed waiver would apply equally to all Users. The proposed
fee waiver would not apply differently to distinct types or sizes of
market participants. Rather, it would apply uniformly to all Users.
The Exchange believes that the proposal is equitable because all
similarly-situated Users would not be charged a fee to use the Hot
Hands service that the User would have to use because of the Data
Center closure.
The Proposed Change Is Not Unfairly Discriminatory and Would Protect
Investors and the Public Interest
The Exchange believes that the proposed change is not unfairly
discriminatory for the following reasons.
The proposed waiver would not apply differently to distinct types
or sizes of market participants. Rather, all Users whose equipment
requires work during the Data Center closure would have the resulting
fees waived, and the waiver would apply uniformly to all Users from
March 16, 2020 through March 29, 2020. For the reasons above, the
proposed changes do not unfairly discriminate between or among market
participants.
In addition, the Exchange believes that the proposed rule change
would perfect the mechanisms of a free and open market and a national
market system and, in general, protect investors and the public
interest because it would allow a User to have work carried out on its
equipment notwithstanding the closure of the Data Center pursuant to
Rules 7.1-E and 7.1-O without incurring Hot Hands fees. Accordingly,
the Exchange believes that the requested relief is designed to perfect
the mechanisms of a free and open market and a national market system
and, in general, protect investors and the public interest by
facilitating the uninterrupted availability of Users' equipment.
For all of the above 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.
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\10\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition
The Exchange does not believe that the proposed change would place
any burden on intramarket competition that is not necessary or
appropriate.
The proposal it is not designed to affect competition, but rather
to provide relief to Users that, while the Rules 7.1-E and 7.1-O
closures are in effect, have no option but to use the Hot Hands
service.
The proposed waiver would not apply differently to distinct types
or sizes of
[[Page 16400]]
market participants. All Users who use the Hot Hands service from March
16, 2020 through March 29, 2020 would have the resulting fees waived.
Intermarket Competition
The Exchange does not believe that the proposed change would impose
any burden on intermarket competition that is not necessary or
appropriate.
The Exchange believes that the proposed change would not affect the
competitive landscape among the national securities exchanges, as the
Hot Hands service is solely charged within co-location to existing
Users, and would be temporary.
For the reasons described above, the Exchange believes that the
proposed rule change reflects this competitive environment.
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 foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(2).
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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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEARCA-2020-22 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-2020-22. 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 (http://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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEARCA-2020-22 and should be submitted
on or before April 13, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06000 Filed 3-20-20; 8:45 am]
BILLING CODE 8011-01-P