[Federal Register Volume 75, Number 220 (Tuesday, November 16, 2010)]
[Notices]
[Pages 70048-70052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28691]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63275; File No. SR-NYSEArca-2010-100]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the
Applicable Sections of Its Schedules of Fees and Charges for Exchange
Services for Both Its Equities and Options Platforms (the
``Schedules'') To Reflect Fees Charged for Co-location Services
November 8, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\
[[Page 70049]]
notice is hereby given that, on November 3, 2010, NYSE Arca, Inc. (the
``Exchange'' or ``NYSE Arca'') 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 applicable sections of its
Schedules of Fees and Charges for Exchange Services for both its
equities and options platforms (the ``Schedules'') to reflect fees
charged for co-location services as described more fully herein. The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, on the Commission's Web site at
http://www.sec.gov, and http://www.nyse.com.
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 its Schedules to identify fees
pertaining to co-location services, which allow Users \4\ of the
Exchange to rent space on premises controlled by the Exchange in order
that they may locate their electronic servers in close physical
proximity to the Exchange's trading and execution systems.\5\ The
Exchange plans to offer these co-location services beginning in January
2011 at its data center in Mahwah, New Jersey.\6\ The Exchange will
offer space at the data center in cabinets with power usage capability
of either four or eight kilowatts (kW).\7\ In addition, the Exchange
will offer Users services related to co-location, including cross
connections, equipment and cable installation, and remote ``hot-hands''
services.
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\4\ For the purposes of this filing, the term ``Users'' includes
any ETP Holder or Sponsored Participant who is authorized to obtain
access to the NYSE Arca Marketplace pursuant to NYSE Arca Equities
Rule 7.29 (see NYSE Arca Equities Rule 1.1(yy)), or any OTP Holder,
OTP Firm or Sponsored Participant that is authorized to obtain
access to OX pursuant to NYSE Arca Options Rule 6.2A (see NYSE Arca
Options Rule 6.1A(a)(19)).
\5\ The Commission has approved proposed rule filings submitted
by the Exchange's affiliates, the New York Stock Exchange LLC, and
NYSE Amex LLC (with respect to its equities business), to offer the
same co-location services from the Mahwah data center at the same
prices. See Securities Exchange Act Release No. 62961 (September 21,
2010), 75 FR 59299 (September 27, 2010) (SR-NYSE-2010-56);
Securities Exchange Act Release No. 62960 (September 21, 2010) 75 FR
59310 (September 27, 2010) (SR-NYSEAmex-2010-80).
\6\ The Exchange will announce the effective date of the fees
set forth in this proposed rule change through a notice to Users.
\7\ The Exchange also allows Users, for a monthly fee (i.e., 40%
of the applicable monthly per kW fee), to obtain an option for
future use on available, unused cabinet space in proximity to their
existing cabinet space. Specifically, Users may reserve cabinet
space of up to 30% of the cabinet space under contract, which the
Exchange will endeavor to provide as close as reasonably possible to
the User's existing cabinet space, taking into consideration power
availability within segments of the data center and the overall
efficiency of use of data center resources as determined by the
Exchange. (If the 30% measurement results in a fractional cabinet,
the cabinet count is adjusted up to the next increment.) If reserved
cabinet space becomes needed for use, the reserving User will have
30 business days to formally contract with the Exchange for full
payment for the reserved cabinet space needed or the space will be
reassigned.
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Users that receive co-location services from the Exchange will not
receive any means of access to the Exchange's trading and execution
systems that is separate from or superior to that of Users that do not
receive co-location services. All orders sent to the Exchange enter the
Exchange's trading and execution systems through the same order gateway
regardless of whether the sender is co-located in the Exchange's data
center or not. In addition, co-located Users do not receive any market
data or data service product that is not available to all Users.
However, Users that receive co-location services normally would expect
reduced latencies in sending orders to the Exchange and receiving
market data from the Exchange. In addition, co-located Users have the
option of obtaining access to the Exchange's Liquidity Center Network
(``LCN''), a local area network available in the data center.\8\ Co-
located Users have the option of using either the LCN or the Exchange's
Secure Financial Transaction Infrastructure (``SFTI'') network, to
which all Users have access. Because it operates as a local area
network within the data center, the LCN provides reduced latencies in
comparison with SFTI. Other than the reduced latencies, the Exchange
believes that there are no material differences in terms of access to
the Exchange between Users that choose to co-locate and those that do
not. SFTI and LCN both provide Users with access to the Exchange's
trading and execution systems and to the Exchange's proprietary market
data products. User access to non-proprietary market data products is
available through SFTI and not through LCN.
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\8\ As set forth below, pricing for LCN access is provided on a
stand-alone basis and on a bundled basis in combination with SFTI
connections and optic connections to outside access centers and
within the data center. The SFTI and optic connections are not
related to the co-location services.
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The Exchange offers co-location space based on availability and the
Exchange believes that it has sufficient space in the Mahwah data
center to accommodate current demand on an equitable basis for the
foreseeable future. In addition, the Exchange believes that any
difference among the positions of the cabinets within the data center
does not create any material difference to co-location Users in terms
of access to the Exchange.
The following charts identify the proposed tiered fees for co-
location and the proposed fees for related services.
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Initial fee per cabinet $5,000
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Number of kWs Per kW fee monthly
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4-8................................................... $1,200
12-20................................................. $1,050
24-40................................................. $950
44 +.................................................. $900
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[[Page 70050]]
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Type of service Description Amount of charge
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LCN Access..................... 1 GB Circuit....... $6,000 per
connection
initial charge
plus $5,000
monthly per
connection.
LCN Access..................... 10 GB Circuit...... $10,000 per
connection.
Bundled Network Access, Option 1 GB Bundle........ $25,000 initial
1 (2 LCN connections, 2 SFTI 10 GB Bundle....... charge plus
connections, and 2 optic $13,000 monthly
connections to outside access charge.
center). $50,000 initial
charge plus
$47,000 monthly
charge.
Bundled Network Access, Option 1 GB Bundle........ $26,000 initial
2 (2 LCN connections, 2 SFTI 10 GB Bundle....... charge plus
connections, 1 optic $16,000 monthly
connection to outside access charge.
center, and 1 optic connection $50,000 initial
in data center). charge plus
$54,250 monthly
charge.
Bundled Network Access, Option 1 GB Bundle........ $27,500 initial
3 (2 LCN Connections, 2 SFTI 10 GB Bundle....... charge plus
connections, and 2 optic $19,000 monthly
connections in data center). charge.
$50,000 initial
charge plus
$61,500 monthly
charge.
Data Center Fiber Cross Connect Cross connect $500 per unit
between a single initial charge
User's cabinets plus $500 monthly
within the data per unit.
center.
Initial Install Services Includes initial $800 per cabinet.
(Required per cabinet). racking of
equipment in
cabinet and
provision of up to
10 cables (4 hrs).
Hot Hands Service: Normal Applies on non-NYSE $200 per hour.
Business Hours, Scheduled Arca holidays,
(Note: Hot Hands Service Monday to Friday,
allows Users to use on-site 9am to 5pm if
data center personnel to scheduled at least
maintain User equipment.). 1 day in advance.
Hot Hands Service: Extended Applies Monday to $275 per hour.
Business Hours, Scheduled. Friday 5pm to 9am,
NYSE Arca
holidays, and
weekends if
scheduled at least
1 day in advance.
Hot Hands Service: Normal Applies on non-NYSE $250 per hour.
Business Hours, Expedited. Arca holidays,
Monday to Friday,
9am to 5pm if NOT
scheduled at least
1 day in advance.
Hot Hands Service: Extended Applies Monday to $325 per hour.
Business Hours, Expedited. Friday 5pm to 9am,
NYSE Arca
holidays, and
weekends if NOT
scheduled at least
1 day in advance.
Rack and Stack................. Installation of one $200 per server.
server in User's
cabinet. Service
encompasses
handling,
unpacking,
tagging, and
installation of
the server as well
as 1 network
connection within
the User rack.
Power Recycling................ Reboot of power on $50 per reset.
one server or
switch as well as
observing and
reporting on the
status of the
reboot back to the
User.
Shipping and Receiving......... Receipt of one $100 per shipment.
shipment of goods
at data center
from User/
supplier. Includes
coordination of
shipping and
receiving.
Badge Request.................. Request for $50 per badge.
provision of a
permanent data
center site access
badge for a User
representative.
External Cabinet Cable Tray.... Engineer, furnish $400 per tray.
and install Rittal
5'H x 12'W cable
tray on cabinet.
Custom External Cabinet Cable Engineer, furnish $100 per linear
Tray. and install 4'' H foot.
x 24'' W custom
basket cable tray
above client's
cabinet rows.
Install and Document Cable..... Labor charges to $200 per hour.
install and
document the
fitting of a
cable(s) in a
User's cabinet(s)
in excess of the
10 copper cables
included in the
cabinet
installation fee.
Equipment Maintenance Call Hardware $100 per call.
Escalation. maintenance-break
fix services
available through
NYSE Arca
arrangement with
Delta Computer
Group.
Visitor Security Escort........ NYSE Arca employee $75 per hour.
escort, which is
required during
User visits to the
data center.
(Note: all User
representatives
are required to
have a visitor
security escort
during visits to
the data center,
including User
representatives
who have a
permanent data
center site access
badge.).
Technician Support Service-Non Network technician $200 per hour.
Emergency. equipped to
support User
network
troubleshooting
activity and to
provide all
necessary testing
instruments to
support the User
request. Prior day
notice is required.
[[Page 70051]]
Technician Support Service- Network technician $325 per hour.
Emergency. equipped to
support User
network
troubleshooting
activity and to
provide all
necessary testing
instruments to
support the User
request. Two hour
notice is required.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\9\ in general, and Sections 6(b)(4) and 6(b)(5), of the
Act,\10\ in particular, in that it is designed to (i) provide for the
equitable allocation of reasonable dues, fees, and other charges among
its members and other persons using its facilities, and (ii) prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system. The Exchange believes that the
proposed changes to the Schedules are equitable in that they apply fees
for comparable co-location services uniformly to our Users. Moreover,
the Exchange believes that, as described herein, access to its market
is offered on fair and non-discriminatory terms.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6). 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 Commission notes that the Exchange satisfied this five-day pre-
filing requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest. The Commission notes that the co-location fees sought
to be codified here are based on filings by the Exchange's affiliates,
the New York Stock Exchange LLC and NYSE Amex LLC, which have already
been approved by the Commission, and that accelerated approval of the
co-location fees will ensure that the co-location services and fees are
made available to all interested parties without delay. For this
reason, the Commission designates the proposed rule change as operative
upon filing.\13\
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\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.
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 e-mail to [email protected]. Please include
File Number SR-NYSEArca-2010-100 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2010-100.
This file number should be included on the subject line if e-mail 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 Web site (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 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEArca-2010-100 and should be submitted on or before December 7,
2010.
[[Page 70052]]
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28691 Filed 11-15-10; 8:45 am]
BILLING CODE 8011-01-P