Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)  and Rule 19b-4 thereunder, notice is hereby given that, on March 5, 2010, 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.
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-locations services, as described more fully herein. A copy of this filing is available on the Exchange's Web site at http://www.nyse.com, on the Start Printed Page 14645Commission's Web site at http://www.sec.gov, at the Exchange's principal office 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
The Exchange proposes to amend its Schedules in order to identify fees pertaining to co-location services. A more detailed description of the proposed changes follows.
Currently, the Exchange offers its Users  the opportunity 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. The Exchange hereby proposes to amend its Schedules to set forth its current co-location fees.
Current Space and Services
The Exchange currently offers co-location services at a data center operated by a private third party vendor located in New Jersey. The Exchange offers space at the data center ranging from half cabinets up to two full cabinets, with different power usage capabilities ranging from 2 kilowatts up to 8 kilowatts. The services provided include equipment installation, cross connections, and miscellaneous post-installation services (including cable installation, equipment racking and “remote-hands” maintenance). The fees assessed for the services and space generally reflect the amount of space used and power required.
Users that receive co-location services from the Exchange do not receive any means of access to the Exchange's trading and execution systems that is separate or superior than Users that do not receive co-location services. All orders sent to the Exchange enter the Exchange's trading and execution systems through 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. 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.
The Exchange offers co-location space based on availability and the Exchange believes that it has sufficient space to accommodate current demand on an equitable basis. 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 chart identifies the proposed co-location fees, which, in part, reflect power usage priced at $1000 per kilowatt (“kW”) per month.
|Half cabinet (up to 2 kW)||$2000 per month.|
|$2500 one time installation fee.|
|Full cabinet (up to 2.5 kW)||$2500 per month.|
|$5000 one time installation fee.|
|Full cabinet (up to 4 kW)||$4000 per month.|
|$5000 one time installation fee.|
|Full cabinet (up to 8 kW)||$8000 per month.|
|$5000 one time installation fee.|
|Miscellaneous services post installation (including cable installation services, equipment racking services, and ongoing remote-hands maintenance)||$200 per hour.|
|Fiber cross connections (local and interfloor)||$600 per month. $950 one time installation fee.|
|Less than half cabinet 4||$150 per Rack Unit.|
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”), in general, and Sections 6(b)(4) and 6(b)(5), of the Act, 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 its 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.
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.Start Printed Page 14646
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 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date 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 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:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
- Send an e-mail to email@example.com. Please include File Number SR-NYSEArca-2010-15 on the subject line.
- 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-2010-15. 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 Web site 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-2010-15 and should be submitted on or before April 16, 2010.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Florence E. Harmon,
3. See NYSE Arca Equities Rule 1.1(yy). The term “User” shall mean any ETP Holder or Sponsored Participant who is authorized to obtain access to the NYSE Arca Marketplace pursuant to Rule 7.29. See also, NYSE Arca Rule 6.1A(a)(19). The term “User” shall mean any OTP Holder, OTP Firm or Sponsored Participant that is authorized to obtain access to the NYSE Arca Options Marketplace pursuant to Rule 6.2A.Back to Citation
4. The Exchange supports existing arrangements to provide Users with less than a half cabinet, but it does not offer that option to new co-location Users.Back to Citation
[FR Doc. 2010-6676 Filed 3-25-10; 8:45 am]
BILLING CODE 8011-01-P