Pursuant to Section 19(b)(1)
The Exchange proposes to amend the NYSE MKT Equities Price List (“Price List”) and, through NYSE Amex Options LLC (“NYSE Amex Options”), to amend the NYSE Amex Options Fee Schedule (“Fee Schedule”), related to co-location services. The Exchange proposes to implement the fee change effective July 28, 2014. The text of the proposed rule change is available on the Exchange's Web site at
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.
The Exchange proposes to amend the Price List and the Fee Schedule related to co-location services. The Exchange proposes to implement the fee change effective July 28, 2014.
A User is able to purchase a cage to house its cabinets within the data center. A cage would typically be purchased by a User that has several cabinets within the data center and that wishes to arrange its cabinets contiguously while also enhancing privacy around its cabinets. The Exchange charges fees for cages based on the size of the cage, which directly corresponds to the number of cabinets housed therein.
The Exchange's “Liquidity Center Network” (“LCN”) is a local area network that is available in the data center. A User is currently able to act as a content service provider (a “CSP” User) and deliver services to another User in the data center (a “Subscribing” User).
The Exchange proposes to discontinue the one gigabit (“Gb”) LCN CSP connection offering, which is no longer utilized by Users, and to remove references to related pricing from the Price List and Fee Schedule. The 10 Gb LCN CSP connection offering would remain available, as would the related pricing in the Price List and Fee Schedule. Also, a CSP User would remain able to deliver its services to a Subscribing User via direct cross connect, as is currently the case and as was the case prior to the introduction of the LCN CSP connection offering.
A User is currently able to select from three “bundled” connectivity options, at various bandwidths (
When a User selects a new cabinet in the data center it is charged the “Initial Install Services” fee ($800 per dedicated cabinet or $400 for per eight-rack unit in a partial cabinet), which includes initial racking of equipment in the cabinet, provision of a certain number of cables (10 per dedicated cabinet or five per eight-rack unit in a partial cabinet), and a certain number of hours of labor (four per dedicated cabinet or two per eight-rack unit in a partial cabinet).
The Exchange proposes that the Initial Install Services would no longer limit the number of cables that are included and that references to those limits would be removed from the Price List and Fee Schedule. A User would therefore be provided with the number of cables required to provision the cabinet for initial installation. The existing limit on the number of labor hours included would remain.
The Exchange currently offers a “Hot Hands Service,” which allows Users to use on-site data center personnel to maintain User equipment.
The Exchange proposes to consolidate all the current categories of Hot Hands Service under a single Hot Hands Service category and charge a single rate of $100 per half hour. The proposed $100 per half hour charge would be equivalent to the existing $200 per hour rate in the Price List and Fee Schedule, except that it would reflect a charge for Hot Hands Service in half hour increments. The other existing rates that currently apply to Hot Hands Service during extended business hours or for expedited Hot Hands Service would be discontinued.
Several other related services described in the Price List and Fee Schedule are available to Users, for which the same $200 per hour rate applies as is currently applicable for the standard Hot Hands Service, as follows:
• Installation of one server in a User's cabinet. This service encompasses handling, unpacking, tagging, and installation of the server as well as one network connection within the User's rack.
• Labor charges to install and document the fitting of cable(s) in a User's cabinet(s) in excess of the cables included in the cabinet Initial Install Services fee (as described above); and
• Network technician equipped to support User network troubleshooting activity and to provide all necessary testing instruments to support the User request. One prior day's notice is required.
The Exchange proposes to perform these services under the single Hot Hands Service category proposed above, at the proposed Hot Hands Service rate of $100 per half hour. Because of the elimination of the limit on the number of cables included with the Initial Install Services fee, the “Install and Document Cable” service that would be subsumed into the Hot Hands Service fee would apply to additional labor hours needed to complete an initial install above the amount of time included in the Initial Install Services fee (
Several other related services described in the Price List and Fee Schedule are available to Users in the data center for which the service fee is different than the current $200 per hour Hot Hands Service fee, as follows:
• Reboot of power on one server or switch as well as observing and reporting on the status of the reboot back to the User.
• Hardware maintenance-break fix services.
• Network technician equipped to support User network troubleshooting activity and to provide all necessary testing instruments to support the User request. Two hour notice is required.
The Exchange also proposes to perform these services under the single Hot Hands Service category proposed above, similarly at the proposed Hot Hands Service rate of $100 per half hour.
Certain services in the data center that are described in the Price List and Fee
As is the case with all Exchange co-location arrangements, (i) neither a User nor any of the User's customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, an ATP Holder, a Sponsored Participant or an agent thereof (
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.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed change is reasonable because the Exchange offers the services described herein as a convenience to Users, but in doing so incurs certain costs, including costs related to the data center facility, hardware and equipment and costs related to personnel required for initial installation and ongoing monitoring, support and maintenance of such services. The Exchange believes that the proposed change is consistent with the Act because it would permit the Exchange to streamline the offerings available to Users in the data center, make the Price List and Fee Schedule easier to understand and administer, and eliminate references in the Price List and Fee Schedule to services that would be discontinued because they are no longer utilized by Users.
The Exchange believes that it is reasonable to require that a User have a minimum of two cabinets in the data center in order to purchase a cage because a User with one cabinet typically would not be interested in placing a cage around a single cabinet, due to the lack of necessity and the added cost that the User would incur. The Exchange also believes that this is reasonable because the existing monthly cage fees reflect the opportunity cost to the Exchange of giving up floor space in the data center for the cage's physical footprint and the value of such space to the User, in that such floor space otherwise could be utilized for additional cabinets for the same or other Users or other Exchange purposes. Placing just a single cabinet in a cage would not be consistent with this opportunity cost. However, existing pricing for cages would not change, and requiring a minimum of two cabinets also would not result in a price increase for a cage, because the price for the cage would not increase until a User's number of cabinets reaches the next pricing tier for cages (
The Exchange believes that it is reasonable to discontinue the services in the data center that are no longer utilized by Users and to remove references to related pricing from the Price List and Fee Schedule because the resulting Price List and Fee Schedule would be more streamlined and easier to read, understand and administer. This would also contribute to a more efficient process for managing the various services offered to Users, which would improve the utilization of the data center resources, both with respect to personnel and infrastructure (
The Exchange believes that it is reasonable to eliminate the limit on the number of cables that are included in the Initial Install Services fee because it would assist Users in meeting the growing needs of their business operations. Some Users require fewer cables than the current limits, while other Users require more. However, the Exchange generally anticipates that, on average, these amounts would be consistent with the amounts currently specified in the Price List and Fee Schedule. The existing limits on labor hours would remain. Therefore, a User whose cable requirements result in labor hours that exceed the amount included in the Initial Install Services fee would be required to utilize Hot Hands Service and pay the corresponding fee.
The Exchange believes that it is reasonable to charge a single rate of $100 per half hour for Hot Hands Service, including for Hot Hands Service during extended business hours and for expedited Hot Hands Service. The proposed $100 per half hour charge would be equivalent to the existing $200 per hour rate in the Price List and Fee Schedule, except that it would reflect billing for Hot Hands Service in half hour increments. This is reasonable because it would consolidate several similar services under one category with a single applicable rate, thereby eliminating the need for Users to identify the type of Hot Hands Service they are requesting, the timing for the request, or for the Exchange to monitor and record the initiation time of the corresponding performance of the service. The Exchange believes that charging $100 per half hour is reasonable because it would represent an overall decrease compared to the several, current Hot Hands Service categories (
The Exchange believes that it is reasonable to perform other related services under the Hot Hands Service category, for which the same $200 per hour rate currently applies for the standard Hot Hands Service, because this would simplify the descriptions of the various categories of services available to Users. However, despite the proposed change, the applicable rate would remain consistent with the current rate in the Price List and Fee Schedule (
The Exchange also believes that it is reasonable to perform various other related services under the proposed single Hot Hands Service category, at the proposed rate of $100 per half hour, despite different fees currently applying
The Exchange believes that it is reasonable to eliminate references in the Price List and Fee Schedule to dates that have already passed because these references are obsolete and no longer have an impact on pricing.
As with fees for existing co-location services, the fees proposed herein would be charged only to those Users that voluntarily select the related services, which would be available to all Users. Accordingly, the Exchange believes that the proposed change is equitable and not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory and are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
For the reasons above, the proposed change would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange.
Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually review, and consider adjusting, its services and related fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
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)
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 (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.