[Federal Register Volume 76, Number 245 (Wednesday, December 21, 2011)]
[Notices]
[Pages 79249-79250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32667]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65974; File No. SR-NYSEAmex-2011-81]
Self-Regulatory Organizations; NYSE Amex LLC; Order Approving a
Proposed Rule Change Expanding the Scope of Potential ``Users'' of Its
Co-Location Services To Include Any Market Participant That Requests To
Receive Co-Location Services Directly From the Exchange and Amending
Its Price List To Establish a Fee for Users That Host Their Customers
at the Exchange's Data Center
December 15, 2011.
I. Introduction
On October 14, 2011, NYSE Amex LLC (``NYSE Amex'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to expand the scope of potential ``Users'' of its
co-location services, and to amend its Price List. The proposed rule
change was published for comment in the Federal Register on November 1,
2011.\3\ The Commission received no comments on the proposal. This
order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 65627 (October 26,
2011), 76 FR 67520 (``Notice'').
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II. Description of the Proposed Rule Change
The Exchange operates a data center in Mahwah, New Jersey from
which it provides co-location services to Users.\4\ For purposes of its
co-location services, the term ``User'' currently includes member
organizations, as that term is defined in Rule 2(b)--NYSE Amex
Equities, and Sponsored Participants, as that term is defined in Rule
123B.30(a)(ii)(B)--NYSE Amex Equities. The Exchange proposed to expand
the scope of potential Users of its co-location services to include any
market participant that requests to receive co-location services
directly from the Exchange.\5\ Under the proposed rule change, Users
could therefore include member organizations, Sponsored Participants,
non-member broker-dealers and vendors.\6\
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\4\ See Securities Exchange Act Release No. 62961 (September 21,
2010), 75 FR 59299.
\5\ As stated by the Exchange, Users must agree to, and be
capable of satisfying, any applicable co-location fees,
requirements, terms and conditions established from time to time by
the Exchange. See Notice, 76 FR at 67521.
\6\ Id. The Exchange anticipated that the potential additional
Users would provide, for example, hosting, service bureau, technical
support, risk management, order routing and market data delivery
services to their customers while the User is co-located in the
Exchange's data center.
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The Exchange also proposed to amend its Price List to establish a
fee applicable to Users that provide hosting services to their
customers (``Hosted Users'') at the Exchange's data center.\7\
``Hosting'' would be a service offered by a User to a Hosted User and
could include, for example, a User supporting its Hosted User's
technology, whether hardware or software, through the User's co-
location space. Specifically, the Exchange proposed to charge each User
a fee of $500.00 per month for each Hosted User that the User hosts in
the Exchange's data center. Users would independently set fees for
their Hosted Users and the Exchange would not receive a share of any
such fees.
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\7\ Id.
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III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\8\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\9\ which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees and other charges among its members
and issuers and other persons using its facilities, and with Section
6(b)(5) of the Act,\10\ which requires, among other things, that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest, and not be
designed to permit unfair
[[Page 79250]]
discrimination between customers, issuers, brokers, or dealers.
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\8\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange noted that the expansion of the scope of potential
Users of the Exchange's co-location services increases access to the
Exchange's co-location facilities and that the co-location services
would be offered to these additional Users in a manner that is not
unfairly discriminatory.\11\ The Commission believes that this
expansion of the scope of potential Users is consistent with the
Exchange Act and should increase access to the Exchange co-location
facilities by allowing additional categories of market participants to
access the Exchange's co-location services.
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\11\ See Notice, 76 FR at 67521.
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Regarding the proposed hosting fee, the Exchange represented that
it will be applied uniformly and will not unfairly discriminate between
Users of co-location services, as the hosting fee will be applicable to
all interested Users that provide hosting services.\12\ The Exchange
also represented that the hosting fee is reasonable because it is
designed to defray expenses incurred or resources expended by the
Exchange.\13\ In light of the Exchange's representations, the
Commission believes that the hosting fee is consistent with Section
6(b)(4) of the Exchange Act.
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\12\ Id.
\13\ Id.
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-NYSEAmex-2011-81) be, and it
hereby is, approved.
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\14\ 15 U.S.C. 78s(b)(2).
\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32667 Filed 12-20-11; 8:45 am]
BILLING CODE 8011-01-P