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Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices
to its co-located Users. The proposed change is available on the Exchanges website at www.nyse.com, at the principal office of the Exchange, and at the Commissions Public Reference Room.
II. Self-Regulatory Organizations 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 Organizations Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change
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1. Purpose The Exchange proposes to establish procedures for the allocation of power to its co-located 4 Users.5
Recently, the Exchange added procedures for the allocation of cabinets Existing Procedures 6 in colocation 4 The Exchange initially filed rule changes relating to its co-location services with the Securities and Exchange Commission Commission in 2019. See Securities Exchange Act Release No. 87408 October 28, 2019, 84 FR
58778 November 1, 2019 SRNYSECHX2019
27. The Exchange is an indirect subsidiary of Intercontinental Exchange, Inc. ICE. Through its ICE Data Services IDS business, ICE operates a data center in Mahwah, New Jersey the data center, from which the Exchange provides colocation services to Users.
5 For purposes of the Exchanges co-location services, a User means any market participant that requests to receive co-location services directly from the Exchange. See id., at note 6. As specified in the Fee Schedule of NYSE Chicago, Inc. Fee Schedule, 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 Exchanges affiliates New York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., and NYSE
National, Inc. together, the Affiliate SROs. Each Affiliate SRO has submitted substantially the same proposed rule change to propose the changes described herein. See SRNYSE202112, SR
NYSEAMER202108, SRNYSEArca202111, and SRNYSENAT202103.
6 See Securities Exchange Act Release No. 90732
December 18, 2020, 85 FR 84443 December 28, 2020 SRNYSE202073, SRNYSEAMER2020
66, SRNYSEArca202082, SRNYSECHX2020
26, and SRNYSENAT202028 Notice of Filings of Amendment No. 1 and Order Granting Approval of Proposed Rule Changes, Each as Modified by Amendment No. 1, Amending the Exchanges CoLocation Services To Establish Procedures for the Allocation of Cabinets to Co-Located Users if Cabinet Inventory Falls Below Certain Thresholds.

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should it become needed, which procedures are not currently being used.
In addition, Users have had an unprecedented demand for power, largely driven by the demands caused by volatile market conditions related to the COVID19 pandemic and higher than usual trading volumes. The Exchange is currently working to expand the amount of power and number of cabinets available in colocation. To complement the procedures for allocation of colocation cabinets, the Exchange believes it would be prudent to have procedures in place for the allocation of power, should such allocation be necessary. The Exchange accordingly proposes to expand the Existing Procedures to incorporate procedures for the allocation of power Proposed Procedures.
Background Users currently have two options for purchasing power. First, a User may purchase a new dedicated or partial cabinet, which comes with power. The User pays an initial fee and a monthly fee based on the number of kilowatts kW contracted for the cabinet. The dedicated cabinets have a standard power allocation of either 4 kW or 8 kW
the Standard Cabinet Power. Partial cabinets are available in increments of eight-rack units of space, and each eight-rack unit may be allocated 1 or 2
kW. The Exchange allocates cabinets on a first-come/first-serve basis.
Second, a User may request power upgrades to dedicated cabinets in addition to the Standard Cabinet Power.7 Users may request that such additional power Additional Power be allocated to a cabinet when it is first set up or later. A User with a dedicated cabinet, for example, may develop its infrastructure in a manner that allows it to expand the hardware within that cabinet by adding Additional Power.
Because it could add Additional Power to its existing cabinet, the User would not need an additional cabinet. Adding Additional Power may entail overhauling wiring, circuitry and hardware for the dedicated cabinet so that it can handle the increased power.8
The Exchange also offers cabinets that do not have power: Cabinets for which power is not utilized PNU cabinets.
PNU cabinets are reserved cabinet space that are not active, and that can be converted to a powered, dedicated cabinet when the User requests it.9
Although PNU cabinets do not use power, when the Exchange establishes a 7 See
84 FR 58778, supra note 4, at 58781.
Id.
9 See Id.
8 See
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PNU cabinet, it allocates unused power capacity to it, depending on the Users requirements. The allocated power is kept in reserve for the PNU cabinet, and, upon the Users request, the PNU
cabinet may be powered and used promptly.
If additional power or cabinets are needed, the Exchange may use established measures to convert PNU
cabinets:
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.10

The Exchange proposes to provide additional detail regarding the conversion of PNU cabinets in the Proposed Procedures.
Proposed Procedures Like the Existing Procedures, the Proposed Procedures would be set forth in General Notes 7 and 8. General Note 7 would be amended to provide that, if the amount of power or cabinets available fell below specified thresholds, Users would be subject to purchasing limits. General Note 7 would also specify when the purchasing limits would cease to apply. Consistent with the Existing Procedures, the amended General Note 7 would provide that if a User requests a number of Standard Cabinets and/or amount of Additional Power that would cause the unallocated power capacity to be below the specified power and cabinet thresholds, the purchasing limits would apply only to the portion of the Users order below the relevant threshold.11
The Exchange proposes that, if either the Cabinet Threshold or the Power Threshold, or if both the Cabinet Threshold and Power Threshold are reached, all Users with PNU cabinets would be required to either convert or relinquish them, consistent with the 10 Securities Exchange Act Release No. 62732
August 16, 2010, 75 FR 51512 August 20, 2010
SRNYSE201056, at note 5. See also 84 FR
58778, supra note 4, at 58781. Reserved cabinet space is a PNU cabinet. See Securities Exchange Act Release No. 70913 November 21, 2013, 78 FR
70987 November 27, 2013 SRNYSE201374.
11 For example, if there was 365 kW unallocated power capacity in co-location and a User requested to purchase cabinets and Additional Power that would, together, total 55 kW, the purchasing limits in General Note 7 would not apply to the Users purchase of the first 15 kW, whether those kW were in the form of cabinets or Additional Power. Once the power threshold was reached, the combined limits would be activated, limiting the Users purchase of additional cabinets and Additional Power. In all, the User would be permitted to purchase a total of 47 kW out of its original order of 55 kW. The User could choose whether the 47
kW was in the form of cabinets, Additional Power, or both.

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