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Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES

dedicated cabinets or relinquish them if either or both the Cabinet Threshold and Power Threshold are reached.
Doing so would mean that no User would be subject to limitations on its ability to purchase and use power or cabinets at the same time that PNU
cabinets were dormant. The Exchange believes that the measure is therefore reasonably designed to prevent a User from reserving but not using power or cabinets at a time when other Users are subject to limitations.
The proposed rule change would protect investors and the public interest because the proposed revised General Notes would articulate rational, objective procedures consistent with the Existing Procedures and PNU cabinet provisions, and would serve to reduce any potential for confusion on how cabinets and power would be allocated if a shortage in one or the other were to arise in the future, and would thereby make the Price List more transparent and reduce any potential ambiguity.
The Proposed Change is Not Unfairly Discriminatory The Exchange believes that the proposed change is not unfairly discriminatory for the following reasons.
The proposed change would apply equally to all types and sizes of market participants. If the Proposed Procedures were in place, all Users would be able to identify the permitted cabinet and power options and the procedures that would apply to them in the event that unallocated cabinet or power supply runs low in the future. All Users with PNU cabinets would be subject to the same measures if the Cabinet Threshold or Power Threshold were met. The Proposed Procedures would assist the Exchange in accommodating demand for co-location services, and power and cabinets in particular, on an equitable basis.
For the reasons above, the proposed changes do 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.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
B. Self-Regulatory Organizations Statement on Burden on Competition In accordance with Section 6b8 of the Act,17 the Exchange believes that the proposed rule change will not impose 17 15

U.S.C. 78fb8.

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any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Intramarket Competition The Exchange does not believe that the proposed change would place any burden on intramarket competition that is not necessary or appropriate. The proposed change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally.
The Exchange believes that, if triggered, the imposition of the Combined Limits or Combined Waitlist would not impose a burden on a Users ability to compete that is not necessary or appropriate. The Exchange believes that User demand for power will continue in the future, and the Exchange is presently working to expand the amount of power and number of cabinets available in colocation. In this context, the Exchange believes that it would be reasonable for it to put in place the Proposed Procedures to expand on the Existing Procedures and establish a method for allocating not just cabinets but also power on an equitable basis.
The Exchange would only follow the Proposed Procedures and place limits on Users ability to purchase new power and cabinets if either or both the proposed Power Threshold and existing Cabinet Threshold were met, as specified in the proposed General Notes.
Similarly, the Exchange would only create the Proposed Waitlist if the unallocated power capacity is zero, or if a User requests, in writing, an amount of power that, if provided, would cause the unallocated power capacity to be below zero. Based on its experience with co-location and purchasing trends over the last few years, the Exchange believes that in most cases the amount of power that a User would be allowed to buy under the proposed Combined Limits, whether in the form of cabinets or Additional Power, would be sufficient for a Users needs while leaving a margin for potential growth.
The Exchange believes that the proposed revised General Notes would articulate rational, objective procedures consistent with the Existing Procedures and PNU cabinet provisions, and would serve to reduce any potential for confusion on how power and cabinets would be allocated if a shortage in one or the other were to arise in the future, and would thereby make the Price List more transparent and reduce any potential ambiguity.
The Exchange believes that it would not impose a burden on a Users ability to compete that is not necessary or
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appropriate to require Users with PNU
cabinets to either convert or relinquish their PNU cabinets if either or both the Cabinet Threshold and Power Threshold are reached. Doing so would make the power reserved for PNU cabinets and the cabinets themselves available to meet User demand for power and cabinets. As a result, no User would be subject to limitations on its ability to purchase and use power or cabinets at the same time that PNU cabinets were dormant. A User does not require a PNU
cabinet to trade on the Exchange, and whether or not a User has a PNU cabinet has no effect on such Users orders going to, or trade data coming from, the Exchange, or the Users ability to utilize other co-location services. Rather, the proposed change would assist the Exchange in accommodating demand for co-location services on an equitable basis.
Use of any co-location service is completely voluntary, and each market participant is able to determine whether to use co-location services based on the requirements of its business operations.
Intermarket Competition The Exchange does not believe that the proposed change would impose any burden on intermarket competition that is not necessary or appropriate.
The Exchange operates in a highly competitive market in which exchanges and other vendors i.e., Hosting Users offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations.
Accordingly, fees charged for colocation services are constrained by the active competition for the order flow of, and other business from, such market participants.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies. 18
The proposed rule change would protect investors and the public interest because the proposed revised General Notes would articulate rational, objective procedures consistent with the 18 See Securities Exchange Act Release No. 51808
June 9, 2005, 70 FR 37496, 37499 June 29, 2005.

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