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Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Notices
The Exchange operates in a highly competitive market in which exchanges and other vendors e.g., 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. 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. 12
The proposed changes are 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.

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2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6b of the Act,13 in general, and furthers the objectives of Section 6b5
of the Act,14 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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 because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange further believes that the proposed rule change is consistent with Section 6b4 of the Act,15 because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers, or dealers.
12 See Securities Exchange Act Release No. 51808
June 9, 2005, 70 FR 37496, 37499 June 29, 2005
Regulation NMS Adopting Release.
13 15 U.S.C. 78fb.
14 15 U.S.C. 78fb5.
15 15 U.S.C. 78fb4.

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The Proposed Change Is Reasonable The Exchange believes that the proposed rule change is reasonable and would perfect the mechanisms of a free and open market and a national market system and, in general, protect investors and the public interest, for the following reasons.
The Exchange believes that it is reasonable to expand its PCS bundle options by offering the proposed Option E and F bundles. Currently, the Exchange offers Users the ability to purchase connectivity to the LCN/NMS
and IP/NMS networks in 10 Gb and 40
Gb bandwidths, but within the Exchanges existing PCS bundle options, 40 Gb connections are not available.
This means that at present, Users interested in the PCS bundled serviceseither because they have minimal power and cabinet space demands or because the costs attendant with having a dedicated cabinet are too burdensomecannot access 40 Gb connections and are limited to the 10 Gb connections offered as part of the Option C and D bundles. Users and potential customers have requested that the Exchange provide them the opportunity to purchase PCS bundles that include 40 Gb connections, which would enable them to connect to more of the Included Data Products and Third Party Data Feeds or have the same size connection in co-location that they have everywhere. The Exchange believes that it is reasonable to offer the proposed Option E and F bundles to satisfy this customer demand, while continuing to offer the existing bundle offerings, in order to provide potential Users of the PCS bundled services an additional 40
Gb option for their network connection requirements.
Additionally, the Exchange believes that the proposed change may make PCS
bundles more competitive with the services that Hosting Users offer.
Without this proposed rule change, potential Users choosing between a PCS
bundle and a Hosting User Bundle would have fewer options.
The Exchange believes that the proposed charges for the Option E and F bundles are reasonable. The Exchange proposes that Users choosing the Option E or F bundles would pay the same $10,000 initial charge that Users currently pay when choosing the Option C or D bundles, which reflects the fact that setting up each of these four cabinet options involves a similar amount of work for the Exchange. It is also reasonable for the Exchange to set MRC
charges of $18,000 for an Option E
bundle a $4,000 increase over Option C and $19,000 for an Option F bundle
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a $4,000 increase over Option D which reflects the fact that the Exchange will have to supply multiple 40 Gb connections in the Option E and F
bundles, as opposed to the 10 Gb connections included in the Option C
and D bundles.
The Exchange believes that it is reasonable to provide a period of eligibility for a 50% MRC reduction as an incentive to Users to utilize the Option E and F bundles. Similar 50%
MRC reductions were proposed and approved for Options A through D when those product offerings were added to the Fee Schedules.
The Proposed Change Is Not Unfairly Discriminatory The Exchange believes its proposal is not unfairly discriminatory. 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 would continue to offer the four existing PCS bundles Options A
through D with different cabinet footprints and network connection options, in addition to the proposed Option E and F bundles. Users that require other sizes or combinations of cabinets, network connections, and cross connects could still request them.
As is currently the case, the purchase of any co-location service, including PCS
bundles, would be completely voluntary.
The Exchange believes that the proposed charges for Option E and F
bundles are not unfairly discriminatory.
The proposed initial charges and MRCs for Options E and F would apply equally to all Users that purchase an Option E or F bundle, and the proposed 50% reduction of MRC for the first 12
months would apply to any User that orders an Option E or F bundle on or before December 31, 2021.
The Proposed Change Is an Equitable Allocation of Fees and Credits The Exchange believes that its proposal equitably allocates its fees among its market participants.
The proposed change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally.
Specifically, the proposed initial charges and MRCs for Options E and F
would apply equally to all Users that purchase an Option E or F bundle, and the proposed 50% reduction of MRC for the first 12 months would apply to any User that orders an Option E or F
bundle on or before December 31, 2021.
The Exchange would continue to offer the four existing PCS bundles Options
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