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Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Notices 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.
Without this proposed rule change, potential Users choosing between a PCS
bundle and a Hosting User Bundle would have fewer options. Potential Users could benefit from having an additional 40 Gb option for their network connection requirements, which would allow 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 elsewhere.
Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchanges statement regarding the burden on competition.
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.

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B. Self-Regulatory Organizations Statement on Burden on Competition The Exchange believes that the proposal will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of Section 6b8 of the Act.16
Intramarket Competition The Exchange believes that the proposed changes would not place any burden on intramarket competition that is not necessary or appropriate.
The Exchanges offering of the proposed Option E and F bundles would provide potential Users of PCS
bundles a wider range of choices, which would be especially beneficial for potential Users with minimal power and cabinet space demands, but which could nevertheless benefit from an additional 40 Gb option for their network connection requirements. The Exchange believes that the proposed change may make PCS bundles more attractive to potential Users who might otherwise opt to become Hosted 16 15

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Customers, and thus would enhance the competitive environment for potential Users, who would then have more options from which to select. At the same time, however, no potential User would be obligated to purchase a PCS
bundle, and it would still have the options offered by Hosting Users.
Intermarket Competition The Exchange believes that the proposed changes will not impose any burden on intermarket competition that is not necessary or appropriate. The proposed change is not meant to affect competition among national securities exchanges. Rather, the Exchange believes that the proposed change is a reasonable attempt to maintain a more level playing field between the Exchange and the Hosting Users, who compete for Hosted Customer business.
Because Hosting Users services are not regulated, they may offer differentiated pricing and are not required to make their pricing public. The Exchange believes that the proposed change may make PCS bundles more attractive to potential users who might otherwise opt to become Hosted Customers.
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. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchanges data center which could be a competing exchange, or pursuing strategies less dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, an exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly colocated trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. 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.
The Commission has repeatedly expressed its preference for competition
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over regulatory intervention in determining price, 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, recognizing 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. 17
For these reasons, the Exchange believes that the proposed rule change reflects this competitive environment and does not impose any undue burden on intermarket competition.
C. Self-Regulatory Organizations Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days i as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or ii as to which the self-regulatory organization consents, the Commission will:
A By order approve or disapprove the proposed rule change, or B institute proceedings to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments 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:
Electronic Comments Use the Commissions internet comment form http www.sec.gov/
rules/sro.shtml; or Send an email to rule-comments@
sec.gov. Please include File Number SR
NYSEARCA202107 on the subject line.
Paper Comments Send paper comments in triplicate to: Securities and Exchange 17 See Regulation NMS Adopting Release, supra note 12, at 37499.

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