FR 2025-07701

Summary of the Document

The document outlines a proposal by the New York Stock Exchange (NYSE) Texas to amend its connectivity fee schedule, specifically regarding access to third-party systems and data feeds. This proposal aims to provide users with additional connectivity options without incurring extra monthly fees unless they decide to use specific new services. The changes are designed to enhance user flexibility by including systems like Blue Ocean ATS and MEMX, and they incorporate compliance and competitive market considerations.

Significant Issues and Concerns

One of the primary issues with the document is its complexity. It uses dense language and industry-specific jargon, making it difficult for readers without a financial or regulatory background to fully understand. Terms like 'MDC', 'ATS', and 'FIDS' are not explained, which can be confusing for the uninitiated.

There is also a perceived risk of favoritism or unfair advantage for certain organizations, notably Intercontinental Exchange, Inc. (ICE), which owns and operates the data centers involved. This ownership could lead to anti-competitive practices, favoring larger entities over smaller market participants.

The document does not sufficiently address potential conflicts of interest, particularly concerning integrated operations between the exchange and affiliated entities. It assumes that market competition will naturally regulate excessive pricing, without giving detailed safeguards against market manipulation or monopolistic behavior.

Public Impact

The proposed changes may broadly impact the public by affecting how financial data and market connectivity services are managed and priced. For those involved in trading or financial services, the amendments propose to offer more options, which might translate into better, more customized service offerings.

However, if the changes result in complexities or increased costs for users, they might inadvertently push smaller or less resource-rich participants out of the market. This could lead to less diversity and potentially stifle innovation within the financial markets.

Impact on Specific Stakeholders

For large market participants and sophisticated users, the proposal could be beneficial, offering more choices in tailoring their connectivity needs without additional costs under certain conditions. Larger firms often have the resources to navigate complex systems and leverage new options effectively.

Conversely, smaller stakeholders may face challenges due to the potential for increased complexity and indirect costs associated with connecting to and using the new systems. If these participants cannot afford or opt not to navigate the new options, they might find themselves at a competitive disadvantage, leading to a concentration of market power among larger entities.

Overall, while the proposed amendments aim to enhance user options and market dynamics positively, they also raise significant concerns regarding complexity, fairness, and the potential for anti-competitive behavior. It remains crucial to watch how these changes are implemented and their impacts on market balance and accessibility.

The document under review from NYSE Texas, Inc. involves a proposed rule change related to connectivity fee schedules. This change primarily affects the connection to third-party systems and data feeds. The financial references in this document outline various fees associated with connecting to these systems and data feeds.

Summary of Financial Allocations

The document details various monthly recurring fees for connectivity to new third-party data feeds and systems. For instance, connecting to Blue Ocean ATS (BOATS) will cost $750 per month. Other monthly fees include $1,500 for Cboe CFE Futures, $2,600 for Long Term Stock Exchange, $2,000 each for MEMX Equities and MEMX Options, and $1,000 for Small Exchange. Additionally, there is a combined fee of $2,000 per month for Cboe MATCHNow and Cboe Canada integration, replacing separate fees previously charged.

Further financial allocations are seen in the restructuring of fees for Miami International Securities Exchange/MIAX Pearl, where various feeds will each incur a monthly charge of $2,600. Moreover, the combination of Nasdaq Stock Market and Nasdaq ISE into a unified "Nasdaq Stock Market" brings a new connectivity fee of $3,000 per month. Lastly, the merger of TMX Group and Montreal Exchange results in a combined fee of $2,500 monthly.

Financial References and Related Issues

The restructuring of these fees, as highlighted in the document, might raise concerns about fairness, transparency, and competitive balance. Some key issues include:

1. Complexity and Transparency: The document's language is complex and rife with industry-specific jargon, potentially leaving smaller, less-experienced market participants at a disadvantage. Without a simplified breakdown or justification of these fees, stakeholders might struggle to understand how these changes affect them directly.

2. Potential Competitive Disadvantage: Smaller market participants might face disproportionate impacts from the increased connectivity fees, potentially leading to competitive disadvantages. High costs might deter new entries or even force current smaller users to reconsider their participation, potentially limiting market diversity.

3. Anti-Competitive Concerns: There is a risk of anti-competitive practices given that fees are derived in an environment where Intercontinental Exchange, Inc. (ICE) operates critical infrastructure. This intertwining of operations could result in biased fee structures that favor entities with pre-existing relationships with ICE.

4. Safeguards and Market Manipulation: The document suggests that market competition will naturally regulate prices. However, without explicit safeguards, there is a risk of monopolistic practices or market manipulation that could hinder equitable access to these third-party systems and data feeds.

Overall, while the proposed changes in connectivity fees are clearly delineated in terms of the financial obligations they impose, the broader implications on market dynamics call for careful scrutiny to ensure these financial references do not inadvertently compromise competitive balance or accessibility in the securities exchange ecosystem.