The Securities and Exchange Commission published a notice on March 12, 2026, detailing a proposed rule change by NYSE American LLC. The exchange filed this amendment on February 26, 2026, under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4, seeking to update its Connectivity Fee Schedule. This update adds new third-party systems and data feeds available to users at the Mahwah, New Jersey data center. The proposal took immediate effect, allowing NYSE American to broaden connectivity options in response to market participant needs. This development is significant as it enhances access to emerging trading platforms, potentially influencing market efficiency and competition without introducing new fees for bandwidth connections.
Background and Purpose of the Proposal
NYSE American operates colocation services at the Mahwah data center, managed by Intercontinental Exchange through its Fixed Income and Data Services business. Users, defined as market participants requesting direct colocation services, can connect to third-party systems and data feeds. The exchange currently offers connectivity to various third-party execution systems and data feeds, with fees outlined in its Connectivity Fee Schedule.
The proposed change addresses user requests by incorporating 24X, Bruce ATS, and Texas Stock Exchange into the list of accessible third-party systems. For data feeds, it adds connectivity to these same entities with specific monthly fees: $4,000 for 24X, $1,250 for Bruce ATS, and $1,300 for Texas Stock Exchange. These additions do not alter the existing monthly recurring fees for bandwidth connections to third-party systems, which remain based on connection size rather than the specific system chosen.
This filing builds on prior approvals, such as the 2025 release (No. 103410) that expanded third-party connectivity options. NYSE American and its affiliate self-regulatory organizations submitted similar proposals, ensuring uniformity across platforms like NYSE Arca and NYSE National.
Key Players and Process
The primary entities involved include NYSE American as the self-regulatory organization, the Securities and Exchange Commission as the regulator, and third-party providers like 24X, Bruce ATS, and Texas Stock Exchange. 24X and Texas Stock Exchange submitted Form 1 applications to the SEC in 2024 and 2025, respectively, while Bruce ATS filed a Form ATS-N.
Users must enter agreements directly with these third parties for access, after which NYSE American facilitates connectivity via its IP network. The exchange receives data feeds from remote locations and retransmits them to users at the data center. This process is voluntary, with users charged only for selected services. The SEC solicited comments on the proposal, emphasizing transparency and public input.
Legal and Statutory Basis
The proposal aligns with Section 6(b) of the Securities Exchange Act, promoting fair competition and investor protection. NYSE American argues the changes are reasonable, equitable, and not unfairly discriminatory. Fees for new data feeds are set comparably to existing ones, such as $1,300 for Boston Options Exchange or $750 for Blue Ocean ATS.
Precedents include Regulation NMS, which favors market competition over regulation, as noted in the 2005 release (No. 51808). The exchange asserts no burden on competition, as users can access these systems independently through telecommunications providers. It highlights that over 98 percent of user circuits are supplied by third-party telecoms, underscoring a competitive environment.
Implications and Perspectives
In the short term, this amendment provides users with more choices for low-latency connectivity, potentially improving trading efficiency. Users can tailor operations by selecting specific systems without mandatory adoption. For instance, connectivity occurs over unicast or multicast formats, with no advantage given to the exchange's execution system.
Long-term implications include enhanced market integration, as new platforms like Texas Stock Exchange enter the landscape. This could foster innovation but raises questions about data redistribution and competitive equity. From the exchange's perspective, the changes respond to demand without creating affiliations or advantages, as stated in the filing: 'The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems.'
Market participants may view this positively for expanded access, while competitors like telecom providers see it as neutral, given alternative connection methods. Regulators emphasize that the proposal must not impose undue burdens, aligning with the Act's goals. Critics might argue for closer scrutiny of fee structures, though the filing claims fees are market-based and constrained by substitutes.
Evidence and Supporting Details
The filing includes specific fee tables, adding the new systems alphabetically to the existing list. For example, the updated Third Party Data Feeds table lists 24X at $4,000 monthly, justified by higher market rates. Quotes from the document reinforce this: 'The proposed fee for 24X is equitable because the market rate for connecting to 24X is greater.'
Comparisons to prior filings, such as the 2015 release (No. 76009) defining 'User,' support the uniform application across affiliates. The proposal notes minimal expected customer growth, estimating 'at most a handful of new customers,' indicating limited market disruption.
In conclusion, this rule change expands connectivity options at NYSE American, driven by user needs and statutory compliance. It maintains existing fee structures for bandwidth while introducing targeted fees for new data feeds, promoting a competitive colocation environment.
