On February 6, 2026, the Securities and Exchange Commission published a notice in the Federal Register regarding a proposed rule change by NYSE National, Inc. The exchange filed the proposal on January 28, 2026, seeking to amend a footnote in its Connectivity Fee Schedule related to virtual routing and forwarding (VRF) and virtual control circuit (VCC) services. This adjustment targets connections between the Mahwah, New Jersey data center and trading floors operated by affiliated exchanges, introducing a fee structure that treats certain paired circuits as a single unit for billing purposes. The move, filed for immediate effectiveness under Section 19(b)(3)(A)(ii) of the Securities Exchange Act of 1934, reflects an effort to bolster infrastructure resiliency amid evolving market demands, without imposing new burdens on users.
Background on Colocation and Connectivity Services
NYSE National operates as a self-regulatory organization under the umbrella of Intercontinental Exchange, Inc., which manages the Mahwah data center through its Fixed Income and Data Services business. Colocation services allow market participants, referred to as 'Users,' to house their equipment in proximity to exchange systems, facilitating low-latency trading. The Connectivity Fee Schedule outlines charges for various services, including VCCs and VRFs, which enable virtual connections between the data center and external points.
VCCs provide point-to-point virtual links, such as from the data center to trading floors of affiliates like the New York Stock Exchange LLC, NYSE American LLC, and NYSE Arca, Inc. VRFs offer multipoint connectivity. These services were previously detailed in SEC filings, including Release No. 101578 from November 2024 and Release No. 103546 from July 2025, which established fees for connections to trading floors—defined under relevant exchange rules as physical spaces for floor-based trading activities. NYSE National and NYSE Texas, Inc. do not maintain such floors, but the services extend across affiliates to ensure uniform application.
Currently, users with multiple VCCs to the same trading floor pay separately for each, even if redundancy limits simultaneous use. This setup stems from the dual-network architecture on each trading floor, designed for failover and continuity. As noted in the filing, no users presently employ the specific resilient configuration targeted by the proposal.
Details of the Proposed Rule Change
The core amendment revises a footnote in the Fee Schedule to address 'Resilient TF VCCs'—pairs of virtual control circuits connecting the Mahwah data center to the same trading floor via different networks, where only one can be active at any time. Under the change, such pairs would incur fees equivalent to a single VCC, rather than two separate charges. The revised footnote states: 'A virtual control circuit ("VCC") is between the Mahwah data center and a single end point, including a Trading Floor, while a virtual routing and forwarding service ("VRF") can be between the Mahwah data center and one or more Trading Floors. If the User chooses VCCs or a combination of a VCC and a VRF for connectivity to several Trading Floors, it will be charged separately for each connection, provided that two VCCs from the Mahwah data center to the same Trading Floor will be subject to one VCC charge so long as only one VCC is able to be active at a given time. If the User chooses one VRF for connectivity to multiple trading floors, the User will be charged for one connection.'
This clarification ensures that users opting for resiliency through diverse networks are not penalized financially, while those with simultaneously active circuits—such as those on the same network—continue to pay per connection. The exchange emphasizes that the change applies uniformly to all users and is voluntary, with no anticipated influx of new participants.
Statutory Basis and Regulatory Context
NYSE National justifies the proposal under Section 6(b) of the Securities Exchange Act of 1934, arguing it promotes just and equitable principles of trade, removes impediments to a free and open market, and protects investors by enhancing system resiliency. Specifically, it aligns with Section 6(b)(4) for equitable fee allocation and Section 6(b)(5) by avoiding unfair discrimination. The filing cites no direct legal precedents but references prior SEC approvals for similar connectivity adjustments, such as those in Release Nos. 83351 (2018) and 98002 (2023), which addressed colocation fees and meet-me-room operations.
Key players include NYSE National and its affiliates, all indirect subsidiaries of Intercontinental Exchange, Inc., alongside the SEC, which solicits public comments on the filing. The proposal's immediate effectiveness under Rule 19b-4(f)(2) allows implementation without prior approval, subject to potential suspension within 60 days if deemed necessary for public interest or investor protection. No comments were received prior to the filing, as stated.
Implications and Perspectives
The change could incentivize users to adopt more robust connectivity setups, potentially reducing risks of outages on trading floors. Short-term, it offers cost savings for those implementing resilient pairs, fostering greater adoption without immediate revenue impact for the exchange, given the absence of current users. Long-term, it may contribute to overall market stability, aligning with broader regulatory emphases on infrastructure resilience post-events like the 2020 market volatility.
From a market participant perspective, larger firms with sophisticated operations might benefit most, viewing the adjustment as a nod to efficiency. Smaller users could see it as neutral, given the voluntary nature and focus on redundancy. Critics, if any emerge in comments, might argue it subtly favors certain configurations, though the filing asserts non-discriminatory application. Regulators may weigh whether it adequately balances competition, noting the exchange's operation of meet-me-rooms alongside 17 telecommunications providers, which constrains pricing power as detailed in prior filings.
Forward-Looking Considerations
This proposal underscores ongoing efforts to refine exchange infrastructure amid technological advancements. Key takeaways include the emphasis on resiliency without added costs and the uniform application to all users. Potential next steps involve monitoring public comments due by March 4, 2026, and any SEC actions. Future challenges may arise if adoption patterns shift, prompting reviews of fee structures or expansions to other services. Debates could center on whether such incentives sufficiently address broader systemic risks in high-frequency trading environments, with stakeholders watching for similar filings from affiliate exchanges.
