[Federal Register Volume 87, Number 136 (Monday, July 18, 2022)]
[Notices]
[Pages 42767-42775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15222]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95264; File No. SR-MRX-2022-07]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, 
Section 5 To Add Membership Fees

July 12, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 29, 2022, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I, II, and III, below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend MRX's Pricing Schedule at Options 7, 
Section 5, Other Options Fees and Rebates, to assess membership fees.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/mrx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    MRX proposes to amend its Pricing Schedule at Options 7, Section 5, 
Other Options Fees and Rebates, to assess membership fees, which are 
not assessed today, and which have not been assessed since MRX's 
inception in 2016.\3\ The proposed changes are designed to update fees 
for MRX's services to reflect their current value--rather than their 
value when it was a new exchange six years ago--based on MRX's ability 
to deliver value to its customers through technology, liquidity and 
functionality. Newly-opened exchanges often charge no fees for certain 
services such as membership, in order to attract order flow to an 
exchange, and later amend their fees to reflect the true value of those 
services.\4\ Allowing newly-opened exchanges time to build and sustain 
market share before charging non-transactional fees encourages market 
entry and promotes competition. The proposed changes to membership fees 
within Options 7, Section 5; Other Options Fees and Rebates, are 
described below.
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    \3\ The Exchange initially filed the proposed pricing changes on 
May 2, 2022 (SR-MRX-2022-04) instituting fees for membership, ports 
and market data. On June 29, 2022, the Exchange withdrew that 
filing, and submitted separate filings for membership, ports and 
market data. The instant filing replaces the membership fees set 
forth in SR-MRX-2022-04.
    \4\ See also Securities Exchange Act Release No. 93927 (January 
7, 2022), 87 FR 2191 (January 13, 2022) (SR-MEMX-2021-19) 
(introduction of membership fees by MEMX).
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    This proposal reflects MRX's assessment that it has gained 
sufficient market share to compete effectively against the other 15 
options exchanges without waiving fees for membership. These types of 
fees are assessed by options exchanges that compete with MRX in the 
sale of exchange services--indeed, MRX is the only options exchange 
(out of the 16 current options exchanges) not assessing membership fees 
today. New exchanges commonly waive membership fees to attract market 
participants, facilitating their entry into the market and, once there 
is sufficient depth and breadth of liquidity, ``graduate'' to compete 
against established exchanges and charge fees that reflect the value of 
their services.\5\ If MRX is incorrect in this assessment, that error 
will be reflected in MRX's ability to compete with other options 
exchanges.\6\
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    \5\ For example, MIAX Emerald commenced operations as a national 
securities exchange registered on March 1, 2019. See Securities 
Exchange Act Release No. 84891 (December 20, 2018), 83 FR 67421 
(December 28, 2018) (File No. 10-233) (order approving application 
of MIAX Emerald, LLC for registration as a national securities 
exchange). MIAX Emerald filed to adopt its transaction fees and 
certain of its non-transaction fees in its filing SR-EMERALD-2019-
15. See Securities Exchange Act Release No. 85393 (March 21, 2019), 
84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Establish 
the MIAX Emerald Fee Schedule). MIAX Emerald waived its one-time 
application fee and monthly Trading Permit Fees assessable to EEMs 
and Market Makers among other fees within SR-EMERALD-2019-15.
    \6\ Nasdaq recently announced that, beginning in 2022, Nasdaq 
plans to migrate its North American markets to Amazon Web Services 
in a phased approach, starting with Nasdaq MRX, a U.S. options 
market. The proposed fee changes are entirely unrelated to this 
effort.
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    As noted above, MRX Members are not assessed fees for membership 
today. Under the proposed fee change, MRX Members will be required to 
pay a monthly Access Fee, which entitles MRX Members to trade on the 
Exchange based on their membership type. Specifically, MRX proposes to 
assess Electronic Access Members \7\ an Access Fee of $200 per month, 
per membership. The Exchange proposes to assess Market Makers \8\ 
Access Fees depending on whether they are a Primary Market Maker 
(``PMM'') or a Competitive Market Maker (``CMM''). A PMM would be 
assessed an Access Fee of $200 per month, per membership. A CMM would 
be assessed an Access Fee of $100 per month, per membership.\9\ The 
proposed fees are identical to access fees on Nasdaq GEMX, LLC 
(``GEMX'').\10\
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    \7\ The term ``Electronic Access Member'' or ``EAM'' means a 
Member that is approved to exercise trading privileges associated 
with EAM Rights. See General 1, Section 1(a)(6).
    \8\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See Options 1, 
Section 1(a)(21). The term ``Competitive Market Maker'' means a 
Member that is approved to exercise trading privileges associated 
with CMM Rights. See Options 1, Section 1(a)(12). The term ``Primary 
Market Maker'' means a Member that is approved to exercise trading 
privileges associated with PMM Rights. See Options 1, Section 
1(a)(35).
    \9\ In the case where a single Member has multiple MRX 
memberships, the monthly access fee is charged for each membership. 
For example, if a single member firm is both an EAM and a CMM, or 
owns multiple CMM memberships, the firm is subject to the access fee 
for each of those memberships.
    \10\ See GEMX Options 7, Section 6.A. (Access Fees).
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    In order to receive market making appointments to quote in any 
options class, CMMs will also be assessed a CMM Trading Right Fee 
identical to GEMX.\11\ CMM trading rights entitle a

[[Page 42768]]

CMM to enter quotes in options symbols that comprise a certain 
percentage of industry volume. On a quarterly basis, the Exchange 
assigns points to each options class equal to its percentage of overall 
industry volume (not including exclusively traded index options), 
rounded down to the nearest one hundredth of a percentage with a 
maximum of 15 points. A new listing is assigned a point value of zero 
for the remainder of the quarter in which it was listed. CMMs may seek 
appointments to options classes that total 20 points for the first CMM 
Right it holds, and 10 points for the second and each subsequent CMM 
Right it holds.\12\ In order to encourage CMMs to quote on the 
Exchange, MRX launched CMM trading rights without any fees, allowing 
CMMs to freely quote in all options classes.
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    \11\ See GEMX Options 7, Section 6.B. (CMM Trading Rights Fees).
    \12\ A CMM may request changes to its appointments at any time 
upon advance notification to the Exchange in a form and manner 
prescribed by the Exchange. See MRX Options 2, Section 3(c)(3).
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    The Exchange is now proposing to adopt a monthly CMM Trading Rights 
Fee. Under the proposed fee structure, CMMs will be assessed a Trading 
Rights Fee of $850 per month for the first trading right, which will 
entitle the CMM to quote in 20 percent of industry volume.\13\ Each 
additional CMM Right will cost $500 per month, and will entitle the CMM 
to quote an additional 10 percent of volume. Similar to GEMX's trading 
rights fee,\14\ a new CMM would pay $850 for the first trading right 
and all CMMs would thereafter pay $500 for each additional trading 
right. The Exchange is proposing this pricing model because each 
subsequent CMM Right costs less than the first trading right. All CMMs 
have the opportunity to purchase additional CMM Rights beyond the 
initial trading right in order to quote in additional options series. 
The Exchange notes that it is not proposing trading right fees for 
PMMs, as the Exchange wishes to encourage Members to act as PMMs, which 
will benefit the market through, for example, more robust quoting 
requirements. PMMs have additional obligations on MRX as compared to 
CMMs.\15\ The Exchange is proposing only to charge the $200 access fee 
to EAMs, and no trading rights fee, as the technical, regulatory, and 
administrative services associated with an EAM's use of the Exchange 
are not as comprehensive as those associated with Market Makers' 
use.\16\
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    \13\ These trading rights are referred to as CMM Rights. See MRX 
Options 2, Section 3.
    \14\ See GEMX Options 7, Section 6.B.
    \15\ PMMs are required to provide two-sided quotations in 90% of 
cumulative number of seconds, or such higher percentage as the 
Exchange may announce in advance. In contrast, a CMM is not required 
to enter quotations in the options classes to which it is appointed; 
however, if a CMM initiates quoting in an options class, the CMM is 
required to provide two-sided quotations in 60% of the cumulative 
number of seconds, or such higher percentage as the Exchange may 
announce in advance. See Options 2, Section 5(e)(2). Additionally, 
PMMs are required to submit a Valid Width Quote to open their 
assigned options series. See Options 3, Section 8(c)(1) and 8(c)(3).
    \16\ The Exchange notes that all MRX Members may submit orders; 
however, only Market Makers may submit quotes. The Exchange surveils 
Market Makers quotes in addition to any orders transacted on MRX and 
conducts surveillance on Market Maker quotes to ensure these 
participants have met their quoting and other market making 
obligations. The regulatory oversight for Market Makers is in 
addition to the regulatory oversight which is administered for all 
EAMs.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\17\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\18\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \17\ See 15 U.S.C. 78f(b).
    \18\ See 15 U.S.C. 78f(b)(4) and (5).
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    The proposed changes to the Pricing Schedule are reasonable in 
several respects. As a threshold matter, the Exchange is subject to 
significant competitive forces in the market for order flow, which 
constrains its pricing determinations. The fact that the market for 
order flow is competitive has long been recognized by the courts. In 
NetCoalition v. Securities and Exchange Commission, the D.C. Circuit 
stated, ``[n]o one disputes that competition for order flow is 
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market 
system, buyers and sellers of securities, and the broker-dealers that 
act as their order-routing agents, have a wide range of choices of 
where to route orders for execution'; [and] `no exchange can afford to 
take its market share percentages for granted' because `no exchange 
possesses a monopoly, regulatory or otherwise, in the execution of 
order flow from broker dealers' . . . .'' \19\
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    \19\ See NetCoalition, 615 F.3d at 539 (D.C. Cir. 2010) (quoting 
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 
74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-21)).
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    The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention to determine 
prices, products, and services in the securities markets. In Regulation 
NMS, while adopting a series of steps to improve the current market 
model, 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.'' \20\
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    \20\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Congress directed the Commission to ``rely on `competition, 
whenever possible, in meeting its regulatory responsibilities for 
overseeing the SROs and the national market system.'' \21\ As a result, 
the Commission has historically relied on competitive forces to 
determine whether a fee proposal is equitable, fair, reasonable, and 
not unreasonably or unfairly discriminatory. ``If competitive forces 
are operative, the self-interest of the exchanges themselves will work 
powerfully to constrain unreasonable or unfair behavior.'' \22\ 
Accordingly, ``the existence of significant competition provides a 
substantial basis for finding that the terms of an exchange's fee 
proposal are equitable, fair, reasonable, and not unreasonably or 
unfairly discriminatory.'' \23\ In its 2019 guidance on fee proposals, 
Commission staff indicated that they would look at factors beyond the 
competitive environment, such as cost, only if a ``proposal lacks 
persuasive evidence that the proposed fee is constrained by significant 
competitive forces.'' \24\
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    \21\ See NetCoalition, 615 F.3d at 534-35; see also H.R. Rep. 
No. 94-229 at 92 (1975) (``[I]t is the intent of the conferees that 
the national market system evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed.'').
    \22\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74,770 (December 9, 2008) (SR-NYSEArca-2006-21).
    \23\ Id.
    \24\ See U.S. Securities and Exchange Commission, ``Staff 
Guidance on SRO Rule filings Relating to Fees'' (May 21, 2019), 
available at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees.
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History of MRX Operations
    Over the years, MRX has amended its transactional pricing to remain 
competitive and attract order flow to the Exchange.\25\
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    \25\ See e.g. Securities Exchange Act Release Nos. 77292 (March 
4, 2016), 81 FR 12770 (March 10, 2016) (SR-ISEMercury-2016-02) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Establish the Schedule of Fees); 77409 (March 21, 2016), 
81 FR 16240 (March 25, 2016) (SR-ISEMercury-2016-05) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
the Schedule of Fees); 81 FR 16238 (March 21, 2016), 81 FR 16238 
(March 25, 2016) (SR-ISEMercury-2016-06) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees); 77841 (May 16, 2016), 81 FR 31986 (SR-ISEMercury-
2016-11) (Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend the Schedule of Fees); 82537 (January 19, 
2018), 83 FR 3784 (January 26, 2018) (SR-MRX-2018-01) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
the Schedule of Fees To Introduce a New Pricing Model); 82990 (April 
4, 2018), 83 FR 15434 (April 10, 2018) (SR-MRX-2018-10) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Chapter IV of the Exchange's Schedule of Fees); 28677 (June 14, 
2018), 83 FR 28677 (June 20, 2018) (SR-MRX-2018-19) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To 
Increase Certain Route-Out Fees Set Forth in Section II.A of the 
Schedule of Fees); 84113 (September 13, 2018), 83 FR 47386 
(September 19, 2018) (SR-MRX-2018-27) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Relocate the 
Exchange's Schedule of Fees); 85143 (February 14, 2019), 84 FR 5508 
(February 21, 2019) (SR-MRX-2019-02) (Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change To Amend the Pricing 
Schedule at Options 7, Section 3); 85313 (March 14, 2019), 84 FR 
10357 (March 20, 2019) (SR-MRX-2019-05) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change Relating to PIM 
Fees and Rebates); 86326 (July 8, 2019), 84 FR 33300 (July 12, 2019) 
(SR-MRX-2019-14) (Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Adopt Complex Order Pricing); 88022 (January 
23, 2020), 85 FR 5263 (January 29, 2020) (SR-MRX-2020-02) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
MRX Pricing Schedule); 89046 (June 11, 2020), 85 FR 36633 (June 17, 
2020) (SR-MRX-2020-11) (Notice of Filing and Immediate Effectiveness 
of Proposed Rule Change To Amend Its Pricing Schedule at Options 7); 
89320 (July 15, 2020), 85 FR 44135 (July 21, 2020) (SR-MRX-2020-14) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend Its Pricing Schedule at Options 7, Section 5, Other 
Options Fees and Rebates, in Connection With the Pricing for Orders 
Entered Into the Exchanges Price Improvement Mechanism); 90503 
(November 24, 2020), 85 FR 77317 (December 1, 2020) (SR-MRX-2020-18) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend Its Pricing Schedule at Options 7 for Orders Entered 
Into the Exchange's Price Improvement Mechanism); 90434 (November 
16, 2020), 85 FR 74473 (November 20, 2020) (SR-MRX-2020-19) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To the 
Exchange's Pricing Schedule at Options 7 To Amend Taker Fees for 
Regular Orders); 90455 (November 18, 2020), 85 FR 75064 (November 
24, 2020) (SR-MRX-2020-21) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change To Amend the Pricing 
Schedule); and 91687 (April 27, 2021), 86 FR 23478 (May 3, 2021) 
(SR-MRX-2021-04) (Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Amend the Exchange's Pricing Schedule at 
Options 7). Note that ISE Mercury is an earlier name for MRX.

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[[Page 42769]]

    In June 2019, MRX commenced offering complex orders.\26\ With the 
addition of complex order functionality, MRX offered Members certain 
order types, an opening process, auction capabilities, and other 
trading functionality that was nearly identical to functionality 
available on ISE.\27\ By way of comparison, ISE, unlike MRX, assessed 
membership fees in 2019 \28\ while offering the same suite of 
functionality as MRX, with a limited exception.\29\
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    \26\ See Securities Exchange Act Release No. 86326 (July 8, 
2019), 84 FR 33300 (July 12, 2019) (SR-MRX-2019-14) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to 
Adopt Complex Order Pricing).
    \27\ One distinction is that ISE offered its Members access to 
Nasdaq Precise in 2019 and since that time. MRX has never offered 
Precise. ``Nasdaq Precise'' or ``Precise'' is a front-end interface 
that allows EAMs and their Sponsored Customers to send orders to the 
Exchange and perform other related functions. Features include the 
following: (1) order and execution management: enter, modify, and 
cancel orders on the Exchange, and manage executions (e.g., parent/
child orders, inactive orders, and post-trade allocations); (2) 
market data: access to real-time market data (e.g., NBBO and 
Exchange BBO); (3) risk management: set customizable risk parameters 
(e.g., kill switch); and (4) book keeping and reporting: 
comprehensive audit trail of orders and trades (e.g., order history 
and done away trade reports). See ISE Supplementary Material .03(d) 
of Options 3, Section 7. Precise is also available on GEMX.
    \28\ In 2019, ISE assessed the following Access Fees: $500 per 
month, per membership to an Electronic Access Member, $5,000 per 
month, per membership to a Primary Market Maker and $2,500 per 
month, per membership to a Competitive Market Maker. ISE does not 
assess Trading Rights Fees to Competitive Market Makers. See 
Securities Exchange Act Release No. 82446 (January 5, 2018), 83 FR 
1446 (January 11, 2018) (SR-ISE-2017-112) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend Certain 
Non-Transaction Fees in the Exchange's Schedule of Fees). Of note, 
ISE assessed Access Fees prior to 2019 as well.
    \29\ Unlike ISE, MRX does not offer Precise. See note 27, supra.
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Membership Is Subject to Significant Substitution-Based Competitive 
Forces
    An exchange can show that a product is ``subject to significant 
substitution-based competitive forces'' by introducing evidence that 
customers can substitute the product for products offered by other 
exchanges.
    Chart 1 below shows the January 2022 market share for multiply-
listed options by exchange. Of the 16 operating options exchanges, none 
currently has more than a 13.1% market share, and MRX has the smallest 
market share at 1.8%. Customers widely distribute their transactions 
across exchanges according to their business needs and the ability of 
each exchange to meet those needs through technology, liquidity and 
functionality. Average market share for the 16 options exchanges is 
6.26 percent, with the median at 5.8, and a range between 1.8 and 13.1 
percent.

[[Page 42770]]

[GRAPHIC] [TIFF OMITTED] TN18JY22.007

    Market share is the percentage of volume on a particular exchange 
relative to the total volume across all exchanges, and indicates the 
amount of order flow directed to that exchange. High levels of market 
share enhance the value of trading and membership.
    Chart 2 below compares the number of firms purchasing memberships 
from MRX to the number of firms purchasing such services from the four 
MRX-affiliated options exchanges, GEMX, ISE, The Nasdaq Stock Market 
LLC (``NOM'') and Nasdaq PHLX, LLC (``Phlx'').
[GRAPHIC] [TIFF OMITTED] TN18JY22.008

    Chart 2 also shows that MRX has the smallest number of Members 
relative to its GEMX, ISE, NOM and Phlx affiliates, with approximately 
40 members. This demonstrates that customers can and will choose where 
to become members, need not become members of all exchanges, and do not 
need to become Members of MRX and instead may utilize a third 
party.\30\
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    \30\ Of course, that third party must itself become a Member of 
MRX, so at least some market participants must become Members of MRX 
for any trading to take place at all. Nevertheless, because some 
firms would be able to exercise the option of not becoming Members, 
excessive membership fees would cause the Exchange to lose members.
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    Further, BOX Exchange LLC (``BOX'') recently filed to establish a 
new monthly Participant Fee.\31\ In that rule change BOX noted that it 
responded to Market Maker feedback to the proposed fees in January 2022 
and due to this valuable feedback, BOX lowered the proposed fees.\32\ 
BOX stated that, ``. . . this reduction demonstrates that competitive 
constraints do not depend on showing that a Market Maker walked away, 
or threatened to walk away, from

[[Page 42771]]

BOX due to a pricing change. Rather, the absence of negative feedback 
(in and of itself, and particularly when coupled with valuable feedback 
suggesting modifications or alternatives) is indicative that the 
proposed fees are, in fact, reasonable and consistent with BOX being 
subject to competitive forces in setting fees.'' \33\
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    \31\ See Securities and Exchange Release No. 94894 (May 11, 
2022), 87 FR 29987 (May 17, 2022) (SR-BOX-2022-17) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the 
Fee Schedule on the BOX Options Market LLC Facility To Adopt 
Electronic Market Maker Trading Permit Fees).
    \32\ Id at 29990.
    \33\ Id at 29990.
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    MRX filed its membership fees on May 2, 2022 and has not received a 
comment with respect to the proposed membership fee changes. MRX 
Members may elect to cancel their membership on MRX. No MRX Member is 
required by rule, regulation, or competitive forces to be a Member on 
the Exchange.
    Further, BOX noted in its rule change that one Market Maker 
modified their access to BOX since the implementation of the proposed 
fee change.\34\ After the Market Maker reviewed the notice the Exchange 
issued describing the proposed fees, the Market Maker informed the 
Exchange that it would terminate its Market Maker status on BOX as it 
had no intention to provision itself for access.\35\ BOX argued in its 
rule change that,
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    \34\ BOX noted that this Market Maker was approved as an 
electronic Market Maker in 2017 but never underwent the process of 
provisioning itself to access the BOX systems. Id at 29991.
    \35\ Id at 29991.

    The Exchange believes this further demonstrates competition 
within the market for exchange access, which as a result constrains 
fees the Exchange may charge for that access. The Exchange believes 
the fact that this Participant chose to terminate its Market Maker 
status on BOX but retained its status as an Order Flow Provider on 
BOX demonstrates that market participants can and do alter their 
membership statuses at exchanges if the market participant deems any 
fees as too high for its relevant marketplace. In BOX's case, the 
Participant determined that the Exchange's proposed fees for 
electronic Market Makers did not make business sense for itself, 
however it retained its membership as a BOX Participant in a 
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different capacity.

    Yet another example of an exchange being subject to significant 
competitive forces with respect to membership fees was noted in a 
recent NYSE Arca, Inc. (``NYSE Arca'') rule change.\36\ Recently, NYSE 
Arca filed a rule change to modify the number of option issues a Market 
Maker may quote per OTP and modify the fees applicable to Market Maker 
OTPs.\37\ In that rule change, NYSE Arca stated that,
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    \36\ See Securities Exchange Act Release No. 95142 (June 23, 
2022), 87 FR 38786 (June 29, 2022) (SR-NYSEArca-2022-36) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
the NYSE Arca Options Fee Schedule).
    \37\ Id.

    The Exchange has also observed that another options exchange 
group experienced decreases in market share following its proposed 
modifications of its access fees (including Market Maker trading 
permit fees), suggesting that market participants (including Market 
Makers) are sensitive to changes in exchanges' access fees and may 
respond by shifting their order flow elsewhere if they deem the fees 
to be unreasonable or excessive.\38\
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    \38\ Id at 38790.

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Moreover, NYSE Arca noted that it observed that,

    . . .exchanges in the MIAX Group introduced multiple access fee 
increases in July and August 2021. In June 2021, prior to these fee 
increases, the aggregate MIAX Group share of multi-list options 
volume was 15.45%. In the months after the introduction of higher 
access fees, MIAX Group's market share declined: by September 2021, 
the aggregate MIAX Group market share was 14.50%, and as of March 
2022, market share was 13.75%.\39\
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    \39\ Id at note 24.

    Similar to MIAX, Chart 3 below demonstrates that since the 
inception of its membership, port and market data fees, MRX volumes 
declined.
[GRAPHIC] [TIFF OMITTED] TN18JY22.009


[[Page 42772]]


    Specifically, since May 2, 2022, MRX saw a larger drop in its 
average daily volume (-11%) than all other options exchanges (-5%) 
since MRX's fees were added on May 2, 2022 when compared to their 
respective year-to-date volumes through April 29, 2022. This pattern 
indicates that the adoption of MRX membership, port, and market data 
fees impacted MRX's volume negatively.
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    \40\ The chart displays the log volume for MRX and all other 
options exchanges combined. It is ``normalized'' by subtracting each 
day's value from the first trading day of the year (January 3, 
2022). The straight lines represent the average normalized log 
volumes from January 3, 2022 through April 29, 2022 and from May 2, 
2022 through June 23, 2022, respectively.
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    In summary, MRX membership fees are subject to significant 
substitution-based competitive forces due to its consistently low 
percentage of market share, the relatively small number of purchasers 
for each product, and the purchasers that are reviewing their 
subscriptions. Implementation of the proposed fees is therefore 
consistent with the Act.
Fees for Membership
    The proposed membership fees described below are in line with those 
of other markets. Setting a fee above competitors is likely to drive 
away customers, so the most efficient price-setting strategy is to set 
prices at the same level as other firms.
    The Exchange's proposal to adopt membership fees is reasonable, 
equitable and not unfairly discriminatory. As a self-regulatory 
organization, MRX's membership department reviews applicants to ensure 
that each application complies with the rules specified within MRX 
General 3 \41\ as well as other requirements for membership.\42\ 
Applicants must meet the Exchange's qualification criteria prior to 
approval. The membership review includes, but is not limited to, the 
registration and qualification of associated persons, financial health, 
the validity of the required clearing relationship, and the history of 
disciplinary matters. Approved Members would be required to comply with 
MRX's By-Laws and Rules and would be subject to regulation by MRX. The 
proposed membership fees are identical to membership fees on GEMX,\43\ 
and are lower than similar fees assessed on other options markets.\44\
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    \41\ MRX General 3, Membership and Access, incorporates by 
reference Nasdaq General 3.
    \42\ The Exchange's Membership Department must ensure, among 
other things, that an applicant is not statutorily disqualified.
    \43\ See GEMX Options 7, Section 6A (Access Fees).
    \44\ See Cboe's Fees Schedule. Cboe assesses permit fees as 
follows: Market-Maker Electronic Access Permit of $5,000 per month; 
Electronic Access Permits of $3,000 per month; and Clearing TPH 
Permit of $2,000 per month. See also Miami International Securities 
Exchange, LLC's (``MIAX'') Fee Schedule. MIAX assesses an Electronic 
Exchange Member Fee of $1,500 per month.
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    The Exchange believes that there are many factors that may cause a 
market participant to decide to become a member of a particular 
exchange. Among various factors, the Exchange believes market 
participants consider: (i) an exchange's available liquidity in options 
series; (ii) trading functionality offered on a particular market; 
(iii) product offerings; (iv) customer service on an exchange; and (v) 
transactional pricing. The Exchange believes that the decision to 
become a member of an exchange, particularly as a registered market 
maker, is a complex one that is not solely based on non-transactional 
costs assessed by an exchange. Market participants weigh the tradeoff 
between where they choose to deploy liquidity versus where trading 
opportunities exist. Of course, the cost of membership may factor into 
a decision to become a member of a certain exchange, but the Exchange 
believes it is by no means the only factor when comparing exchanges.
Market Makers
    Market makers play an important role on options exchanges as they 
provide liquidity. In options markets, registered market makers are 
assigned options series \45\ and are required to quote in those options 
series for a specified time period during the day.\46\ Typically, a 
lead or primary market maker \47\ will be required to quote for a 
longer period of time during the day as compared to other market makers 
registered on an exchange.\48\ Additionally, market makers are 
typically required to quote within a certain width on options 
markets.\49\ Greater liquidity on options markets benefits all market 
participants by providing more trading opportunities and attracting 
greater participation by market makers. An increase in the activity of 
market makers in turn facilitates tighter spreads. Market participants 
are attracted to options markets that have ample liquidity and tighter 
spreads in options series.
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    \45\ See Phlx, ISE, GEMX, MRX, Nasdaq BX, Inc. (``BX'') and NOM 
Options 2, Section 3; Cboe Exchange, Inc. (``Cboe'') Rule 5.50; BOX 
Exchange LLC (``BOX'') Rule 8030; MIAX Rule 602; and NYSE Arca, Inc. 
(``NYSE Arca'') Rule 6.35-O.
    \46\ See ISE, GEMX and MRX, Phlx, BX and NOM Options 2, Section 
5; Cboe Rule 5.52; BOX Rule 8050; MIAX Rule 604; and NYSE Arca Rule 
6.37A-O.
    \47\ Options markets refer to the primary market maker on an 
exchange in several ways.
    \48\ See BX Options 2, Section 4; ISE, GEMX and MRX, and Phlx 
Options 2, Section 5; BOX Rule 8055; MIAX Rule 604; and NYSE Arca 
Rule 6.37A-O.
    \49\ See BX Options 2, Section 4; ISE, GEMX and MRX, Phlx and 
NOM Options 2, Section 5; and Cboe Rule 5.52; BOX Rule 8040.
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Trading Functionality
    An exchange's trading functionality attracts market participants 
who may elect, for example, to submit an order into a price improving 
auction,\50\ enter a complex order,\51\ or utilize a particular order 
type.\52\ Different options exchanges offer different trading 
functionality to their members. For example, with respect to priority 
and allocation of an order book, some options exchanges have price/time 
allocation,\53\ some have a size pro-rata allocation,\54\ while other 
exchanges offer both allocation models.\55\ The allocation methodology 
on a particular options exchange's order book may attract certain 
market participants. Also, the manner in which some options markets 
structure their solicitation auction,\56\ or opening process,\57\ may 
be attractive to certain market participants. Finally, some exchanges 
have trading floors \58\ which may accommodate trading for certain 
market participants or trading firms.\59\
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    \50\ See ISE, GEMX, MRX, Phlx and BX Options 3, Section 13; MIAX 
Rule 515A; Cboe Rule 5.37; and BOX Rules 7150 and 7245.
    \51\ See Phlx and ISE Options 3, Section 14; MIAX Rule 518; Cboe 
Rule 5.33; BOX Rule 7240; and NYSE Arca Rule 6.91-O.
    \52\ See ISE, GEMX, MRX, Phlx, BX and NOM Options 3, Section 7; 
MIAX Rule 615; Cboe Rule 5.6; BOX Rule 7110; and NYSE Arca Rule 
6.62-O.
    \53\ See Cboe Rule 5.85; BOX Rule 7130; and NYSE Arca Rule 6.76-
O.
    \54\ See Phlx, ISE, GEMX and MRX Options 3, Section 10; and BOX 
Rule 7135.
    \55\ See BX Options 3, Section 10. While BX's rule permits both 
price/time and size pro-rata allocation, all symbols on BX are 
currently designated as Price/Time. See also BOX Rules 7130 and 
7135. MIAX's rule permits both Price-Time and Pro-Rata allocation. 
See also MIAX Rule 514.
    \56\ See ISE, GEMX and MRX Options 3, Section 11; NYSE American 
Rules 971.1NY and 971.2NY; and Cboe Rule 5.39.
    \57\ See ISE, GEMX, MRX, Phlx, BX and NOM Options 3, Section 8; 
Cboe Rule 5.31, MIAX Rule 503, BOX Rule 7070, and NYSE Arca Rule 
6.64-O.
    \58\ Today, Phlx, Cboe, BOX, NYSE Arca, and NYSE American LLC 
have a trading floor. Trading floors require an on-floor presence to 
execute options transactions.
    \59\ There are certain features of open outcry trading that are 
difficult to replicate in an electronic trading environment. The 
Exchange has observed, and understands from various market 
participants, that they have had difficulty executing certain 
orders, such as larger orders and high-risk and complicated 
strategies, in an all-electronic trading configuration without the 
element of human interaction to negotiate pricing for these orders.
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Product Offerings
    Introducing new and innovative products to the marketplace designed 
to meet customer demands may attract market participants to a 
particular

[[Page 42773]]

options venue. New products in the options industry may allow market 
participants greater trading and hedging opportunities, as well as new 
avenues to manage risks. The listing of new options products enhances 
competition among market participants by providing investors with 
additional investment vehicles, as well as competitive alternatives, to 
existing investment products. An exchange's proprietary product 
offering may attract order flow to a particular exchange to trade a 
particular options product.\60\
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    \60\ See e.g., options on the Nasdaq-100 Index[supreg] available 
on ISE, GEMX and Phlx and Cboe's Market Volatility Index[supreg]. 
Currently, MRX does not list any proprietary products.
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Transaction Pricing
    The pricing available on a particular exchange may impact a market 
participant's decision to submit order flow to a particular options 
venue. The options industry is competitive. Clear substitutes to the 
Exchange exist in the market for options security transaction services; 
the Exchange is only one of sixteen options exchanges to which market 
participants may direct their order flow. Within this environment, 
market participants can freely, and often do, shift their order flow 
among the Exchange and competing venues in response to changes in their 
respective pricing schedules.
    With respect to the CMM Trading Rights Fee, the proposed fees 
compare favorably with those of other options exchanges. For example, a 
market maker on MIAX is assessed a $3,000 one-time fee and then a 
tiered monthly fee from $7,000 for up to 10 classes to $22,000 for over 
100 classes.\61\ By comparison, under the proposed fee structure, a CMM 
can be granted access on the Exchange for as little as $950 per month 
(i.e., a $100 access fee and an $850 trading right), and could quote in 
all options classes on the Exchange by paying the access fee and 
obtaining nine CMM trading rights for a total of $4,950 per month. The 
Exchange notes that its tiered model for CMM trading rights is 
consistent with the pricing practices of other exchanges, such as NYSE 
Arca, which charges $6,000 per month for the first market maker trading 
permit, down to $1,000 per month for the fifth and additional trading 
permits, with various tiers in-between. Like other options exchanges, 
the Exchange is proposing a tiered pricing model because it may 
encourage CMM firms to purchase additional trading rights and quote 
more issues because subsequent trading rights are priced lower than the 
initial trading right.
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    \61\ See Miami International Securities Exchange, LLC Fee 
Schedule at 20 and 21: https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Options_Fee_Schedule_03012022.pdf.
---------------------------------------------------------------------------

    The Exchange does not believe that it is unfairly discriminatory to 
assess different fees for PMMs, CMMs, and EAMs. For PMMs on MRX, the 
fees required to access the Exchange are substantially lower than those 
of competing exchanges. For example, a PMM could quote on the Exchange 
for only $200 (i.e., the access fee), compared with the minimum $6,000 
per month trading permit fee charged by NYSE Arca. The Exchange notes 
that it is not proposing trading right fees for PMMs, as the Exchange 
wishes to encourage Members to act as PMMs, which will benefit the 
market through, for example, more robust quoting requirements. 
Similarly, the Exchange is proposing only to charge the $200 access fee 
to EAMs as the technical, regulatory, and administrative services 
associated with an EAM's use of the Exchange are not as comprehensive 
as those associated with Market Makers. The CMM Trading Right Fee is 
identical to GEMX.\62\
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    \62\ See GEMX Options 7, Section 6.B. (CMM Trading Rights Fees).
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    Membership fees are charged by nearly all exchanges, and all 
established exchanges with sufficient order flow. In 2022, MEMX LLC 
(``MEMX'') established a monthly membership fee of $200.\63\ MEMX 
reasoned in that rule change that there is value in becoming a member 
of the exchange. MEMX stated that it believed that its proposed 
membership fee ``is not unfairly discriminatory because no broker-
dealer is required to become a member of the Exchange.'' Moreover, 
``neither the trade-through requirements under Regulation NMS nor 
broker-dealers' best execution obligations require a broker-dealer to 
become a member of every exchange.'' In this respect, MEMX is correct; 
a monthly membership fee is reasonable, equitably allocated and not 
unfairly discriminatory. Market participants may choose to become a 
member of one or more options exchanges based on the market 
participant's business model. A very small number of market 
participants choose to become a member of all sixteen options 
exchanges. It is not a requirement for market participants to become 
members of all options exchanges, in fact, certain market participants 
conduct an options business as a member of only one options market.
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    \63\ See Securities Exchange Act Release No. 93927 (January 7, 
2022), 87 FR 2191 (January 13, 2022) (SR-MEMX-2021-19). The Monthly 
Membership Fee is assessed to each active Member at the close of 
business on the first day of each month.
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    Most firms that actively trade on options markets are not currently 
Members of MRX. Using options markets that Nasdaq operates as points of 
comparison, less than a third of the firms that are members of at least 
one of the options markets that Nasdaq operates are also Members of MRX 
(approximately 29%). The Exchange notes that no firm is a Member of MRX 
only. Few, if any, firms have become Members at MRX, notwithstanding 
the fact that MRX membership is currently free, because MRX currently 
has less liquidity than other options markets. As explained above, MRX 
has the smallest market share of the 16 options exchanges, representing 
only approximately 1.8% of the market, and, for certain market 
participants, the current levels of liquidity may be insufficient to 
justify the costs associated with becoming a Member and connecting to 
the Exchange, notwithstanding the fact that membership is free.
    The decision to become a member of an exchange, particularly for 
registered market makers, is complex, and not solely based on the non-
transactional costs assessed by an exchange. As noted herein, specific 
factors include, but are not limited to: (i) an exchange's available 
liquidity in options series; (ii) trading functionality offered on a 
particular market; (iii) product offerings; (iv) customer service on an 
exchange; and (v) transactional pricing. Becoming a member of an 
exchange does not ``lock'' a potential member into a market or diminish 
the overall competition for exchange services. The decision to become a 
member of an exchange is made at the beginning of the relationship, and 
is no less subject to competition than trading fees.
    In lieu of becoming a member at each options exchange, a market 
participant may join one exchange and elect to have their orders routed 
in the event that a better price is available on an away market. 
Nothing in the Order Protection Rule requires a firm to become a Member 
at MRX.\64\ If MRX is not at the NBBO, MRX will route an order to any 
away market that is at the NBBO to prevent a trade-through and also 
ensure that the order was executed at a superior price.\65\
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    \64\ See Options Order Protection and Locked/Crossed Market Plan 
(August 14, 2009), available at https://www.theocc.com/getmedia/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/options_order_protection_plan.pdf.
    \65\ MRX Members may elect to not route their orders by marking 
an order as ``do-not-route.'' In this case, the order would not be 
routed. See Options 3, Section 7(m).

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[[Page 42774]]

    In lieu of joining an exchange, a third-party may be utilized to 
execute an order on an exchange. For example, a third-party broker-
dealer Member of MRX may be utilized by a retail investor to submit 
orders into an Exchange. An institutional investor may utilize a 
broker-dealer, a service bureau,\66\ or request sponsored access \67\ 
through a member of an exchange in order to submit a trade directly to 
an options exchange.\68\ A market participant may either pay the costs 
associated with becoming a member of an exchange or, in the 
alternative, a market participant may elect to pay commissions to a 
broker-dealer, pay fees to a service bureau to submit trades, or pay a 
member to sponsor the market participant in order to submit trades 
directly to an exchange. Market participants may elect any of the above 
models and weigh the varying costs when determining how to submit 
trades to an exchange. Depending on the number of orders to be 
submitted, technology, ability to control submission of orders, and 
projected revenues, a market participant may determine one model is 
more cost efficient as compared to the alternatives.
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    \66\ Service bureaus provide access to market participants to 
submit and execute orders on an exchange. On MRX, a Service Bureau 
may be a Member. Some MRX Members utilize a Service Bureau for 
connectivity and that Service Bureau may not be a Member. Some 
market participants utilize a Service Bureau who is a Member to 
submit orders. As noted herein only MRX Members may submit orders or 
quotes through ports.
    \67\ Sponsored Access is an arrangement whereby a member permits 
its customers to enter orders into an exchange's system that bypass 
the member's trading system and are routed directly to the Exchange, 
including routing through a service bureau or other third-party 
technology provider.
    \68\ This may include utilizing a Floor Broker and submitting 
the trade to one of the five options trading floors.
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    After 6 years, MRX proposes to commence assessing membership fees, 
just as all other options exchanges.\69\ The introduction of these fees 
will not impede a Member's access to MRX, but rather will allow MRX to 
continue to compete and grow its marketplace so that it may continue to 
offer a robust trading architecture, a quality opening process, an 
array of simple and complex order types and auctions, and competitive 
transaction pricing. If MRX is incorrect in its assessment of the value 
of its services, that assessment will be reflected in MRX's ability to 
compete with other options exchanges.
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    \69\ Today, MRX is the only options exchange that does not 
assess membership fees.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
    The Exchange believes its proposal remains competitive with other 
options markets, and will offer market participants with another choice 
of venue to transact options. The Exchange notes that it operates in a 
highly competitive market in which market participants can readily 
favor competing venues if they deem fee levels at a particular venue to 
be excessive, or rebate opportunities available at other venues to be 
more favorable. Because competitors are free to modify their own fees 
in response, and because market participants may readily adjust their 
order routing practices, the Exchange believes that the degree to which 
fee changes in this market may impose any burden on competition is 
extremely limited.
    The proposed membership fees are identical to membership fees 
assessed by GEMX.\70\ The proposed fees are designed to reflect the 
benefits of the technical, regulatory, and administrative services 
provided to a Member by the Exchange, and the fees remain competitive 
with similar fees offered on other options exchanges. The Exchange does 
not believe that assessing different fees for PMMs, CMMs, and EAMs 
creates an undue burden on competition.
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    \70\ See GEMX Options 7, Section 6.A. (Access Fees) and Section 
6.B. (CMM Trading Rights Fees).
---------------------------------------------------------------------------

    With respect to the CMM Trading Rights Fee, the proposed fees 
compare favorably with those of other options exchanges.\71\ Like other 
options exchanges, the Exchange is proposing a tiered pricing model 
because it may encourage CMM firms to purchase additional trading 
rights and quote more issues because subsequent trading rights are 
priced lower than the initial trading right. The Exchange notes that it 
is not proposing trading right fees for PMMs as the Exchange wishes to 
encourage Members to act as PMMs, which will benefit the market 
through, for example, more robust quoting. Additionally, as noted 
herein, PMMs have higher quoting obligations as compared to CMMs.\72\
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    \71\ See NYSE Arca Fees and Charges, General Options and Trading 
Permit (OTP) Fees (comparing CMM Trading Rights Fees to the Arca 
Market Maker fees).
    \72\ See MRX Options 2, Section 5. PMMs, associated with the 
same Member, are collectively required to provide two-sided 
quotations in 90% of the cumulative number of seconds, or such 
higher percentage as the Exchange may announce. CMMs are not 
required to enter quotations in the options classes to which it is 
appointed, however if a CMM initiates quoting in an options class, 
the CMM, associated with the same Member, is collectively required 
to provide two-sided quotations in 60% of the cumulative number of 
seconds, or such higher percentage as the Exchange may announce.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\73\ At any time within 60 days of the 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is: (i) necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) otherwise in 
furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \73\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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 Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MRX-2022-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-MRX-2022-07. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent

[[Page 42775]]

amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-MRX-
2022-07 and should be submitted on or before August 8, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\74\
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    \74\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-15222 Filed 7-15-22; 8:45 am]
BILLING CODE 8011-01-P