[Federal Register Volume 89, Number 45 (Wednesday, March 6, 2024)]
[Notices]
[Pages 16049-16061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04695]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99635; File No. SR-MEMX-2024-06]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Fee Schedule To Adopt Connectivity and Application Session 
Fees for MEMX Options

February 29, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 15, 2024, MEMX LLC (``MEMX'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (the ``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 is filing a proposal to amend the Fee Schedule to: (i) 
apply the Exchange's current Connectivity and Application Session fees 
to MEMX Options Users, and (ii) make an organizational change to its 
existing fee schedule for the Exchange's pre-existing equities market 
(``MEMX Equities''), in order to create a separate fee schedule for 
Connectivity Fees (for both MEMX Equities and MEMX Options). The 
Exchange proposes to implement the changes to the Fee Schedule pursuant 
to this proposal immediately. The text of the proposed rule change is 
provided in Exhibit 5.

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
Background
    The Exchange is filing a proposal to amend the Fee Schedule to: (i) 
apply the Exchange's current Connectivity and Application Session fees 
to MEMX Options Users, and (ii) make an organizational change to its 
existing fee schedule for the Exchange's pre-existing equities market 
(``MEMX Equities''), in order to create a separate fee schedule for 
Connectivity Fees (for both MEMX Equities and MEMX Options). The 
Exchange believes that these changes will provide greater transparency 
to Members about how the Exchange assesses fees, as well as allowing 
Members to more easily validate their bills on a monthly basis. The 
Exchange notes that none of these changes amend any existing fee 
applicable to MEMX Equities. The Exchange is proposing to implement the 
proposal immediately. The Exchange previously filed the proposal on 
October 24, 2023 (SR-MEMX-2023-29) (the ``Initial Proposal''). The 
Exchange withdrew the Initial Proposal and replaced the proposal with 
SR-MEMX-2023-39 (the ``Second Proposal''). The Exchange recently 
withdrew the Second Proposal and is replacing it with the current 
filing (SR-MEMX-2024-06).
    As set forth below, the Exchange believes that its proposal 
provides a great deal of transparency regarding the cost of providing 
connectivity services and anticipated revenue and that the proposal is 
consistent with the Act and associated guidance. The Exchange is re-
filing this proposal promptly following the withdrawal of the Second 
Proposal in order to update the Cost Analysis included in the Second 
Proposal.

[[Page 16050]]

(i) Fees for Connectivity to MEMX Options
    As noted above, the Exchange is proposing to apply the current fees 
it charges to Members and non-Members \3\ for physical connectivity to 
the Exchange and for application sessions (otherwise known as ``logical 
ports'') that a Member utilizes in connection with their participation 
on the Exchange (together with physical connectivity, collectively 
referred to in this proposal as ``connectivity services'', as described 
in greater detail below) to both Users of MEMX Equities and MEMX 
Options.\4\ Specifically, the Exchange will continue to charge $6,000 
per month for a physical connection in the data center where the 
Exchange primarily operates under normal market conditions (``Primary 
Data Center''), and $3,000 per month for a physical connection at the 
geographically diverse data center, which is operated for backup and 
disaster recovery purposes (``Secondary Data Center''). These physical 
connections can be used to access both platforms, accordingly, a firm 
that is a Member of both MEMX Equities and MEMX Options may use a 
single physical connection to access its application sessions at both 
MEMX Equities and MEMX Options. This differs from application sessions 
in that a firm that is a Member of both MEMX Equities and MEMX Options 
would need to purchase separate application sessions for each trading 
platform in order to access each such trading platform. These 
application session fees will continue to be $450 per month for an 
application session used for order entry (``Order Entry Port'') and 
$450 per month for an application session for receipt of drop copies 
(``Drop Copy Port''), to the extent such ports are in the Primary Data 
Center. As is true today for MEMX Equities, the Exchange will not 
charge for Order Entry Ports or Drop Copy Ports in the Secondary Data 
Center. The Exchange's proposal to apply the same fees to Equities and 
Options stems from the same cost analysis it conducted in adopting 
those fees to its Equities Members,\5\ which the Exchange has reviewed 
and updated for 2024 as detailed below. Given that the Exchange has 
only recently launched MEMX Options, however, and the fact that its 
analysis is based on projections across all potential revenue streams, 
the Exchange is committing to conduct a one-year review after these 
fees are applied. The Exchange expects that it may propose to adjust 
fees at that time, to increase fees in the event that revenues fail to 
cover costs, or to decrease fees in the event that revenue materially 
exceeds expectations.
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    \3\ Types of market participants that obtain connectivity 
services from the Exchange but are not Members include service 
bureaus and extranets. Service bureaus offer technology-based 
services to other companies for a fee, including order entry 
services to Members, and thus, may access application sessions on 
behalf of one or more Members. Extranets offer physical connectivity 
services to Members and non-Members.
    \4\ MEMX Options launched on September 27, 2023.
    \5\ See Securities Exchange Act Release No. 59846 (September 27, 
2022), 87 FR 59845 (October 3, 2022) (SR-MEMX-2022-026).
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    In general, the Exchange believes that exchanges, in setting fees 
of all types, should meet very high standards of transparency to 
demonstrate why each new fee or fee increase meets the Exchange Act 
requirements that fees be reasonable, equitably allocated, not unfairly 
discriminatory, and not create an undue burden on competition among 
members and markets. In particular, the Exchange believes that each 
exchange should take extra care to be able to demonstrate that these 
fees are based on its costs and reasonable business needs.
    In proposing to charge fees for connectivity services to MEMX 
Options, the Exchange has sought to be especially diligent in assessing 
those fees in a transparent way against its own aggregate costs of 
providing the related services, and also carefully and transparently 
assessing the impact on Members--both generally and in relation to 
other Members, i.e., to assure the fee will not create a financial 
burden on any participant and will not have an undue impact in 
particular on smaller Members and competition among Members in general. 
The Exchange believes that this level of diligence and transparency is 
called for by the requirements of Section 19(b)(1) under the Act,\6\ 
and Rule 19b-4 thereunder,\7\ with respect to the types of information 
self-regulatory organizations (``SROs'') should provide when filing fee 
changes, and Section 6(b) of the Act,\8\ which requires, among other 
things, that exchange fees be reasonable and equitably allocated,\9\ 
not designed to permit unfair discrimination,\10\ and that they not 
impose a burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.\11\ This rule change proposal 
addresses those requirements, and the analysis and data in each of the 
sections that follow are designed to clearly and comprehensively show 
how they are met.\12\
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    \6\ 15 U.S.C. 78s(b)(1).
    \7\ 17 CFR 240.19b-4.
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78f(b)(8).
    \12\ In 2019, Commission staff published guidance suggesting the 
types of information that SROs may use to demonstrate that their fee 
filings comply with the standards of the Exchange Act (``Fee 
Guidance''). While MEMX understands that the Fee Guidance does not 
create new legal obligations on SROs, the Fee Guidance is consistent 
with MEMX's view about the type and level of transparency that 
exchanges should meet to demonstrate compliance with their existing 
obligations when they seek to charge new fees. See 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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    As detailed below, MEMX calculated its aggregate annual costs for 
providing physical connectivity to both MEMX Equities and MEMX Options 
in 2024 at $14,970,454 and its aggregate annual costs for providing 
application sessions at $7,185,273. In order to cover the aggregate 
costs of providing connectivity to its Options and Equities Users (both 
Members and non-Members) going forward and to make a modest profit, as 
described below, the Exchange is proposing to modify its Fee Schedule, 
pursuant to MEMX Rules 15.1(a) and (c), to charge a fee to Options 
Users, as it currently does to Equities Users, of $6,000 per month for 
each physical connection in the Primary Data Center and of $3,000 per 
month for each physical connection in the Secondary Data Center. The 
Exchange also proposes to modify its Fee Schedule, pursuant to MEMX 
Rules 15.1(a) and (c), to charge a fee to Options Users, as it 
currently does to Equities Users, of $450 per month for each Order 
Entry Port and Drop Copy Port in the Exchange's Primary Data Center, as 
further described below.\13\
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    \13\ As proposed, fees for connectivity services would be 
assessed based on each active connectivity service product at the 
close of business on the first day of each month. If a product is 
cancelled by a Member's submission of a written request or via the 
MEMX User Portal prior to such fee being assessed then the Member 
will not be obligated to pay the applicable product fee. MEMX will 
not return pro-rated fees even if a product is not used for an 
entire month.
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Cost Analysis
Background on Cost Analysis
    In February 2024, MEMX completed an updated study of its aggregate 
projected costs to produce market data and connectivity across both its 
Equities and Options platforms in 2024 (the ``Cost Analysis'').\14\ The 
Cost Analysis required a detailed analysis of MEMX's aggregate baseline 
costs, including a

[[Page 16051]]

determination and allocation of costs for core services provided by the 
Exchange--transaction execution, market data, membership services and 
trading permits, regulatory services, physical connectivity, and 
application sessions (which provide order entry, cancellation and 
modification functionality, risk functionality, ability to receive drop 
copies, and other functionality). MEMX separately divided its costs 
between those costs necessary to deliver each of these core services, 
including infrastructure, software, human resources (i.e., personnel), 
and certain general and administrative expenses (``cost drivers''). 
Next, MEMX adopted an allocation methodology with various principles to 
guide how much of a particular cost should be allocated to each core 
service. For instance, fixed costs that are not driven by client 
activity (e.g., message rates), such as data center costs, were 
allocated more heavily to the provision of physical connectivity (80%), 
with smaller allocations to logical ports (11%), and the remainder to 
the provision of transaction execution, regulatory services, and market 
data services (9%). In contrast, costs that are driven largely by 
client activity (e.g., message rates), were not allocated to physical 
connectivity at all but were allocated primarily to the provision of 
transaction execution and market data services (80%) with a smaller 
allocation to application sessions (20%). The allocation methodology 
was decided through conversations with senior management familiar with 
each area of the Exchange's operations. After adopting this allocation 
methodology, the Exchange then applied an estimated allocation of each 
cost driver to each core service, resulting in the cost allocations 
described below.
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    \14\ The updated Cost Analysis completed in February 2024 is 
based on the same principles applied to the Cost Analysis completed 
in September 2023 that was included in the Initial Proposal but 
contains updated figures now that MEMX Options has been operational 
for several months.
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    By allocating segmented costs to each core service, MEMX was able 
to estimate by core service the potential margin it might earn based on 
different fee models. The Exchange notes that as a non-listing venue it 
has four primary sources of revenue that it can potentially use to fund 
its operations: transaction fees, fees for connectivity services, 
membership and regulatory fees, and market data fees. Accordingly, the 
Exchange must cover its expenses from these four primary sources of 
revenue. The Exchange also notes that as a general matter each of these 
sources of revenue is based on services that are interdependent. For 
instance, the Exchange's system for executing transactions is dependent 
on physical hardware and connectivity; only Members and parties that 
they sponsor to participate directly on the Exchange may submit orders 
to the Exchange; many Members (but not all) consume market data from 
the Exchange in order to trade on the Exchange; and the Exchange 
consumes market data from external sources in order to comply with 
regulatory obligations. Accordingly, given this interdependence, the 
allocation of costs to each service or revenue source required judgment 
of the Exchange and was weighted based on estimates of the Exchange 
that the Exchange believes are reasonable, as set forth below.
    Through the Exchange's extensive Cost Analysis, the Exchange 
analyzed every expense item in the Exchange's general expense ledger to 
determine whether each such expense relates to the provision of 
connectivity services, and, if such expense did so relate, what portion 
(or percentage) of such expense actually supports the provision of 
connectivity services, and thus bears a relationship that is, ``in 
nature and closeness,'' directly related to network connectivity 
services. In turn, the Exchange allocated certain costs more to 
physical connectivity and others to application sessions, while certain 
costs were only allocated to such services at a very low percentage or 
not at all, using consistent allocation methodologies as described 
above. Based on this analysis, MEMX estimates that the cost drivers to 
provide connectivity services in 2024, including both physical 
connections and application sessions, will result in an aggregate 
annual cost of $22,155,727, as further detailed below. The Exchange 
notes that it utilized the same principles to generate the 2021 Cost 
Analysis, applicable to Equities only, and at that time, the estimated 
annual aggregate cost to provide connectivity services was $13,724,580. 
The differences between such estimated costs and the overall analysis 
are primarily based on: (1) the addition of MEMX Options, (ii) 
increased, and in some cases decreased, costs projected by the 
Exchange, (iii) and changes made to reallocate certain costs into 
categories that more closely align the Exchange's audited financial 
statements, as further described below.
Costs Related To Offering Physical Connectivity
    The following chart details the individual line-item costs 
considered by MEMX to be related to offering physical connectivity as 
well as the percentage of the Exchange's overall costs such costs 
represent for such area (e.g., as set forth below, the Exchange 
allocated approximately 18% of its overall Human Resources cost to 
offering physical connectivity).
[GRAPHIC] [TIFF OMITTED] TN06MR24.056

    Below are additional details regarding each of the line-item costs 
considered by MEMX to be related to offering physical connectivity, as 
well as any relevant discussion of how the costs projected for 2024 
differ, if any, from the Exchange's previous Cost Analysis conducted in 
2021 in adopting Connectivity Fees for its Equities platform, which are 
the same fees the

[[Page 16052]]

Exchange is proposing to apply for its Options platform in this 
filing.\15\
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    \15\ See supra note 5.
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Human Resources
    In allocating personnel (Human Resources) costs, in order to not 
double count any allocations, the Exchange first excluded any employee 
time allocated towards options regulation in order to recoup costs via 
the Options Regulatory Fee (``ORF'').\16\ Of the remaining employee 
time left over, MEMX then calculated an allocation of employee time for 
employees whose functions include providing and maintaining physical 
connectivity and performance thereof (primarily the MEMX network 
infrastructure team, which spends most of their time performing 
functions necessary to provide physical connectivity) and for which the 
Exchange allocated 80% of each employee's time. The Exchange also 
allocated Human Resources costs to provide physical connectivity to a 
limited subset of personnel with ancillary functions related to 
establishing and maintaining such connectivity (such as information 
security and finance personnel), for which the Exchange allocated cost 
on an employee-by-employee basis (i.e., only including those personnel 
who do support functions related to providing physical connectivity) 
and then applied a smaller allocation to such employees (30%).\17\ The 
Exchange notes that it has fewer than 100 employees and each department 
leader has direct knowledge of the time spent by those spent by each 
employee with respect to the various tasks necessary to operate the 
Exchange. The estimates of Human Resources cost were therefore 
determined by consulting with such department leaders, determining 
which employees are involved in tasks related to providing physical 
connectivity, and confirming that the proposed allocations were 
reasonable based on an understanding of the percentage of their time 
such employees devote to tasks related to providing physical 
connectivity. The Exchange notes that senior level executives were only 
allocated Human Resources costs to the extent the Exchange believed 
they are involved in overseeing tasks related to providing physical 
connectivity. The Human Resources cost was calculated using a blended 
rate of compensation reflecting salary, equity and bonus compensation, 
benefits, payroll taxes, and 401(k) matching contributions.
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    \16\ See Securities Exchange Act Release No. 99259 (January 2, 
2024), 89 FR 965 (January 8, 2024) (SR-MEMX-2023-38).
    \17\ To reiterate, these allocations are applied to the 
percentage of employee time left over after the ORF allocation. As 
such, if 10% of an employee's time was allocated towards options 
regulation, the percentage of time allocated to physical 
connectivity in this example would apply to the 90% of the 
employee's time left over.
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    In 2021, 13.8% of the Exchange's Human Resources costs were 
allocated towards the provision of physical connectivity, which is 
slightly lower than the 18% allocation in the current Cost Analysis. 
The Exchanges notes that this increase is due to additional hiring 
necessary to support network infrastructure, and that in advance of the 
launch of MEMX Options, this hiring started at the beginning of 2023.
Connectivity
    The Connectivity cost includes external fees paid to connect to 
other exchanges and third parties. The Exchange notes that its 
connectivity to external markets is required in order to receive market 
data to run the Exchange's matching engine and basic operations 
compliant with existing regulations, primarily Regulation NMS. 
Approximately 75% of the Exchange's connectivity costs are allocated 
towards the provision of physical connectivity, which is the same 
percentage identified in the 2021 Cost Analysis. Of note, the 2021 Cost 
Analysis allocated approximately $162,000 per month of connectivity 
costs towards physical connectivity, which is notably higher than the 
$61,018 \18\ per month allocated under the current Cost Analysis. The 
Exchange notes that this is due to a substantial redesign in the 
Exchange's connectivity plan which achieved the cost savings noted. 
Additionally, in the 2021 Cost Analysis, certain costs were included in 
the Connectivity category that have since been moved into the broader 
Technology category.
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    \18\ This figure is arrived at by dividing the annual allocated 
Connectivity costs in the table on page 12 ($732,216) by 12.
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Data Center
    Data Center costs include an allocation of the costs the Exchange 
incurs to provide physical connectivity in the third-party data centers 
where it maintains its equipment (such as dedicated space, security 
services, cooling and power). The Exchange notes that it does not own 
the Primary Data Center or the Secondary Data Center, but instead, 
leases space in data centers operated by third parties. The Exchange 
has allocated a high percentage of the Data Center cost (80%) to 
physical connectivity because the third-party data centers and the 
Exchange's physical equipment contained therein is the most direct cost 
in providing physical access to the Exchange. In other words, for the 
Exchange to operate in a dedicated space with connectivity of 
participants to a physical trading platform, the data centers are a 
very tangible cost, and in turn, if the Exchange did not maintain such 
a presence then physical connectivity would be of no value to market 
participants. This slight increase over the allocation of Data Center 
costs to physical connectivity from 2021 (75%) is due to the Exchange's 
determination that the Data Center is more directly linked to physical 
connectivity than any other core service provided by the Exchange.
Technology
    The Technology category includes the Exchange's network 
infrastructure, other hardware, software, and software licenses used to 
operate and monitor physical assets necessary to offer physical 
connectivity to the Exchange. Of note, certain of these costs were 
included in the Connectivity and a separate Hardware and Software 
Licenses category in the 2021 Cost Analysis; however, in order to align 
more closely with the Exchange's audited financial statements these 
costs were combined into the broader Technology category. The Exchange 
allocated approximately 25% of its Technology costs to physical 
connectivity in 2024.
Depreciation
    All physical assets and software, which also includes assets used 
for testing and monitoring of Exchange infrastructure, were valued at 
cost, depreciated or leased over periods ranging from three to five 
years. Thus, the depreciation cost primarily relates to servers 
necessary to operate the Exchange, some of which are owned by the 
Exchange and some of which are leased by the Exchange in order to allow 
efficient periodic technology refreshes. As noted above, the Exchange 
allocated 39% of all depreciation costs to providing physical 
connectivity. This is a higher percentage than was allocated to 
providing physical connectivity in 2021 (18.5%), and this increase is 
due to a high amount of capital expenditures required to build the 
Exchange's options platform, none of which began to depreciate until 
the launch of options in September 2023. The Exchange notes, however, 
that it did not allocate depreciation costs for any internally 
developed software to build the Exchange's trading platforms to 
physical connectivity, as such software does not impact the provision 
of physical connectivity.

[[Page 16053]]

External Market Data
    External Market Data includes fees paid to third parties, including 
other exchanges, to receive and consume market data from other markets. 
The Exchange notes that it did not allocate any External Market Data 
fees to the provision of physical connectivity as market data is not 
related to such services.
Allocated Shared Expenses
    Finally, a limited portion of general shared expenses was allocated 
to physical connectivity as without these general shared costs the 
Exchange would not be able to operate in the manner that it does and 
provide physical connectivity. The costs included in general shared 
expenses include general expenses of the Exchange, including office 
space and office expenses (e.g., occupancy and overhead expenses), 
utilities, recruiting and training, marketing and advertising costs, 
professional fees for legal, tax and accounting services (including 
external and internal audit expenses), and telecommunications costs. 
The Exchange notes that the cost of paying directors to serve on its 
Board of Directors is also included in the Exchange's general shared 
expenses, and thus a portion of such overall cost amounting to 7% of 
the overall cost for directors was allocated to providing physical 
connectivity.
    As a final part of the Exchange's analysis related to physical 
connectivity, the Exchange determined the total monthly cost of 
providing physical connections, (i.e. the annual cost of $14,970,454 
noted in the table above divided by 12), $1,247,537.83, and projected 
average monthly revenue for physical connections under the proposed 
pricing herein of approximately $1,413,500.\19\ Thus, the Exchange 
calculated an average monthly profit of $165,962, resulting in a 
physical connectivity profit margin of approximately 11.7%.\20\ The 
Exchange notes that this projected profit margin represents an increase 
over the projected profit margin noted in the 2021 Cost Analysis 
related to physical connectivity,\21\ which is in part due to certain 
cost savings noted above associated with a redesign in the Exchange's 
external connectivity plan. Nevertheless, the Exchange believes that 
the projected profit margin is reasonable and well within the range of 
where a similarly situated company would expect to be after three years 
of growth, especially upon launching a new trading platform that 
provides scale. While the Exchange does not anticipate a significant 
change to physical connectivity during 2024 (i.e., neither a 
significant increase nor a significant decrease), it is possible that 
participants will shift the way that they connect to the Exchange and a 
reduction occurs or that additional connectivity is established, 
resulting in an increase.
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    \19\ This projection was based off of actuals earned in January 
and February 2024 and revenue projections for the remainder of the 
year based off the number of primary and secondary connections 
maintained as of February 1, 2024, in both Equities and Options. The 
Exchange notes that its previous method of estimating profit by 
dividing the cost of providing physical connectivity by the number 
of physical connections maintained as of the date of proposed 
pricing is no longer an accurate method. This is due to the fact 
that such a calculation assumes that the Exchange earns revenue on 
all physical connections throughout the entire year, which it will 
not, given that the Exchange will not begin charging for options 
connections until March 1, 2024, and that the Exchange earns revenue 
of $6,000 for all physical connections, regardless of whether such 
connections are found in the primary or secondary data center, which 
is also not the case.
    \20\ The Exchange calculated margin by dividing the total profit 
($165,962) by the total revenue ($1,413,500) and multiplying by 100.
    \21\ The 2021 Cost Analysis projected a profit margin for 
physical connections of 8%.
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Costs Related to Offering Application Sessions
    The following chart details the individual line-item costs 
considered by MEMX to be related to offering application sessions as 
well as the percentage of the Exchange's overall costs such costs 
represent for such area (e.g., as set forth below, the Exchange 
allocated approximately 11% of its overall Human Resources cost to 
offering application sessions).
[GRAPHIC] [TIFF OMITTED] TN06MR24.057

Human Resources
    With respect to application sessions, MEMX calculated Human 
Resources cost by taking an allocation of employee time for employees 
whose functions include providing application sessions and maintaining 
performance thereof (including a broader range of employees such as 
technical operations personnel, market operations personnel, and 
software engineering personnel) as well as a limited subset of 
personnel with ancillary functions related to maintaining such 
connectivity (such as sales, membership, and finance personnel). The 
estimates of Human Resources cost were again determined by consulting 
with department leaders, determining which employees are involved in 
tasks related to providing application sessions and maintaining 
performance thereof, and confirming that the proposed allocations were 
reasonable based on an understanding of the percentage of their time 
such employees devote to tasks related to providing application 
sessions and maintaining performance thereof. The Exchange notes that 
senior level executives were only allocated Human Resources costs to 
the extent the Exchange believed they are involved in overseeing tasks 
related to providing application sessions and maintaining performance 
thereof. The Human Resources cost was again calculated

[[Page 16054]]

using a blended rate of compensation reflecting salary, equity and 
bonus compensation, benefits, payroll taxes, and 401(k) matching 
contributions. As shown in the table above, for 2024, the Exchange 
allocated approximately 11% of its Human Resources costs to providing 
application sessions, which is higher than the 7.7% it allocated in 
2021. This increase is again due to additional hiring needed to support 
the addition of MEMX Options.
Connectivity
    The Connectivity cost includes external fees paid to connect to 
other exchanges, as described above. The Exchange allocated 
approximately 4% of its Connectivity costs to providing application 
sessions.
Data Center
    Data Center costs include an allocation of the costs the Exchange 
incurs to provide physical connectivity in the third-party data centers 
where it maintains its equipment as well as related costs (the Exchange 
does not own the Primary Data Center or the Secondary Data Center, but 
instead, leases space in data centers operated by third parties). As 
shown in the table, the Exchange allocated 11% of its Data Center costs 
to application sessions in the current Cost Analysis, which represents 
an increase over the 2.6% it allocated in the 2021 Cost Analysis.
Technology
    The Technology category includes the Exchange's network 
infrastructure, other hardware, software, and software licenses used to 
monitor the health of the order entry services provided by the 
Exchange. The Exchange allocated 12% of its Technology costs to the 
provision of application sessions, which represents a slight increase 
over the 10.1% it allocated in the 2021 Cost Analysis.
External Market Data
    External Market Data includes fees paid to third parties, including 
other exchanges, to receive and consume market data from other markets. 
The Exchange allocated 20% of External Market Data fees to the 
provision of application sessions as such market data is necessary to 
offer certain services related to such sessions, such as validating 
orders on entry against the National Best Bid and National Best Offer 
(``NBBO'') and checking for other conditions (e.g., whether a symbol is 
halted or subject to a short sale circuit breaker). Thus, as market 
data from other exchanges is consumed at the application session level 
in order to validate orders before additional processing occurs with 
respect to such orders, the Exchange believes it is reasonable to 
allocate a small amount of such costs to application sessions. The 
increase in allocation of External Market Data costs to the provision 
of application sessions compared to the 2021 Cost Analysis, in which 
7.5% of its External Market Data costs were allocated, is due to a 
restructuring of the category. Specifically, in 2021, External Market 
Data only included those costs incurred to receive data from other 
exchanges, while costs to receive the SIP feeds and other non-exchange 
data feeds were categorized under Hardware and Software Licenses. These 
costs are now all categorized under External Market Data.
Depreciation
    All physical assets and software, which also includes assets used 
for testing and monitoring of order entry infrastructure, were valued 
at cost, depreciated or leased over periods ranging from three to five 
years. Thus, the depreciation cost primarily relates to servers 
necessary to operate the Exchange, some of which is owned by the 
Exchange and some of which is leased by the Exchange in order to allow 
efficient periodic technology refreshes. The Exchange allocated 14% of 
all depreciation costs to providing application sessions, which 
represents an increase over the 8.3% allocated in the 2021 Cost 
Analysis. In contrast to physical connectivity, described above, the 
Exchange did allocate depreciation costs for depreciated internally 
developed software to build the Exchange's platforms to application 
sessions because such software is related to the provision of such 
connectivity.
Allocated Shared Expenses
    Finally, a limited portion of general shared expenses was allocated 
to overall application session costs as without these general shared 
costs the Exchange would not be able to operate in the manner that it 
does and provide application sessions. The costs included in general 
shared expenses include general expenses of the Exchange, including 
office space and office expenses (e.g., occupancy and overhead 
expenses), utilities, recruiting and training, marketing and 
advertising costs, professional fees for legal, tax and accounting 
services (including external and internal audit expenses), and 
telecommunications costs. The Exchange again notes that the cost of 
paying directors to serve on its Board of Directors is included in the 
calculation of Allocated Shared Expenses, and thus a portion of such 
overall cost amounting to less than 5% of the overall cost for 
directors was allocated to providing application sessions.
    Lastly, the Exchange determined the total monthly cost of providing 
application sessions, (i.e. the annual cost of $7,185,273 noted in the 
table above divided by 12), $598,772.75, and estimated an average 
monthly revenue from application sessions under the proposed pricing 
herein of $662,738. Thus, the Exchange calculated an average monthly 
profit of $63,965, resulting in an application session profit margin of 
approximately 9.7%.\22\ This profit margin for application sessions is 
slightly higher than the projected profit margin noted in the 2021 Cost 
Analysis,\23\ which the Exchange believes is reasonable and well within 
the range of where the Exchange would expect it to be at this time.
---------------------------------------------------------------------------

    \22\ The Exchange calculated margin by dividing the total profit 
($63,965) by the total revenue ($662,738) and multiplying by 100.
    \23\ The 2021 Cost Analysis projected an application session 
profit margin of approximately 8%.
---------------------------------------------------------------------------

Cost Analysis--Additional Discussion
    In conducting its Cost Analysis, the Exchange did not allocate any 
of its expenses in full to any core services (including physical 
connectivity or application sessions) and did not double-count any 
expenses. Instead, as described above, the Exchange allocated 
applicable cost drivers across its core services and used the same Cost 
Analysis to form the basis of this proposal and the filing it recently 
submitted proposing the establishment of an ORF.\24\ For instance, in 
calculating the Human Resources expenses to be allocated to physical 
connections, the Exchange has a team of employees dedicated to network 
infrastructure and with respect to such employees the Exchange 
allocated network infrastructure personnel with a high percentage of 
the time of such personnel (80%) given their focus on functions 
necessary to provide physical connections. The time of those same 
personnel were allocated only 4% to application sessions and the 
remaining 16% was allocated to transactions and market data. Of note, 
this allocation applied only to the network infrastructure employee's 
time that was left over after allocating for options regulation 
support. The Exchange did not allocate any other Human Resources 
expense for providing physical connections to any other employee group 
outside of a smaller allocation

[[Page 16055]]

(30%) of the employee time associated with certain specified personnel 
who work closely with and support network infrastructure personnel. In 
contrast, the Exchange allocated much smaller percentages of employee 
time (15% or less) across a wider range of personnel groups in order to 
allocate Human Resources costs to providing application sessions. This 
is because a much wider range of personnel are involved in functions 
necessary to offer, monitor and maintain application sessions but the 
tasks necessary to do so are not a primary or full-time function.
---------------------------------------------------------------------------

    \24\ See supra note 16.
---------------------------------------------------------------------------

    In total, the Exchange allocated 18% of its Human Resources costs 
to providing physical connections and 11% of its Human Resources costs 
to providing application sessions, for a total allocation of 29% of its 
Human Resources expense to provide connectivity services. In turn, the 
Exchange allocated the remaining 71% of its Human Resources expense to 
Regulatory Services (21%), membership (2%) and transactions and market 
data (48%). Thus, again, the Exchange's allocations of cost across core 
services were based on real costs of operating the Exchange and were 
not double-counted across the core services or their associated revenue 
streams.
    As another example, the Exchange allocated depreciation expense to 
all core services, including physical connections and application 
sessions, but in different amounts. The Exchange believes it is 
reasonable to allocate the identified portion of such expense because 
such expense includes the actual cost of the computer equipment, such 
as dedicated servers, computers, laptops, monitors, information 
security appliances and storage, and network switching infrastructure 
equipment, including switches and taps that were purchased to operate 
and support the network. Without this equipment, the Exchange would not 
be able to operate the network and provide connectivity services to its 
Members and non-Members and their customers. However, the Exchange did 
not allocate all of the depreciation and amortization expense toward 
the cost of providing connectivity services, but instead allocated 
approximately 53% of the Exchange's overall depreciation and 
amortization expense to connectivity services (39% attributed to 
physical connections and 14% to application sessions). The Exchange 
allocated the remaining depreciation and amortization expense 
(approximately 47%) toward regulatory services (approximately 6%), and 
to providing transaction services and market data (approximately 41%).
    Looking at the Exchange's operations holistically, the estimated 
total monthly costs to the Exchange for offering core services in 2024 
is $5,299,754, compared to the $3,954,537 noted in the 2021 Cost 
Analysis. Based on its projections, the Exchange expects to collect 
approximately $2,076,238 on a monthly basis for connectivity services. 
Incorporating this amount into the Exchange's overall projected 
revenue, including projections related to the ORF, the Exchange 
anticipates monthly revenue of approximately $6,080,631 from all 
sources (i.e., connectivity fees and membership fees, transaction fees, 
ORF, and revenue from market data, both through the fees adopted in 
April 2022 \25\ and through the revenue received from the SIPs). As 
such, applying the Exchange's holistic Cost Analysis to a holistic view 
of anticipated revenues, the Exchange would earn approximately 13% 
margin on its operations as a whole. The Exchange believes that this 
amount is reasonable.
---------------------------------------------------------------------------

    \25\ See Securities Exchange Act Release No. 97130 (March 13, 
2013), 88 FR 16491 (March 17, 2023) (SR-MEMX-2023-04).
---------------------------------------------------------------------------

    The Exchange notes that its revenue estimates are based on 
projections across all potential revenue streams and will only be 
realized to the extent such revenue streams actually produce the 
revenue estimated. As a new entrant to the hyper-competitive exchange 
environment, and an exchange focused on driving competition, the 
Exchange does not yet know whether such expectations will be realized. 
For instance, in order to generate the revenue expected from 
connectivity, the Exchange will have to be successful in retaining 
existing options clients that wish to maintain physical connectivity 
and/or application sessions or in obtaining new clients that will 
purchase such services. Similarly, the Exchange will have to be 
successful in retaining a positive net capture on transaction fees in 
order to realize the anticipated revenue from transaction pricing.
    The Exchange notes that the Cost Analysis was based on the 
Exchange's current operations and projections for the remainder of 
2024. As such, the Exchange believes that its costs will remain 
relatively similar in future years (as demonstrated by the comparison 
of the 2021 Cost Analysis to the 2024 Cost Analysis). It is possible 
however that such costs will either decrease or increase. To the extent 
the Exchange sees growth in use of connectivity services it will 
receive additional revenue to offset future cost increases. However, if 
use of connectivity services is static or decreases, the Exchange might 
not realize the revenue that it anticipates or needs in order to cover 
applicable costs. Accordingly, the Exchange is committing to conduct a 
one-year review after implementation of these fees. The Exchange 
expects that it may propose to adjust fees at that time, to increase 
fees in the event that revenues fail to cover costs and a reasonable 
mark-up of such costs. Similarly, the Exchange would propose to 
decrease fees in the event that revenue materially exceeds our current 
projections. In addition, the Exchange will periodically conduct a 
review to inform its decision making on whether a fee change is 
appropriate (e.g., to monitor for costs increasing/decreasing or 
subscribers increasing/decreasing in ways that suggest the then-current 
fees are becoming dislocated from the prior cost-based analysis) and 
would propose to increase fees in the event that revenues fail to cover 
its costs and a reasonable mark-up, or decrease fees in the event that 
revenue or the mark-up materially exceeds our current projections. In 
the event that the Exchange determines to propose a fee change, the 
results of a timely review, including an updated cost estimate, will be 
included in the rule filing proposing the fee change. More generally, 
the Exchange believes that it is appropriate for an exchange to refresh 
and update information about its relevant costs and revenues in seeking 
any future changes to fees, and the Exchange commits to do so.
Proposed Fees
Physical Connectivity Fees
    MEMX offers its Members the ability to connect to the Exchange in 
order to transmit orders to and receive information from the Exchange. 
Members can also choose to connect to MEMX indirectly through physical 
connectivity maintained by a third-party extranet. Extranet physical 
connections may provide access to one or multiple Members on a single 
connection. Users of MEMX physical connectivity services (both Members 
and non-Members \26\) seeking to establish one or more connections with 
the Exchange submit a request to the Exchange via the MEMX User Portal 
or directly to Exchange personnel. Upon receipt of the completed 
instructions, MEMX establishes the physical connections requested by 
the User. The number of physical connections assigned to each User (for 
both equities and options) as of October 1, 2023, ranges from one (1)

[[Page 16056]]

to 46, depending on the scope and scale of the Member's trading 
activity on the Exchange as determined by the Member, including the 
Member's determination of the need for redundant connectivity. Separate 
physical connections are not required to access the Exchange's Options 
and Equities platforms, as such, a User could use a single connection 
to access both platforms. The Exchange notes that 50% of its Members do 
not maintain a physical connection directly with the Exchange in the 
Primary Data Center (though many such Members have connectivity through 
a third-party provider) and 21 members, or 27.6% have either one or two 
physical ports to connect to the Exchange in the Primary Data 
Center.\27\ Thus, only a limited number of Members, (17 members, or 
22%), maintain three or more physical ports to connect to the Exchange 
in the Primary Data Center.\28\
---------------------------------------------------------------------------

    \26\ See supra note 3.
    \27\ Of those 21 members, four (4) have designated certain of 
their physical ports will be used to connect to MEMX Options.
    \28\ Of those 17 members, thirteen (13) have designated certain 
of their physical ports will be used to connect to MEMX Options.
---------------------------------------------------------------------------

    As described above, the Exchange has previously justified its 
pricing with respect to MEMX Equities and believes the most fair 
approach, absent a significant differentiation between application 
costs to Equities and Options, is to apply the same pricing to all 
participants of either platform. As such, in order to cover the 
aggregate costs of providing physical connectivity to Options and 
Equities Users and make a modest profit, as described below, the 
Exchange is proposing to charge a fee of $6,000 per month for each 
physical connection in the Primary Data Center and a fee of $3,000 per 
month for each physical connection in the Secondary Data Center for 
connections to its Options platform, as it currently charges for 
connections to its Equities platform. There is no requirement that any 
Member maintain a specific number of physical connections and a Member 
may choose to maintain as many or as few of such connections as each 
Member deems appropriate. Further, as noted above, existing Equities 
Members may choose to use their existing physical connection(s) to 
access the Exchange's Options platform.
    The Exchange notes, however, that pursuant to Rule 2.4 (Mandatory 
Participation in Testing of Backup Systems), the Exchange does require 
a small number of Members to connect and participate in functional and 
performance testing as announced by the Exchange, which occurs at least 
once every 12 months. Specifically, Members that have been determined 
by the Exchange to contribute a meaningful percentage of the Exchange's 
overall volume must participate in mandatory testing of the Exchange's 
backup systems (i.e., such Members must connect to the Secondary Data 
Center). The Exchange notes that designated Members are still able to 
use third-party providers of connectivity to access the Exchange at its 
Secondary Data Center, and that for its Equities platform, one of eight 
such designated Members does use a third-party provider instead of 
connecting directly to the Secondary Data Center through connectivity 
provided by the Exchange. Nonetheless, because some Members are 
required to connect to the Secondary Data Center pursuant to Rule 2.4 
and to encourage Exchange Members to connect to the Secondary Data 
Center generally, the Exchange has proposed to charge one-half of the 
fee for a physical connection in the Primary Data Center for its 
Options platform, as it currently charges for Equities. The Exchange 
notes that its costs related to operating the Secondary Data Center 
were not separately calculated for purposes of this proposal, but 
instead, all costs related to providing physical connections were 
considered in the aggregate. The Exchange believes this is appropriate 
because had the Exchange calculated such costs separately and then 
determined the fee per physical connection that would be necessary for 
the Exchange to cover its costs for operating the Secondary Data 
Center, the costs would likely be much higher than those proposed for 
connectivity at the Primary Data Center because Members maintain 
significantly fewer connections at the Secondary Data Center. The 
Exchange believes that charging a higher fee for physical connections 
at the Secondary Data Center would be inconsistent with its objective 
of encouraging Members to connect at such data center and is 
inconsistent with the fees charged by other exchanges, which also 
provide connectivity for disaster recovery purposes at a discounted 
rate.\29\
---------------------------------------------------------------------------

    \29\ See, e.g., the BZX options fee schedule, available at 
https://www.cboe.com/us/options/membership/fee_schedule/bzx/.
---------------------------------------------------------------------------

    The proposed fee will not apply differently based upon the size or 
type of the market participant, but rather based upon the number of 
physical connections a User requests, based upon factors deemed 
relevant by each User (either a Member, service bureau or extranet). 
The Exchange believes these factors include the costs to maintain 
connectivity, business model and choices Members make in how to 
participate on the Exchange, as further described below.
    The proposed fee of $6,000 per month for physical connections at 
the Primary Data Center is designed to permit the Exchange to cover the 
costs allocated to providing connectivity services with a modest profit 
margin (approximately 11.7%), which would also help fund future 
expenditures (increased costs, improvements, etc.). The Exchange 
believes it is appropriate to charge fees that represent a reasonable 
markup over cost given the other factors discussed above and the need 
for the Exchange to maintain a highly performant and stable platform to 
allow Members to transact with determinism.
    As noted above, the Exchange proposes a discounted rate of $3,000 
per month for physical connections at its Secondary Data Center. The 
Exchange has proposed this discounted rate for Secondary Data Center 
connectivity in order to encourage Members to establish and maintain 
such connections. Also, as noted above, a small number of Members are 
required pursuant to Rule 2.4 to connect and participate in testing of 
the Exchange's backup systems, and the Exchange believes it is 
appropriate to provide a discounted rate for physical connections at 
the Secondary Data Center given this requirement. The Exchange notes 
that this rate is well below the cost of providing such services and 
the Exchange will operate its network and systems at the Secondary Data 
Center without recouping the full amount of such cost through 
connectivity services.
    The proposed fee for physical connections is effective on filing 
and will become operative immediately, subject to the proposed waiver 
described below.
Application Session Fees
    Similar to other exchanges, MEMX offers its Members application 
sessions, also known as logical ports, for order entry and receipt of 
trade execution reports and order messages. Members can also choose to 
connect to MEMX indirectly through a session maintained by a third-
party service bureau. Service bureau sessions may provide access to one 
or multiple Members on a single session. Users of MEMX connectivity 
services (both Members and non-Members \30\) seeking to establish one 
or more application sessions with the Exchange submit a request to the 
Exchange via the MEMX User Portal or directly to Exchange personnel. 
Upon receipt of the completed instructions, MEMX assigns the User the 
number of

[[Page 16057]]

sessions requested by the User. The number of sessions assigned to each 
User as of February 1, 2024, ranges from one (1) to more than 300 
depending on the scope and scale of the Member's trading activity on 
the Exchange (either through a direct connection or through a service 
bureau) as determined by the Member. For example, by using multiple 
sessions, Members can segregate order flow from different internal 
desks, business lines, or customers. The Exchange does not impose any 
minimum or maximum requirements for how many application sessions a 
Member or service bureau can maintain, and it is not proposing to 
impose any minimum or maximum session requirements for its Members or 
their service bureaus. The same application session cannot be used to 
access both MEMX Equities and MEMX Options, as such, Users will need to 
purchase separate application sessions for MEMX Options, which differs 
from physical connections.
---------------------------------------------------------------------------

    \30\ See supra note 3.
---------------------------------------------------------------------------

    As described above, in order to cover the aggregate costs of 
providing application sessions to Options Users and to make a modest 
profit, as described below, the Exchange is proposing to charge a fee 
of $450 per month for each Order Entry Port and Drop Copy Port in the 
Primary Data Center for Options application sessions, which is the same 
fee it currently charges for Equities application sessions. The 
Exchange notes that it does not propose to charge for: (1) Order Entry 
Ports or Drop Copy Ports in the Secondary Data Center, or (2) any Test 
Facility Ports or MEMOIR Gap Fill Ports, again, which it does not 
charge for Equities Users. The Exchange has proposed to continue to 
provide Order Entry Ports and Drop Copy Ports in the Secondary Data 
Center for Options free of charge in order to encourage Members to 
connect to the Exchange's backup trading systems. Similarly, because 
the Exchange wishes to encourage Members to conduct appropriate testing 
of their use of the Exchange, the Exchange has not proposed to charge 
for Test Facility Ports. With respect to MEMOIR Gap Fill ports, such 
ports are exclusively used in order to receive information when a 
market data recipient has temporarily lost its view of MEMX market 
data. The Exchange has not proposed charging for such ports because the 
costs of providing and maintaining such ports is more directly related 
to producing market data.
    The proposed fee of $450 per month for each Order Entry Port and 
Drop Copy Port in the Primary Data Center is designed to permit the 
Exchange to cover the costs allocated to providing application sessions 
with a modest profit margin (approximately 9.7%), which would also help 
fund future expenditures (increased costs, improvements, etc.).
    The proposed fee is also designed to encourage Users to be 
efficient with their application session usage, thereby resulting in a 
corresponding increase in the efficiency that the Exchange would be 
able to realize in managing its aggregate costs for providing 
connectivity services. There is no requirement that any Member maintain 
a specific number of application sessions and a Member may choose to 
maintain as many or as few of such ports as each Member deems 
appropriate. The Exchange has designed its platform such that Order 
Entry Ports can handle a significant amount of message traffic (i.e., 
over 50,000 orders per second), and has no application flow control or 
order throttling. In contrast, other exchanges maintain certain 
thresholds that limit the amount of message traffic that a single 
logical port can handle.\31\ As such, while several Members maintain a 
relatively high number of ports because that is consistent with their 
usage on other exchanges and is preferable for their own reasons, the 
Exchange believes that it has designed a system capable of allowing 
such Members to significantly reduce the number of application sessions 
maintained.
---------------------------------------------------------------------------

    \31\ See, e.g., Cboe US Options BOE Specification, available at: 
https://cdn.cboe.com/resources/membership/US_Options_BOE_Specification.pdf (describing a 5,000 message per 
second Port Order Rate Threshold on Cboe BOE ports).
---------------------------------------------------------------------------

    The proposed fee will not apply differently based upon the size or 
type of the market participant, but rather based upon the number of 
application sessions a User requests, based upon factors deemed 
relevant by each User (either a Member or service bureau on behalf of a 
Member). The Exchange believes these factors include the costs to 
maintain connectivity and choices Members make in how to segment or 
allocate their order flow.\32\
---------------------------------------------------------------------------

    \32\ The Exchange understands that some Members (or service 
bureaus) may also request more Order Entry Ports to enable the 
ability to send a greater number of simultaneous order messages to 
the Exchange by spreading orders over more Order Entry Ports, 
thereby increasing throughput (i.e., the potential for more orders 
to be processed in the same amount of time). The degree to which 
this usage of Order Entry Ports provides any throughput advantage is 
based on how a particular Member sends order messages to MEMX, 
however the Exchange notes that its architecture reduces the impact 
or necessity of such a strategy. All Order Entry Ports on MEMX 
provide the same throughput, and as noted above, the throughput is 
likely adequate even for a Member sending a significant amount of 
volume at a fast pace, and is not artificially throttled or limited 
in any way by the Exchange.
---------------------------------------------------------------------------

    The proposed fee for application sessions is effective on filing 
and will become operative immediately, subject to the proposed waiver 
described below.
Proposed Fees--Additional Discussion
    As discussed above, the proposed fees for connectivity services do 
not by design apply differently to different types or sizes of Members. 
As discussed in more detail in the Statutory Basis section, the 
Exchange believes that the likelihood of higher fees for certain 
Members subscribing to connectivity services usage than others is not 
unfairly discriminatory because it is based on objective differences in 
usage of connectivity services among different Members. The Exchange's 
incremental aggregate costs for all connectivity services are 
disproportionately related to Members with higher message traffic and/
or Members with more complicated connections established with the 
Exchange, as such Members: (1) consume the most bandwidth and resources 
of the network; (2) transact the vast majority of the volume on the 
Exchange; and (3) require the high-touch network support services 
provided by the Exchange and its staff, including network monitoring, 
reporting and support services, resulting in a much higher cost to the 
Exchange to provide such connectivity services. For these reasons, MEMX 
believes it is not unfairly discriminatory for the Members with higher 
message traffic and/or Members with more complicated connections to pay 
a higher share of the total connectivity services fees. While Members 
with a business model that results in higher relative inbound message 
activity or more complicated connections are projected to pay higher 
fees, the level of such fees is based solely on the number of physical 
connections and/or application sessions deemed necessary by the Member 
and not on the Member's business model or type of Member. The Exchange 
notes that the correlation between message traffic and usage of 
connectivity services is not completely aligned because Members 
individually determine how many physical connections and application 
sessions to request, and Members may make different decisions on the 
appropriate ways based on facts unique to their individual businesses. 
Based on the Exchange's architecture, as described above, the Exchange 
believes that a Member even with high message traffic would be able to 
conduct business on the Exchange with a

[[Page 16058]]

relatively small connectivity services footprint.
    Finally, the fees for connectivity services will help to encourage 
connectivity services usage in a way that aligns with the Exchange's 
regulatory obligations. As a national securities exchange, the Exchange 
is subject to Regulation Systems Compliance and Integrity (``Reg 
SCI'').\33\ Reg SCI Rule 1001(a) requires that the Exchange establish, 
maintain, and enforce written policies and procedures reasonably 
designed to ensure (among other things) that its Reg SCI systems have 
levels of capacity adequate to maintain the Exchange's operational 
capability and promote the maintenance of fair and orderly markets.\34\ 
By encouraging Users to be efficient with their usage of connectivity 
services, the proposed fee will support the Exchange's Reg SCI 
obligations in this regard by ensuring that unused application sessions 
are available to be allocated based on individual User needs and as the 
Exchange's overall order and trade volumes increase. Additionally, 
because the Exchange will charge a lower rate for a physical connection 
to the Secondary Data Center and will not charge any fees for 
application sessions at the Secondary Data Center or its Test Facility, 
the proposed fee structure will further support the Exchange's Reg SCI 
compliance by reducing the potential impact of a disruption should the 
Exchange be required to switch to its Disaster Recovery Facility and 
encouraging Members to engage in any necessary system testing with low 
or no cost imposed by the Exchange.\35\
---------------------------------------------------------------------------

    \33\ 17 CFR 242.1000-1007.
    \34\ 17 CFR 242.1001(a).
    \35\ While some Members might directly connect to the Secondary 
Data Center and incur the proposed $3,000 per month fee, there are 
other ways to connect to the Exchange, such as through a service 
bureau or extranet, and because the Exchange is not imposing fees 
for application sessions in the Secondary Data Center, a Member 
connecting through another method would not incur any fees charged 
directly by the Exchange. However, the Exchange notes that a third-
party service provider providing connectivity to the Exchange likely 
would charge a fee for providing such connectivity; such fees are 
not set by or shared in by the Exchange.
---------------------------------------------------------------------------

(ii) Organizational Fee Schedule Changes
    The Exchange is proposing to more clearly separate Connectivity 
Fees from the Exchange's current fee schedule. Currently, the Exchange 
has separate transaction fee schedules for Equities and Options, and 
the current Connectivity Fees appear solely on the Equities fee 
schedule. The Exchange proposes to remove the Connectivity Fees section 
from the Equities fee schedule, and add hyperlinks at the bottom of the 
Equities and Options fee schedules that direct the User to a single 
Connectivity fee schedule. The Exchange believes this format is 
appropriate given that the same Connectivity Fees apply to both 
Equities and Options Users, and separating out the fee schedule for 
Connectivity Fees will reduce potential confusion (e.g., as to which 
fees a Member that participates on both MEMX Equities and MEMX Options 
must pay on a monthly basis to maintain connectivity to the Exchange).
    The Exchange also proposes to add three additional bullet points to 
the new Connectivity Fee Schedule related to MEMX Options. The first 
will notify Members that a physical connection can be used to access 
MEMX Equities and/or MEMX Options. The second will clarify that an 
application session can only be used to access one MEMX platform, i.e., 
MEMX Equities or MEMX Options. The third will note that Connectivity 
and application session fees solely related to participation on MEMX 
Options are waived until March 1, 2024.\36\ The Exchange notes that the 
existing bullet points related to Connectivity and application sessions 
will be included on the proposed separate Connectivity Fee Schedule, 
(i.e., detailing the Exchange's billing practices, and making clear 
that that the Exchange does not charge for: (1) Order Entry Ports or 
Drop Copy Ports in the Secondary Data Center, or (2) any Test Facility 
Ports or MEMOIR Gap Fill Ports.
---------------------------------------------------------------------------

    \36\ On February 8, 2024, the Exchange filed a proposed rule 
change to amend the Exchange's Fee Schedule to extend the existing 
Membership Fee and Options Connectivity Fee Waivers until February 
29, 2024. See SR-MEMX-2024-05, available at: https://info.memxtrading.com/category/rule-filings/effective-rule-filings/.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed fees for connectivity 
services to MEMX Options are reasonable, equitable and not unfairly 
discriminatory because, as described above, the proposed pricing for 
connectivity services is directly related to the relative costs to the 
Exchange to provide those respective services and does not impose a 
barrier to entry to smaller participants.
    The Exchange recognizes that there are various business models and 
varying sizes of market participants conducting business on the 
Exchange. The Exchange's incremental aggregate costs for all 
connectivity services are disproportionately related to Members with 
higher message traffic and/or Members with more complicated connections 
established with the Exchange, as such Members: (1) consume the most 
bandwidth and resources of the network; (2) transact the vast majority 
of the volume on the Exchange; and (3) require the high-touch network 
support services provided by the Exchange and its staff, including 
network monitoring, reporting and support services, resulting in a much 
higher cost to the Exchange to provide such connectivity services. 
Accordingly, the Exchange believes the allocation of the proposed fees 
that increase based on the number of physical connections or 
application sessions is reasonable based on the resources consumed by 
the respective type of market participant (i.e., lowest resource 
consuming Members will pay the least, and highest resource consuming 
Members will pay the most), particularly since higher resource 
consumption translates directly to higher costs to the Exchange.
    With regard to reasonableness, the Exchange understands that when 
appropriate given the context of a proposal the Commission has taken a 
market-based approach to examine whether the SRO making the proposal 
was subject to significant competitive forces in setting the terms of 
the proposal. In looking at this question, the Commission considers 
whether the SRO has demonstrated in its filing that: (i) there are 
reasonable substitutes for the product or service; (ii) ``platform'' 
competition constrains the ability to set the fee; and/or (iii) revenue 
and cost analysis shows the fee would not result in the SRO taking 
supra-competitive profits. If the SRO demonstrates that the fee is 
subject to significant competitive forces, the Commission will next 
consider whether there is any substantial countervailing basis to 
suggest the fee's terms fail to meet one or more standards under the 
Exchange Act. If the filing fails to demonstrate that the fee is 
constrained by competitive forces, the SRO must provide a substantial 
basis, other than competition, to show that it is consistent with the 
Exchange Act, which may include production of relevant revenue and cost 
data pertaining to the product or service.
    MEMX believes the proposed fees for connectivity services are fair 
and reasonable as a form of cost recovery for the Exchange's aggregate 
costs of offering connectivity services to Members and non-Members. The 
proposed fees are expected to generate monthly revenue of $2,076,238 
providing cost recovery to the Exchange for the aggregate costs of 
offering

[[Page 16059]]

connectivity services, based on a methodology that narrowly limits the 
cost drivers that are allocated cost to those closely and directly 
related to the particular service. In addition, this revenue will allow 
the Exchange to continue to offer, to enhance, and to continually 
refresh its infrastructure as necessary to offer a state-of-the-art 
trading platform. The Exchange believes that, consistent with the Act, 
it is appropriate to charge fees that represent a reasonable markup 
over cost given the other factors discussed above. The Exchange also 
believes the proposed fee is a reasonable means of encouraging Users to 
be efficient in the connectivity services they reserve for use, with 
the benefits to overall system efficiency to the extent Members and 
non-Members consolidate their usage of connectivity services or 
discontinue subscriptions to unused physical connectivity.
    The Exchange further believes that the proposed fees, as they 
pertain to purchasers of each type of connectivity alternative, 
constitute an equitable allocation of reasonable fees charged to the 
Exchange's Members and non-Members and are allocated fairly amongst the 
types of market participants using the facilities of the Exchange.
    As described above, the Exchange believes the proposed fees are 
equitably allocated because the Exchange's incremental aggregate costs 
for all connectivity services are disproportionately related to Members 
with higher message traffic and/or Members with more complicated 
connections established with the Exchange, as such Members: (1) consume 
the most bandwidth and resources of the network; (2) transact the vast 
majority of the volume on the Exchange; and (3) require the high-touch 
network support services provided by the Exchange and its staff, 
including network monitoring, reporting and support services, resulting 
in a much higher cost to the Exchange to provide such connectivity 
services.
    Commission staff previously noted that the generation of supra-
competitive profits is one of several potential factors in considering 
whether an exchange's proposed fees are consistent with the Act.\37\ As 
described in the Fee Guidance, the term ``supra-competitive profits'' 
refers to profits that exceed the profits that can be obtained in a 
competitive market. The proposed fee structure would not result in 
excessive pricing or supra-competitive profits for the Exchange. The 
proposed fee structure is merely designed to permit the Exchange to 
cover the costs allocated to providing connectivity services with a 
modest margin (approximately 11.7% for physical connectivity and 9.7% 
for application sessions), which would also help fund future 
expenditures (increased costs, improvements, etc.). While the Fee 
Guidance did not establish a guideline as to what constitutes supra-
competitive pricing through analyzing margin (nor does the Exchange 
believe it should have), the Exchange does not believe that it would be 
reasonable to consider the aforementioned margins to constitute supra-
competitive pricing. As noted above, the increase in margin for 
connectivity services is primarily driven by certain cost savings that 
the Exchange has been able to achieve as compared to the 2021 Cost 
Analysis, and the Exchange does not believe it should be penalized, and 
instead should be rewarded for identifying and realizing such savings. 
Of course, should the Exchange find opportunities to dramatically 
reduce costs or increase revenues such that it believes the cost it is 
charging for physical connections or applications sessions is 
inconsistent with the cost of providing such connectivity or resulting 
in unreasonable margin, the Exchange will seek to lower its fees in 
order to pass savings on to its constituents. Thus, the Exchange 
believes that its proposed pricing for Connectivity Fees is fair, 
reasonable, and equitable. Further, the Exchange notes that certain of 
its competitors have connectivity fees that were approved without the 
presentation of a cost-based analysis, but it is reasonable to assume 
that certain of those competitors with significantly higher fees also 
operate with significantly higher profit margins. Accordingly, the 
Exchange believes that its proposal is consistent with Section 6(b)(4) 
\38\ of the Act because the proposed fees will permit recovery of the 
Exchange's costs and will not result in excessive pricing or supra-
competitive profit.
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    \37\ See Fee Guidance, supra note 12.
    \38\ 15 U.S.C. 78f(b)(4).
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    The proposed fees for Options connectivity services will allow the 
Exchange to cover certain costs incurred by the Exchange associated 
with providing and maintaining necessary hardware and other network 
infrastructure as well as network monitoring and support services; 
without such hardware, infrastructure, monitoring and support the 
Exchange would be unable to provide the connectivity services. The 
Exchange routinely works to improve the performance of the network's 
hardware and software. The costs associated with maintaining and 
enhancing a state-of-the-art exchange network is a significant expense 
for the Exchange, and thus the Exchange believes that it is reasonable 
and appropriate to help offset those costs by adopting fees for 
connectivity services. As detailed above, the Exchange has four primary 
sources of revenue that it can potentially use to fund its operations: 
transaction fees, fees for connectivity services, membership and 
regulatory fees, and market data fees. Accordingly, the Exchange must 
cover its expenses from these four primary sources of revenue. The 
Exchange's Cost Analysis estimates the monthly costs to provide 
connectivity services at $1,846,310.58. Based on current connectivity 
services usage, the Exchange would generate monthly revenues of 
approximately $2,076,238. This represents a modest profit when compared 
to the cost of providing connectivity services and that profit 
represents a modest increase over the profit estimated in the 2021 Cost 
Analysis (a reasonable goal for a newly formed business, i.e., growing 
from non-profitable, to break-even to modestly profitable).\39\ Even if 
the Exchange earns that amount or incrementally more, the Exchange 
believes the proposed fees for connectivity services are fair and 
reasonable because they will not result in excessive pricing or supra-
competitive profit, when comparing the total expense of MEMX associated 
with providing connectivity services versus the total projected revenue 
of the Exchange associated with network connectivity services.
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    \39\ Specifically, in the 2021 Cost Analysis, the Exchange 
estimated the total costs to provide connectivity services at 
$1,143,715 and estimated monthly revenues of $1,233,750.
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    As noted above, when incorporating the projected revenue from 
connectivity services into the Exchange's overall projected revenue, 
including projections related to recently adopted market data fees, the 
Exchange anticipates monthly revenue of $6,080,631 from all sources. As 
such, applying the Exchange's holistic Cost Analysis to a holistic view 
of anticipated revenues, the Exchange would earn approximately 13% 
margin on its operations as a whole. The Exchange believes that this 
amount is reasonable and is again evidence that the Exchange will not 
earn a supra-competitive profit.
    The Exchange notes that other exchanges offer similar connectivity 
options to market participants and that the Exchange's fees are a 
discount as compared to the majority of such fees.\40\

[[Page 16060]]

With respect to physical connections, MIAX Options (``MIAX''), MIAX 
Pearl, LLC (``MIAX Pearl''), MIAX Emerald, LLC (``MIAX Emerald''), each 
of the Nasdaq Stock Market LLC (``Nasdaq'') options exchanges,\41\ NYSE 
American Options (``NYSE American''), NYSE Arca Options (``NYSE 
Arca''), Cboe Exchange, Inc. (``Cboe Options''), Cboe BZX Options 
(``BZX Options''), and Cboe EDGX Options (``EDGX Options'') charge 
between $7,000-$22,000 per month for physical connectivity at their 
primary data centers that is comparable to that offered by the 
Exchange.\42\ Nasdaq, NYSE American and NYSE Arca also charge 
installation fees, which are not proposed to be charged by the 
Exchange. With respect to application sessions, BX, PHLX, GEMX, MRX, 
BOX Options (``BOX''), Cboe Options, BZX Options and EDGX charge 
between $500-$800 per month for order entry and drop ports.\43\ The 
Exchange further notes that several of these exchanges each charge for 
other logical ports that the Exchange will continue to provide for 
free, such as application sessions for testing and disaster recovery 
purposes.\44\ While the Exchange's proposed Options Connectivity Fees 
are lower than certain of the fees charged by the Nasdaq options 
exchanges, MIAX Options, MIAX Pearl, MIAX Emerald, NYSE American, NYSE 
Arca, BOX, Cboe, BZX and EDGX, MEMX believes that it offers significant 
value to Members over these other exchanges in terms of bandwidth 
available over such connectivity services, which the Exchange believes 
is a competitive advantage, and differentiates its connectivity versus 
connectivity to other exchanges.\45\ Additionally, the Exchange's 
proposed Connectivity Fees to its disaster recovery facility are within 
the range of the fees charged by other exchanges for similar 
connectivity alternatives.\46\ The Exchange believes that its proposal 
to offer certain application sessions free of charge is reasonable, 
equitably allocated and not unfairly discriminatory because such 
proposal is intended to encourage Member connections and use of backup 
and testing facilities of the Exchange, and, with respect to MEMOIR Gap 
Fill ports, such ports are used exclusively in connection with the 
receipt and processing of market data from the Exchange.
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    \40\ One significant differentiation between the Exchanges is 
that while it offers different types of physical connections, 
including 10Gb, 25Gb, 40Gb, and 100Gb connections, the Exchange does 
not propose to charge different prices for such connections. In 
contrast, most of the Exchange's competitors provide scaled pricing 
that increases depending on the size of the physical connection. The 
Exchange does not believe that its costs increase incrementally 
based on the size of a physical connection but instead, that 
individual connections and the number of such separate and disparate 
connections are the primary drivers of cost for the Exchange.
    \41\ Including Nasdaq PHLX (``PHLX''), Nasdaq Options Market 
(``NOM''), Nasdaq BX Options (``BX''), Nasdaq ISE (``ISE''), Nasdaq 
GEMX (``GEMX''), and Nasdaq MRX (``MRX'').
    \42\ See the MIAX fee schedule, available at: https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX__Options__Fee__Schedule_10022023.pdf; the MIAX Pearl fee 
schedule, available at: https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Options_Fee_Schedule_09122023.pdf; the MIAX Emerald fee 
schedule, available at: https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_10122023_3.pdf; 
the Nasdaq Options markets fee schedule, at http://www.nasdaqtrader.com/trader.aspx?id=pricelisttrading2; the NYSE 
Connectivity fee schedule, at: https://www.nyse.com/publicdocs/Wireless_Connectivity_Fees_and_Charges.pdf ; the Cboe fee schedule, 
at: https://www.cboe.com/us/options/membership/fee_schedule/cone/; 
the BZX Options fee schedule, available at: https://www.cboe.com/us/options/membership/fee_schedule/bzx/; the EDGX Options fee schedule, 
available at: https://www.cboe.com/us/options/membership/fee_schedule/edgx/, and the BOX Options fee schedule, available at: 
https://boxoptions.com/fee-schedule/. This range is based on a 
review of the fees charged for 10-40Gb connections at each of these 
exchanges and relates solely to the physical port fee or connection 
charge, excluding co-location fees and other fees assessed by these 
exchanges. The Exchange notes that it does not offer physical 
connections with lower bandwidth than 10Gb and that Members and non-
Members with lower bandwidth requirements typically access the 
Exchange through third-party extranets or service bureaus.
    \43\ See id.
    \44\ See id.
    \45\ As noted above, all physical connections offered by MEMX 
are at least 10Gb capable and physical connections provided with 
larger bandwidth capabilities will be provided at the same rate as 
such connections. In contrast to other exchanges, MEMX has not 
proposed different types of physical connections with higher pricing 
for those with greater capacity. See supra note 39. The Exchange 
also reiterates that MEMX application sessions are capable of 
handling significant amount of message traffic (i.e., over 50,000 
orders per second), and have no application flow control or order 
throttling, in contrast to competitors that have imposed message 
rate thresholds. See supra note 32 and accompanying text.
    \46\ See supra note 42.
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    In conclusion, the Exchange submits that its proposed fee structure 
satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act 
\47\ for the reasons discussed above in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its Members and other persons using its facilities, does not permit 
unfair discrimination between customers, issuers, brokers, or dealers, 
and is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system and in general to protect investors 
and the public interest, particularly as the proposal neither targets 
nor will it have a disparate impact on any particular category of 
market participant.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed reorganization of its fee 
schedule to establish a separate fee schedule for Connectivity Fees is 
reasonable and equitable because it is a non-substantive change and 
does not involve changing any existing fees or rebates that apply to 
trading activity on MEMX Equities. Further, the changes are designed to 
make the fee schedule easier to read and for Members to validate the 
bills they receive from the Exchange. The Exchange also believes this 
reorganization is non-discriminatory because it applies uniformly to 
all Members. The Exchange believes the proposed fee schedule will be 
clearer and less confusing for Members of the Exchange and will 
eliminate potential Member confusion, thereby removing impediments to 
and perfecting the mechanism of a free and open market and a national 
market, and in general, protecting investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\48\ the Exchange 
does not believe that the proposed rule change would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act.
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    \48\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

Intramarket Competition
    The Exchange does not believe that the proposed rule change to 
apply the same Connectivity Fees to Options Users as it does to 
Equities Users would place certain market participants at the Exchange 
at a relative disadvantage compared to other market participants 
because the proposed connectivity pricing is associated with relative 
usage of the Exchange by each market participant and does not impose a 
barrier to entry to smaller participants. As noted above, the Exchange 
has previously justified its pricing with respect to MEMX Equities and 
believes the most fair approach, absent a significant differentiation 
between application costs to Equities and Options, is to apply the same 
pricing to all participants of either platform. The Exchange believes 
its proposed pricing is reasonable and lower than what other options 
exchanges charge and, when coupled with the availability of third-party 
providers that also offer connectivity solutions, that participation on 
the Exchange is

[[Page 16061]]

affordable for all market participants, including smaller trading 
firms. Therefore, the fees may stimulate intramarket competition by 
attracting additional firms to become Members of MEMX Options. As 
described above, the connectivity services purchased by market 
participants typically increase based on their additional message 
traffic and/or the complexity of their operations. The market 
participants that utilize more connectivity services typically utilize 
the most bandwidth, and those are the participants that consume the 
most resources from the network. Accordingly, the proposed fees for 
connectivity services do not favor certain categories of market 
participants in a manner that would impose a burden on competition; 
rather, the allocation of the proposed Connectivity Fees reflects the 
network resources consumed by the various size of market participants 
and the costs to the Exchange of providing such connectivity services.
    As it relates to the reorganization of the fee schedule, as 
discussed above, the Exchange does not believe that the proposed change 
would impose any burden on competition because such change serves to 
create an easier to read fee schedule to avoid any Member confusion.
Intermarket Competition
    The Exchange does not believe the proposed fees for Options 
Connectivity place an undue burden on competition on other SROs that is 
not necessary or appropriate. Additionally, other exchanges have 
similar connectivity alternatives for their participants, but with 
higher rates to connect.\49\ The Exchange is also unaware of any 
assertion that the proposed fees for connectivity services would 
somehow unduly impair its competition with other exchanges. As a new 
entrant in an already highly competitive environment for equity options 
trading, MEMX does not have the market power necessary to set prices 
for services that are unreasonable or unfairly discriminatory in 
violation of the Exchange Act. In sum, MEMX's proposed Connectivity 
Fees for Options Members are comparable to and generally lower than 
fees charged by other options exchanges for the same or similar 
services.
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    \49\ See supra notes 41-46 and accompanying text.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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 \50\ and Rule 19b-4(f)(2) \51\ thereunder.
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    \50\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \51\ 17 CFR 240.19b-4(f)(2).
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    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 change should be approved or 
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 Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-MEMX-2024-06 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-MEMX-2024-06. 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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-MEMX-2024-06 and should be 
submitted on or before March 27, 2024.
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    \52\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\52\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-04695 Filed 3-5-24; 8:45 am]
BILLING CODE 8011-01-P