[Federal Register Volume 89, Number 51 (Thursday, March 14, 2024)]
[Notices]
[Pages 18687-18689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05366]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99699; File No. SR-MEMX-2024-08]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Fee Schedule

March 8, 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 29, 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 and II 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 with the Commission a proposed rule change 
to amend the Exchange's fee schedule applicable to Members \3\ and non-
Members \4\ of the Exchange (the ``Fee Schedule'') pursuant to Exchange 
Rules 15.1(a) and (c) to implement a waiver of application session fees 
solely related to participation on the Exchange's platform for trading 
equity options, MEMX Options, until March 31, 2024. The Exchange 
proposes to implement the changes to the Fee Schedule pursuant to this 
proposal on March 1, 2024. The text of the proposed rule change is 
provided in Exhibit 5.
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    \3\ See Exchange Rule 1.5(p).
    \4\ 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.
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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
    The purpose of the proposed rule change is to amend the Fee 
Schedule to

[[Page 18688]]

implement a waiver of application session fees solely related to 
participation on the Exchange's platform for trading equity options, 
MEMX Options, until March 31, 2024. The Exchange notes that the 
proposed change does not amend any existing fee or rebate for equities 
or options transactions, market data or connectivity fees. The sole 
change proposed herein is to extend the timeframe during which the 
Exchange will waive Options application session fees for new Members 
and non-Members of the Exchange, as further described below.
    MEMX currently has a waiver in place, the ``Options Connectivity 
Fee Waiver'', which is set to expire on February 29, 2024.\5\ Under the 
current Options Connectivity Fee Waiver, fees charged to Members and 
Non-Members for physical connectivity to MEMX Options \6\ and for 
application sessions (otherwise known as ``logical ports'') utilized in 
connection with participation on MEMX Options would not be assessed 
until March 1, 2024. Specifically, the physical connectivity fees are 
$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''), and the 
application session fees are $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.
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    \5\ See SR-MEMX-2024-05, available at: https://info.memxtrading.com/sr-memx-2024-05-proposed-change-to-amend-the-exchanges-fee-schedule/.
    \6\ Physical connections may be used to access both MEMX 
equities and options platforms, as such, the Exchange internally 
verifies whether new connections are being used solely for Options 
connections in order to determine whether such connection qualifies 
for the Options Connectivity Fee Waiver.
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    The Exchange believes that the existing Options Connectivity Waiver 
has been effective in incentivizing options market participants to join 
MEMX Options. MEMX Options launched in September of 2023, and has been 
conducting a staged rollout of options available for trading on the 
Exchange since that time. The Exchange's rollout completed on February 
27, 2024, and given the impending expiration of the Options 
Connectivity Fee Waiver, the Exchange is proposing to implement a new 
waiver, in which it will waive application session fees (but not 
physical connectivity fees) until March 31, 2024 (the ``Options 
Application Session Fee Waiver'').
    Under the proposed Options Application Session Fee Waiver, 
applicable Options application session fees of $450 per month for each 
Order Entry Port and Drop Copy Port in the Exchange's Primary Data 
Center will be assessed to Members and non-Members beginning April 1, 
2024. The Exchange believes that it is appropriate to continue to waive 
application session fees solely used for Options for an additional 
month due to the recent completion of the phased underlying symbol 
rollout. Given the fact that application sessions are generally added 
and removed on a more fluid basis, the Exchange wishes to offer new 
participants on the Exchange more time to determine the appropriate 
amount of application sessions required to conduct their business on 
the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its Members and other persons using its facilities 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes it is reasonable to waive application session 
fees solely related to participation on MEMX Options for new and 
existing Members and non-Members of the Exchange because the proposal 
continues to provide an incentive for options trading firms to apply 
for Exchange membership. Further, the Exchange has determined that a 
waiver of application session fees only is appropriate because in 
general, the number of physical connections used by Members and non-
Members fluctuates less than the number of application sessions, which 
are added or discontinued on a more frequent basis depending on the 
participant's business model. Given that the Exchange has very recently 
completed the final phase of the underlying symbol rollout on MEMX 
Options, the Exchange would like to provide additional time for 
participants to determine the appropriate amount of application 
sessions necessary for their options trading free of charge. The 
Exchange believes that providing this opportunity for a limited period 
of time enables it to improve its overall competitiveness and 
strengthen its market quality for all market participants.
    In addition, the Exchange believes that the proposed Options 
Application Session Fee Waiver is equitable and not unfairly 
discriminatory in that it will apply uniformly to all Members and non-
Members of the Exchange.

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

    The Exchange does not believe that the proposal will result in any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. Instead, as discussed above, 
the Exchange believes that the proposed change would encourage market 
participants who have not already done so to join the Exchange, in 
addition to providing existing participants additional time to 
potentially modify their number of application sessions in order to 
optimize their activities on MEMX Options. As a result, the Exchange 
believes that the Options Application Session Fee Waiver will enhance 
the competitiveness of MEMX Options as a new exchange. For these 
reasons, the Exchange believes that the proposal furthers the 
Commission's goal in adopting Regulation NMS of fostering competition 
among orders, which promotes ``more efficient pricing of individual 
stocks for all types of orders, large and small.'' \9\
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    \9\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70 
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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Intramarket Competition
    As discussed above, the Exchange believes that the proposal would 
encourage new participants to apply for Exchange membership, thereby 
enhancing liquidity and market quality on the Exchange, as well as 
enhancing the attractiveness of the Exchange as a trading venue, which 
the Exchange believes, in turn, would continue to encourage market 
participants to direct additional order flow to the Exchange.
    The Exchange does not believe that the proposed changes would 
impose any burden on intramarket competition because such changes will 
incentivize new participants to join the Exchange and provide an added 
benefit to Members and non-Members already connected to MEMX Options. 
For the foregoing reasons, the Exchange believes the proposed changes 
would not impose

[[Page 18689]]

any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.
Intermarket Competition
    As described above, the proposed Options Application Session Fee 
Waiver will allow current Members and non-Members added flexibility and 
time in determining the appropriate number of application sessions they 
wish to purchase in order to participate on the Exchange. Accordingly, 
the Exchange believes the proposal would not burden, but rather 
promote, intermarket competition by enabling it to better compete with 
other options exchanges following the recent completion of the final 
phased rollout on MEMX Options.

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 under 
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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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-2024-08 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-2024-08. 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-2024-08 and should be 
submitted on or before April 4, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-05366 Filed 3-13-24; 8:45 am]
BILLING CODE 8011-01-P