[Federal Register Volume 89, Number 136 (Tuesday, July 16, 2024)]
[Notices]
[Pages 57952-57956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15507]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100493; File No. SR-GEMX-2024-17]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, 
Section 6

July 10, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 1, 2024, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III, below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Rules at Options 7, Section 6, 
C, Ports and Other Services.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/gemx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Options 7, Section 6, C, Ports and 
Other Services. Specifically, the Exchange

[[Page 57953]]

proposes to amend the monthly caps for SQF Ports \3\ and SQF Purge 
Ports.\4\
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    \3\ ``Specialized Quote Feed'' or ``SQF'' is an interface that 
allows Market Makers to connect, send, and receive messages related 
to quotes, Immediate-or-Cancel Orders, and auction responses to the 
Exchange. Features include the following: (1) options symbol 
directory messages (e.g., underlying instruments); (2) System event 
messages (e.g., start of trading hours messages and start of 
opening); (3) trading action messages (e.g., halts and resumes); (4) 
execution messages; (5) quote messages; (6) Immediate-or-Cancel 
Order messages; (7) risk protection triggers and purge 
notifications; (8) opening imbalance messages; (9) auction 
notifications; and (10) auction responses. The SQF Purge Interface 
only receives and notifies of purge requests from the Market Maker. 
Market Makers may only enter interest into SQF in their assigned 
options series. Immediate-or-Cancel Orders entered into SQF are not 
subject to the Order Price Protection, Market Order Spread 
Protection, and Size Limitation Protection in Options 3, Section 
15(a)(1)(A), (1)(B), and (2)(B) respectively. See Supplementary 
Material .03(c) to Options 3, Section 7.
    \4\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the Market Maker. 
Dedicated SQF Purge Ports enable Market Makers to seamlessly manage 
their ability to remove their quotes in a swift manner. The SQF 
Purge Port is designed to assist Market Makers in the management of, 
and risk control over, their quotes. Market Makers may utilize a 
purge port to reduce uncertainty and to manage risk by purging all 
quotes in their assigned options series. Of note, Market Makers may 
only enter interest into SQF in their assigned options series. 
Additionally, the SQF Purge Port may be utilized by a Market Maker 
in the event that the Member has a system issue and determines to 
purge its quotes from the order book.
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    Today, GEMX assesses $1,250 per port, per month for an SQF Port as 
well as an SQF Purge Port.\5\ Also, today, SQF Ports and SQF Purge 
Ports are subject to a monthly cap of $17,500, which cap is applicable 
to Market Makers.
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    \5\ The Exchange proposes to add a comma between ``per port'' 
and ``per month'' in the Options 7, Section 6, C, SQF Port and SQF 
Purge Port Fee rule text. The Exchange also proposes to remove an 
extraneous period in Options 7, Section 6, C, in the second 
paragraph.
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    At this time, the Exchange proposes to increase the monthly maximum 
SQF Port and SQF Purge Port Fee Cap of $17,500 for Market Makers based 
on the size of the Market Maker on GEMX. The Exchange is determining 
the size of the Market Maker based on the amount of transactional 
volume executed on GEMX in a given month. The Exchange proposes to take 
each Market's Maker's electronic monthly transactional volume via SQF 
on GEMX and divide that number by the sum of all Market Maker 
electronic monthly transactional volume via SQF on GEMX 
(``Transactional Volume''). All SQF interest would be considered. Each 
Market Maker would then be classified on GEMX, for the purpose of the 
SQF Port Fee and SQF Purge Port Cap, as a ``small,'' ``medium,'' or 
``large'' Market Maker based on their Transactional Volume on GEMX to 
determine the applicable cap in a given month. Market Makers that 
qualify as ``small'' would be subject to an increased SQF Port and SQF 
Purge Port monthly cap of $22,500. Market Makers that qualify as 
``medium'' would be subject to an increased monthly cap of $25,000 for 
SQF Port and SQF Purge Port Fees. Finally, Market Makers that qualify 
as ``large'' would be subject to an increased monthly cap of $27,500 
for SQF Port and SQF Purge Port Fees.
    As is the case today, the Exchange would not assess a Market Maker 
an SQF Port and SQF Purge Port Fee beyond the monthly cap once the 
Market Maker has exceeded the monthly cap for the respective month. 
Despite increasing the maximum SQF Port and SQF Purge Port Fee Cap for 
Market Makers that qualify as ``small,'' ``medium'' and ``large,'' the 
Exchange will continue to offer all Market Makers the opportunity to 
cap their SQF Port and SQF Purge Port Fees to limit their costs as they 
would not be assessed an SQF Port or SQF Purge Port Fee beyond the 
applicable cap each month.
    A GEMX Market Maker requires only one SQF Port to submit quotes in 
its assigned options series into GEMX. An SQF Purge is a specific port 
for the SQF interface that only receives and notifies of purge requests 
from the Market Maker. A GEMX Market Maker may submit all quotes 
through one SQF Port and utilize one SQF Purge Port to view its purge 
requests. While a Market Maker may elect to obtain multiple SQF Ports 
and SQF Purge Ports to organize its business,\6\ only one SQF Port and 
SQF Purge Port is necessary for a Market Maker to fulfill its 
regulatory quoting obligations.\7\
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    \6\ For example, a Market Maker may desire to utilize multiple 
SQF Ports for accounting purposes, to measure performance, for 
regulatory reasons or other determinations that are specific to that 
Member.
    \7\ GEMX Market Makers have various regulatory requirements as 
provided for in Options 2, Section 4. Additionally, GEMX Market 
Makers have certain quoting requirements with respect to their 
assigned options series as provided in Options 2, Section 5. SQF 
Ports are the only quoting protocol available on GEMX and only 
Market Makers may utilize SQF Ports. The same is true for SQF Purge 
Ports.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among members and issuers and other persons using any facility, 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The proposed pricing change to increase the SQF Port Fee and SQF 
Purge Port Fee Cap for Market Makers that qualify as ``small,'' from 
$17,500 to $22,500, to increase the SQF Port Fee and SQF Purge Port Fee 
Cap for Market Makers that qualify as ``medium'' from $27,500 to 
$25,000 per month, and to increase the SQF Port Fee and SQF Purge Port 
Fee Cap for Market Makers that qualify as ``large'' from $42,000 to 
$50,000 per month, is reasonable because despite the increase in the 
maximum SQF Port Fee and SQF Purge Port Fee Cap, the Exchange will 
continue to offer all Market Makers the opportunity to cap their SQF 
Port Fees each month to limit their cost as they would not be assessed 
an SQF Port or SQF Purge Port Fee Cap Fees beyond the cap.
    A GEMX Market Maker requires only one SQF Port to submit quotes in 
its assigned options series into GEMX. A GEMX Market Maker may submit 
all quotes through one SQF Port and utilize one SQF Purge Port to view 
its purge requests. While a Market Maker may elect to obtain multiple 
SQF Ports and SQF Purge Ports to organize its business,\10\ only one 
SQF Port and SQF Purge Port is necessary for a Market Maker to fulfill 
its regulatory quoting obligations.\11\ Members may choose a greater 
number of SQF Ports or SQF Purge Ports, beyond one port, depending on 
that Member's particular business model. Additionally, the Exchange 
believes that the caps are reasonable for two reasons.
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    \10\ For example, a Market Maker or may desire to utilize 
multiple SQF Ports for accounting purposes, to measure performance, 
for regulatory reasons or other determinations that are specific to 
that Member.
    \11\ GEMX Market Makers have various regulatory requirements as 
provided for in Options 2, Section 4. Additionally, GEMX Market 
Makers have certain quoting requirements with respect to their 
assigned options series as provided in Options 2, Section 5. SQF 
Ports are the only quoting protocol available on GEMX and only 
Market Makers may utilize SQF Ports.
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    First, SQF Ports are a secure method for Market Makers to submit 
quotes into the Exchange's match engine and for the Exchange to send 
messages related to those quotes to Market Makers. GEMX must manage the 
security and message traffic, among other things, for each port. 
Utilizing the various caps based on the ``size'' of the Market Maker as 
determined by Transactional Volume, provides every Market Maker the 
ability to manage cost. Additionally, the Exchange would have the 
ability to manage the quantity of SQF Ports and SQF Purge Ports issued 
by the

[[Page 57954]]

Exchange. The various SQF Port and SQF Purge Port Fee Caps were 
determined based on the level of Transactional Volume on GEMX in 2024 
for Market Makers. The Exchange assessed each level of Market Maker an 
increased fee based on size, as reflected by Transactional Volume, to 
reflect the various sizes of Market Makers present on the Exchange at 
this time. By capping the SQF Ports and SQF Purge Ports at different 
levels based on ``size,'' the Exchange is considering the message 
traffic and message rates generated by the various ``sizes'' of Market 
Makers and the Exchange's ability to process messages from all SQF 
Ports and SQF Purge Ports. The SQF Port and SQF Purge Port Fee Cap 
would allow the Exchange to scale its needs with respect to processing 
messages in an efficient manner. The Exchange notes that Cboe Exchange, 
Inc. (``Cboe'') limits usage on each port and assesses fees for 
incremental usage.\12\
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    \12\ Each Cboe Binary Order Entry (``BOE'') or FIX Logical Port 
incur the logical port fee indicated when used to enter up to 70,000 
orders per trading day per logical port as measured on average in a 
single month. For each incremental usage of up to 70,000 per day per 
logical port will incur an additional logical port fee of $800 per 
month. BOE or FIX Logical Ports provide users the ability to enter 
order/quotes. See Cboe's Fees Schedule.
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    Second, the Exchange notes that multiple ports are not necessary, 
however, to the extent that some Market Makers elect to obtain multiple 
SQF Ports and SQF Purge Ports, the Exchange is offering to cap their 
total port cost. GEMX believes the existence of a cap based on the 
``size'' of the Market Maker will level the playing field. The Exchange 
believes that this approach enables various types of Market Makers to 
effectively limit costs based on their executed Transactional Volume on 
the Exchange. Further, the existence of an SQF Port and SQF Purge Port 
Fee Cap allows for efficiencies and permits Market Makers to increase 
their number of ports beyond the cap. The cap levels the playing field 
by allowing various types of Market Makers that want to obtain a larger 
number of ports to do so with the certainty of a fee cap. Without the 
SQF Port and SQF Purge Port Fee Cap, Market Makers may pay more to 
obtain multiple SQF Port and SQF Purge Ports on the Exchange. Other 
markets tier port fees. BOX Exchange LLC (``BOX'') assesses $1,000 per 
month for all SAIL Ports for Market Making and $500 per month per port 
up to 5 ports for order entry and $150 per month for each additional 
port.\13\ Miami International Securities Exchange, LLC's (``MIAX'') 
MIAX Express Interface (``MEI'') Fee levels are based on a tiered fee 
structure based on the Market Maker's total monthly executed volume 
during the relevant month.\14\
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    \13\ See BOX's Fee Schedule.
    \14\ MEI is a connection to MIAX systems that enables Market 
Makers to submit simple and complex electronic quotes to MIAX. MIAX 
caps its MEI Ports. For these Monthly MIAX MEI Fees levels, if the 
Market Maker's total monthly executed volume during the relevant 
month is less than 0.060% of the total monthly executed volume 
reported by OCC in the market maker account type for MIAX-listed 
option classes for that month, then the fee will be $14,500 instead 
of the fee otherwise applicable to such level. See MIAX's Fee 
Schedule.
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    The proposed pricing change to increase the SQF Port Fee and SQF 
Purge Port Fee Cap for Market Makers that qualify as ``small,'' from 
$17,500 to $22,500, to increase the SQF Port Fee and SQF Purge Port Fee 
Cap for Market Makers that qualify as ``medium'' from $27,500 to 
$25,000 per month, and to increase the SQF Port Fee and SQF Purge Port 
Fee Cap for Market Makers that qualify as ``large'' from $42,000 to 
$50,000 per month, is equitable and not unfairly discriminatory because 
the Exchange is offering different sizes of Market Makers, based on 
Transactional Volume executed on the Exchange, the ability to cap their 
costs at different levels and potentially obtain some SQF Ports and SQF 
Purge Ports at no cost. The proposal recognizes that some Market Makers 
may be deemed ``small'' and may not be able to achieve the same cap as 
other Market Makers. To this end, the Exchange proposes to increase SQF 
Port and SQF Purge Port Fee Cap from $17,500 to $22,500 per month for 
Market Makers that qualify as ``small.'' To the extent that a Market 
Maker qualifies in a given month as a ``medium'' Market Maker the 
Exchange proposes to increase the cap from $17,500 to $25,000 per 
month. This fee presumes to place a Market Maker that qualifies as 
``medium'' on equal footing with a Market Maker that qualifies as a 
``small'' Market Maker in terms of the cap by setting different fee 
caps for each group. The proposal presumes that based on Transactional 
Volume, these Market Makers that qualify as ``medium'' have a greater 
ability to obtain a greater amount of SQF Ports and SQF Purge Ports as 
compared to Market Makers that qualify as ``small.'' Finally, to the 
extent that a Market Maker qualifies in a given month as a ``large'' 
Market Maker the Exchange proposes to increase the cap from $17,500 to 
$27,500 per month. This fee presumes to place a Market Maker that 
qualifies as ``large'' on equal footing with a Market Maker that 
qualifies as a ``small'' Market Maker, and a Market Maker that 
qualifies as ``medium'' in terms of the cap by setting different fee 
caps for each group. The proposal presumes that based on Transactional 
Volume these Market Makers that qualify as ``large'' have the ability 
to obtain the largest amount of SQF Ports and SQF Purge Ports. The 
Exchange would uniformly apply the appropriate Market Maker cap to each 
Market Maker group based on the same volume calculation. Also, Market 
Makers who exceed their applicable cap would uniformly not be assessed 
any fee for SQF Ports and SQF Purge Ports beyond the applicable maximum 
amount.
    Market Makers are the only market participants that are assessed 
SQF Port and SQF Purge Port fees because they are the only market 
participants that are permitted to quote on the Exchange. SQF Ports and 
SQF Purge Ports are only utilized in the Market Maker's assigned 
options series. Unlike other market participants, Market Makers are 
subject to market making and quoting obligations.\15\ These liquidity 
providers are critical market participants in that they are the only 
market participants that provide liquidity to GEMX on a continuous 
basis. In addition, the Exchange notes that Lead Market Makers are 
required to submit quotes in the Opening Process to open an options 
series.\16\ Market Makers are subject to a number of fees, unlike other 
market participants. Market Makers pay separate Membership Fees,\17\ 
and CMM Trading Right Fees,\18\ in addition to other fees paid by other 
market participants. Providing Market Makers a means to cap their cost 
related to quoting at a rate that reflects their ``size'' and enabling 
all Market Makers to acquire SQF Ports and SQF Purge Ports at no cost 
beyond the applicable cap enables these market participants to provide 
the necessary liquidity to GEMX at lower costs. Therefore, because 
Market Makers fulfill a unique role on the Exchange, are the only 
market participant required to submit quotes as part of their 
obligations to operate on the Exchange, and, in light of that role, 
they are eligible for certain incentives. The proposed SQF Port and SQF 
Purge Fee cap is designed to continue to incent Market Makers to quote 
on GEMX, thereby promoting liquidity, quote competition, and trading 
opportunities.
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    \15\ See Options 2, Sections 4 and 5.
    \16\ See Options 3, Section 8.
    \17\ See Options 7, Section 6, A.
    \18\ See Options 7, Section 6, B.
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    In 2022, NYSE Arca, Inc. (``NYSE Arca'') proposed to restructure 
fees relating to OTPs for Market Makers.\19\ In

[[Page 57955]]

that rule change,\20\ NYSE Arca argued that,
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    \19\ See Securities Exchange Act Release No. 95412 (June 23, 
2022), 87 FR 38786 (June 29, 2022) (SR-NYSEArca-2022-36). NYSE Arca 
proposed to increase both the monthly fee per Market Maker OTP and 
the number of issues covered by each additional OTP because, among 
other reasons, the number of issues traded on the Exchange has 
increased significantly in recent years.
    \20\ Id at 38788.

    Market Makers serve a unique and important function on the 
Exchange (and other options exchanges) given the quote-driven nature 
of options markets. Because options exchanges rely on actively 
quoting Market Makers to facilitate a robust marketplace that 
attracts order flow, options exchanges must attract and retain 
Market Makers, including by setting competitive Market Maker permit 
fees. Stated otherwise, changes to Market Maker permit fees can have 
a direct effect on the ability of an exchange to compete for order 
flow. The Exchange also believes that the number of options 
exchanges on which Market Makers can effect option transactions also 
ensures competition in the marketplace and constrains the ability of 
exchanges to charge supracompetitive fees for access to its market 
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by Market Makers.

    Further, NYSE ARCA noted that,\21\
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    \21\ Id at 38790.

    The Exchange further believes that its ability to set Market 
Maker permit fees is constrained by competitive forces based on the 
fact that Market Makers can, and have, chosen to terminate their 
status as a Market Maker if they deem Market Maker permit fees to be 
unreasonable or excessive. Specifically, the Exchange notes that a 
BOX participant modified its access to BOX in connection with the 
implementation of a proposed change to BOX's Market Maker permit 
fees. The Exchange has also observed that another options exchange 
group experienced decreases in market share following its proposed 
modifications of its access fees (including Market Maker trading 
permit fees), suggesting that market participants (including Market 
Makers) are sensitive to changes in exchanges' access fees and may 
respond by shifting their order flow elsewhere if they deem the fees 
to be unreasonable or excessive.
    There is no requirement, regulatory or otherwise, that any 
Market Maker connect to and access any (or all of) the available 
options exchanges. The Exchange also is not aware of any reason why 
a Market Maker could not cease being a permit holder in response to 
unreasonable price increases. The Exchange does not assess any 
termination fee for a Market Maker to drop its OTP, nor is the 
Exchange aware of any other costs that would be incurred by a Market 
Maker to do so.

    The Exchange likewise believes that its ability to cap SQF Port and 
SQF Purge Port fees is constrained by competitive forces and that its 
proposed modifications to the SQF Port and SQF Purge Fee cap is 
reasonably designed in consideration of the competitive environment in 
which the Exchange operates, by balancing the value of the enhanced 
benefits available to Market Makers, based on their transactional 
volume and presumed ``size.'' At the same time, the Exchange believes 
the proposed fees will incent Market Makers to support increased 
liquidity, quote competition, and trading opportunities on the 
Exchange, for the benefit of all market participants.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
Intermarket Competition
    The proposal does not impose an undue burden on intermarket 
competition. The Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges. Because 
competitors are free to modify their own fees in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited.
Intramarket Competition
    The proposed pricing change to increase the SQF Port Fee and SQF 
Purge Port Fee Cap for Market Makers that qualify as ``small,'' from 
$17,500 to $22,500, to increase the SQF Port Fee and SQF Purge Port Fee 
Cap for Market Makers that qualify as ``medium'' from $27,500 to 
$25,000 per month and to increase the SQF Port Fee and SQF Purge Port 
Fee Cap for Market Makers that qualify as ``large'' from $42,000 to 
$50,000 per month does not impose an undue burden on competition 
because the Exchange is offering different sizes of Market Makers, 
based on Transactional Volume executed on the Exchange, the ability to 
cap their costs at different levels and potentially obtain some SQF 
Ports and SQF Purge Ports at no cost. The proposal recognizes that some 
Market Makers may be deemed ``small'' and may not be able to achieve 
the same cap as other Market Makers. To this end, the Exchange proposes 
to increase SQF Port and SQF Purge Port Fee Cap from $17,500 to $22,500 
per month for Market Makers that qualify as ``small.'' To the extent 
that a Market Maker qualifies in a given month as a ``medium'' Market 
Maker the Exchange proposes to increase the cap from $17,500 to $25,000 
per month. This fee presumes to place a Market Maker that qualifies as 
``medium'' on equal footing with a Market Maker that qualifies as a 
``small'' Market Maker in terms of the cap by setting different fee 
caps for each group. The proposal presumes that based on Transactional 
Volume these Market Makers that qualify as ``medium'' have a greater 
ability to obtain a greater amount of SQF Ports and SQF Purge Ports as 
compared to Market Makers that qualify as ``small.'' Finally, to the 
extent that a Market Maker qualifies in a given month as a ``large'' 
Market Maker the Exchange proposes to increase the cap from $17,500 to 
$27,500 per month. This fee presumes to place a Market Maker that 
qualifies as ``large'' on equal footing with a Market Maker that 
qualifies as a ``small'' Market Maker, and a Market Maker that 
qualifies as ``medium'' in terms of the cap by setting different fee 
caps for each group. The proposal presumes that based on Transactional 
Volume these Market Makers that qualify as ``large'' have the ability 
to obtain the largest amount of SQF Ports and SQF Purge Ports. The 
Exchange would uniformly apply the appropriate Market Maker cap to each 
Market Maker group based on the same volume calculation. Also, Market 
Makers who exceed their applicable cap would uniformly not be assessed 
any fee for SQF Ports and SQF Purge Ports beyond the applicable maximum 
amount.
    Market Makers are the only market participants that are assessed 
SQF Port and SQF Purge Port fees because they are the only market 
participants that are permitted to quote on the Exchange. SQF Ports and 
SQF Purge Ports are only utilized in the Market Maker's assigned 
options series. Unlike other market participants, Market Makers are 
subject to market making and quoting obligations.\22\ These liquidity 
providers are critical market participants in that they are the only 
market participants that provide liquidity to GEMX on a continuous 
basis. In addition, the Exchange notes that Lead Market Makers are 
required to submit quotes in the Opening Process to open an options 
series.\23\ Market Makers are subject to a number of fees, unlike other 
market participants. Market Makers pay separate Membership Fees,\24\ 
and CMM Trading Right Fees,\25\ in addition to

[[Page 57956]]

other fees paid by other market participants. Providing Market Makers a 
means to cap their cost related to quoting at a rate that reflects 
their ``size'' and enabling all Market Makers to acquire SQF Ports and 
SQF Purge Ports at no cost beyond the applicable cap enables these 
market participants to provide the necessary liquidity to GEMX at lower 
costs. Therefore, because Market Makers fulfill a unique role on the 
Exchange, are the only market participant required to submit quotes as 
part of their obligations to operate on the Exchange, and, in light of 
that role, they are eligible for certain incentives. The proposed SQF 
Port and SQF Purge Fee cap is designed to continue to incent Market 
Makers to quote on GEMX, thereby promoting liquidity, quote 
competition, and trading opportunities.
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    \22\ See Options 2, Sections 4 and 5.
    \23\ See Options 3, Section 8.
    \24\ See Options 7, Section 6, A.
    \25\ See Options 7, Section 6, B.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\26\ At any time within 60 days of the 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is: (i) necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) otherwise in 
furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \26\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-GEMX-2024-17 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-GEMX-2024-17. 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-GEMX-2024-17 and should be 
submitted on or before August 6, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-15507 Filed 7-15-24; 8:45 am]
BILLING CODE 8011-01-P