Notice2023-15261
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule To Waive Membership Fees for New Members Temporarily
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 19, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 137 (Wednesday, July 19, 2023)</title>
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[Federal Register Volume 88, Number 137 (Wednesday, July 19, 2023)]
[Notices]
[Pages 46285-46287]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-15261]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97893; File No. SR-MEMX-2023-13]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Fee Schedule To Waive Membership Fees for New Members
Temporarily
July 13, 2023.
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 June 30, 2023, 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 with the Commission a proposed rule change
to amend the Exchange's fee schedule applicable to Members \3\ (the
``Fee Schedule'') pursuant to Exchange Rules 15.1(a) and (c). The
Exchange proposes to waive the membership fees (``Membership Fees'')
for approximately the next six months for all new Members of the
Exchange. The Exchange will implement the membership fee waiver (the
``Membership Fee Waiver'') for the period of time commencing
immediately and ending on December 31, 2023. The text of the proposed
rule change is provided in Exhibit 5.
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\3\ See Exchange Rule 1.5(p).
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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 Exchange proposes to modify its fee schedule in order to waive
the Membership Fees for all new Members of the Exchange who join the
Exchange through December 31, 2023. The Exchange will implement the
Membership Fee Waiver (as defined above) until December 31, 2023. The
Exchange notes that the proposed change does not amend any existing fee
or rebate for equities transactions, market data or connectivity fees.
The sole change proposed herein is to waive membership fees for new
Members of the Exchange, as described below.
MEMX currently charges $200 per month to maintain active
membership. In preparation for the launch of the Exchange's options
market (``MEMX Options''),\4\ the Exchange wishes to
[[Page 46286]]
encourage additional participants to join the Exchange by waiving the
Exchange's membership fee for such new participants. The Exchange
proposes to apply the Membership Fee Waiver to all new Members ending
on December 31, 2023. Specifically, the Exchange is proposing to add a
description under ``Membership'' in the Exchange's Fee Schedule, noting
that Membership Fees will be waived for new Members of the Exchange
until January 1, 2024.
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\4\ On August 8, 2022, the Commission approved SR-MEMX-2022-10,
which proposed rules for the trading of options on the Exchange. See
Securities Exchange Act Release No. 95445 (August 9, 2022) [sic], 87
FR 49884 (August 12, 2022) (SR-MEMX-2022-010). The Exchange plans to
launch MEMX Options in September of 2023.
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Although the Exchange notes that the proposed change is intended
primarily to encourage new participants to join the Exchange in order
to participate on the MEMX Options market and the Exchange believes the
participants that will benefit from this waiver are firms that will do
so, the Exchange is intentionally proposing the waiver to apply broadly
to all new participants on the Exchange, including firms that would
trade only on the Exchange's market for equity securities or on both
the Exchange's market for equity securities and MEMX Options.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and
furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\
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 its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes it is reasonable to waive the Membership Fee
for new Members of the Exchange, primarily to provide an incentive for
options trading firms to apply for Exchange membership in advance of
the launch of MEMX Options. The options markets are quote-driven
markets and are dependent on liquidity providers for liquidity and
price discovery. The proposal will be of particular importance in
encouraging liquidity providers to become members of the Exchange,
which may result in more trading opportunities, enhanced competition,
and improved overall market quality on the Exchange. Although the
proposed change is intended primarily to encourage new participants to
join the Exchange in order to participate on the MEMX Options market
and the Exchange believes the participants that will benefit from this
waiver are firms that will do so, the Exchange also believes that it is
reasonable to adopt the waiver in a manner that applies broadly to all
new participants on the Exchange, including firms that would trade only
on the Exchange's market for equity securities or on both the
Exchange's market for equity securities and MEMX Options.
In addition, the Exchange believes that the proposed Membership Fee
Waiver is equitable and not unfairly discriminatory in that it will
apply uniformly to all new Members of the Exchange. Further, the
Exchange believes that the waiver is reasonable, equitable and not
unfairly discriminatory to current Members of the Exchange because the
majority of the Exchange's current Members joined at a time when the
Exchange did not impose membership fees (also to incentivize such
participants to join), and thus have already received this benefit.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change 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. As a result, if such participants do join the Exchange and
route their orders to the Exchange or support other Members that route
orders (i.e., clearing firms) the Exchange believes the proposal would
enhance its competitiveness as a market. Encouraging additional
participants to join the Exchange will enable a greater number of
participants to be onboard when MEMX Options launches. Attracting a
greater number of participants will foster greater competition on the
Exchange, particularly in the case of MEMX Options which is a quote-
driven market. 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.'' \7\
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\7\ 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 the majority of
the Exchange's current members joined at a time when the Exchange did
not impose membership fees (also to incentivize such participants to
join), and thus have already received this benefit. The options markets
are quote-driven markets and are dependent on liquidity providers for
liquidity and price discovery. The proposal will be of particular
importance in encouraging liquidity providers to become members of the
Exchange, which may result in more trading opportunities, enhanced
competition, and improved overall market quality on the Exchange. For
the foregoing reasons, the Exchange believes the proposed changes would
not impose 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 Membership Fee Waiver will
incentive market participants to join the Exchange during the
Membership Fee Waiver period. Accordingly, the Exchange believes the
proposal would not burden, but rather promote, intermarket competition
by enabling it to better compete with other options exchanges at the
time MEMX Options launches. In addition, as noted above, the Exchange
has intentionally proposed to adopt the waiver broadly so that it is
also applicable to new Members that will participate on the Exchange's
market for equity securities or that will participate on such market as
well as MEMX Options, and thus, the proposal may also better enable the
Exchange to compete with other equities exchanges.
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.
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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 \8\ and Rule 19b-4(f)(2) \9\ thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ccbeb9a0a9e1afa3a1a1a9a2b8bf8cbfa9afe2aba3ba"><span class="__cf_email__" data-cfemail="5d2f283138703e3230303833292e1d2e383e733a322b">[email protected]</span></a>. Please include
file number SR-MEMX-2023-13 on the subject line.
Paper Comments
<bullet> 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-2023-13. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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-2023-13 and should be
submitted on or before August 9, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-15261 Filed 7-18-23; 8:45 am]
BILLING CODE 8011-01-P
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