Notice2024-00178
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule To Remove Expired Rebate Tier Criterion
Primary source
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Published
January 9, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 6 (Tuesday, January 9, 2024)</title>
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[Federal Register Volume 89, Number 6 (Tuesday, January 9, 2024)]
[Notices]
[Pages 1132-1134]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-00178]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99266; File No. SR-MEMX-2023-41]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Fee Schedule To Remove Expired Rebate Tier Criterion
January 3, 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 December 26, 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 implement the changes to the Fee Schedule pursuant
to this proposal on January 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).
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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 remove an expired criteria under Liquidity Provision Tier
4.
The Exchange currently provides a base rebate of $0.0015 per share
for executions of orders in securities priced at or above $1.00 per
share that add displayed liquidity to the Exchange (such orders,
``Added Displayed Volume'').\4\ The Exchange also currently offers
Liquidity Provision Tiers 1-5 under which a Member may receive an
enhanced rebate for executions of Added Displayed Volume by achieving
the corresponding required volume criteria for each such tier. With
respect to Liquidity Provision Tier 4, the Exchange currently provides
an enhanced rebate of $0.0029 per share for executions of Added
Displayed Volume for Members that qualify for such tier by achieving:
(1) an ADAV \5\ (excluding Retail Orders) that is equal to or greater
than 0.09% of the TCV; \6\ or (2) an ADAV that is equal to or greater
than 0.006% of the TCV and a Step-Up
[[Page 1133]]
ADAV \7\ from June 2023 that is equal to or greater than 40% of the
Member's June 2023 ADAV.\8\ Additionally, the Fee Schedule indicates
that criteria (2) of Liquidity Provision Tier 4 will expire no later
than December 31, 2023. Now, given the expiration of criteria (2) of
Liquidity Provision Tier 4, it is necessary to modify the Fee Schedule
to delete this criteria (2) as well as the note under the Liquidity
Provision Tiers pricing table that indicates its expiration, as both
are no longer applicable and otherwise obsolete. The Exchange is not
proposing to make any changes to this or any other Liquidity Provision
Tier, and as such, Liquidity Provision Tier 4 will now consist solely
of the previously existing criteria (1).
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\4\ The base rebate for executions of Added Displayed Volume is
referred to by the Exchange on the Fee Schedule under the existing
description ``Added displayed volume'' with a Fee Code of ``B'',
``D'' or ``J'', as applicable, on execution reports.
\5\ As set forth on the Fee Schedule, ``ADAV'' means the average
daily added volume calculated as the number of shares added per day,
which is calculated on a monthly basis.
\6\ As set forth on the Fee Schedule, ``TCV'' means total
consolidated volume calculated as the volume reported by all
exchanges and trade reporting facilities to a consolidated
transaction reporting plan for the month for which the fees apply.
\7\ As set forth on the Fee Schedule, ``Step Up ADAV'' means
ADAV in the relevant baseline month subtracted from current ADAV.
\8\ The proposed pricing for Liquidity Provision Tier 4 is
referred to by the Exchange on the Fee Schedule under the existing
description ``Added displayed volume, Liquidity Provision Tier 4''
with a Fee Code of ``B4'', ``D4'' or ``J4'', as applicable, to be
provided by the Exchange on the monthly invoices provided to
Members.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\9\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed change to modify Liquidity
Provision Tier 4 to remove the expired criteria (2) criteria is
reasonable because there was an expiration date associated with this
criteria that has now passed. As such, this criteria is no longer
available under this tier, and should not remain on the Fee Schedule.
The Exchange believes that the enhanced rebate for executions of Added
Displayed Volume provided under Liquidity Provision Tier 4, which the
Exchange is not proposing to change with this proposal, remains
commensurate with the required criteria under such tier, as modified,
and is reasonably related to the market quality benefits that such tier
is designed to achieve. The Exchange also believes the enhanced rebate
for executions of Added Displayed Volume provided under Liquidity
Provision Tier 4 remains equitable and not unfairly discriminatory, as
such enhanced rebate will continue to apply equally to all qualifying
Members.
For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act \11\ 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 unfairly
discriminate between customers, issuers, brokers, or dealers.
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\11\ 15 U.S.C. 78f(b)(4) and (5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\12\ the Exchange
believes that the proposed rule change will not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\12\ 15 U.S.C. 78f(b)(8).
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The Exchange believes that the proposed rule change would not place
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
designed to address any competitive issues but rather is designed to
enhance the clarity of the Fee Schedule and alleviate possible Member
confusion that may arise from the inclusion of obsolete language.
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 \13\ and Rule 19b-4(f)(2) \14\ thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 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#9be9eef7feb6f8f4f6f6fef5efe8dbe8fef8b5fcf4ed"><span class="__cf_email__" data-cfemail="4032352c256d232f2d2d252e3433003325236e272f36">[email protected]</span></a>. Please include
file number SR-MEMX-2023-41 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-2023-41. 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-2023-41 and should be
submitted on or before January 30, 2024.
[[Page 1134]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00178 Filed 1-8-24; 8:45 am]
BILLING CODE 8011-01-P
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