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Notice2024-16553

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

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Published
July 29, 2024

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 89 Issue 145 (Monday, July 29, 2024)</title>
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[Federal Register Volume 89, Number 145 (Monday, July 29, 2024)]
[Notices]
[Pages 60954-60955]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-16553]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100583; File No. SR-MEMX-2024-27]


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

July 23, 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 July 16, 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 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 July 16, 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 make certain non-
substantive, clarifying changes to the Fee Schedule, including: (1) 
adding definitions of fee codes B, D, J, and I in the Transaction Fees 
pricing table; (2) adding a clarifying note under the Transaction Fees 
pricing table related to the applicability of tiers to executions in 
securities priced at or above $1.00 per share; and (3) correcting an 
inadvertent error in the location of the Display-Price Sliding Tier 
pricing table within the Fee Schedule. The Exchange proposes to 
implement these changes effective immediately.
Define Certain Fee Codes
    Currently, the Exchange 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,'') which is reflected on the first line of 
the Transaction Fees pricing table on the Fee Schedule, with a Fee Code 
description of ``B, D, J, or I''. Fee code B refers to orders, other 
than Retail Orders, that establish the NBBO (i.e., ``set'' the NBBO), 
fee code D refers to orders, other than Retail Orders, that add 
displayed liquidity to the Exchange but do not set or join the NBBO, 
and fee code J refers to orders, other than Retail Orders, that 
establish a new BBO on the Exchange that matches the NBBO first 
established on an away market (i.e. ``join'' the NBBO). Fee code I does 
not correspond to the type of order originally entered, but rather, is 
assigned to executions of orders subject to Display-Price Sliding that 
add liquidity to the Exchange and receive price improvement over the 
order's ranked price when executed (such orders, ``Added Price Improved 
Volume'', or orders with a fee code ``P'') if a Member otherwise meets 
the criteria under Display-Price Sliding Tier 1.\4\ With the exception 
of fee code I, which is described under the Display-Price Sliding Tier 
pricing table on the Fee Schedule, the Exchange historically has not 
included the specific definitions of fee codes B, D, and J on the Fee 
Schedule, because all represent Added Displayed Volume and there is no 
difference in the rebate provided between these particular codes. For 
example, if a Member meets the criteria under Liquidity Provision 2, 
all of its executions of Added Displayed Volume in securities priced at 
or above $1.00 per share for that month will be provided a rebate of 
$0.0033 per share, regardless of whether those executions have a fee 
code of B, D, or J. Further, the Exchange has provided the specific 
definitions of these fee codes in each rule filing in which they are 
referenced.\5\ However, the Exchange is now proposing to include high 
level definitions of these fee codes within the Fee Schedule to provide 
more clarity to Members. Specifically, the Exchange is proposing to add 
a note directly under the Transaction Fees pricing table which defines 
the fee codes as previously stated. This change will not affect when 
the fee codes are appended to any execution or modify the rebate 
provided, and only serves to clarify to Members the definitions of the 
fee codes within the Transaction Fees pricing table on the Fee 
Schedule.
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    \4\ Fee code I is included in the rows of the Transaction Fees 
pricing table related to Added Displayed Volume, even though fee 
code I is only appended to executions of Added Price Improved 
Volume, because pursuant to the criteria of Display-Price Sliding 
Tier 1, if a Member meets said criteria, the rebate provided for its 
executions of Added Price Improved Volume will be the highest rebate 
otherwise achieved for that Member for its executions of Added 
Displayed Volume. Thus, the possible rebate provided for such ``I'' 
executions could be any of those on the Transaction Fees pricing 
table otherwise applicable to fee codes B, D, or J, excluding the 
base rebate for Added Displayed Retail Volume or the rebate provided 
under Retail Tier 1, as the Display-Price Sliding Tier 1 excludes 
Retail Orders, and as such, the Exchange included the ``I'' in each 
of those applicable rows of the Transaction Fees pricing table.
    \5\ See, e.g., most recently, Securities Exchange Act Release 
No. 100469 (July 9, 2024), SR-MEMX-2024-26, notes 13-14, available 
at: <a href="https://www.sec.gov/files/rules/sro/memx/2024/34-100469.pdf">https://www.sec.gov/files/rules/sro/memx/2024/34-100469.pdf</a>.
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Clarify Tier Rebate/Fee Execution Applicability

    The Exchange also proposes to add a note under the Transaction Fee 
pricing table indicating that unless otherwise indicated, rebates 
provided or fees charged under the tiers below apply only to executions 
in securities priced at or above $1.00. Currently, the Fee Schedule 
either specifically denotes to which executions a rebate or fee will 
apply in a note under the table in which the tier is described, and in 
the absence of such a note, the specific rebate provided or fee 
charged, separated by securities priced at or above $1.00 or below 
$1.00, is provided alongside each tier description in the Transaction 
Fees pricing table on the first page of the Fee Schedule. The Exchange 
proposes to add the clarifying note in order to provide additional 
certainty related to the tiers and avoid any potential

[[Page 60955]]

Member confusion. This proposed change will not modify the rebates 
provided or fees charged under any of the Exchange's pricing tiers.
Re-Order the Display-Pricing Tier Within the Fee Schedule
    Lastly, in adopting the Display-Price Sliding Tier, the Exchange 
inadvertently added its pricing table to the Fee Schedule immediately 
after the DLI Tiers pricing table, but before the Definitions and Notes 
section applicable only to the DLI Tiers. As such, the Exchange is 
proposing to delete the Display-Price Sliding Tier from its current 
location and move it immediately before the DLI Tiers pricing table on 
the Fee Schedule (i.e., immediately after the existing Cross Asset Tier 
pricing table). This correction will improve the readability of the Fee 
Schedule and again, avoid any potential Member confusion.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes its proposal to amend the Transaction Fees 
pricing table related to fee codes B, D, J and I and add the clarifying 
language regarding the applicability of the tiers to executions in 
securities priced at or above $1.00 per share is reasonable, equitable, 
and consistent with the Act because such changes are designed to 
provide additional clarity to Members with respect to the Exchange's 
pricing without changing how the fee codes and pricing tiers are 
applied. Further, the Exchange's proposal to move the location of the 
Display-Price Sliding Tier pricing table is intended to correct an 
inadvertent error in where the table should have been placed within the 
Fee Schedule. Additionally, the proposed changes promote just and 
equitable principles of trade and are designed to removed impediments 
to and perfect the mechanism of a free and open market and a national 
market system as they provide transparency to Members regarding the 
definitions of the fee codes with the Transaction Table and the 
applicability of the tiers to executions in securities priced at or 
above $1.00 per share.

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 Act.
    The proposed changes would not affect competition among national 
securities exchanges or among Members of the Exchange. The proposed 
rule change is not designed to address any competitive issues but 
rather to enhance the clarity and transparency of the Fee Schedule and 
alleviate possible Member confusion that may arise. The proposed rule 
change would have no impact on pricing or existing services. Rather, 
the changes would clarify the Fee Schedule, making it easier to 
understand and alleviating any possible Member confusion.

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 \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#8ffdfae3eaa2ece0e2e2eae1fbfccffceaeca1e8e0f9"><span class="__cf_email__" data-cfemail="98eaedf4fdb5fbf7f5f5fdf6ecebd8ebfdfbb6fff7ee">[email&#160;protected]</span></a>. Please include 
file number SR-MEMX-2024-27 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-2024-27. 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-2024-27 and should be 
submitted on or before August 19, 2024.

    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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16553 Filed 7-26-24; 8:45 am]
BILLING CODE 8011-01-P


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