Notice2024-27222
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Concerning Options Transaction Fees
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
November 21, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 225 (Thursday, November 21, 2024)</title>
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[Federal Register Volume 89, Number 225 (Thursday, November 21, 2024)]
[Notices]
[Pages 92207-92211]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27222]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101643; File No. SR-MEMX-2024-43]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule Concerning Options Transaction Fees
November 15, 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 October 31, 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\ pursuant
to Exchange Rules 15.1(a) and (c). The Exchange proposes to implement
the changes to the MEMX Options Fee Schedule (the ``Options Fee
Schedule'') pursuant to this proposal immediately. 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 Options Fee
Schedule to (1) amend the Transaction Fees section of the Options Fee
Schedule to separate the existing transaction rebates and fees for
executions of contracts made in the Market Maker capacity \4\ from
transaction rebates and fees for executions of contracts made in the
Professional,\5\ Firm,\6\ Away Market Maker,\7\ or Broker-Dealer \8\
capacities; \9\ (2) reduce the transaction rebate for executions of
contracts where the underlying security of the applicable option is in
the Penny Interval program (``Penny options'') \10\ which add liquidity
to the MEMX Options Book \11\ and which are made in the Professional,
Firm, Away Market Maker, or Broker-Dealer capacities; and (3) reduce
the transaction rebate for executions of contracts where the underlying
security of the applicable option is not in the Penny Interval program
(``Non-Penny options'') \12\ which add liquidity to the MEMX Options
Book and which are made in the Professional, Firm, Away Market Maker,
or Broker-Dealer capacities, each as further described below.
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\4\ MEMX Options provides fee qualifier ``m'' for market maker
transactions. Fee qualifiers will be provided by the Exchange on the
monthly invoices provided to Options Members.
\5\ MEMX Options provides fee qualifier ``p'' for professional
transactions.
\6\ MEMX Options provides fee qualifier ``f'' for firm
transactions.
\7\ MEMX Options provides fee qualifier ``a'' for away market
maker transactions.
\8\ MEMX Options provides fee qualifier ``b'' for broker-dealer
transactions.
\9\ Each of professional transactions, firm transactions, away
market maker transactions, and broker-dealer transactions, and
market maker transactions are referred to as ``non-Customer''
transactions.
\10\ MEMX Options provides Fee Code ``P'' for transactions in
Penny options. Fee Codes are provided by the Exchange on the monthly
invoices provided to Options Members.
\11\ MEMX Options provides Fee Code ``D'' for transactions which
add liquidity to the MEMX Options Book.
\12\ MEMX Options provides Fee Code ``N'' for transactions in
Non-Penny options.
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The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. The Exchange is one of only
18 options venues to which market participants may direct their order
flow. Based on publicly available information, no single options
exchange has more than approximately 17.13% of the market share and
currently the Exchange represents only approximately 3.29% of the
market share.\13\ In such a low-concentrated and highly competitive
market, no single options exchange, including the Exchange, possesses
significant pricing power in the execution of option order flow. The
Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, discontinue, or reduce use of certain categories of
products in response to fee changes. Accordingly competitive forces
constrain the Exchange's transaction fees, and market participants can
readily trade on competing venues if they deem pricing levels at those
other venues to be more favorable. The Exchange's Fee Schedule sets
forth standard rebates and rates applied per contract.
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\13\ Market share percentage calculated as of October 31, 2024.
The Exchange receives and processes data made available through the
consolidated data feeds (i.e., OPRA).
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Amended Transaction Fees Section of the Options Fee Schedule To
Separate the Transaction Rebates and Fees for Executions in the Market
Maker Capacity From Executions in Other Non-Customer Capacities
Currently, the Exchange provides the same standard transaction
rebates and fees for all executions in Market Maker, Professional,
Firm, Away Market Maker, and Broker-Dealer capacities (each a ``non-
Customer'' capacity). Specifically, the Exchange provides a standard
transaction rebate of $0.45 per contract for executions of Penny
options (as defined above) in all non-Customer capacities which add
liquidity to the MEMX Options Book, a standard transaction rebate of
$0.80 per contract for executions of non-Penny options (as defined
above) in all non-Customer
[[Page 92208]]
capacities which add liquidity to the MEMX Options Book, a standard
transaction fee of $0.50 per contract for executions of Penny options
in all non-Customer capacities which remove liquidity from the MEMX
Options Book, and a standard transaction fee of $1.21 per contract for
executions of non-Penny options in all non-Customer capacities which
remove liquidity from the MEMX Options Book. The Transaction Fees table
within the Options Fee Schedule currently groups together all non-
Customer capacities and shows that executions made in any non-Customer
capacity receive the same standard transaction rebates and fees. Now,
the Exchange proposes to provide different transaction rebates and fees
for executions in the Market Maker capacity than are provided for other
non-Customer capacities (namely, different than the transaction rebates
and fees provided for executions in the Professional, Firm, Away Market
Maker, and Broker-Dealer capacities). As such, the Exchange proposes to
delete the rows ``Professional (``p'')'', ``Firm (``f'')'', ``Away
Market Maker (``a'')'', and ``Broker-Dealer (``b'')'' in the fourth row
of the table and to create a new fifth row of the table that separates
out the fees and rebates applicable to executions in the Market Maker
capacity. The Exchange does not propose to change any of the fees
charged or rebates provided for any executions in the Market Maker
capacity, which remain in the fourth row of the table.
The Exchange proposes to make these changes in order to align its
Options Fee Schedule with those of other national securities exchanges
and to offer different transaction fees and rebates for executions made
in the non-Customer, non-Market Maker capacity from transactions made
in the Customer capacity and in the Market Maker capacity. The Exchange
notes that the Options Fee Schedules of several national securities
exchanges separate transaction fees and rebates for executions in the
Market Maker capacity from the transaction fees and rebates for
executions made in other non-Customer capacities.\14\ The Exchange also
notes that other national securities exchanges have established
separate transaction fees and rebates for executions made in each non-
Customer capacity.\15\
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\14\ See the Cboe C2 Options Fee Schedule, available at <a href="https://www.cboe.com/us/options/membership/fee_schedule/ctwo/">https://www.cboe.com/us/options/membership/fee_schedule/ctwo/</a>. The Cboe C2
Options Fee Schedule separates executions in the C2 Market-Maker
capacity from executions in other non-Customer capacities (the
``Non-Customer, Non-Market-Maker'' capacity on the C2 Options Fee
Schedule). Specifically, the C2 Options Fee Schedule provides a
transaction rebate of $0.41 for executions of Penny options in the
C2 Market-Maker capacity which add liquidity to C2, a transaction
fee of $0.50 for Penny options executed in the C2 Market-Maker
capacity which remove liquidity from C2, a transaction rebate of
$0.73 for executions of non-Penny options in the C2 Market-Maker
capacity which add liquidity to C2, and a transaction fee of $0.90
for executions of non-Penny options in the C2 Market-Maker capacity
which remove liquidity from C2. The C2 Options Fee Schedule groups
together transactions in the ``Non-Customer, Non-Market Maker''
capacities, which includes Professional Customer, Firm, Broker/
Dealer, non-C2 Market-Maker, and Joint Back Office capacities. The
C2 Options Fee Schedule provides a transaction rebate of $0.36 for
executions of Penny options in the Non-Customer, Non-Market Maker
capacity which add liquidity to C2, a transaction fee of $0.50 for
Penny options executed in the Non-Customer, Non-Market Maker
capacity which remove liquidity from C2, a transaction rebate of
$0.65 for executions of non-Penny options in the Non-Customer, Non-
Market Maker capacity which add liquidity to C2, and a transaction
fee of $0.93 for executions of non-Penny options in the Non-
Customer, Non-Market Maker capacity which remove liquidity from C2.
See also the MIAX Pearl Options Fee Schedule, available at <a href="https://www.miaxglobal.com/markets/us-options/pearl-options/fees">https://www.miaxglobal.com/markets/us-options/pearl-options/fees</a>. The MIAX
Pearl Options Fee Schedule separates executions in the ``All MIAX
Pearl Market Maker'' capacity from executions in other non-Customer
capacities (the ``Non-Priority Customer, Firm, BD, and Non-MIAX
Pearl Market Makers'' origin capacities listed on the MIAX Pearl
Options Fee Schedule. Specifically, the MIAX Pearl Options Fee
Schedule sets forth a rebate ranging from $0.25 to $0.48 (based on
tier) for executions of Penny options in the MIAX Pearl Market Maker
capacity which add liquidity to MIAX Pearl where the contra side of
the contract arises from a non-Priority Customer, a rebate ranging
from $0.22 to $0.46 (based on tier) for executions of Penny options
in the MIAX Pearl Market Maker capacity which add liquidity to MIAX
Pearl where the contra side of the contract arises from a Priority
Customer, a fee of $0.50 for executions of Penny Options in the MIAX
Pearl Market Maker capacity which remove liquidity from MIAX Pearl,
a rebate ranging from $0.30 to $0.85 (based on tier) for executions
of non-Penny options in the MIAX Pearl Market Maker capacity which
add liquidity to MIAX Pearl, and a fee ranging from $1.07 to $1.10
(based on tier) for executions of non-Penny options in the MIAX
Pearl Market Maker capacity which remove liquidity from MIAX Pearl.
\15\ See the Cboe BZX Options Fee Schedule, available at <a href="https://www.cboe.com/us/options/membership/fee_schedule/bzx/">https://www.cboe.com/us/options/membership/fee_schedule/bzx/</a>. The Cboe BZX
Options Fee Schedule establishes separate ranges of transaction fees
and rebates, based on tier, for executions made in the Customer,
Professional, Firm/Broker-Dealer/Joint Back Office, Market Maker,
and Away Market Maker capacities. See also the MIAX Options Fee
Schedule, available at <a href="https://www.miaxglobal.com/markets/us-options/miax-options/fees">https://www.miaxglobal.com/markets/us-options/miax-options/fees</a>. The MIAX Options Fee Schedule establishes
separate ranges of transaction fees and rebates for executions made
in the capacity of all MIAX Market Makers, Priority Customers,
Public Customers that are not Priority Customers, Non-MIAX Market
Makers, Non-Member Broker-Dealer, and Firm capacity.
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Reduced Transaction Rebate for Executions of Penny Options in the
Professional, Firm, Away Market Maker, or Broker Dealer Capacities
Which Add Liquidity to the MEMX Options Book
Currently, the Exchange provides a standard transaction rebate of
$0.45 per contract for executions of Penny options (as defined above)
in the Professional, Firm, Market Maker, Away Market Maker, and Broker
Dealer capacities which add liquidity to the MEMX Options Book. Now,
the Exchange proposes to reduce the standard transaction rebate on
contracts for executions of Penny options made in non-Market Maker,
non-Customer capacities which add liquidity to the MEMX Options Book
from $0.45 per contract to $0.42 per contract. Specifically, the
Exchange proposes to create a separate line on the Options Fee Schedule
for executions made in the Professional, Firm, Away Market Maker, and
Broker-Dealer capacities and to note on the Options Fee Schedule that
the standard transaction rebates for executions of Penny options in
such capacities which add liquidity to the MEMX Options Book is $0.42
per contract.
The purpose of reducing the rebate is for business and competitive
reasons as the Exchange believes that reducing such rebate would
decrease the Exchange's expenditures with respect to transaction
pricing in a manner that is still consistent with the Exchange's
overall pricing philosophy of encouraging executions which add
liquidity to the MEMX Options Book. As noted above, other national
securities exchanges separate out the transaction rebate provided for
executions in non-Customer, non-Market Maker capacities from those
executions made in Customer capacity and executions made in the Market
Maker capacity. The Exchange notes that the proposed reduced rebate is
competitive with, or exceeds the transaction rebate provided by other
national securities exchanges for executions in non-Customer, non-
Market Maker capacities in Penny options which add liquidity.\16\
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\16\ See infra note 22.
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Reduced Transaction Rebate for Executions of Non-Penny Options in the
Professional, Firm, Away Market Maker, or Broker Dealer Capacities
Which Add Liquidity to the MEMX Options Book
Currently, the Exchange provides a standard transaction rebate of
$0.80 per contract for executions of non-Penny options (as defined
above) in the Professional, Firm, Market Maker, Away Market Maker, and
Broker Dealer capacities which add liquidity to the MEMX Options Book.
Now, the Exchange proposes to reduce; the standard transaction rebate
on contracts for the execution of non-Penny options made in non-Market
Maker, non-Customer capacities which add liquidity
[[Page 92209]]
to the MEMX Options Book from $0.80 per contract to $0.72 per contract.
Specifically, the Exchange proposes to create a separate line on the
Options Fee Schedule for executions made in the Professional, Firm,
Away Market Maker, and Broker-Dealer capacities and to note on the
Options Fee Schedule that the standard transaction rebates for
execution of non-Penny options in such capacities which add liquidity
to the MEMX Book is $0.72 per contract.
The purpose of reducing the rebate is for business and competitive
reasons as the Exchange believes that reducing such rebate would
decrease the Exchange's expenditures with respect to transaction
pricing in a manner that is still consistent with the Exchange's
overall pricing philosophy of encouraging executions which add
liquidity to the MEMX Options Book. As discussed above, other national
securities exchanges separate out the transaction rebate for non-
Customer, non-Market Maker capacities from those executions made in the
Customer capacity. The Exchange notes that the proposed reduced rebate
is competitive with, or exceeds the transaction rebate provided by
other national securities exchanges for executions in non-Customer,
non-Market Maker capacities in non-Penny options which add
liquidity.\17\
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\17\ See infra note 23.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Options Fee
Schedule is consistent with the provisions of Section 6 of the Act,\18\
in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\19\ in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among Options Members and other
persons using its facilities. The Exchange also believes the proposal
furthers the objectives of Section 6(b)(5) of the Act in that it is
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest and is not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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\18\ 15 U.S.C. 78f.
\19\ 15 U.S.C. 78f(b)(4) and (5).
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MEMX Options operates in a highly fragmented and competitive market
in which market participants can readily direct order flow to competing
venues if they deem fee levels at a particular venue to be excessive or
incentives to be insufficient, and the Exchange represents only a small
percentage of the overall market. The Commission and the courts have
repeatedly expressed their preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. In Regulation NMS, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and
also recognized that current regulation of the market system ``has been
remarkably successful in promoting market competition in its broader
forms that are most important to investors and listed companies.'' \20\
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\20\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005).
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Accordingly, competitive forces constrain the Exchange's
transaction fees and rebates, and market participants can readily trade
on competing venues if they deem pricing levels at those other venues
to be more favorable. The Exchange believes the proposal reflects a
reasonable and competitive pricing structure which the Exchange
believes would promote price discovery and enhance liquidity and market
quality on the Exchange to the benefit of all Members and market
participants.
The Exchange believes that it is reasonable and equitable to
provide different transaction rebates and fees for executions in non-
Customer, non-Market Maker capacities, than for executions in the
Customer capacity or in the Market Maker capacity. The Exchange
believes that providing different rebates and assessing different fees
for executions in non-Customer, non-Market Maker capacities is
equitable and not unfairly discriminatory because each Member who
executes contracts in such capacities will be assessed the respective
fees or provided the respective rebates. As noted above, other national
securities exchanges separate transaction fees and rebates for
executions in the Market Maker capacity from the transaction fees and
rebates for executions made in other non-Customer capacities.\21\
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\21\ See supra note 14.
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The Exchange believes that the proposed changes to reduce the
rebate for executions of Penny options made in non-Market Maker, non-
Customer capacities which add liquidity to the MEMX Options Book from
$0.45 per contract to $0.42 per contract, and to reduce the rebate for
executions of non-Penny options made in non-Market Maker, non-Customer
capacities which add liquidity to the MEMX Options Book from $0.80 per
contract to $0.72 per contract, are reasonable because such changes are
designed to decrease the Exchange's expenditures with respect to its
transaction pricing in a manner that is still consistent with the
Exchange's overall pricing philosophy of encouraging executions which
add liquidity to the MEMX Options Book in both Penny and non-Penny
options. The Exchange believes that the proposed changes are equitable
and not unfairly discriminatory because the reduced rebates will apply
to all market participants who make executions of Penny options or non-
Penny options, respectively, in non-Market Maker, non-Customer
capacities which add liquidity to the MEMX Options Book.
The Exchange believes the proposed reduced rebate for executions of
Penny options made in non-Market Maker, non-Customer capacities which
add liquidity to the MEMX Options Book is appropriate because it
exceeds or is comparable to, and competitive with, the rebates provided
by other exchanges for executions of Penny options made in non-Market
Maker and non-Customer capacities which add liquidity.\22\ Similarly,
the Exchange believes that the proposed reduced rebate for executions
of non-Penny options made in non-Market Maker, non-Customer capacities
which add liquidity to the MEMX Options Book is appropriate because it
exceeds or is comparable to, and competitive with, the rebates offered
by other national securities exchanges on Options platforms for
executions of non-Penny options made in non-Market Maker and non-
Customer capacities which add liquidity.\23\ The
[[Page 92210]]
Exchange believes that the proposed reduced rebates which add liquidity
to the MEMX Book in Penny and non-Penny options in non-Market Maker,
non-Customer capacities will provide right-sized incentives which will
continue to attract non-Market Maker, non-Customer order flow to the
Exchange.
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\22\ For example, the Cboe C2 Options Exchange offers a rebate
of $0.36 for transaction in non-Customer, non-Market Maker
capacities in Penny options which add liquidity to the C2 Book. See
the Cboe C2 Options Fee Schedule, available at <a href="https://www.cboe.com/us/options/membership/fee_schedule/ctwo/">https://www.cboe.com/us/options/membership/fee_schedule/ctwo/</a>. The MIAX Pearl Options
Exchange offers rebates ranging from $0.22 to $0.48 for transactions
in non-Priority Customer, Firm, Broker-Dealer, and Non-MIAX Pearl
Market Maker capacities in Penny options which add liquidity to the
MIAX Pearl Options Book. See the MIAX Pearl Options Fee Schedule,
available at <a href="https://www.miaxglobal.com/markets/us-options/pearl-options/fees">https://www.miaxglobal.com/markets/us-options/pearl-options/fees</a>.
\23\ For example, the Cboe C2 Options Exchange offers a rebate
of $0.65 for transaction in non-Customer, non-Market Maker
capacities in non-Penny options which add liquidity to the C2 Book.
See the Cboe C2 Options Fee Schedule, available at <a href="https://www.cboe.com/us/options/membership/fee_schedule/ctwo/">https://www.cboe.com/us/options/membership/fee_schedule/ctwo/</a>. The MIAX
Pearl Options Exchange offers rebates ranging from $0.85 to $0.30
for transactions in non-Priority Customer, Firm, Broker-Dealer, and
Non-MIAX Pearl Market Maker capacities in non-Penny options which
add liquidity to the MIAX Pearl Options Book. See the MIAX Pearl
Options Fee Schedule, available at <a href="https://www.miaxglobal.com/markets/us-options/pearl-options/fees">https://www.miaxglobal.com/markets/us-options/pearl-options/fees</a>.
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For the reasons discussed above, the Exchange submits that its
proposed change to the Options Transaction Fee Schedule satisfies the
requirements of Sections 6(b)(4) and 6(b)(5) of the Act \24\ 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 are not designed to unfairly discriminate between customers,
issuers, brokers, or dealers. As described more fully below in the
Exchange's statement regarding burden on competition, the Exchange
believes that its transaction pricing is subject to significant
competitive forces, and that the proposed rebate described herein is
appropriate to address such forces.
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\24\ 15 U.S.C. 78f(b)(4) and (5).
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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 proposal is intended to decrease the Exchange's expenditures,
generate additional revenue with respect to its transaction pricing,
incentivize market participants to direct additional order flow to the
MEMX Options platform, which the Exchange believes would promote price
discovery and enhance liquidity and market quality on the Exchange to
the benefit of all Members and market participants. Further, MEMX
Options' proposed modified transaction fees and rebates exceed or are
comparable to the transaction fees and rebates assessed by other
options exchanges.\25\ As a result, 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.'' \26\
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\25\ See supra notes 22 and 23.
\26\ See supra note 20.
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Intramarket Competition
The Exchange does not believe that the proposed rule change will
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rebate applies equally to all Options Members. The proposed
pricing structure is intended to decrease the Exchange's expenditures
and generate additional revenue with respect to its transaction
pricing, in a manner that is comparable with the rebates and fees
offered by other exchanges for executions in the non-Customer, non-
Market Maker capacities in both Penny and non-Penny options. The
Exchange believes that the proposed reduced rebates are consistent with
the Exchange's overall pricing philosophy. As the proposed rebate is
equally applicable to all market participants, the Exchange does not
believe there is any burden on intramarket competition.
Intermarket Competition
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
the Exchange believes that the proposed pricing structure will increase
competition and is intended to provide rebates for executions in non-
Customer, non-Market Maker capacities which add liquidity to the MEMX
Options book which are comparable to those offered by other exchanges,
which the Exchange believes will help to encourage Members to send
orders to the Exchange to the benefit of all Exchange participants. As
the proposed rebate is equally applicable to all market participants,
the Exchange does not believe there is any burden on intramarket
competition.
Additionally, the Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \27\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. SEC, the D.C. Circuit stated as follows:
``[n]o one disputes that competition for order flow is `fierce.' . . .
As the SEC explained, `[i]n the U.S. national market system, buyers and
sellers of securities, and the broker-dealers that act as their order-
routing agents, have a wide range of choices of where to route orders
for execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers' . . . .''.\28\ Accordingly, the Exchange does not believe its
proposed pricing changes impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\27\ See supra note 20.
\28\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSE-2006-21)).
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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 \29\ and Rule 19b-4(f)(2) \30\ thereunder.
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\29\ 15 U.S.C. 78s(b)(3)(A)(ii).
\30\ 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#a1d3d4cdc48cc2ceccccc4cfd5d2e1d2c4c28fc6ced7"><span class="__cf_email__" data-cfemail="f280879e97df919d9f9f979c8681b2819791dc959d84">[email protected]</span></a>. Please include
file number SR-MEMX-2024-43 on the subject line.
[[Page 92211]]
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-2024-43. 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-2024-43 and should be
submitted on or before December 12, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2024-27222 Filed 11-20-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on November 21, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.