Notice2025-10173
In the Matter of the Application of Dream Exchange Holdings, Inc. for Registration as a National Securities Exchange; Order Instituting Proceedings To Determine Whether To Grant or Deny an Application for Registration as a National Securities Exchange Under Section 6 of the Securities Exchange Act of 1934
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
June 4, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 106 (Wednesday, June 4, 2025)</title>
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[Federal Register Volume 90, Number 106 (Wednesday, June 4, 2025)]
[Notices]
[Pages 23751-23753]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10173]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103157; File No. 010-00248]
In the Matter of the Application of Dream Exchange Holdings, Inc.
for Registration as a National Securities Exchange; Order Instituting
Proceedings To Determine Whether To Grant or Deny an Application for
Registration as a National Securities Exchange Under Section 6 of the
Securities Exchange Act of 1934
May 30, 2025.
I. Introduction
On February 14, 2025, Dream Exchange Holdings, Inc. (``DreamEx'')
filed with the Securities and Exchange Commission (``Commission'') a
Form 1 application (``Form 1'') under the Securities Exchange Act of
1934 (``Act''), seeking registration as a national securities exchange
under Section 6 of the Act.\1\ Notice of the application was published
for comment in the Federal Register on March 3, 2025.\2\ The Commission
has not received any comments on the Form 1.
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\1\ 15 U.S.C. 78f.
\2\ See Securities Exchange Act Release No. 102484 (Feb. 25,
2025), 90 FR 11078.
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Section 19(a)(1) of the Act \3\ requires the Commission, within
ninety days of the date of publication of notice of an application for
registration as a national securities exchange, or such longer period
as to which the applicant consents, to, by order, grant such
registration \4\ or institute proceedings to determine whether such
registration should be denied.\5\ This order is instituting proceedings
under Section 19(a)(1)(B) of the Act \6\ to determine whether DreamEx's
application for registration as a national securities exchange should
be granted or denied, and provides notice of the grounds for
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denial under consideration by the Commission, as set forth below.
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\3\ 15 U.S.C. 78s(a)(1).
\4\ 15 U.S.C. 78s(a)(1)(A).
\5\ 15 U.S.C. 78a(a)(1)(B).
\6\ 15 U.S.C. 78s(a)(1)(B).
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II. Overview of DreamEx's Trading System
DreamEx proposes to operate a fully automated electronic trading
platform for the trading of NMS stocks with a continuous automated
matching function. DreamEx would not maintain a physical trading floor.
Liquidity would be derived from orders to buy and orders to sell
submitted to DreamEx electronically by its registered broker-dealer
members from remote locations. DreamEx proposes to have one class of
membership open to registered broker-dealers and also proposes to allow
members to register under DreamEx rules as market makers on DreamEx and
be subject to certain specified requirements and obligations set forth
in DreamEx's proposed rules. DreamEx would be a subsidiary of its
parent companies: DX Capital Partners, LLC, which would own 50.1% of
the common stock of DreamEx; Dream Exchange LLC, which would own 49.9%
of the common stock of DreamEx; and Dream Exchange Preferred Holdings
LLC, which would own 100% of the preferred stock of DreamEx. DreamEx's
proposed rulebook is Exhibit B to DreamEx's Form 1, and the governing
documents for DreamEx and its parent companies can be found in Exhibit
A and C, respectively.\7\
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\7\ DreamEx's Form 1, including all its exhibits, is available
at: <a href="https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/dream-exchange-form-1">https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/dream-exchange-form-1</a>.
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DreamEx proposes to enter into a technology services agreement with
MEMX Technologies, LLC (``MEMX Technologies'') to license the
technology underlying the DreamEx trading platform (``Agreement'').\8\
DreamEx would not own the trading technology and systems (``System'')
developed by MEMX Technologies.
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\8\ MEMX Technologies is affiliated with MEMX LLC (``MEMX
Exchange''), a registered national securities exchange. MEMX
Exchange is not a party to the Agreement. See Exhibit E to DreamEx's
Form 1 (discussing the proposed Agreement in greater detail).
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Generally, the Agreement would govern (1) the delivery and
licensing of certain software and hardware for operation of the System,
(2) the development and testing of software necessary for connectivity
to DreamEx and/or third-party developed functions and certain other
software necessary to support trading on DreamEx, and (3) the provision
of certain operational and support services related to the System.\9\
DreamEx states that the service levels to be provided under the
Agreement would ensure that it can meet its Regulation Systems
Compliance and Integrity (``Regulation SCI'') obligations.\10\ A more
detailed description of the manner of operation of DreamEx's proposed
System can be found in Exhibit E to DreamEx's Form 1.
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\9\ See Exhibit E to DreamEx's Form 1 at 3.
\10\ See id. at 4.
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III. Proceedings To Determine Whether To Grant or Deny the Application
and Grounds for Potential Denial Under Consideration
As required by Section 19(a)(1)(B) of the Act,\11\ the Commission
is hereby providing notice of grounds for denial under consideration,
as set forth below. Institution of such proceedings is appropriate at
this time in view of the issues raised by the application. Institution
of proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved.
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\11\ 15 U.S.C. 78s(a)(1)(B).
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Under Section 19(a)(1) of the Act, the Commission shall grant an
application for registration as a national securities exchange if the
Commission finds that the requirements of the Act and the rules and
regulations thereunder with respect to the applicant are satisfied. The
Commission shall deny such application for registration if it does not
make such a finding.\12\ Under Section 6(b) of the Act, an exchange
shall not be registered as a national securities exchange unless the
Commission determines that it has satisfied the relevant requirements
of the Act.\13\ In particular, Section 6(b)(1) of the Act requires that
the Commission determine that an exchange is so organized and has the
capacity to carry out the purposes of the Act.\14\ In addition, under
Section 6(b)(3) of the Act, the Commission must determine that the
rules of the exchange assure a fair representation of its members in
the selection of its directors and administration of its affairs and
provide that one or more directors shall be representative of issuers
and investors and not be associated with a member of the exchange,
broker or dealer.\15\ Section 6(b)(5) of the Act requires that the
rules of the exchange be designed, among other things, to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanisms of a
free and open market and a national market system, and in general to
protect investors and the public interest.\16\ Finally, under Section
6(b)(8) of the Act, the Commission must determine that the rules of the
exchange do not impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of Act.\17\ The
Commission requests comment on all aspects of DreamEx's Form 1,
including comment on any specific Exhibits,\18\ as well as any
information or data that would help the Commission's review of
DreamEx's Form 1.
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\12\ 15 U.S.C. 78s(a)(1).
\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(1).
\15\ 15 U.S.C. 78f(b)(3).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78f(b)(8).
\18\ See supra note 7.
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IV. Request for Written Comment
The Commission requests that interested persons provide written
views and data with respect to DreamEx's Form 1 and any relevant
issues. 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#592b2c353c743a3634343c372d2a192a3c3a773e362f"><span class="__cf_email__" data-cfemail="a8daddc4cd85cbc7c5c5cdc6dcdbe8dbcdcb86cfc7de">[email protected]</span></a>. Please include
File No. 010-002448 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 No. 010-00248. 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/other">https://www.sec.gov/rules/other</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to DreamEx's Form 1 filed with the Commission,
and all written communications relating to the application 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. Do not include
personal
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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 No. 010-00248 and should be submitted on or before June
25, 2025.
By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-10173 Filed 6-3-25; 8:45 am]
BILLING CODE 8011-01-P
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