Notice2025-12635
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend and Restate the Exchange's Second Amended and Restated Limited Liability Company Agreement as the Third Amended and Restated Limited Liability Company Agreement
Primary source
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Published
July 8, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 128 (Tuesday, July 8, 2025)</title>
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[Federal Register Volume 90, Number 128 (Tuesday, July 8, 2025)]
[Notices]
[Pages 30168-30170]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12635]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103375; File No. SR-MEMX-2025-19]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend and Restate
the Exchange's Second Amended and Restated Limited Liability Company
Agreement as the Third Amended and Restated Limited Liability Company
Agreement
July 2, 2025.
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 23, 2025, MEMX LLC (``MEMX'' or the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial''
[[Page 30169]]
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 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 and restate the Exchange's Second Amended and Restated Limited
Liability Company Agreement (the ``Second Amended LLC Agreement'') as
the Third Amended and Restated Limited Liability Company Agreement (the
``Third Amended LLC Agreement'') to reflect certain amendments, as
further described below. The text of the proposed rule change is
provided in Exhibit 5 and is available on the Exchange's website at
<a href="https://info.memxtrading.com/regulation/rules-and-filings/">https://info.memxtrading.com/regulation/rules-and-filings/</a>.
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 amend and restate the Exchange LLC
Agreement to modify the requirements of who may serve as a Nominating
Committee member, as discussed below.
Currently, the Exchange LLC Agreement provides that the Board shall
be comprised of natural Persons (each such Person, a ``Director'') who
shall be nominated on an annual basis by the Nominating Committee, and
Section 8.7(a) provides that, among other requirements, all Nominating
Committee members shall be Independent Directors. As set forth in
Section 1.1, an ``Independent Director'' is defined as a Director who
has no material relationship with the Company or any Affiliate of the
Company, or any Exchange Member or any Affiliate of any such Exchange
Member; provided, however, that an individual who otherwise qualifies
as an Independent Director shall not be disqualified from serving in
such capacity solely because such Director is a Director of the Company
or Holdco.\5\
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\5\ MEMX Holdings LLC (i.e. ``Holdco'') is the parent company of
the Exchange and directly or indirectly owns all of the limited
liability company membership interests in the Exchange.
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The Exchange is proposing to modify this provision under 8.7(a) to
state that all Nominating Committee members shall be Independent
Committee Members. Also as set forth in Section 1.1, an ``Independent
Committee Member'' is defined as a member of any Committee who has no
material relationship with the Company or any Affiliate of the Company,
or any Exchange Member or any Affiliate of any such Exchange Member,
other than as member of such Committee. The term ``Independent
Committee Member'' may but is not required to refer to an Independent
Director who serves on a Committee; provided, however, that an
individual who otherwise qualifies as an Independent Committee Member
shall not be disqualified from serving in such capacity solely because
such individual is an Independent Director of the Company or, if
applicable, an independent director of Holdco.
The purpose of the proposed change is to provide the Exchange
flexibility to allow individuals who meet the definition of Independent
Committee Members, but not necessarily Independent Directors, to serve
on the Nominating Committee. The Exchange notes that the definition of
an Independent Committee Member may, but is not required to, refer to
an Independent Director, and as such, the Nominating Committee may be
comprised solely of Independent Directors under the language of the
proposed change, however, the Exchange wishes to modify the language in
order to expand the universe of individuals that may serve on the
Nominating Committee to include Independent Committee Members, which
may not be Directors. The Exchange notes that this modification would
make the structure of the Nominating Committee consistent with that of
its affiliate Exchange, MX2, LLC (``MX2''), pursuant to Section 8.7 of
the First Amended and Restated Limited Liability Company Agreement of
MX2.
The Exchange is not proposing to modify any other provisions of the
Exchange LLC Agreement related to the composition of the Nominating
Committee under Section 8.7(a) \6\ or the process by which the
Nominating Committee is elected,\7\ and as a practical matter, no
changes to the current Nominating Committee are contemplated by this
rule change.
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\6\ Section 8.7(a) otherwise provides that the number of Non-
Industry Committee Members on the Nominating Committee shall equal
or exceed the number of Industry Committee or Panel Members on the
Nominating Committee, and that a Nominating Committee member may
simultaneously serve on the Nominating Committee and the Board.
\7\ Section 8.7(a) provides that the Nominating Committee and
the Member Nominating Committee shall each be elected on an annual
basis by vote of Holdco. Holdco shall appoint the initial Nominating
Committee and Member Nominating Committee consistent with the
compositional requirements of Section 7.3(b). In each subsequent
year, each of the Nominating Committee and Member Nominating
Committee, after completion of its respective duties for nominating
Directors for election to the Board for that year, shall nominate
candidates to serve on the succeeding year's Nominating Committee or
Member Nominating Committee, as applicable, such candidates to be
elected by Holdco at the annual meeting of the Company Members (in
case of any vacancy occurring on a Nominating Committee or Member
Nominating Committee during a calendar year, the remaining members
of the Nominating Committee or Member Nominating Committee, as
applicable, shall nominate a candidate to fill such vacancy and such
candidate shall be elected by Holdco in accordance with Section
6.4). Additional candidates for the Member Nominating Committee may
be nominated and elected pursuant to the same process as provided
for in Section 7.4.
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Further, MEMX has reviewed the rules of other U.S. securities
exchanges and noted that certain other exchanges do not require
Nominating Committee members to be Directors.\8\
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\8\ See the By-Laws of BOX Exchange LLC, Section 4.06, which
provides that ``. . . Nominating Committee members need not be
Directors.'' See also the Amended and Restated By-Laws of MIAX
Pearl, LLC, Section 5.2, which provides that ``. . . A Nominating
Committee member may not simultaneously serve on the Nominating
Committee and the Board, unless such member is in his or her final
year of service on the Board, and following that year, that member
may not stand for election to the Board until such time as he or she
is no longer a member of the Nominating Committee. No more than one
(1) member of the Nominating Committee shall be a current Director,
and such Director shall be a Non-Industry Director.'' See also the
By-Laws of Nasdaq PHLX, LLC, Section 5-3, which provides that ``. .
. no more than three of the Nominating Committee members and no more
than two of the Industry members shall be current Directors.''
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2. Statutory Basis
The Exchange believes that the proposed amendment to the Exchange
LLC Agreement is consistent with Section 6(b) of the Act,\9\ in
general, and furthers the objectives of Section 6(b)(1) of the Act,\10\
in particular, in that such amendment enables the Exchange to be
[[Page 30170]]
so organized as to have the capacity to be able to carry out the
purposes of the Act and to comply with the provisions of the Act, the
rules and regulations thereunder, and the rules of the Exchange. The
Exchange also believes that the proposed amendment is consistent with
Section 6(b)(5) of the Act,\11\ which requires the rules of an exchange
to be 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(1).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that amending which individuals may serve on
the Nominating Committee is consistent with the Act as this will
provide a broader base of potential candidates to serve on the
Nominating Committee and aligns with the governance framework of the
Exchange's affiliate, MX2. In other words, as MX2 does, allowing
members of the Nominating Committee to be Independent Committee
Members, rather than Independent Directors, allows both Directors and
non-Directors to serve on the Nominating Committee. Thus, the Exchange
does not believe this change will affect the Exchange's ability to be
organized as to have the capacity to carry out the purposes of the Act
and to comply with the provisions of the Act, the rules and regulations
thereunder, and the rules of the Exchange, promoting just and equitable
principles of trade, removing impediments to and perfect the mechanism
of a free and open market, and protecting investors and the public
interest. Further, the Exchange believes the proposed change to the
Exchange LLC Agreement is consistent with, and will not interfere with,
the self-regulatory obligations of the Exchange. The Exchange notes
that it is not proposing to amend any provisions within the Exchange
LLC Agreement dealing with the availability or protection of
information, books and records, undue influence, conflicts of interest,
unfair control by an affiliate, or regulatory independence of the
Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposal will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposal is not intended to
address competitive issues but rather is concerned solely with the type
of individuals that may serve on the Nominating Committee, as described
above.
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)(iii) \12\ of the Act and Rule 19b-4(f)(6) thereunder \13\
in that it effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 will 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#384a4d545d155b5755555d564c4b784b5d5b165f574e"><span class="__cf_email__" data-cfemail="80f2f5ece5ade3efedede5eef4f3c0f3e5e3aee7eff6">[email protected]</span></a>. Please include
file number SR-MEMX-2025-19 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-2025-19. 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-2025-19 and should be
submitted on or before July 29, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-12635 Filed 7-7-25; 8:45 am]
BILLING CODE 8011-01-P
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