Notice2025-18137
Self-Regulatory Organizations; 24X National Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Fee Schedule To Establish a Monthly Membership Fee
Primary source
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Published
September 19, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 180 (Friday, September 19, 2025)</title>
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[Federal Register Volume 90, Number 180 (Friday, September 19, 2025)]
[Notices]
[Pages 45278-45280]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18137]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103976; File No. SR-24X-2025-03]
Self-Regulatory Organizations; 24X National Exchange LLC; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To Amend
the Exchange's Fee Schedule To Establish a Monthly Membership Fee
September 16, 2025.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on September 5, 2025, 24X National Exchange LLC (``24X'' 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 self-regulatory
organization. The Commission is
[[Page 45279]]
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\ 15 U.S.C. 78a.
\3\ 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 proposes to establish a monthly membership fee for
Members of the Exchange of $200. The proposed rule change is available
on the Exchange's website at <a href="https://equities.24exchange.com/regulation">https://equities.24exchange.com/regulation</a>
and at the principal office of the Exchange.
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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to establish a monthly membership fee for
Members of the Exchange of $200 (``Monthly Membership Fee''). The
Monthly Membership Fee is proposed to be assessed to each active Member
at the close of business on the first day of each month. For example,
the Monthly Membership Fee for October 2025 will be assessed to all
active Members at the close of business on October 1, 2025, the first
business day of the month.
However, if a Member is pending a voluntary termination of rights
as a Member pursuant to Exchange Rule 2.8 prior to the time any Monthly
Membership Fee will be assessed (e.g., the close of business on October
1, 2025) and the Member does not utilize the facilities of the Exchange
while such voluntary termination of rights is pending, then the Member
will not be obligated to pay the Monthly Membership Fee, as such Member
will not be considered to have an ``active'' Membership. The Exchange
believes this to be appropriate because there are several pre-
conditions and then a 30-day waiting period before a voluntary
resignation shall take effect pursuant to Exchange Rule 2.8.
As proposed, the Monthly Membership Fee will not be prorated, which
the Exchange believes is reasonable based on the frequency that the fee
is assessed (i.e., monthly instead of applying to a longer period) and
the relatively low proposed fee of $200.
The Exchange does not presently contemplate proposing any
application fees, trading rights or trading permit fees, market
participant identifier (``MPID'') fees or so-called ``headcount'' fees.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\4\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that there is value in becoming a Member of
the Exchange and that the proposed Monthly Membership Fee is
reasonable. The Monthly Membership Fee is lower than \6\ or identical
to \7\ the membership fees imposed by several other national securities
exchanges that charge such fees. Moreover, insofar as the Exchange does
not charge--nor does it presently contemplate charging--application
fees, trading rights fees, trading permit fees, or fees for multiple
MPIDs, the comparative price of membership is less or significantly
less than comparative prices at other exchanges. The Exchange also does
not charge--nor does it presently contemplate charging--so-called
``headcount fees,'' e.g., fees charged for each Form U-4 filed for
registration of a representative or a principal or the transfer or re-
licensing of such personnel, further highlighting the reasonableness of
the proposed Monthly Membership Fee.
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\6\ For example, NYSE Arca, Inc. charges Equity Trading Permit
Holders an annual fee of $15,000 (see NYSE Arca Equities Fees and
Charges, effective July 1, 2025, available at: <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf</a>);
Long Term Stock Exchange, Inc. charges an annual membership fee of
$10,000; (see Long Term Stock Exchange, Inc. fee schedule, available
at: <a href="https://ltse.com/trading/fee-schedules">https://ltse.com/trading/fee-schedules</a>).
\7\ See MEMX LLC membership fees, available at: <a href="https://info.memxtrading.com/membership-fees/">https://info.memxtrading.com/membership-fees/</a>.
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The Exchange believes that the proposed Monthly Membership Fee is
not unfairly discriminatory because it would be assessed equally across
all Members or market participants that seek to become Members, and
because no market participant is required to become a member of the
Exchange. Instead, many market participants are expected to wait until
the Exchange consistently achieves a certain percentage of market share
before they would join as Members of the Exchange.
Accordingly, the vigorous competition among national securities
exchanges provides many alternatives for market participants to
voluntarily decide whether membership to the Exchange is appropriate
and worthwhile, and no broker-dealer is required to become a member of
the Exchange. Specifically, neither the trade-through requirements
under Regulation NMS nor broker-dealers' best execution obligations
require a broker-dealer to become a member of every exchange. The
Exchange acknowledges that competitive forces may require certain
broker-dealers to be members of all equities exchanges. However, the
Exchange believes that the proposed fee of $200 as a Monthly Membership
Fee is reasonable, equitably allocated, and not unfairly
discriminatory, even for a broker-dealer that deemed it necessary to
join the Exchange for business purposes, as those business reasons
should presumably result in revenue capable of covering the proposed
fee.
The Exchange further believes that the proposed fees would be an
equitable allocation of reasonable dues, fees, and other charges among
its members and issuers and other persons using its facilities, and are
not unfairly discriminatory. As the Commission noted in its Concept
Release Concerning Self-Regulation:
The Commission to date has not issued detailed rules specifying
proper funding levels of [self-regulatory organization (``SRO'')]
regulatory programs, or how costs should be allocated among the
various SRO constituencies. Rather, the Commission has examined the
SROs to determine whether they are complying with their statutory
responsibilities. This approach was developed in response to the
diverse characteristics and roles of the various SROs and the
markets they operate. The mechanics of SRO funding, including the
amount of revenue that is spent on regulation and how that amount is
allocated among various regulatory operations, is related to the
type of market that an SRO is operating. Thus, each SRO and its
financial structure is, to a certain extent, unique. While this
uniqueness can result in different levels of SRO funding across
markets, it also is a reflection of one of the primary underpinnings
of the National Market System. Specifically, by fostering an
environment in which diverse markets with diverse business models
compete within a
[[Page 45280]]
unified National Market System, investors and market participants
benefit.\8\
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\8\ Securities Exchange Act Release No. 34-50700 (November 22,
2004), 69 FR 71255, 71267-68 (December 8, 2004) (File No. S7-40-04).
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 \9\ 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. Effective
regulation is central to the proper functioning of the securities
markets. Recognizing the importance of such efforts, Congress decided
to require national securities exchanges to register with the
Commission as self-regulatory organizations to carry out the purposes
of the Act. The Exchange therefore believes that it is critical to
ensure that regulation is appropriately funded. The Monthly Membership
Fee is expected to provide a source of funding towards the Exchange's
costs related to onboarding Members and providing ongoing support.
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\9\ 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,\10\ the Exchange
believes that the proposed rule change would not impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange's
proposed membership fees will be lower than the cost of membership on
other exchanges,\11\ and therefore, may stimulate intramarket
competition by attracting additional market participants to become
Members on the Exchange, or at least should not deter interested
participants from joining the Exchange. In addition, membership fees
are subject to competition from other exchanges. Accordingly, if the
changes proposed herein are unattractive to market participants, it is
likely the Exchange will see a decline in membership as a result. The
proposed fee change will not impact intermarket competition because it
will apply to all Members equally. The Exchange operates in a highly
competitive market in which market participants can determine whether
or not to join the Exchange based on the value received compared to the
cost of joining and maintaining membership on the Exchange.
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\10\ 15 U.S.C. 78f(b)(8).
\11\ See supra note 6.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to 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) \12\ of the Act and subparagraph (f)(2) of Rule 19b-4 \13\
thereunder, because it establishes a due, fee, or other charge imposed
by the Exchange. 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 under Section 19(b)(2)(B) \14\ of the Act to determine
whether the proposed rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
\14\ 15 U.S.C. 78s(b)(2)(B).
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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#c2b0b7aea7efa1adafafa7acb6b182b1a7a1eca5adb4"><span class="__cf_email__" data-cfemail="afdddac3ca82ccc0c2c2cac1dbdcefdccacc81c8c0d9">[email protected]</span></a>. Please include
file number SR-24X-2025-03 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-24X-2025-03. 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 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. All submissions should refer
to file number SR-24X-2025-03 and should be submitted on or before
October 10, 2025.
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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2025-18137 Filed 9-18-25; 8:45 am]
BILLING CODE 8011-01-P
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