Notice2025-20693
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule Concerning Equities Transaction Pricing
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 24, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 224 (Monday, November 24, 2025)</title>
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[Federal Register Volume 90, Number 224 (Monday, November 24, 2025)]
[Notices]
[Pages 53023-53028]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20693]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104224; File No. SR-MEMX-2025-31]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Fee Schedule Concerning Equities Transaction Pricing
November 19, 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 September 30, 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, 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). As is
further described below, the Exchange proposes to (i) increase the base
rebates for executions of orders that add non-displayed liquidity to
the Exchange (such orders, ``Added Non-Displayed Volume'') in
securities priced at or above $1.00 per share; (ii) increase the base
rebates for executions of Added Non-Displayed Volume in securities
priced below $1.00 per share (such orders, ``Added Non-Displayed Sub-
Dollar Volume''); (iii) increase the base rebates provided for
executions of orders in securities priced below $1.00 per share that
add displayed liquidity to the Exchange (such orders, ``Added Displayed
Sub-Dollar Volume''); (iv) modify the Non-Display Add Tiers by
eliminating Non-Display Add Tiers 2 and 3; (v) adopt new standard fees
for executions of orders that remove liquidity from the Exchange (such
orders, ``Removed Volume''), separated by Tapes A, B, and C; (vi)
reduce the fee for executions of Retail Orders \4\ in securities priced
at or above $1.00 per share that remove liquidity from the Exchange
(such orders, ``Removed Retail Volume''); (vii) eliminate the Sub-
Dollar Rebate Tier; and (viii) modify the required criteria under the
Tape A Quoting Tier. The Exchange proposes to implement the changes to
the 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).
\4\ A ``Retail Order'' means an agency or riskless principal
order that meets the criteria of FINRA Rule 5320.03 that originates
from a natural person and is submitted to the Exchange by a Retail
Member Organization (``RMO''), provided that no change is made to
the terms of the order with respect to price or side of market and
the order does not originate from a trading algorithm or any other
computerized methodology. See Exchange Rule 11.21(a).
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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 Fee
Schedule to: (i) increase the base rebates for executions of orders
that add non-displayed liquidity to the Exchange (such orders, ``Added
Non-Displayed Volume'') in securities priced at or above $1.00 per
share; (ii) increase the base rebates for executions of Added Non-
Displayed Volume in securities priced below $1.00 per share (such
orders, ``Added Non-Displayed Sub-Dollar Volume''); (iii) increase the
base rebates provided for executions of orders in securities priced
below $1.00 per share that add displayed liquidity to the Exchange
(such orders, ``Added Displayed Sub-Dollar Volume''); (iv) modify the
Non-Display Add Tiers by eliminating Non-Display Add Tiers 2 and 3; (v)
adopt new standard fees for executions of orders that remove liquidity
from the Exchange (such orders, ``Removed Volume''), separated by Tapes
A, B, and C; (vi) reduce the fee
[[Page 53024]]
for executions of Retail Orders \5\ in securities priced at or above
$1.00 per share that remove liquidity from the Exchange (such orders,
``Removed Retail Volume''); (vii) eliminate the Sub-Dollar Rebate Tier;
and (viii) modify the required criteria under the Tape A Quoting Tier,
each as further described below.
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\5\ A ``Retail Order'' means an agency or riskless principal
order that meets the criteria of FINRA Rule 5320.03 that originates
from a natural person and is submitted to the Exchange by a Retail
Member Organization (``RMO''), provided that no change is made to
the terms of the order with respect to price or side of market and
the order does not originate from a trading algorithm or any other
computerized methodology. See Exchange Rule 11.21(a).
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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. More specifically, the
Exchange is only one of 18 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues, to
which market participants may direct their order flow. Based on
publicly available information, no single registered equities exchange
currently has more than approximately 14% of the total market share of
executed volume of equities trading.\6\ Thus, in such a low-
concentrated and highly competitive market, no single equities exchange
possesses significant pricing power in the execution of order flow, and
the Exchange currently represents approximately 2% of the overall
market share.\7\ The Exchange in particular operates a ``Maker-Taker''
model whereby it provides rebates to Members that add liquidity to the
Exchange and charges fees to Members that remove liquidity from the
Exchange. The Fee Schedule sets forth the standard rebates and fees
applied per share for orders that add and remove liquidity,
respectively. Additionally, in response to the competitive environment,
the Exchange also offers tiered pricing, which provides Members with
opportunities to qualify for higher rebates or lower fees where certain
volume criteria and thresholds are met. Tiered pricing provides an
incremental incentive for Members to strive for higher tier levels,
which provides increasingly higher benefits or discounts for satisfying
increasingly more stringent criteria.
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\6\ Market share percentage calculated as of September 29, 2025.
The Exchange receives and processes data made available through
consolidated data feeds (i.e., CTS and UTDF).
\7\ Id.
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Increase Base Rebates for Added Non-Displayed Volume
The Exchange is proposing to uniformly increase the rebates
provided for executions of Added Non-Displayed Volume in securities
priced at or above $1.00 per share. Added Non-Displayed Volume is
comprised of the three following types of orders: (i) orders subject to
Display-Price Sliding that receive price improvement when executed
(such orders, ``Added Price-Improved Volume''); (ii) Pegged orders \8\
with a Midpoint Peg \9\ instruction that add non-displayed liquidity to
the Exchange (such orders, ``Added Midpoint Volume''); and (iii) orders
which are not orders subject to Display-Price Sliding that receive
price improvement when executed or Midpoint Peg Orders, that add non-
displayed liquidity to the Exchange (such orders, ``Added Non-Midpoint
Hidden Volume'').
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\8\ See Exchange Rule 11.6(h).
\9\ See Exchange Rule 11.6(h)(2).
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Currently, the Exchange provides a base rebate of $0.0008 per share
for executions of Added Price-Improved Volume, Added Midpoint Volume,
and Added Non-Midpoint Hidden Volume in securities priced at or above
$1.00 per share. The Exchange now proposes to increase each of these
base rebates to $0.0025 per share.\10\ The purpose of the rebate
increase for executions of Added Non-Displayed Volume is to encourage
participants to add liquidity on the Exchange. The Exchange believes is
it appropriate to provide the same rebate for executions of Added
Price-Improved Volume, Added Midpoint Volume, and Added Non-Midpoint
Hidden Volume, as all of these orders similarly add liquidity to the
Exchange and are executed at prices at are not displayed on the MEMX
order book, and the Exchange notes that all of these orders are also
currently subject to same pricing today.
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\10\ The proposed base rebate for executions of Added Price-
Improved Volume is referred to by the Exchange on the Fee Schedule
under the existing description ``Added volume, order subject to
Display-Price Sliding that receives price improvement when
executed'' and such orders will continue to receive a Fee Code of
``P'' on execution reports. The proposed base rebate for executions
of Added Midpoint Volume is referred to by the Exchange on the Fee
Schedule under the existing description ``Added non-displayed
volume, Midpoint Peg'', and such orders will continue to receive a
Fee Code of ``M'' on execution reports. The proposed base rebate for
executions of Added Non-Midpoint Hidden Volume is referred to by the
Exchange on the Fee Schedule under the existing description ``Added
non-displayed volume'' and such orders will continue to receive a
Fee Code of ``H'' on execution reports.
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Increase Base Rebates for Added Non-Displayed Sub-Dollar Volume
The Exchange is also proposing to increase the rebates provided for
all sub-dollar executions of Added Non-Displayed Volume. As noted
above, Added Non-Displayed Volume is comprised of the three following
types of orders: (i) Added Price-Improved Volume; (ii) Added Midpoint
Volume; and (iii) Added Non-Midpoint Hidden Volume. Currently, the
Exchange provides a rebate of 0.075% of the total dollar value for each
execution of Added Non-Displayed Volume in securities priced below
$1.00 per share. This pricing structure is similarly applied to all
executions of Added Non-Displayed Volume by Members that qualify for
enhanced rebates in securities priced below $1.00 per share pursuant to
the Non-Display Add Tiers. The Exchange now proposes to increase the
rebate for all Added Non-Displayed Volume to 0.15% of total dollar
value. Specifically, the Exchange will provide a rebate of 0.15% of the
total dollar value for each execution of Added Midpoint Volume, Added
Non-Midpoint Hidden Volume, and Added Price-Improved Volume in
securities priced below $1.00 per share. The Exchange is similarly
proposing to provide a rebate of 0.15% of the total dollar value to
Members that qualify for an enhanced rebate pursuant to the Non-Display
Add Tier 1 \11\ in securities priced below $1.00 per share. Thus, all
Added Non-Displayed Volume will qualify for the same rebate for
executions in securities priced below $1.00 per share.
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\11\ The Exchange currently offers Non-Display Add Tiers 1, 2,
and 3, however, as discussed further below, it is proposing to
eliminate Non-Display Add Tiers 2 and 3, and as such, Non-Display
Add Tier 1 will be the only Non-Display Add Tier remaining.
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The purpose of the rebate increase for sub-dollar executions of
Added Non-Displayed Volume is to encourage participants to add sub-
dollar liquidity on the Exchange. The proposed new rebate of 0.15% of
the total dollar value will be the same rebate that is being proposed
to be provided for sub-dollar executions which add displayed liquidity
on the Exchange, as discussed further below. The Exchange believes by
offering the same rebate for sub-dollar non-displayed liquidity as for
displayed liquidity, the resulting pricing structure will encourage the
provision of sub-dollar liquidity on the Exchange.
[[Page 53025]]
Additionally, the Exchange believes it is appropriate to provide the
same rebate for sub-dollar executions of Added Price-Improved Volume
and Added Midpoint Volume as for Added Non-Midpoint Hidden Volume, as
all of these orders similarly add liquidity to the Exchange and are
executed at prices that are not displayed on the Exchange's order book,
and the Exchange notes that all of these orders are also currently
subject to the same sub-dollar rebate and pricing structure today.
Increase Base Rebates for Added Displayed Sub-Dollar Volume
The Exchange is also proposing to increase the rebates provided for
all executions of Added Displayed Sub-Dollar Volume. Currently, the
Exchange provides a rebate of 0.075% of the total dollar value for each
execution of Added Displayed Volume in securities priced below $1.00
per share. This pricing structure is similarly applied to all
executions of Added Displayed Volume by Members that qualify for
enhanced rebates in securities priced below $1.00 per share pursuant to
Liquidity Provision Tiers 1-5, DLI Tiers 1-2, and Cross Asset Tier 1.
The Exchange now proposes to increase the rebate for all Added
Displayed Sub-Dollar Volume to 0.15% of the total dollar value.
Specifically, the Exchange will provide a rebate of 0.15% of the total
dollar value for each of execution of Added Displayed Volume in
securities priced below $1.00 per share. The Exchange is similarly
proposing to provide a rebate of 0.15% of total dollar value to Members
that qualify for an enhanced rebate pursuant to the Liquidity Provision
Tiers, the DLI Tiers, and Cross Asset Tier 1 in securities priced below
$1.00 per share. Thus, all Added Displayed Volume will qualify for the
same rebate for executions in securities priced below $1.00 per
share.\12\
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\12\ The Exchange notes that executions of Added Displayed
Volume in Retail Orders in securities priced below $1.00 per share
are currently provided a base rebate of 0.15% of the total dollar
value of the Exchange. This sub-dollar rebate also applies to
executions of Added Displayed Volume in Retail Orders in sub-dollar
securities that meet the required criteria under Retail Tier 1.
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The purpose of the rebate increase for executions of Added
Displayed Sub-Dollar Volume is to encourage participants to add sub-
dollar liquidity on the Exchange. The proposed new rebate of 0.15% of
the total dollar value will be the same rebate that is being proposed
for sub-dollar executions which provide non-displayed liquidity on the
Exchange, as discussed above. The Exchange believes by offering the
same rebate for sub-dollar non-displayed liquidity as for displayed
liquidity, the resulting pricing structure will encourage the provision
of sub-dollar liquidity on the Exchange.
Non-Display Add Tiers
The Exchange currently offers Non-Display Add Tiers 1-3 under which
a Member may receive an enhanced rebate for executions of Added Non-
Displayed Volume by achieving the corresponding required volume
criteria for each such tier. The Exchange now proposes to modify the
Non-Display Add Tiers by eliminating Non-Display Add Tiers 2 and 3.
With respect to Non-Display Add Tier 2, the Exchange provides an
enhanced rebate of $0.0025 per share for executions of Added Non-
Displayed Volume in securities priced at or above $1.00 per share for
Members that qualify for such tier by achieving a Non-Displayed ADAV
\13\ that is equal to or greater than 2,00,000 shares. Under Non-
Display Add Tier 3, the Exchange provides an enhanced rebate of $0.0018
per share for executions of Added Non-Displayed Volume in securities
priced at or above $1.00 per share for Members that qualify for such
tier by achieving a Non-Displayed ADAV that is equal to or greater than
1,000,000 shares. The Exchange now proposes to eliminate Non-Display
Add Tiers 2 and 3, as the Exchange no longer wishes to, nor is it
required to, maintain such tiers. With respect to the current Non-
Display Add Tier 1, the Exchange is not proposing to make any changes
to the rebate provided or the required criteria under such tier,
however, as noted above, the Exchange has proposed to increase the
rebate provided for all executions of Added Non-Displayed Sub-Dollar
Volume, and as such, the Exchange is proposing to provide a rebate of
0.15% of the total value of executions of Added Non-Displayed Sub-
Dollar volume for Members that qualify for an enhanced rebate pursuant
to the Non-Display Add Tier 1.\14\
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\13\ As set forth on the Fee Schedule, ``ADAV'' means the
average daily added volume calculated as the number of shares added
per day, which is calculated on a monthly basis, and ``Non-Displayed
ADAV'' means ADAV with respect to non-displayed orders.
\14\ The pricing for Non-Display Add Tier 1 is referred to by
the Exchange on the Fee Schedule under the existing description
``Added non-displayed volume, Non-Display Add Tier 1'' with a Fee
Code of ``H1'', ``M1'', or ``P1'', as applicable, to be provided by
the Exchange on the monthly invoices provided to Members.
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Fees for Removed Volume
The Exchange currently charges a standard fee of $0.0030 per share
for executions of Removed Volume.\15\ The Exchange now wishes to modify
the pricing for executions of Removed Volume by charging separate fees
for Removed Volume based on whether the execution occurs in a Tape A,
B, or C security, respectively. Specifically, the Exchange is proposing
to charge a standard fee of $0.0029 per share for executions of Removed
Volume in Tape A securities (such orders, ``Tape A Removed
Volume''),\16\ a standard fee of $0.0030 per share for executions of
Removed Volume in Tape B securities (such orders, ``Tape B Removed
Volume''),\17\ and a standard fee of $0.0030 per share for executions
of Removed Volume in Tape C securities (such orders, ``Tape C Removed
Volume'').\18\ The Exchange is proposing to continue to charge a fee of
0.28% of the total dollar value for all three categories of Removed
Volume in securities priced below $1.00 per share, which is the current
fee charged for such executions.
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\15\ The standard fee for Removed Volume is referred to the
Exchange on the Fee Schedule under the description, ``Removed volume
from the MEMX Book'' with a Fee Code of ``R'' assigned by the
Exchange.
\16\ The proposed standard fee for executions of Tape A Removed
Volume will be referred to by the Exchange on the Fee Schedule under
the description ``Removed volume from MEMX Book, Tape A'' with a Fee
Code of ``Ra'' on execution reports.
\17\ The proposed standard fee for executions of Tape B Removed
Volume will be referred to by the Exchange on the Fee Schedule under
the description ``Removed volume from MEMX Book, Tape B'' with a Fee
Code of ``Rb'' on execution reports.
\18\ The proposed standard fee for executions of Tape C Removed
Volume will be referred to by the Exchange on the Fee Schedule under
the description ``Removed volume from MEMX Book, Tape C'' with a Fee
Code of ``Rc'' on execution reports.
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The purpose of creating separate fees for Removed Volume by Tape
and effectively charging a reduced fee of $0.0029 per share for
executions of Tape A Removed Volume and maintaining a fee of $0.0030
per share for executions of Tape B and Tape C Removed Volume is for
business and competitive reasons, as the Exchange believes that such
changes would incentivize Members to submit additional order flow in
Tape A securities, thereby promoting price discovery and market quality
on the Exchange with regard to such Tape A securities. Further, other
exchanges similarly separate out their fee structure by Tape, and
currently or have historically charged separate fees or provided
separate rebates for executions based on Tape.\19\ The Exchange
believes
[[Page 53026]]
that the proposed fee structure to charge separate fees by Tape is
aligned with and comparable to such other national securities'
exchanges.
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\19\ See, e.g., the NYSE Price List, available at: <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf</a>, and
the Nasdaq Price List, available at: <a href="https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2">https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2</a>. See also reference to Nasdaq PSX
pricing providing different fees per share for liquidity removal in
Tape A and B securities versus for Tape C securities in NYSE's rule
filing: Securities Exchange Act Release No. 34-85864 (May 9, 2019),
84 FR 23109 (May 21, 2019).
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Reduce Standard Fee for Removed Retail Volume
Currently, the Exchange charges a standard fee of $0.0030 per share
for executions of Removed Retail Volume. The Exchange now proposes to
reduce the standard fee for executions of Removed Retail Volume to
$0.0029 per share.\20\ The purpose of reducing the fee for executions
of Removed Retail Volume is to incentivize Members to submit additional
Retail orders to the Exchange. Additionally, the Exchange believes by
offering the same reduced fee for Removed Retail Volume as the best
priced fee for Removed (non-Retail Volume),\21\ the resulting pricing
structure will encourage the provision of Retail orders on the
Exchange.
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\20\ The proposed standard fee for executions of Removed Retail
Volume is referred to by the Exchange on the Fee Schedule under the
existing description ``Removed volume from MEMX Book, Retail Order''
with a Fee Code of ``RrA'' on execution reports.
\21\ As noted previously, the lowest fee for Removed Volume
proposed herein is similarly $0.0029 per share, for Tape A Removed
Volume.
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Sub-Dollar Rebate Tier
Currently, the Exchange offers a Sub-Dollar Rebate Tier under which
a Member may receive an enhanced rebate of 0.15% of the total dollar
value of the transaction for executions of orders in securities priced
below $1.00 per share that add liquidity to the Exchange (such orders,
``Added Sub-Dollar Volume'') for Members that qualify for such tier by
achieving a Sub-Dollar ADAV \22\ that is equal to or greater than
5,000,000 shares. The Exchange now proposes to eliminate this tier, as
the Exchange's above-described proposal to increase the base rebate for
all Added Sub-Dollar Volume to 0.15% of the total dollar value of the
transaction renders the enhanced rebate provided under this tier
obsolete.
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\22\ ``Sub-Dollar ADAV'' means ADAV with respect to orders in
securities priced below $1.00 per share. ``ADAV'' means average
daily added volume calculated as the number of shares added per day,
calculated on a monthly basis.
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Tape A Quoting Tier
The Exchange currently offers the Tape A Quoting Tier under which a
Member may receive an additive rebate of $0.0002 per share for a
qualifying Member's executions of Added Displayed Volume (other than
Retail Orders) in Tape A securities priced over $1.00 per share by
achieving an NBBO Time \23\ of at least 50% in an average of at least
500 Tape A securities per trading day during the month. Now, the
Exchange proposes to modify the required criteria under the Tape A
Quoting Tier such that a Member would now qualify for such tier by
achieving an NBBO time of at least 25% in an average of at least 100
Tape A securities per trading day during the month.\24\ Thus, such
proposed change would reduce the NBBO quoting time as well as the
number of Tape A securities in which a Member is required to quote at
the NBBO. The Exchange is not proposing to change the amount of the
additive rebate provided under the Tape A Quoting Tier.
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\23\ As set forth on the Fee Schedule, ``NBBO Time'' means the
aggregate of the percentage of time during regular trading hours
during which one of a Member's MPIDs has a displayed order of at
least one round lot at the national best bed or the national best
offer.
\24\ The pricing for the Tape A Quoting Tier is referred to by
the Exchange on the Fee Schedule under the existing description
``Tape A Quoting'' Tier with a Fee Code of ``a'' to be appended to
the otherwise applicable Fee Code assigned by the Exchange on the
monthly invoices for qualifying executions.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\25\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\26\ 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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\25\ 15 U.S.C. 78f.
\26\ 15 U.S.C. 78f(b)(4) and (5).
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As discussed above, the Exchange 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.'' \27\
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\27\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005).
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The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue use of certain categories of products,
in response to new or different pricing structures being introduced
into the market. 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 designed to
incentivize market participants to direct additional order flow,
including displayed, non-displayed, liquidity-adding and/or liquidity-
removing orders to the Exchange, in both securities priced at or above
$1.00 per share and in Sub-Dollar securities, 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 the proposed changes to increase the
base rebates provided for all Added Non-Displayed Volume (both Sub-
Dollar and above $1.00 per share), to increase the base rebates
provided for all executions of Added Displayed Sub-Dollar Volume, and
to eliminate the now obsolete Sub-Dollar Rebate Tier as a result, are
reasonable because, as described above, such changes are designed to
encourage Members to submit additional liquidity adding orders to the
Exchange, promoting price discovery and enhancing liquidity on the
Exchange to the benefit of all Member and market participants.
Additionally, the Exchange believes that the proposed base rebates
provided for executions of Added Non-Displayed Volume, Added Non-
Displayed Sub-Dollar Volume and Added Displayed Sub-Dollar Volume are
equitable and not unfairly discriminatory, as such base rebates will
apply equally to all Members.
The Exchange similarly believes that the proposed changes to
separate the fees for Removed Volume out by Tape, thus charging a
reduced fee for executions of Tape A Removed Volume and continuing to
charge the same fee
[[Page 53027]]
for executions of Tape B and C Removed Volume, as well as the proposed
change to reduce the fee for Removed Retail Volume, are reasonable
because such changes are designed to encourage Members to submit
additional liquidity removing orders to the Exchange, particularly in
Tape A securities, as well as Retail Removing orders, and the proposed
fees are equitable and unfairly discriminatory as such fees will apply
equally to all Members. Further, other exchanges have historically and
currently charge separate fees and provide separate rebates based on
the Tape of a security, and as such, the Exchange's proposed Tape A, B
and C Remove Volume fee structure is consistent with that of other
market centers.\28\
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\28\ See supra note 19.
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The Exchange believes the proposed change to eliminate Non-Display
Add Tiers 2 and 3 while maintaining Non-Display Add Tier 1 is
reasonable because, as noted above, the Exchange is not required to
maintain such tiers and the opportunity to qualify for Non-Display Add
Tier 1 continues to be equally available to all Members, and continues
to provide Members with an incremental incentive to achieve certain
volume thresholds on the Exchange thereby contributing to a deeper,
more liquid and well balanced market ecosystem on the Exchange to the
benefit of all Members and market participants.
The Exchange notes that volume and quoting-based incentives (such
as tiers) have been widely adopted by exchanges, including the
Exchange, and are reasonable, equitable and not unfairly discriminatory
because they are open to all members on an equal basis and provide
additional benefits that are reasonably related to the value to an
exchange's market quality associated with higher levels of market
activity, such as higher levels of liquidity provision and/or growth
patterns, and the introduction of higher volumes of orders into the
price and volume discovery process. The Exchange believes that the Tape
A Quoting Tier, as modified by the proposed changes to the required
criteria under such tier, is reasonable, equitable and not unfairly
discriminatory for these same reasons, as such tier will continue to
provide Members with an incremental incentive to achieve certain volume
thresholds on the Exchange, is available to all Members on an equal
basis, and, as described above, is designed to encourage Members to
maintain or increase their order flow, including in the form of
displayed, liquidity-adding, orders to the Exchange in Tape A
securities in order to qualify for an additive rebate for executions of
Added Displayed Volume in Tape A securities, thereby contributing to a
deeper, more liquid and well balanced market ecosystem on the Exchange
to the benefit of all Members and market participants. The Exchange
also believes that the proposed changes to such tier reflects a
reasonable and equitable allocation of fees and rebates, because, as
noted above, the Exchange believes that the additive rebate under the
Tape A Quoting Tier remains commensurate with the corresponding
required criteria under such tier, and is reasonably related to the
market quality benefits that the tier is designed to achieve.
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 \29\ 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. As
described more fully below in the Exchange's statement regarding the
burden on competition, the Exchange believes that its transaction
pricing is subject to significant competitive forces, and that the
proposed rebates described herein are appropriate to address such
forces.
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\29\ 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 incentivize market participants to direct
additional order flow to the Exchange, thereby enhancing liquidity and
market quality on the Exchange to the benefit of all Members and market
participants. As a result, the Exchange believes the proposal would
enhance its competitiveness as a market that attracts actionable
orders, thereby making it a more desirable destination venue for its
customers. For these reasons, 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.'' \30\
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\30\ See supra note 27.
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Intramarket Competition
As discussed above, the Exchange believes that the proposal would
incentivize Members to submit additional order flow, including
displayed, non-displayed, liquidity-adding and removing orders to the
Exchange, in both Sub-Dollar securities as well as securities over
$1.00 per share, thereby enhancing liquidity and market quality on the
Exchange to the benefit of all Members, as well as enhancing the
attractiveness of the Exchange as a trading venue, which the Exchange
believes, in turn, would continue to encourage market participants to
direct additional order flow to the Exchange. Greater liquidity
benefits all Members by providing more trading opportunities and
encourages Members to send additional orders to the Exchange, thereby
contributing to robust levels of liquidity, which benefits all market
participants.
The Exchange does not believe that the proposed changes to increase
the base rebates for executions of Added Displayed Sub-Dollar Volume,
Added Non-Displayed Volume, and Added Non-Displayed Sub-Dollar Volume,
the proposal to separate the Remove Volume fees by Tape and thus reduce
the standard fee for Tape A Volume, or the proposal to reduce the
standard fee for Removed Retail Volume would impose any burden on
intramarket competition because such changes will apply to all Members
uniformly in that the proposed base rebates and fee for such executions
would be the base rebates and fees applicable to all Members, and the
opportunity to qualify for enhanced rebates or discounted fees, as
applicable, is available to all Members. Further, the opportunity to
qualify for Non-Display Add Tier 1, and thus receive the proposed
enhanced rebate for executions of Added Non-Displayed Volume under such
tier, and the opportunity to qualify for the modified Tape A Quoting
Tier and thus receive the proposed additive rebate for executions of
Tape A Volume, would be available to all Members that meet the
associated volume or quoting requirements in any month. For the
foregoing reasons, the Exchange believes the proposed changes would not
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
Intermarket Competition
As noted above, the Exchange 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
[[Page 53028]]
particular venue to be excessive or incentives to be insufficient.
Members have numerous alternative venues that they may participate on
and direct their order flow to, including 17 other equities exchanges
and numerous alternative trading systems and other off-exchange venues.
As noted above, no single registered equities exchange currently has
more than approximately 14% of the total market share of executed
volume of equities trading. Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. Moreover, the Exchange
believes that the ever-shifting market share among the exchanges from
month to month demonstrates that market participants can shift order
flow or reduce use of certain categories of products, in response to
new or different pricing structures being introduced into the market.
Accordingly, competitive forces constrain the Exchange's transaction
fees and rebates, including with respect to Added, Removed, Displayed,
Non-Displayed, Sub-Dollar, and Tape A Volume, and market participants
can readily choose to send their orders to other exchange and off-
exchange venues if they deem fee levels at those other venues to be
more favorable. As described above, the proposed changes represent a
competitive proposal through which the Exchange is seeking to generate
additional revenue with respect to its transaction pricing and to
encourage the submission of additional order flow to the Exchange
through volume and quoting-based tiers, which have been widely adopted
by exchanges, including the Exchange. Accordingly, the Exchange
believes the proposal would not burden, but rather promote, intermarket
competition by enabling it to better compete with other exchanges that
offer similar pricing incentives to market participants.
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.'' \31\ 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'. . . .''.\32\ 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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\31\ Id.
\32\ 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 \33\ and Rule 19b-4(f)(2) \34\ thereunder.
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\33\ 15 U.S.C. 78s(b)(3)(A)(ii).
\34\ 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#2c5e594049014f4341414942585f6c5f494f024b435a"><span class="__cf_email__" data-cfemail="87f5f2ebe2aae4e8eaeae2e9f3f4c7f4e2e4a9e0e8f1">[email protected]</span></a>. Please include
file number SR-MEMX-2025-31 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-2025-31. 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 protection. All submissions
should refer to file number SR-MEMX-2025-31 and should be submitted on
or before December 15, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-20693 Filed 11-21-25; 8:45 am]
BILLING CODE 8011-01-P
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