Notice2026-02888
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
February 13, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 30 (Friday, February 13, 2026)</title>
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[Federal Register Volume 91, Number 30 (Friday, February 13, 2026)]
[Notices]
[Pages 6943-6948]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-02888]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104812; File No. SR-MEMX-2026-05]
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
February 10, 2026.
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 January 30, 2026, 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
standard fee for executions of orders that remove liquidity from the
Exchange in Tape A Securities priced at or above $1.00 per share (such
orders, ``Removed Tape A Volume''); (ii) adopt a new Tape A Liquidity
Removal Tier that provides a reduced fee for executions of Removed Tape
A Volume; (iii) reduce the rebate provided under the Displayed
Liquidity Incentive (``DLI'') Tier 1; (iv) modify the required criteria
under the Tape A Quoting Tier; (v) reduce the additive rebate provided
under the Tape B Volume Tier 1; and (vi) amend the Notes section of the
Fee Schedule to bring the Exchange's transactions fees and rebates into
compliance with Regulation NMS Rule 610(d). 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).
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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 standard fee for executions of orders
that remove liquidity from the Exchange in Tape A Securities priced at
or above $1.00 per share (such orders, ``Removed Tape A Volume''); (ii)
adopt a new Tape A Liquidity Removal Tier that provides a reduced fee
for executions of Removed Tape A Volume; (iii) reduce the rebate
provided under the Displayed Liquidity Incentive (``DLI'') Tier 1; (iv)
modify the required criteria under the Tape A Quoting Tier; (v) reduce
the additive rebate provided under the Tape B Volume Tier 1; and (vi)
amend the Notes section of the Fee Schedule to bring the Exchange's
transactions fees and rebates into compliance with Regulation NMS Rule
610(d), each as further described below.
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.\4\ 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.\5\ 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,
[[Page 6944]]
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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\4\ Market share percentage calculated as of January 29, 2026.
The Exchange receives and processes data made available through
consolidated data feeds (i.e., CTS and UTDF).
\5\ Id.
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Increase Standard Fee for Removed Tape A Volume
Currently, the Exchange charges a standard fee of $0.0029 per share
for executions of Removed Tape A Volume. The Exchange now proposes to
increase the standard fee for executions of Removed Tape A Volume to
$0.0030 per share.\6\ The purpose of increasing the standard fee for
executions of Removed Tape A Volume is for business and competitive
reasons, as the Exchange believes that increasing such fee as proposed
would generate additional revenue to offset some of the costs
associated with the Exchange's current pricing structure, which
provides various rebates for liquidity-adding orders, and the
Exchange's operations generally, in a manner that is still consistent
with the Exchange's overall pricing philosophy of encouraging added
liquidity. The Exchange notes that despite the increase proposed
herein, the proposed standard fee for executions of Removed Tape A
Volume remains in line with the standard fees charged by other
exchanges for executions of Removed Tape A Volume.\7\ The Exchange is
not proposing to change the fee charged for executions of Removed Tape
A Volume in securities priced below $1.00 per share.
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\6\ The proposed standard fee for executions of Removed Tape A
Volume is referred to by the Exchange on the Fee Schedule under the
existing description ``Removed volume from MEMX Book, Tape A'' with
a Fee Code of ``Ra'' on execution reports.
\7\ See, e.g., the Cboe EDGX equities fee schedule on its public
website (available at <a href="https://www.cboe.com/us/equities/membership/fee_schedule/edgx/">https://www.cboe.com/us/equities/membership/fee_schedule/edgx/</a>), which reflects a standard fee of $0.0030 per
share for executions of orders in Tape A securities priced at or
above $1.00 per share that remove liquidity; see also the Cboe BZX
equities fee schedule on its public website (available at <a href="https://www.cboe.com/us/equities/membership/fee_schedule/bzx/">https://www.cboe.com/us/equities/membership/fee_schedule/bzx/</a>) which
reflects a standard fee of $0.0030 per share for executions of
orders in Tape A securities priced at or above $1.00 per share that
remove liquidity.
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Adoption of Tape A Liquidity Removal Tier
The Exchange proposes to adopt a new tier applicable to Member
participation in Tape A securities, referred to by the Exchange as the
Tape A Liquidity Removal Tier, in which the Exchange will charge a
discounted fee for executions of Removed Tape A Volume for Members that
qualify for the Tier by achieving certain volume criteria in Tape A
securities. Under the proposed Tape A Liquidity Removal Tier, the
Exchange will charge $0.0029 per share for executions of Tape A Removed
Volume for a Member that qualifies for the Tier by achieving a Tape A
ADAV \8\ of at least 10,000,000 shares.\9\
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\8\ 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.
\9\ The proposed pricing for Tape A Liquidity Removal Tier will
be referred to by the Exchange on the Fee Schedule under the
description ``Removed volume from MEMX Book, Tape A Liquidity
Removal Tier 1'' with a Fee Code of ``Ra1'' on execution reports.
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The Exchange proposes to charge Members that qualify for the
Liquidity Removal Tier a fee of 0.28% of the total dollar value of the
transaction for executions of orders that remove liquidity from the
Exchange in securities priced below $1.00 per share, which is the same
fee that would be applicable to such executions for Members that do not
qualify for the Tape A Liquidity Removal Tier.
The proposed Tape A Liquidity Removal Tier is designed to encourage
Members to strive for higher ADAV on the Exchange in Tape A securities
in order to qualify for the discounted fee for executions of Removed
Tape A Volume. As such, the proposed tier is designed to encourage
Members to maintain or increase their order flow directed to the
Exchange, thereby contributing to a deeper and more liquid market to
the benefit of all market participants and enhancing the attractiveness
of the Exchange as a trading venue. The Exchange notes that the
proposed discounted fee for executions of Removed Tape A Volume
applicable to Members that qualify for the Tape A Liquidity Removal
Tier is comparable to, and competitive with, the fees charged for
executions of liquidity-removing orders charged by at least one other
exchange under similar volume-based tiers.\10\
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\10\ See, e.g., the NYSE Arca Equities Fees and Charges,
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>, which reflects a Tape B Remove
Tier that charges a discounted fee of $0.0029 per share for
executions that remove liquidity in Tape B securities.
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DLI Tier 1
The Exchange currently offers DLI Tiers 1 and 2 under which a
Member may receive an enhanced rebate for executions of orders in
securities priced at or above $1.00 per share that add displayed
liquidity to the Exchange (``Added Displayed Volume'') by achieving the
corresponding required criteria for each such tier. The DLI Tiers are
designed to encourage Members, through the provision of an enhanced
rebate for executions of Added Displayed Volume, to promote price
discovery and market quality by quoting at the NBBO for a significant
portion of each day (i.e., through the applicable quoting requirement
\11\) in a broad base of securities (i.e., through the applicable
securities requirements \12\), thereby benefitting the Exchange and
investors by providing improved trading conditions for all market
participants through narrower bid-ask spreads and increased depth of
liquidity available at the NBBO in a broad base of securities and
committing capital to support the execution of orders. Now, the
Exchange proposes to modify DLI Tier 1 by reducing the rebate for
executions of Added Displayed Volume under such tier.
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\11\ As set forth on the Fee Schedule, the term ``quoting
requirement'' means the requirement that a Member's NBBO Time be at
least 25%, and the term ``NBBO Time'' means the aggregate of the
percentage of time during regular trading hours during which one of
a Member's market participant identifiers (``MPIDs'') has a
displayed order of at least one round lot at the national best bid
or the national best offer.
\12\ As set forth on the Fee Schedule, the term ``securities
requirement'' means the requirement that a Member meets the quoting
requirement in the applicable number of securities per day.
Currently, each of DLI Tiers 1 and 2 has a securities requirement
that may be achieved by a Member meeting the quoting requirement in
the specified number of securities traded on the Exchange.
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Currently, under DLI Tier 1, the Exchange provides an enhanced
rebate of $0.0033 per share for executions of Added Displayed Volume
for Members that qualify for such tier by achieving an NBBO Time of at
least 50% in an average of at least 1,000 securities per trading day
during the month. The Exchange now proposes to reduce the rebate for
executions of Added Displayed Volume under DLI Tier 1 to $0.0032 per
share.\13\ The Exchange is not proposing to change the criteria
required to qualify for DLI Tier 1.
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\13\ The pricing for the DLI Tier 1 is referred to by the
Exchange on the Fee Schedule under the existing description ``Added
displayed volume, DLI Tier 1'' Tier with a Fee Code of ``Bq1, Dq1,
Jq1, or Iq1'', as applicable, on execution reports.
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The Exchange believes that the proposed reduction of the rebate
under DLI Tier 1 (i.e., by $0.0001 per share) represents a modest
reduction and that the proposed rebate under DLI Tier 1 remains
commensurate with the required criteria under such tier. The purpose of
reducing the rebate for executions of Added Displayed Volume
[[Page 6945]]
provided under DLI Tier 1, as proposed, is for business and competitive
reasons, as the Exchange believes the reduction of such rebate would
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 added and/or displayed
liquidity and promoting the price discovery and market quality
objectives of the DLI Tiers described above. The Exchange is not
proposing to change the rebate provided under such tier for executions
of orders in securities priced below $1.00 per share.
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) \14\ in Tape A securities priced over $1.00 per share 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. 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 500 Tape A securities
per trading day during the month.\15\ Thus, such proposed change would
increase 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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\14\ 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).
\15\ 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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Tape B Volume Tier 1
The Exchange currently offers Tape B Volume Tiers 1 and 2 under
which a Member may receive an additive rebate for a qualifying Member's
executions of Added Displayed Volume (other than Retail Orders) in Tape
B securities priced over $1.00 per share by achieving certain criteria.
Currently under Tape B Volume Tier 1, the Exchange provides an additive
rebate of $0.0005 per share for a qualifying Member's executions of
Added Displayed Volume (other than Retail Orders) in Tape B securities
priced over $1.00 per share by achieving: (1) a Tape B ADAV that is
equal to or greater than 0.40% of the Tape B TCV \16\ (excluding Retail
Orders); and (2) a Non-Display ADAV \17\ that is equal to or greater
than 8,000,000 shares. Now, the Exchange proposes to reduce the
additive rebate provided under the Tape B Volume Tier 1 to $0.0004 per
share.\18\ The Exchange is not proposing to change the criteria
required to qualify for Tape B Volume Tier 1.
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\16\ As set forth on the Fee Schedule, ``TCV'' means total
consolidated volume calculated as the volume reported by all
exchanges and trade reporting facilities to a consolidated
transaction reporting plan for the month for which the fees apply.
\17\ As set forth on the Fee Schedule, ``Non-Displayed ADAV''
means ADAV with respect to non-displayed orders (including orders
subject to Display-Price Sliding that receive price improvement when
executed and Midpoint Peg orders).
\18\ The pricing for the Tape B Volume Tier 1 is referred to by
the Exchange on the Fee Schedule under the existing description
``Tape B Volume Tier 1'' with a Fee Code of ``b1'' to be appended to
the otherwise applicable Fee Code assigned by the Exchange on the
monthly invoices for qualifying executions.
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The Exchange believes that the proposed reduction of the rebate
under Tape B Volume Tier 1 (i.e., by $0.0001 per share) represents a
modest reduction and that the proposed rebate under Tape B Volume Tier
1 remains commensurate with the required criteria under such tier and
is reasonably related to the market quality benefits that the tier is
designed to achieve.
Tier/Additive Rebate Qualification
Lastly, the Exchange is proposing to add a note to the Notes
section of the Fee Schedule to bring the Exchange's transaction fees
and rebates into compliance with Regulation 610(d), which becomes
effective on February 2, 2026.
On September 18, 2024, the Commission adopted several amendments to
Regulation NMS in order to increase the transparency of exchange fees
and rebates.\19\ New Regulation NMS Rule 610(d) provides that ``[a]
national securities exchange shall not impose, nor permit to be
imposed, any fee or fees, or provide, or permit to be provided, any
rebate or other remuneration, for the execution of an order in an NMS
stock that cannot be determined at the time of execution.'' \20\ The
compliance date for new Regulation NMS Rule 610(d) is the first
business day of February 2026, which is Monday, February 2, 2026.\21\
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\19\ See Securities Exchange Act Release No. 101070 (Sept. 18,
2024), 89 FR 81620 (Oct. 8, 2024) (File No. S7-30-22) (Regulation
NMS: Minimum Pricing increments, Access Fees, and Transparency of
Better Priced Orders.) (``Rule 610(d) Adopting Release'').
\20\ 17 CFR 242.610(d).
\21\ See Securities Exchange Act Release No. 104172 (October 31,
2025), 90 FR 51418 (November 17, 2025) (Order Granting Temporary
Exemptive Relief, Pursuant to Section 36(a)(1) of the Securities
Exchange Act of 1934 and Rules 610(f) and 612(d) of Regulation NMS,
From Compliance With Rule 600(b)(89)(i)(F), Rule 610(c), Rule 610(d)
and Rule 612 of Regulation NMS, as Amended).
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Currently, unless otherwise noted on the Fee Schedule,\22\ the
Exchange establishes certain transaction fees and rebates for equities
executions that are based on tiers calculated using volume figures from
trading or quoting activity in the current month. This means that the
fees and rebates currently assessed by the Exchange associated with a
given execution often cannot be determined at the time of execution,
but rather are determined retroactively at the end of the month in
which the execution occurred. Now, in order to ensure that its
transaction fees and rebates are compliant with new Regulation NMS Rule
610(d), the Exchange is adding the following text to the Notes section
of the Fee Schedule:
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\22\ The Exchange currently employs this practice under Cross
Asset Tier 1, and as such, is proposing to delete the note under the
Cross Asset Tier pricing table on the Fee Schedule that indicates
that Members that qualify for Cross Asset Tier 1 based on activity
in a given month will also receive that associated Cross Asset Tier
1 rebate during the following month. Now that the Exchange will
determine qualification for all tiers based on activity during the
prior month, this specific note is duplicative and no longer
necessary.
In compliance with Rule 610(d) of Regulation NMS, effective
February 2, 2026, for purposes of determining quoting or transaction
volumes for fee and rebate qualifications under the Tiers and
Additive Rebates below, all volume figures will be derived from
quoting or trading activity in the prior month. Consequently, new
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Members will receive the base rates in their first month of trading.
This change will ensure that all Exchange participants will be able
to ascertain at the time of execution all the transaction fees and
rebates associated with an execution of an order in an NMS stock at the
Exchange.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\23\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\24\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among its Members and other
[[Page 6946]]
persons using its facilities and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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\23\ 15 U.S.C. 78f.
\24\ 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.'' \25\
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\25\ 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, liquidity-adding and/or liquidity-removing orders
to the Exchange, 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
standard fee charged for executions of Removed Tape A Volume is
reasonable because it represents only a modest increase from the
current standard fee charged for executions of Removed Tape A Volume on
other exchanges.\26\ The Exchange also believes the proposed standard
fee charged for executions of Removed Tape A Volume is equitable and
not unfairly discriminatory, as such fee will apply equally to all
Members of the Exchange.
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\26\ See supra note 7.
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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 DLI
Tier 1, Tape A Quoting Tier, Tape B Volume Tier 1, each as modified by
the proposed changes herein, as well as the adoption of a new Tape A
Liquidity Removal Tier, are reasonable, equitable and not unfairly
discriminatory for these same reasons, as such tiers will continue to
provide Members with an incremental incentive to achieve certain volume
thresholds on the Exchange, are available to all Members on an equal
basis, and, as described above, are designed to encourage Members to
maintain or increase their order flow, including in the form of
displayed, liquidity-adding or liquidity-removing order flow to 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 also believes that such tiers
reflect a reasonable and equitable allocation of fees and rebates,
because, as noted above, the Exchange believes that, after giving
effect to the changes proposed herein, the enhanced rebate for
executions of Added Displayed Volume under DLI Tier 1 and the additive
rebates provided for applicable executions under the Tape A Quoting
Tier and the Tape B Volume Tier 1, are commensurate with the
corresponding required criteria under each such tiers and are
reasonably related to the market quality benefits that each such tier
is designed to achieve, as described above. Additionally, the Exchange
believes the proposed new Tape A Liquidity Removal Tier is reasonable,
in that it is comparable to pricing incentives adopted by other
exchanges that provide a discounted fee for executions of removed
volume for firms that achieve a specified volume threshold.\27\
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\27\ See supra note 10.
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The Exchange believes that the modification made in this filing to
the transaction fees and rebates is reasonable because it attempts to
preserve the current quoting and trading incentives, while bringing
them into compliance with the requirements of new Regulation NMS Rule
610(d). Currently, Members are assessed certain execution fees, and
paid certain execution rebates, based on tiers calculated using volume
figures from trading and quoting activity in the current month. In
order to bring these existing fees and rebates into compliance with new
Regulation NMS Rule 610(d), the Exchange is modifying these fees and
rebates so that they are based on tiers calculated using volume figures
from trading and quoting activity in the immediate prior month for the
relevant current month. This way all fees and rebates associated with
the execution of an order in an NMS stock at the Exchange can be
determined at the time of execution of said order. The Exchange
believes that the modified schedule of transaction fees and rebates is
an equitable allocation and is not unfairly discriminatory because the
Exchange will apply the same fees and rebates to all similarly situated
Members.
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 \28\ 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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\28\ 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
[[Page 6947]]
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.'' \29\
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\29\ See supra note 25.
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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, liquidity-adding and/or removing orders to the Exchange,
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 standard fee for executions of Removed Tape A Volume would impose
any burden on intramarket competition because such changes will apply
to all Members uniformly in that the proposed standard fee for such
executions would be the fee applicable to all Members, and the
opportunity to qualify for a discounted fee, as applicable, is
available to all Members. Further, the opportunity to qualify for DLI
Tier 1, and thus receive the proposed enhanced rebate for executions of
Added Non-Displayed Volume under such tier, the opportunity to qualify
for the modified Tape A Quoting Tier and Tape B Volume Tier 1, and thus
receive the proposed additive rebate for executions of Tape A Volume
and Tape B Volume, respectively, and the opportunity to qualify for the
discounted fee under the newly proposed Tape A Liquidity Removal Tier,
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 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,
Tape A and Tape B 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.
The Exchange's proposal to add a note to the Fee Schedule to bring
the Exchange's methods for calculating fees and rebates into compliance
with new Regulation NMS Rule 610(d) will not result in any burden on
competition due to the fact that such change is being made solely to
comply with Regulation NMS 610(d) and not for competitive purposes.
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.'' \30\ 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'. . . .''.\31\ 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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\30\ Id.
\31\ 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 \32\ and Rule 19b-4(f)(2) \33\ thereunder.
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\32\ 15 U.S.C. 78s(b)(3)(A)(ii).
\33\ 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
[[Page 6948]]
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#0d7f786168206e6260606863797e4d7e686e236a627b"><span class="__cf_email__" data-cfemail="6d1f180108400e0200000803191e2d1e080e430a021b">[email protected]</span></a>. Please include
file number SR-MEMX-2026-05 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-2026-05. 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-2026-05 and should be submitted on
or before March 6, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
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\34\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-02888 Filed 2-12-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on February 13, 2026.
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