Notice2026-07045
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
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Published
April 13, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 70 (Monday, April 13, 2026)</title>
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[Federal Register Volume 91, Number 70 (Monday, April 13, 2026)]
[Notices]
[Pages 18905-18908]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07045]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105183; File No. SR-MEMX-2026-09]
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
April 8, 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 March 31, 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) modify the
required criteria under Liquidity Provision Tier 4, and (ii) adopt a
new Retail Sub-Dollar Liquidity Removal 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).
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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) modify the required criteria under Liquidity Provision
Tier 4, and (ii) adopt a new Retail Sub-Dollar Liquidity Removal Tier,
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 15% 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, 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 March 30, 2026. The
Exchange receives and processes data made available through
consolidated data feeds (i.e., CTS and UTDF).
\5\ Id.
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Liquidity Provision Tier 4
The Exchange currently provides a standard rebate of $0.0015 per
share for executions of orders in securities priced at or above $1.00
per share that add displayed liquidity to the Exchange (such orders,
``Added Displayed Volume'').\6\ The Exchange also currently offers
Liquidity Provision Tiers 1-5, among other volume-based tiers, under
which a Member may receive an enhanced rebate for executions of Added
Displayed Volume by achieving the corresponding required volume
criteria for each such tier. The Exchange now proposes to modify the
required criteria under Liquidity Provision Tier 4, as further
described below.
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\6\ The base rebate for executions of Added Displayed Volume is
referred to by the Exchange on the Fee Schedule under the existing
description ``Added displayed volume'' with a Fee Code of ``B'',
``D'' or ``J'', as applicable, on execution reports.
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The Exchange currently provides an enhanced rebate of $0.0028 per
share for executions of Added Displayed Volume for Members that qualify
for Liquidity Provision Tier 4 by achieving an ADAV \7\ (excluding
Retail Orders) \8\ that is equal to or greater than 0.09% of the
TCV.\9\ Now, the Exchange proposes to modify the required criteria such
that a Member would qualify for Liquidity Provision Tier 4 by achieving
an ADAV that is equal to or greater than 0.10% of the TCV. Thus, such
proposed change would increase the ADAV % of TCV threshold but
eliminate the Retail Order exclusion from the criteria, broadening the
universe of executions which will be included in the Exchange's
calculation of ADAV for purposes of qualifying for Liquidity Provision
Tier 4.\10\ The Exchange is not proposing to change the rebate provided
under such tier.
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\7\ 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.
\8\ 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).
\9\ 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.
\10\ The pricing for Liquidity Provision Tier 4 is referred to
by the Exchange on the Fee Schedule under the existing description,
``Added displayed volume, Liquidity Provision Tier 4'' with a Fee
Code of ``B4'', ``D4'', or ``J4'', as applicable, to be provided by
the Exchange on the monthly invoices provided to Members.
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The proposed change to Liquidity Provision Tier 4 is designed to
encourage Members to maintain or increase their order flow, including
in the form of orders that add liquidity on the Exchange in order to
qualify for the
[[Page 18906]]
enhanced Liquidity Provision Tier 4 rebate, which may contribute to a
more robust and well-balanced market ecosystem on the Exchange to the
benefit of all Members.
Adoption of Retail Sub-Dollar Liquidity Removal Tier
The Exchange currently charges a standard fee of 0.28% of the total
dollar value of the transaction for executions of orders in securities
priced below $1.00 per share that remove liquidity from the Exchange,
(such orders, ``Removed Sub-Dollar Volume''), including Retail Orders.
This standard fee is applicable to all such executions of Removed Sub-
Dollar Volume (including those that qualify for any of the Exchange's
existing volume tiers). Now, the Exchange proposes to adopt a volume-
based tier, known as the Retail Sub-Dollar Liquidity Removal Tier,
under which the Exchange will charge a reduced fee for executions of
Retail Orders in securities priced below $1.00 per share that remove
liquidity from the Exchange (such orders, ``Removed Sub-Dollar Retail
Volume'') for Members that achieve the volume criteria under such tier.
Under the proposed Retail Sub-Dollar Liquidity Removal Tier 1, the
Exchange will charge a reduced fee of 0.125% of the total dollar value
of the transaction for executions of Removed Sub-Dollar Retail Volume
for Members that qualify for such tier by achieving an ADAV in
securities priced below $1.00 per share that is equal to or greater
than 20,000,000 shares.\11\
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\11\ The pricing for the proposed new Sub-Dollar Retail
Liquidity Removal Tier is referred to by the Exchange on the Fee
Schedule under the new description ``Sub-Dollar Retail Liquidity
Removal Tier 1'' with a Fee Code of ``Rr1B'' on monthly invoices
provided to Members.
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The proposed Retail Sub-Dollar Liquidity Removal Tier is designed
to attract liquidity to the Exchange in Sub-Dollar securities, thereby
promoting price discovery and market quality on the Exchange in this
category of securities. The Exchange notes the proposed Retail Sub-
Dollar Liquidity Removal Tier is comparable to other volume-based
incentives and discounts, which have been widely adopted by exchanges,
including the Exchange.\12\
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\12\ 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 shows a Sub-Dollar
Retail Day Remove Tier, whereby members of NYSE Arca are charged a
reduced fee of 0.20% of the total dollar value for executions of
securities priced below $1.00 per share for firms that qualify for
such tier by achieving certain specified volume thresholds.
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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,\13\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\14\ 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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\13\ 15 U.S.C. 78f.
\14\ 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.'' \15\
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\15\ 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 orders to the Exchange, both
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 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 of 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
Liquidity Provision Tier 4, as modified by the proposed changes to the
required criteria under such tier, is reasonable, equitable and not
unfairly discriminatory, 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, 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 tier reflects a reasonable and
equitable allocation of fees and rebates, as the Exchange believes
that, after giving effect to the changes proposed herein, the enhanced
rebate for executions of Added Displayed Volume under such tier is
commensurate with the corresponding required criteria under the tier
and is reasonably related to the market quality benefits that the tier
is designed to achieve, as described above. Additionally, the Exchange
believes the proposed new Retail Sub-Dollar Liquidity Removal Tier is
reasonable, in that it is comparable to pricing incentives adopted by
other exchanges that charge a reduced fee for executions of Removed
Sub-Dollar Retail Volume for firms that achieve a specified volume
threshold.\16\
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\16\ See supra note 12.
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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 \17\ 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
[[Page 18907]]
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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\17\ 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.'' \18\
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\18\ See supra note 15.
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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 orders to the Exchange, in both Retail and
non-Retail orders, in Sub-Dollar securities and securities priced at or
above $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 opportunity to qualify for the proposed new criteria under the
Liquidity Provision Tier 4 and the new Retail Sub-Dollar Liquidity
Removal Tier 1, and thus receive the corresponding rebate for
executions of Added Displayed Volume, and/or reduced fee for executions
of Removed Retail Sub-Dollar Volume, as applicable, would be available
to all Members that meet the associated volume requirements in any
month. As described above, the Exchange believes that, after giving
effect to the changes proposed herein, the required criteria under each
of the tiers described above is commensurate with the corresponding
enhanced rebate/reduced fee under each such tier and is reasonably
related to the enhanced liquidity and market quality that each such
tier is designed to promote.
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 15% 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 Displayed Volume and
Removed Sub-Dollar Retail 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.'' \19\ 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'. . . .''.\20\ 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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\19\ Id.
\20\ 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 \21\ and Rule 19b-4(f)(2) \22\ thereunder.
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\21\ 15 U.S.C. 78s(b)(3)(A)(ii).
\22\ 17 CFR 240.19b-4(f)(2).
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[[Page 18908]]
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#196b6c757c347a7674747c776d6a596a7c7a377e766f"><span class="__cf_email__" data-cfemail="394b4c555c145a5654545c574d4a794a5c5a175e564f">[email protected]</span></a>. Please include
file number SR-MEMX-2026-09 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-2026-09. 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-2026-09 and should be submitted on
or before May 4, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07045 Filed 4-10-26; 8:45 am]
BILLING CODE 8011-01-P
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