Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule

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<title>Federal Register, Volume 91 Issue 162 (Monday, August 24, 2026)</title>
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[Federal Register Volume 91, Number 162 (Monday, August 24, 2026)]
[Notices]
[Pages 54775-54778]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17202]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106160; File No. SR-MEMX-2026-24]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Fee Schedule

August 19, 2026.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4thereunder,\2\ notice is hereby given that 
on August 11, 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 amend the required 
criteria under Retail Sub-Dollar Liquidity Removal Tier 1. 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 and is available at the Exchange's website at <a href="https://info.memxtrading.com/regulation/rules-and-filings/">https://info.memxtrading.com/regulation/rules-and-filings/</a> and at the principal 
office of the Exchange.
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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 the 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend the Fee 
Schedule to amend the required criteria under Retail Sub-Dollar 
Liquidity Removal Tier 1.\4\
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    \4\ The Exchange initially filed the proposed Fee Schedule 
changes on July 31, 2026 (SR-MEMX-2026-23). On August 11, 2026, the 
Exchange withdrew that filing and submitted this proposal.
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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.\5\ 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 1.8% of the overall 
market share.\6\ 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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    \5\ Market share percentage calculated as of July 30, 2026. The 
Exchange receives and processes data made available through 
consolidated data feeds (i.e., CTS and UTDF).
    \6\ Id.
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    Currently, the Exchange charges a standard fee of 0.28% of the 
total dollar value of the transaction for executions of Retail Orders 
\7\ in securities priced below $1.00 per share that remove liquidity 
from the Exchange (such orders, ``Removed Sub-Dollar Retail Volume''). 
The Exchange also currently offers the Retail Sub-Dollar Liquidity 
Removal Tier 1, under which the Exchange charges a reduced fee of 0.18% 
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 a Retail Order ADAV \8\ in securities priced below $1.00 per 
share that is equal to or greater than 20,000,000 shares.\9\ Now, the 
Exchange proposes to modify the required criteria such that a Member

[[Page 54776]]

would now qualify for such tier by achieving either: (1) a Retail Order 
ADAV in securities priced below $1.00 per share that is equal to or 
greater than 20,000,000 shares, or (2) a Retail Order ADAV in 
securities priced below $1.00 per share that is equal to or greater 
than 10,000,000 shares and a Step-Up Retail Order ADAV \10\ in 
securities priced below $1.00 per share that is equal to or greater 
than 50% of the Member's April 2026 Retail Order ADAV in securities 
priced below $1.00 per share. Thus, such proposed change would keep the 
existing criteria intact and add a second alternative criteria which 
requires both a minimum Retail Order ADAV requirement as well as a 50% 
increase over the Member's Retail Order ADAV from April 2026. The 
Exchange is also proposing that these new alternative criteria (2) will 
expire no later than January 31, 2027, which it will indicate in a note 
under the Retail Sub-Dollar Liquidity Removal Tier pricing table on the 
Fee Schedule.\11\ The Exchange is not proposing to change the fee 
charged under such tier.
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    \7\ 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).
    \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. Thus, a Retail Order ADAV 
means an ADAV in Retail Orders.
    \9\ The pricing for the Sub-Dollar Retail Liquidity Removal Tier 
is referred to by the Exchange on the Fee Schedule under the 
existing description ``Sub-Dollar Retail Liquidity Removal Tier 1'' 
with a Fee Code of ``Rr1B'' on monthly invoices provided to Members.
    \10\ As set forth on the Fee Schedule, ``Step-Up ADAV'' means 
ADAV in the relevant baseline month subtracted from the prior 
month's ADAV. As such, ``Step-Up Retail Order ADAV'' means a Step-Up 
ADAV in Retail Orders only.
    \11\ Additionally, the Exchange will include in this same note 
that in the event it determines to terminate Criteria (2) prior to 
January 31, 2027, it will file a rule filing with the SEC.
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    The proposed new alternative criteria is intended to encourage 
additional Members to strive to qualify for the Retail Sub-Dollar 
Liquidity Removal Tier by providing a new alternative criteria that 
includes a lower overall Retail ADAV threshold, as well as a reasonable 
April 2026 Step-Up Retail ADAV threshold, each of which is designed to 
encourage the submission of additional liquidity-adding orders in 
Retail Sub-Dollar securities to the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\12\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ 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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    \12\ 15 U.S.C. 78f.
    \13\ 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.'' \14\
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    \14\ 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 Retail Sub-Dollar Liquidity Removal 
Tier 1, as modified by the proposed change to the required criteria 
under such tier, is reasonable, equitable and not unfairly 
discriminatory for these same reasons, as such tier continues to 
provide Members with incremental incentives to achieve certain volume 
thresholds on the Exchange, is available to all Members on an equal 
basis, and is designed to encourage Members to maintain or increase 
their order flow, including liquidity-adding orders, to the Exchange in 
order to qualify for the discounted fee for executions of Removed Sub-
Dollar Retail Volume, thereby contributing to a deeper and more liquid 
market to the benefit of all Members. The Exchange believes that the 
discounted fee for executions of Removed Sub-Dollar Retail Volume 
remains commensurate with the required criteria under such tier, as 
modified, and is reasonably related to the market quality benefits that 
such 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 \15\ 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 fees described herein are appropriate to address such forces.
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    \15\ 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.'' \16\
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    \16\ See supra note 14.
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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 liquidity-removing orders in Retail 
securities priced below $1.00 per share 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,

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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 change to amend the 
required criteria under the Retail Sub-Dollar Liquidity Removal Tier 
would impose any burden on intramarket competition because such change 
will apply to all Members uniformly, and the opportunity to qualify for 
that discounted fee is available to all Members. As described above, 
the Exchange believes that, after giving effect to the change proposed 
herein, the required criteria under the Retail Sub-Dollar Liquidity 
Removal Tier 1 is commensurate with the corresponding reduced fee under 
such tier and reasonably related to the enhanced liquidity and market 
quality that 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 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 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.'' \17\ 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' . . . .''. \18\ 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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    \17\ Id.
    \18\ 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 \19\ and Rule 19b-4(f)(2) \20\ thereunder.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \20\ 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#0775726b622a64686a6a626973744774626429606871"><span class="__cf_email__" data-cfemail="6113140d044c020e0c0c040f1512211204024f060e17">[email&#160;protected]</span></a>. Please include 
file number SR-MEMX-2026-24 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-2026-24. 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 will be available for inspection and 
copying at the principal office of the Exchange. Do not include 
personal identifiable information in submissions; you should

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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-2026-24 and should be 
submitted on or before September 14, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-17202 Filed 8-21-26; 8:45 am]
BILLING CODE 8011-01-P


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