Notice2026-19117
Self-Regulatory Organizations; MX2 LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt the Framework of the Exchange's Initial Fee Schedule and Establish an Options Regulatory Fee (“ORF”)
Primary source
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Published
September 18, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 180 (Friday, September 18, 2026)</title>
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[Federal Register Volume 91, Number 180 (Friday, September 18, 2026)]
[Notices]
[Pages 59194-59196]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19117]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106371; File No. SR-MX2-2026-05]
Self-Regulatory Organizations; MX2 LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Adopt the
Framework of the Exchange's Initial Fee Schedule and Establish an
Options Regulatory Fee (``ORF'')
September 15, 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 September 9, 2026, MX2 LLC (``MX2'' or the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II 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 adopt the framework of the Exchange's initial fee schedule
applicable to Members \3\ and Non-Members of the Exchange pursuant to
Exchange Rules 15.1(a) and (c) and to establish an Options Regulatory
Fee (``ORF''). 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
In preparation for the launch of the Exchange's options market
(``MX2 Options''),\4\ the Exchange proposes to adopt the framework of
the Exchange's initial fee schedule (the ``Options Fee Schedule'') \5\
applicable to the use of the Exchange and establish an ORF in the
amount of $0.0200 per contract side. The Exchange will commence
operations as a national securities exchange on September 14, 2026, and
thus, proposes the ORF to be effective on that date.
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\4\ On September 30, 2025, the Commission approved SR-MX2-2025-
01, which proposed rules for the trading of options on the Exchange.
See Securities Exchange Act Release No. 104152 (September 30, 2025),
90 FR 47867 (October 2, 2025) (SR-MX2-2025-01). The Exchange plans
to launch MEMX Options in September of 2026.
\5\ Given that this is the first fee filing for MX2 Options, the
Exchange wishes to establish the overall framework for the Options
Fee Schedule applicable to Members and non-Members of MX2 Options by
including headings for the other anticipated sections of the Fee
Schedule, including Transaction Fees, Market Data Fees, and Other
Fees. It is proposing to leave these sections blank, and it will
file separately to adopt those specific fees at a later date.
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The amount of the proposed fee is based on historical industry
volume, projected volumes on the Exchange, and projected Exchange
regulatory costs. The Exchange's proposed ORF should balance the
Exchange's regulatory revenue against the anticipated regulatory costs.
The Exchange will assess ORF for options transactions cleared by
the Options Clearing Corporation (``OCC'') in the ``customer'' \6\
range by Exchange Members that occur on the Exchange (``On Exchange
ORF''). Specifically, the ORF would be collected by OCC on behalf of
the Exchange from Members and Non-Members for all customer transactions
executed on MEMX Options. ORF would be assessed and collected on all
ultimately cleared customer contracts, taking into account adjustments
for Clearing Member Trade Assignment (``CMTA'') that were provided to
the Exchange on the same day as the trade. Further, the Exchange would
bill ORF according to the clearing instructions provided on the
execution. More specifically, the Exchange proposes to assess ORF based
on the clearing instruction provided on the execution on the trade date
and would not take into consideration CMTA changes or transfers that
occur at OCC.\7\
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\6\ The ORF is assessed by MX2 Options and collected via OCC on
executions for the account of Public Customers, including
Professionals, and Broker-Dealers including Foreign Broker-Dealers.
These market participants clear in the ``C'' range at OCC. On the
Exchange, a ``Public Customer'' means a person that is not a broker
or dealer in securities and includes both Priority Customers and
Professionals. A ``Priority Customer'' means a person or entity that
is a Public Customer and is not a Professional. A ``Professional''
is any person or entity that (a) is not a broker or dealer in
securities, and (b) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s). Executions for the account of an OCC clearing member
firm proprietary account, joint back office account clearing in the
Firm range, or account of a market maker clearing in the Market
Maker range will not be charged an ORF.
\7\ As noted previously, the Exchange will take into account
CMTA transfers that were made the same day as the trade on MEMX
Options.
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The following scenarios reflect how the On Exchange ORF will be
assessed and collected:
1. If a Member is the executing clearing firm on a transaction that
occurred on the Exchange, the fee would be assessed to and collected
from that Member by OCC on behalf of the Exchange.
2. If a Member is the executing clearing firm and the transaction
is ``given up'' to a clearing give-up (the ``clearing firm''), the On-
Exchange ORF is assessed to the executing clearing firm, (the On-
Exchange ORF remains the obligation of the executing clearing firm
under the proposal), but the On-Exchange ORF will be collected from the
clearing firm, regardless of whether that clearing firm is a Member of
the Exchange.
The Exchange expects to provide Members sufficient information in
connection with their invoice in order to reconcile charges associated
with ORF. In addition, the proposed method for collecting On-Exchange
ORF will only consider CMTAs reported to the Exchange and not those
reported directly to OCC. The Exchange understands that a CMTA may be
added at order entry, via post-trade edit on the Exchange, or post-
trade at OCC. CMTA transfers that occur at OCC do not necessarily
contain reliable information regarding the Exchange on which the
original transaction occurred. Without specific information as to where
the original transaction occurred, the Exchange would not be able to
accurately account for CMTA transfers that occur at OCC. Therefore, the
Exchange will only account for CMTAs that occur on the Exchange (which
may be a non-Member) and exclude CMTAs occurring at OCC.
The ORF is designed to recover a material portion of the costs to
the Exchange of the supervision and regulation of Members' customer
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options business, including performing routine surveillances and
investigations, as well as policy, rulemaking, interpretive and
enforcement activities. The Exchange believes that revenue generated
from the ORF, when combined with all of the Exchange's other regulatory
fees and fines, will cover a material portion, but not all, of the
Exchange's regulatory costs. Regulatory costs include direct regulatory
expenses and certain indirect expenses for work allocated in support of
the regulatory function. The direct expenses include in-house and
third- party service provider costs to support the day-to-day
regulatory work such as surveillance, investigations and examinations.
The indirect expenses include support from personnel in such areas as
human resources, legal, information technology, facilities and
accounting as well as shared costs necessary to operate the Exchange
and to carry out its regulatory function, such as hardware, data center
costs and connectivity. The Exchange acknowledges that these indirect
expenses are also allocated towards other business operations, such as
providing connectivity and market data services, for which the Exchange
has also conducted a cost-based analysis. As such, when analyzing the
indirect expenses associated with its regulatory program, the Exchange
did not double-count any expenses, but instead, allocated a portion of
the cost not already allocated to other fees imposed by the Exchange.
Indirect expenses are anticipated to be approximately 20% of the total
regulatory costs for 2026. Thus, direct expenses are anticipated to be
approximately 80% of the total regulatory costs for 2026. The Exchange
notes that its regulatory responsibilities with respect to Member
compliance with options sales practice rules have been allocated to the
Financial Industry Regulatory Authority (``FINRA'') under a 17d-2
Agreement. The ORF is not designed to cover the cost of options sales
practice regulation. Finally, the Exchange notes that it takes into
account all regulatory sources of funding, including fines collected by
the Exchange in connection with disciplinary matters, when determining
the appropriate ORF rate.
The Exchange will monitor the amount of revenue collected from the
ORF to ensure that it, in combination with its other regulatory fees
and fines, does not exceed the Exchange's total regulatory costs. More
specifically, the Exchange will ensure that revenue generated from ORF
not exceed 75% of total annual regulatory costs. The Exchange will
monitor regulatory costs and revenues at a minimum on a semi-annual
basis. If the Exchange determines regulatory revenues exceed or are
insufficient to cover a material portion of its regulatory costs, the
Exchange will adjust the ORF by submitting a fee change filing to the
Commission. Going forward, the Exchange will notify Members of
adjustments to the ORF via Regulatory Notice at least 30 calendar days
prior to the effective date of the change and is proposing to codify
this practice in the Options Fee Schedule.
The Exchange notes that other exchanges currently impose an On
Exchange ORF, and most of the options exchanges launched over the last
15 years have implemented an ORF on the day of launch or shortly
thereafter in order to properly fund their regulatory programs.\8\
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\8\ MEMX Options--effective 9/27/23, launch same; MIAX Options--
effective 1/2/13, launch 12/7/12; ISE Topaz--effective 8/5/13,
launch same; MIAX Pearl--effective 2/6/17, launch same; MIAX
Emerald--effective 3/1/19, launch same.
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The Exchange notified current and future Members via a Regulatory
Circular of the proposed ORF prior to the proposed operative date, on
August 18, 2026.\9\ The Exchange believes that the prior notification
to future market participants will ensure that the future market
participants are prepared to configure their systems to properly
account for the proposed ORF.
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\9\ See MX2 Options Regulatory Notice 26-10, <a href="https://www.memxtrading.com/alerts-and-notices/regulatory-notice-26-10:-mx2-options-regulatory-fee">https://www.memxtrading.com/alerts-and-notices/regulatory-notice-26-10:-mx2-options-regulatory-fee</a>.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable dues,
fees, and other charges among its members and issuers and other persons
using its facilities. The Exchange also believes the proposal furthers
the objectives of Section 6(b)(5) of the Act \12\ in that it is
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest and is not designed to permit unfair discrimination
between customers, issuers, brokers and dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that establishing an ORF in the amount of
$0.0200 is reasonable because the Exchange's collection of ORF needs to
be balanced against the amount of projected regulatory costs incurred
by the Exchange. The Exchange believes that the amount proposed herein
will serve to balance the Exchange's regulatory revenue against the
anticipated regulatory costs. Moreover, the proposed amount is lower
than the amount of ORF assessed on other exchanges.\13\
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\13\ See, e.g., the BOX Options Fee Schedule Section II(C),
which provides an ORF rate of $0.0220 per contract. See also the
MIAX Pearl Fee Schedule, Section 2(b), which provides an ORF rate of
$0.0240 per contract, the MIAX Emerald Fee Schedule, Section 2(b),
which provides an ORF rate of $0.0220 per contract, and the MIAX
Sapphire Fee Schedule, Section 2(b), which provides an ORF rate of
$0.0220 per contract.
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The Exchange believes the proposed ORF is equitable and not
unfairly discriminatory because it is objectively allocated to Members
in that it is charged to all Members on all their transactions on MX2
Options that clear as customer at the OCC. Moreover, the Exchange
believes the ORF ensures fairness by assessing fees to those Members
that are directly based on the amount of customer options business they
conduct. Regulating customer trading activity is much more labor
intensive and requires greater expenditure of human and technical
resources than regulating non-customer trading activity, which tends to
be more automated and less labor-intensive. As a result, the costs
associated with administering the customer component of the Exchange's
overall regulatory program are materially higher than the costs
associated with administering the non- customer component (e.g., Member
proprietary transactions) of its regulatory program.
The ORF is designed to recover a material portion of the costs of
supervising and regulating Members' customer options business including
performing routine surveillances and investigations, as well as policy,
rulemaking, interpretive, and enforcement activities. The Exchange will
monitor the amount of revenue collected from the ORF to ensure that it,
in combination with its other regulatory fees and fines, does not
exceed the Exchange's total regulatory costs. The Exchange has designed
the ORF to generate revenues that, when combined with all of the
Exchange's other regulatory fees, will be less than 75% of the
Exchange's regulatory costs, which is consistent with the Exchange's
by-laws that state in Section 17.4(b): ``[a]ny Regulatory Funds shall
not be used for non-regulatory purposes or distributed,
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advanced or allocated to any Company Member, but rather, shall be
applied to fund regulatory operations of the Company (including
surveillance and enforcement activities). . .''.\14\ In this regard,
the Exchange believes that the amount of the fee is reasonable.
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\14\ See MX2 LLC--LLC Agreement at <a href="https://info.memxtrading.com/regulation/governance/">https://info.memxtrading.com/regulation/governance/</a>.
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The Exchange believes that the proposal to provide at least 30 days
advance notice to any change in the ORF is reasonable because it will
give participants certainty on the timing of changes, if any, and
better enable them to properly account for ORF charges among their
customers.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. This proposal will not create
an unnecessary or inappropriate intra-market burden on competition
because the ORF will apply to all customer activity on the Exchange,
and is designed to enable the Exchange to recover a material portion of
the Exchange's cost related to its regulatory activities. This proposal
will not create an unnecessary or inappropriate inter-market burden on
competition because it will be a regulatory fee that supports
regulation and customer protection in furtherance of the purposes of
the Act. The Exchange is obligated to ensure that the amount of
regulatory revenue collected from the ORF, in combination with its
other regulatory fees and fines, does not exceed regulatory costs.
Unilateral action by the Exchange in establishing fees for services
provided to its Members and others using its facilities will not have
an impact on competition. The Exchange's proposed ORF, as described
herein, is lower than or comparable to fees charged by other options
exchanges.
The Exchange notes that while it does not believe that its proposed
ORF will impose any burden on inter-market competition, the Exchange
not charging an ORF or being precluded from charging an ORF would, in-
fact, represent a significant burden on competition. As noted above,
the Exchange is a new entrant in the highly competitive environment for
equity options trading. As also noted above, all seventeen (17) [sic]
registered options exchanges currently impose ORF on their members,
and, similar to the Exchange, the majority of the options exchanges
launched over the last decade have implemented an ORF on the day of
launch or shortly thereafter.\15\ The Exchange believes that in order
to compete with these existing options exchanges, it must, in fact,
impose an ORF on its Members, and that the inability to do so would
result in an unfair competitive disadvantage to the Exchange.
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\15\ See supra, note 8.
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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) of the Act \16\ and paragraph (f) of Rule 19b-4 \17\
thereunder. 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.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4b393e272e66282426262e253f380b382e28652c243d"><span class="__cf_email__" data-cfemail="3644435a531b55595b5b535842457645535518515940">[email protected]</span></a>. Please include
file number SR-MX2-2026-05 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-MX2-2026-05. 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 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-MX2-2026-05 and should be submitted on
or before October 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19117 Filed 9-17-26; 8:45 am]
BILLING CODE 8011-01-P
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