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 195 (Friday, October 9, 2026)</title>
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[Federal Register Volume 91, Number 195 (Friday, October 9, 2026)]
[Notices]
[Pages 64721-64723]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20706]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106601; File No. SR-MEMX-2026-31]


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

October 6, 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 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 amend the required 
criteria under the Tape B Volume Tier 2. 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 modify the required criteria under the Tape B Volume Tier 
2.
    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 1.6% 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 September 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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    Currently, the Exchange 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 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 \7\) in Tape B securities priced over $1.00 
per share by achieving certain criteria. Currently under Tape B Volume 
Tier 2, the Exchange provides an additive rebate of $0.0002 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 a Tape B ADAV \8\ that is equal to or greater than 0.25% of 
the Tape B TCV \9\ (excluding Retail Orders).\10\ Now, the Exchange 
proposes to modify the required criteria such that a Member would now 
qualify for such tier by achieving a Tape B ADAV that is equal to or 
greater than 0.20% of the Tape B TCV (excluding Retail Orders). Thus, 
such proposed change reduces the Tape B ADAV threshold by 0.05%. The 
Exchange is not proposing to change the additive rebate provided under 
such tier.
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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.
    \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.
    \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 the Tape B Volume Tier 2 is referred to by 
the Exchange on the Fee Schedule under the existing description 
``Tape B Volume Tier 2'' with a Fee Code of ``b2'' 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 proposed modified criteria is intended to encourage Members to 
maintain or increase their order flow, including the in form of orders 
that add liquidity on the Exchange in Tape B securities, in order to 
qualify for the additive rebate provided under the Tape B Volume Tier 
2, which may contribute to a more robust and well-balanced market 
ecosystem on the Exchange to the benefit of all Members.

[[Page 64722]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\11\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78f.
    \12\ 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.'' \13\
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    \13\ 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, 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 Tape B Volume Tier 2, 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 an incremental 
incentive to achieve a certain volume threshold 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 
additive rebate for executions of Added Displayed Volume (excluding 
Retail Orders) in Tape B securities, thereby contributing to a deeper 
and more liquid market to the benefit of all Members. The Exchange 
believes that the additive rebate under the Tape B Volume Tier 2 
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 \14\ 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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    \14\ 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.'' \15\
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    \15\ See supra note 13.
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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 in Tape B securities 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 change to amend the 
required criteria under the Tape B Volume Tier 2 would impose any 
burden on intramarket competition because such change will apply to all 
Members uniformly, and the opportunity to qualify for that additive 
rebate 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 Tape B Volume Tier 2 is commensurate with 
the corresponding additive rebate 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

[[Page 64723]]

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 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 change represents 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.'' \16\ 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'. . . .''.\17\ 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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    \16\ Id.
    \17\ 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 \18\ and Rule 19b-4(f)(2) \19\ thereunder.
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    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \19\ 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#6715120b024a04080a0a020913142714020449000811"><span class="__cf_email__" data-cfemail="99ebecf5fcb4faf6f4f4fcf7edead9eafcfab7fef6ef">[email&#160;protected]</span></a>. Please include 
file number SR-MEMX-2026-31 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-MEMX-2026-31. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing 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-2026-31 and should be submitted on 
or before October 30, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20706 Filed 10-8-26; 8:45 am]
BILLING CODE 8011-01-P


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