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 64706-64709]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20707]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106602; File No. SR-MEMX-2026-32]


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 MEMX 
Options Fee Schedule (the ``Options Fee Schedule'') by modifying the 
Volume Tier. The Exchange proposes to implement the changes to the 
Options Fee Schedule pursuant to this proposal on October 1, 2026. 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 Options Fee 
Schedule by re-naming the existing Volume Tier the ``Customer (contra 
Non-Customer) Volume Tier'' and limiting the executions eligible to 
receive the enhanced rebate under such tier to Customer \4\ capacity 
executions that add liquidity \5\ in Penny \6\ options where the 
contra-party is a Non-Customer (i.e. a Market Maker, \7\ 
Professional,\8\ Firm,\9\ Away Market Maker \10\ or Broker-Dealer 
\11\), as further described below.
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    \4\ Customer capacity applies to any order for the account of a 
Priority Customer. ``Priority Customer'' means any person or entity 
that is neither a broker or dealer in securities nor a Professional. 
See Rule 16.1 of the MEMX Rulebook. MEMX Options provides fee 
qualifier ``c'' for Customer transactions.
    \5\ MEMX Options provides Fee Code ``D'' for transactions that 
add liquidity to the MEMX Options Book.
    \6\ MEMX Options provides Fee Code ``P'' for transactions in 
Penny options.
    \7\ As set forth on the Fee Schedule, ``Market Maker'' applies 
to any order for the account of a registered Market Maker. MEMX 
Options provides fee qualifier ``m'' for market maker transactions.
    \8\ As set forth on the Fee Schedule, ``Professional'' applies 
to any order for the account of a Professional. The term 
``Professional'' means 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). All Professional orders shall be 
appropriately marked by Options Members. See Exchange Rule 16.1. 
MEMX Options provides fee qualifier ``p'' for professional 
transactions.
    \9\ As set forth on the Fee Schedule, ``Firm'' applies to any 
order for the proprietary account of an OCC clearing member. MEMX 
Options provides fee qualifier ``f'' for firm transactions.
    \10\ As set forth on the Fee Schedule, ``Away Market Maker'' 
applies to any order for the account of a market maker on another 
options exchange. MEMX Options provides fee qualifier ``a'' for away 
market maker transactions.
    \11\ As set forth on the Fee Schedule, ``Broker Dealer'' applies 
to any order for the account of a broker-dealer, including a foreign 
broker dealer. MEMX Options provides fee qualifier ``b'' for broker-
dealer transactions.
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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. The Exchange is one of only 
18 options venues to which market participants may direct their order 
flow. Based on publicly available information, no single options 
exchange has more than approximately 18.8% of the market share and 
currently the Exchange represents only approximately 4.0% of the market 
share.\12\ In such a low-concentrated and highly competitive market, no 
single options exchange, including the Exchange, possesses significant 
pricing power in the execution of option order flow. The Exchange 
believes that the ever-shifting market share among the exchanges from 
month to month demonstrates that market participants can shift order 
flow, discontinue, or reduce use of certain categories of products in 
response to fee changes. Accordingly, competitive forces constrain the 
Exchange's transaction fees, and market participants can readily trade 
on competing venues if they deem pricing levels at those other venues 
to be more favorable. The Exchange's Fee Schedule sets forth standard 
rebates and rates applied per contract.
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    \12\ Market share percentage calculated as of September 24, 
2026. The Exchange receives and processes data made available 
through the consolidated data feeds (i.e., OPRA).
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    Currently, the Exchange provides a base rebate of $0.49 per 
contract for executions made in a Customer capacity that add liquidity 
in Penny options (``Added Customer Penny Volume'').

[[Page 64707]]

Additionally, it offers the Volume Tier, whereby Members are eligible 
to receive an enhanced rebate of $0.53 per contract for a qualifying 
Member's executions of Added Customer Penny Volume by achieving an ADAV 
\13\ in the Customer capacity in Penny and Non-Penny options that is 
equal to or greater than 1.2% of the equity and ETF option TCV.\14\ As 
noted on the Fee Schedule, ADAV is calculated on a monthly basis, and 
Members that qualify for the Volume Tier by achieving the specified 
ADAV threshold in a particular month will receive the proposed enhanced 
rebate of $0.53 per contract for all executions of Added Customer Penny 
Volume in that month.
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    \13\ As set forth on the Fee Schedule, the term ``ADAV'' means 
the average daily added volume calculated as the number of contracts 
added per day. ADAV is calculated on a monthly basis.
    \14\ As set forth on the Fee Schedule, the term ``TCV'' means 
the total consolidated volume calculated as the volume reported by 
all exchanges to the consolidated transaction reporting plan for the 
month for which the fees apply.
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    Now, the Exchange wishes to modify this tier by limiting the 
executions eligible to receive the enhanced rebate under this tier to 
executions of Added Customer Penny Volume that have a contra-party that 
is a Non-Customer (i.e. a Market Maker, Firm, Away Market Maker, or 
Broker Dealer). Said another way, under the current proposal, 
executions of Added Customer Penny volume that have a contra-party that 
is also a Customer will not be eligible to receive the enhanced rebate 
under the tier, and will receive the base rebate of $0.49 per contract 
even if that Member meets the required criteria under the tier. Given 
this new application, the Exchange proposes to rename the tier the 
``Customer (contra Non-Customer) Volume Tier'' and to make clear on the 
Fee Schedule which executions are eligible to receive the enhanced 
rebate under this tier. The Exchange is not proposing to amend the 
required criteria or the rebate provided under the tier, and as such, 
all of a Member's Added Customer Penny Volume and Added Customer Non-
Penny Volume, regardless of contra-party, shall still continue to count 
towards the ADAV criteria required to receive the enhanced rebate.
    The Exchange believes that the proposed Customer (contra Non-
Customer) Volume Tier continues to provide an incremental incentive for 
Members to strive for higher ADAV on the Exchange to receive the 
proposed enhanced rebate for executions of Added Customer Penny Volume 
with a Non-Customer contra-party. As such, the proposed tier is 
designed to decrease the Exchange's expenditures, while continuing to 
incentivize market participants to direct additional order flow to the 
MEMX Options platform, 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. Further, the 
Exchange notes that other options exchanges maintain tiered pricing 
structures whereby enhanced rebates are provided for members that meet 
certain volume requirements, and other exchanges similarly offer 
pricing structures for rebates/fees that are dependent upon the contra-
party capacity.\15\
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    \15\ See, e.g. the MIAX Sapphire Fee Schedule (available at: 
<a href="https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Sapphire_Fee_Schedule_09012026.pdf">https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Sapphire_Fee_Schedule_09012026.pdf</a>), and the BOX Options Fee 
Schedule, (available at: <a href="https://boxexchange.com/regulatory/fees/">https://boxexchange.com/regulatory/fees/</a>) 
which set forth standard transaction fees and rebates based on the 
member's capacity as well as the contra-party capacity. On both 
exchanges, Customer to Customer executions are neither charged nor 
rebated. BOX Options also provides Public Customer Tiered Volume 
rebates, and like the Exchange is proposing herein, Customer to 
Customer executions are exempted from the per contract enhanced 
rebate provided under such tiers.
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2. Statutory Basis
    The Exchange believes that its proposal to amend the Options Fee 
Schedule is consistent with the provisions of Section 6 of the Act,\16\ 
in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\17\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among Members and other persons 
using its facilities. The Exchange also believes the proposal furthers 
the objectives of Section 6(b)(5) of the Act 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, or dealers.
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    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(4) and (5).
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    MEMX Options 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.'' \18\
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    \18\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005).
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    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 which the Exchange 
believes would promote price discovery and enhance liquidity and market 
quality on the Exchange to the benefit of all Members and market 
participants.
    The Exchange believes that the proposed change to modify the 
category of executions eligible to receive the enhanced rebate under 
the newly named Customer (contra Non-Customer) Volume Tier is 
reasonable because competing options exchanges offer similar 
distinctions between the fees and rebates applicable to executions 
based on the market participant on the contra-side, and while Customer 
to Customer transactions will no longer be eligible to receive the 
enhanced rebate under the proposed tier, they will still receive the 
standard rebate for all executions of Added Customer Penny Volume, a 
rebate which is not provided on some competing options exchanges.\19\ 
The Exchange further believes that the proposed change is equitable and 
not unfairly discriminatory because the enhanced rebate will continue 
to apply equally to all similarly situated market participants.
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    \19\ See supra note 15.
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    For the reasons discussed above, the Exchange submits that its 
proposed change to the Options Transaction Fee Schedule satisfies the 
requirements of Sections 6(b)(4) and 6(b)(5) of the Act \20\ 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 burden on competition, the Exchange

[[Page 64708]]

believes that its transaction pricing is subject to significant 
competitive forces, and that the proposed tier described herein is 
appropriate to address such forces.
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    \20\ 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 decrease the Exchange's expenditures, while 
continuing to incentivize market participants to direct additional 
order flow to the MEMX Options platform, 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. 
Further, MEMX Options' proposed renamed and amended Customer (contra 
Non-Customer) Volume Tier continues to be in line the tiered rebates 
and fees assessed by other options exchanges.\21\ As a result, 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.'' \22\
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    \21\ See supra note 15.
    \22\ See supra note 18.
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Intramarket Competition
    The Exchange does not believe that the proposed rule change will 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed amended tier will apply to all Members uniformly. The 
opportunity to qualify for the Customer (contra Non-Customer) Volume 
Tier and thus received an enhanced rebate for executions of Added 
Customer Penny Volume with a Non-Customer contra party would be 
available to all Members that meet the associated volume requirement in 
any month. As described above, the Exchange believes that after giving 
effect to the change proposed herein, the Customer (contra Non-
Customer) Volume Tier continues to be commensurate with the 
corresponding enhanced rebate under such tier and reasonably related to 
the enhanced liquidity and market quality that such tier is designed to 
promote. As such, the Exchange does not believe the proposed changes 
would impose any burden on intramarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.
Intermarket Competition
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues that they may participate on 
and direct their order flow, including 17 other options exchanges and 
off-exchange venues. Therefore, no exchange possesses significant 
pricing power in the execution of option order flow. To the contrary, 
the proposed change represents a competitive proposal through which the 
Exchange is seeking to decrease its expenditures, while continuing to 
incentivize market participants to direct additional order flow to the 
MEMX Options platform, which the Exchange believes would promote price 
discovery and enhance liquidity and market quality on the Exchange to 
the benefit of all Members. Accordingly, the Exchange believes that the 
proposal would not burden, but rather promote, intermarket competition 
by enabling it to 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.'' \23\ 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'. . . .''.\24\ 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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    \23\ Id.
    \24\ 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 \25\ and Rule 19b-4(f)(2) \26\ thereunder.
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    \25\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \26\ 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#5d2f283138703e3230303833292e1d2e383e733a322b"><span class="__cf_email__" data-cfemail="d1a3a4bdb4fcb2bebcbcb4bfa5a291a2b4b2ffb6bea7">[email&#160;protected]</span></a>. Please include 
file number SR-MEMX-2026-32 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-2026-32. 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

[[Page 64709]]

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-2026-32 and should be submitted on or 
before October 30, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20707 Filed 10-8-26; 8:45 am]
BILLING CODE 8011-01-P


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