[Federal Register Volume 87, Number 11 (Tuesday, January 18, 2022)]
[Notices]
[Pages 2655-2662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00750]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93949; File No. SR-MEMX-2021-21]


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

January 11, 2022.
    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 December 30, 2021, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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). The 
Exchange proposes to implement the changes to the Fee Schedule pursuant 
to this proposal on January 3, 2022. The text of the proposed rule 
change is provided in Exhibit 5.
---------------------------------------------------------------------------

    \3\ See Exchange Rule 1.5(p).
---------------------------------------------------------------------------

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend the Fee 
Schedule to: (i) Reduce the standard rebate 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''); 
(ii) modify the Liquidity Provision Tiers by reducing the rebate for 
executions of Added Displayed Volume and modifying the required 
criteria under Liquidity Provision Tier 1, modifying the required 
criteria under Liquidity Provision Tier 2, and adopting a new Liquidity 
Provision Tier 3; (iii) modify Liquidity Removal Tier 1 by increasing 
the fee for executions of orders in securities priced at or above $1.00 
per share that remove liquidity from the Exchange (such orders, 
``Removed Volume'') and modifying the required criteria under such 
tier; (iv) modify the Displayed Liquidity Incentive (``DLI'') Tiers by 
reducing the rebates for executions of Added Displayed Volume under DLI 
Tiers 1 and 2 and adopting a new additive rebate for executions of 
Added Displayed Volume applicable to DLI Tiers 1 and 2; and (v) modify 
the Exchange's pricing for executions of orders in securities priced 
below $1.00 per share that remove liquidity from the Exchange (such 
orders, ``Removed Sub-Dollar Volume'') and orders in securities priced 
below $1.00 per share that add non-displayed liquidity to the Exchange 
(such orders, ``Added Non-Displayed Sub-Dollar Volume'').
    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 16 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

[[Page 2656]]

has more than approximately 17% 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 4% 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.
---------------------------------------------------------------------------

    \4\ Market share percentage calculated as of December 29, 2021. 
The Exchange receives and processes data made available through 
consolidated data feeds (i.e., CTS and UTDF).
    \5\ Id.
---------------------------------------------------------------------------

Reduced Standard Rebate for Added Displayed Volume
    Currently, the Exchange provides a standard rebate of $0.0028 per 
share for executions of Added Displayed Volume. The Exchange now 
proposes to reduce the standard rebate for executions of Added 
Displayed Volume to $0.0022 per share.\6\ The purpose of reducing the 
standard rebate for executions of Added Displayed Volume is for 
business and competitive reasons, as the Exchange believes that the 
reduction of such rebate would decrease the Exchange's expenditures 
with respect to its transaction pricing in a manner that is still 
consistent with the Exchange's overall pricing philosophy of 
encouraging added displayed liquidity. The Exchange notes that despite 
the reduction proposed herein, the proposed standard rebate for 
executions of Added Displayed Volume (i.e., $0.0022 per share) remains 
higher than, and competitive with, the standard rebates provided by 
other exchanges for executions of orders in securities priced at or 
above $1.00 per share that add displayed liquidity.\7\
---------------------------------------------------------------------------

    \6\ This proposed standard pricing 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.
    \7\ See, e.g., the NYSE Arca, Inc. equities trading fee schedule 
on its public website (available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf), which 
reflects a standard rebate of $0.0020 per share for executions of 
orders in securities priced at or above $1.00 per share that add 
displayed liquidity; the Cboe BZX Exchange, Inc. (``Cboe BZX'') 
equities trading fee schedule on its public website (available at 
https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), 
which reflects a standard rebate of $0.0018 per share for executions 
of orders in securities priced at or above $1.00 per share that add 
displayed liquidity; the Nasdaq Stock Market LLC Price List--Trading 
Connectivity (available at http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2), which reflects a standard rebate 
of $0.0020 per share for executions of orders in Tape A and Tape B 
securities priced at or above $1.00 per share that add displayed 
liquidity and a standard rebate of $0.0015 per share for executions 
of orders in Tape C securities priced at or above $1.00 per share 
that add displayed liquidity.
---------------------------------------------------------------------------

Liquidity Provision Tiers
    The Exchange currently offers Liquidity Provision Tiers in which 
qualifying Members are provided an enhanced rebate for executions of 
Added Displayed Volume by achieving certain specified volume criteria. 
Now, the Exchange proposes to modify its Liquidity Provision Tiers by 
reducing the rebate for executions of Added Displayed Volume and 
modifying the required criteria under Liquidity Provision Tier 1, 
modifying the required criteria under Liquidity Provision Tier 2, and 
adopting a new Liquidity Provision Tier 3.
    First, the Exchange proposes to reduce the rebate for executions of 
Added Displayed Volume under Liquidity Provision Tier 1 from $0.00335 
per share to $0.00325 per share.\8\ The Exchange believes that the 
proposed rebate represents only a modest decrease from the current 
rebate provided for executions of Added Displayed Volume under 
Liquidity Provision Tier 1. The purpose of reducing the enhanced rebate 
for executions of Added Displayed Volume under Liquidity Provision Tier 
1 is for business and competitive reasons, as the Exchange believes the 
reduction of such rebate would decrease the Exchange's expenditures 
with respect to its transaction pricing in a manner that is still 
consistent with the Exchange's overall pricing philosophy of 
encouraging added displayed liquidity. The Exchange also proposes to 
modify the required criteria under Liquidity Provision Tier 1. 
Currently, a Member qualifies for Liquidity Provision Tier 1 by 
achieving an ADAV \9\ of at least 0.20% of the TCV.\10\ Now, the 
Exchange proposes to modify this required criteria such that a Member 
would now qualify for Liquidity Provision Tier 1 by achieving an ADAV 
of at least 0.25% of the TCV. Thus, such proposed change would increase 
the ADAV threshold, which is designed to encourage Members to maintain 
or increase their orders that add liquidity on the Exchange. The 
Exchange believes that the tier, as proposed, would further incentivize 
increased order flow to the Exchange, thereby promoting price discovery 
and contributing to a deeper and more liquid market to the benefit of 
all market participants.
---------------------------------------------------------------------------

    \8\ The proposed pricing for Liquidity Provision Tier 1 is 
referred to by the Exchange on the Fee Schedule under the existing 
description ``Added displayed volume, Liquidity Provision Tier 1'' 
with a Fee Code of ``B1'', ``D1'' or ``J1'', as applicable, to be 
provided by the Exchange on the monthly invoices provided to 
Members. The Exchange notes that because the determination of 
whether a Member qualifies for a certain pricing tier for a 
particular month will not be made until after the month-end, the 
Exchange will provide the Fee Codes otherwise applicable to such 
transactions on the execution reports provided to Members during the 
month and will only designate the Fee Codes applicable to the 
achieved pricing tier on the monthly invoices, which are provided 
after such determination has been made, as the Exchange does for its 
tier-based pricing today.
    \9\ 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.
    \10\ 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.
---------------------------------------------------------------------------

    Next, the Exchange proposes to modify the required criteria under 
Liquidity Provision Tier 2. Currently, a Member qualifies for Liquidity 
Provision Tier 2 by achieving an ADAV that is greater than or equal to 
0.10% of the TCV. Now, the Exchange proposes to modify this required 
criteria such that a Member would now qualify for Liquidity Provision 
Tier 2 by achieving either: (1) An ADAV of at least 0.20% of the TCV; 
or (2) a Step-Up ADAV \11\ from December 2021 of at least 0.05% of the 
TCV. Thus, such proposed changes would increase the ADAV threshold and 
provide an alternative Step-Up ADAV threshold that a Member may choose 
to achieve in order to qualify for Liquidity Provision Tier 2 that is 
based on such Member increasing its ADAV above its December 2021 ADAV, 
each of which is designed to encourage Members to maintain or increase 
their orders that add liquidity on the Exchange. The Exchange believes 
that the tier, as proposed, would further incentivize increased order 
flow to the Exchange, thereby promoting price discovery and 
contributing to a deeper

[[Page 2657]]

and more liquid market to the benefit of all market participants. The 
Exchange does not propose to change the pricing under Liquidity 
Provision Tier 2.
---------------------------------------------------------------------------

    \11\ As set forth on the Fee Schedule, ``Step-Up ADAV'' means 
ADAV in the relevant baseline month subtracted from current ADAV.
---------------------------------------------------------------------------

    Additionally, the Exchange is proposing to adopt a new Liquidity 
Provision Tier 3 in which it would provide an enhanced rebate of 
$0.0027 per share for executions of Added Displayed Volume for Members 
that qualify by achieving an ADAV of at least 0.05% of the TCV.\12\ The 
Exchange proposes to provide Members that qualify for Liquidity 
Provision Tier 3 a rebate of 0.05% of the total dollar value of the 
transaction for executions of orders in securities priced below $1.00 
per share that add displayed liquidity to the Exchange, which is the 
same rebate that is applicable to such executions for all Members. The 
proposed Liquidity Provision Tier 3 is designed to encourage Members to 
maintain or increase their orders that add liquidity on the Exchange in 
order to qualify for an enhanced rebate for executions of Added 
Displayed Volume, which, in turn, the Exchange believes would encourage 
the submission of additional Added Displayed Volume to the Exchange, 
thereby promoting price discovery and contributing to a deeper and more 
liquid market to the benefit of all market participants. Further, the 
proposed new Liquidity Provision Tier 3 would provide Members that 
would not qualify for Liquidity Provision Tiers 1 and 2 with an 
opportunity to still qualify for an enhanced rebate for executions of 
Added Displayed Volume in a manner that, coupled with the higher 
enhanced rebates provided under Liquidity Provision Tiers 1 and 2, as 
described above, provides increasingly higher benefits for satisfying 
increasingly more stringent criteria.
---------------------------------------------------------------------------

    \12\ The proposed pricing for Liquidity Provision Tier 3 is 
referred to by the Exchange on the Fee Schedule under the new 
description ``Added displayed volume, Liquidity Provision Tier 3'' 
with a Fee Code of ``B3'', ``D3'' or ``J3'', as applicable.
---------------------------------------------------------------------------

Liquidity Removal Tier 1
    Currently, the Exchange charges a standard fee of $0.0029 per share 
for executions of Removed Volume. The Exchange also currently offers 
Liquidity Removal Tier 1 in which qualifying Members are charged a 
lower fee of $0.0027 per share for executions of Removed Volume by 
achieving either: (1) A Step-Up ADAV from October 2021 of at least 
0.05% of the TCV; or (2) an ADV of at least 0.55% of the TCV. Now, the 
Exchange proposes to increase the fee charged for executions of Removed 
Volume under such tier and modify the required criteria under such 
tier. Specifically, the Exchange proposes to charge a fee of $0.0028 
per share for executions of Removed Volume for Members that qualify for 
Liquidity Removal Tier 1 by achieving either: (1) An ADAV of at least 
0.50% of the TCV; or (2) an ADV of at least 0.70% of the TCV.
    The Exchange believes that the proposed fee represents only a 
modest increase from the current fee charged for executions of Removed 
Volume under Liquidity Removal Tier 1. The purpose of increasing such 
fee is for business and competitive reasons, as the Exchange believes 
that increasing such fee would generate additional revenue to offset 
some of the costs associated with the Exchange's current transaction 
pricing structure, which provides various rebates for liquidity-adding 
orders, and the Exchange's operations generally, in a manner that is 
still consistent with the Exchange's overall pricing philosophy of 
encouraging added liquidity. The Exchange notes that the proposed 
changes to the required criteria under Liquidity Removal Tier 1 would 
replace the current Step-Up ADAV threshold with an ADAV threshold that 
is not based on a Member's ADAV from a prior month (but that is a 
higher percentage of the TCV) and would increase the alternative ADV 
threshold. Thus, the purpose of the proposed changes to the required 
criteria is to encourage Members to maintain or increase their order 
flow to the Exchange. The Exchange believes that the tier, as proposed, 
would further incentivize increased order flow to the Exchange, thereby 
promoting price discovery and contributing to a deeper and more liquid 
market to the benefit of all market participants.
    The Exchange notes that it is also proposing to change the fee 
charged under Liquidity Removal Tier 1 for executions of Removed Sub-
Dollar Volume, as further described below.
DLI Tiers and DLI Additive Rebate
    The Exchange currently offers DLI Tiers 1 and 2 in which qualifying 
Members are provided an enhanced rebate for executions of Added 
Displayed Volume. The DLI Tiers are designed to encourage Members, 
through the provision of such enhanced rebates for executions of Added 
Displayed Volume, to promote price discovery and market quality by 
quoting at the NBBO for a significant portion of each day in a large 
number of securities, generally, and in a targeted group of securities 
(i.e., the DLI Target Securities), in particular, thereby benefitting 
the Exchange and investors by providing improved trading conditions for 
all market participants through narrower bid-ask spreads and increased 
depth of liquidity available at the NBBO in a broad base of securities, 
including the DLI Target Securities specifically, and committing 
capital to support the execution of orders.\13\ Now, the Exchange 
proposes to modify its DLI Tiers by reducing the rebates for executions 
of Added Displayed Volume under DLI Tiers 1 and 2 and adopting a new 
additive rebate for executions of Added Displayed Volume applicable to 
DLI Tiers 1 and 2.
---------------------------------------------------------------------------

    \13\ See the Exchange's Fee Schedule (available at https://info.memxtrading.com/fee-schedule/) for additional details regarding 
the Exchange's DLI Tiers and DLI Target Securities. See also 
Securities Exchange Act Release No. 92150 (June 10, 2021), 86 FR 
32090 (June 16, 2021) (SR-MEMX-2021-07) (notice of filing and 
immediate effectiveness of fee changes adopted by the Exchange, 
including the adoption of DLI).
---------------------------------------------------------------------------

    First, the Exchange proposes to reduce the rebates for executions 
of Added Displayed Volume under DLI Tiers 1 and 2. Currently, the 
Exchange provides enhanced rebates of $0.0035 per share under DLI Tier 
1 and $0.0034 per share under DLI Tier 2 for executions of Added 
Displayed Volume for Members that qualify for such tiers.\14\ Now, the 
Exchange proposes to reduce the rebate provided under DLI Tier 1 to 
$0.0033 per share and the rebate provided under DLI Tier 2 to $0.0031 
per share. The Exchange is not proposing to modify the required 
criteria for a Member to qualify for DLI Tier 1 or DLI Tier 2, nor is 
the Exchange proposing to change the rebates provided under such tiers 
for executions of orders in securities priced below $1.00 per share 
that add displayed liquidity to the Exchange. The purpose of reducing 
the enhanced rebates provided under DLI Tiers 1 and 2 for executions of 
Added Displayed Volume is for business and competitive reasons, as the 
Exchange believes the reduction of such rebates would decrease the 
Exchange's expenditures with respect to the Exchange's transaction 
pricing in a manner that is still consistent with the Exchange's 
overall pricing philosophy of encouraging added liquidity and promoting 
the price discovery and market quality objectives of the DLI Tiers.
---------------------------------------------------------------------------

    \14\ The pricing for DLI Tier 1 is referred to by the Exchange 
on the Fee Schedule under the description ``Added displayed volume, 
DLI Tier 1'' with a Fee Code of ``Bq1'', ``Bq1'' or ``Jq1'', as 
applicable. The pricing for DLI Tier 2 is referred to by the 
Exchange on the Fee Schedule under the description ``Added displayed 
volume, DLI Tier 2'' with a Fee Code of ``Bq2'', ``Dq2'' or ``Jq2'', 
as applicable.
---------------------------------------------------------------------------

    The Exchange also proposes to revise the ``Displayed Liquidity 
Incentive Tiers'' heading on the Fee Schedule to read ``Displayed 
Liquidity Incentive

[[Page 2658]]

(DLI) Tiers'' (i.e., to include the ``DLI'' abbreviation in a 
parenthetical) so that it is clear that references to ``DLI'' on the 
Fee Schedule are references to the Displayed Liquidity Incentive.
    Additionally, the Exchange is proposing to adopt a new additive 
rebate for executions of Added Displayed Volume applicable to DLI Tiers 
1 and 2 (the ``DLI Additive Rebate''). Specifically, the proposed DLI 
Additive Rebate would provide an additive rebate of $0.0001 per share 
that is in addition the otherwise applicable rebate under DLI Tier 1 or 
DLI Tier 2 for a qualifying Member's executions of Added Displayed 
Volume.\15\ As proposed, a Member that qualifies for DLI Tier 1 would 
qualify for the DLI Additive Rebate if such Member has an ADAV of at 
least 0.30% of the TCV, and a Member that qualifies for DLI Tier 2 
would qualify for the DLI Additive Rebate if such Member has an ADAV of 
at least 0.10% of the TCV.\16\ The Exchange notes that the DLI Additive 
Rebate would only apply to executions of Added Displayed Volume that 
would otherwise receive the rebate applicable under DLI Tier 1 or DLI 
Tier 2.\17\ The purpose of the proposed DLI Additive Rebate is to 
encourage Members that consistently quote at the NBBO on the Exchange 
(i.e., Members that qualify for DLI Tier 1 or DLI Tier 2) to also 
maintain or increase their orders that add liquidity on the Exchange in 
order to qualify for an additive rebate for executions of Added 
Displayed Volume, which, in turn, the Exchange believes would encourage 
the submission of additional Added Displayed Volume to the Exchange, 
thereby promoting price discovery and contributing to a deeper and more 
liquid market to the benefit of all market participants. The Exchange 
notes that the proposed DLI Additive Rebate is comparable to other 
volume-based incentives and discounts, which have been widely adopted 
by exchanges, including the Exchange, such as pricing tiers that 
provide a supplemental incentive for firms that achieve a specified 
volume threshold.\18\
---------------------------------------------------------------------------

    \15\ This proposed pricing is referred to by the Exchange on the 
Fee Schedule under the new description ``DLI Additive Rebate'' with 
a Fee Code of ``Y'' to be appended to the otherwise applicable Fee 
Code for qualifying executions (which include Fee Codes ``Bq1'', 
``Dq1'', ``Jq1'', ``Bq1X'', ``Dq1X'', ``Jq1X'', ``Bq2'', ``Dq2'', 
``Jq2'', ``Bq2X'', ``Dq2X'', ``Jq2X'').
    \16\ Thus, a Member that qualifies for DLI Tier 1 and the DLI 
Additive Rebate applicable to DLI Tier 1 (by achieving an ADAV of at 
least 0.30% of the TCV) would receive a rebate of $0.0034 per share 
(which is the proposed $0.0033 per share rebate under DLI Tier 1, as 
described above, plus the $0.0001 per share DLI Additive Rebate) for 
executions of Added Displayed Volume, and a Member that qualifies 
for DLI Tier 2 and the DLI Additive Rebate applicable to DLI Tier 2 
(by achieving an ADAV of at least 0.10% of the TCV) would receive a 
rebate of $0.0032 per share (which is the proposed $0.0031 per share 
rebate under DLI Tier 2, as described above, plus the $0.0001 per 
share DLI Additive Rebate) for executions of Added Displayed Volume.
    \17\ The Exchange notes that such executions are also eligible 
to receive the $0.0002 per share additive rebate under the existing 
Targeted Step-Up Tier for Members that also qualify for such 
incentive.
    \18\ The Exchange's Targeted Step-Up Tier currently provides an 
additive rebate of $0.0002 per share for executions of added volume 
for Members that qualify for the Targeted Step-Up Tier by achieving 
one of two specified volume thresholds in certain designated 
securities. See the Exchange's Fee Schedule (available at https://info.memxtrading.com/fee-schedule/) for additional details regarding 
the Targeted Step-Up Tier. See also Securities Exchange Act Release 
No. 93554 (November 10, 2021), 86 FR 64248 (November 17, 2021) (SR-
MEMX-2021-16) (notice of filing and immediate effectiveness of fee 
changes adopted by the Exchange, including the adoption of the 
Targeted Step-Up Tier).
---------------------------------------------------------------------------

Pricing for Certain Sub-Dollar Volume
    Currently, the Exchange charges a standard fee of 0.05% of the 
total dollar value of the transaction for executions of Removed Sub-
Dollar Volume, which is the same fee that is applicable to all Members 
(including those that qualify for Liquidity Removal Tier 1). Now, the 
Exchange proposes to increase the standard fee charged to all Members 
(including those that qualify for Liquidity Removal Tier 1) for 
executions of Removed Sub-Dollar Volume to 0.25% of the total dollar 
value of the transaction.\19\ The purpose of increasing the standard 
fee for executions of Removed Sub-Dollar Volume is for business and 
competitive reasons, as the Exchange believes that increasing such fee 
would generate additional revenue to offset some of the costs 
associated with the Exchange's current transaction pricing structure, 
which provides various rebates for liquidity-adding orders, and the 
Exchange's operations generally, in a manner that is still consistent 
with the Exchange's overall pricing philosophy of encouraging added 
liquidity. The Exchange notes that despite the increase proposed 
herein, the proposed standard fee for executions of Removed Sub-Dollar 
Volume (i.e., 0.25% of the total dollar value of the transaction) 
remains lower than, and competitive with, the standard fee charged by 
at least one other equity exchange for executions of orders in 
securities priced below $1.00 per share that remove liquidity.\20\
---------------------------------------------------------------------------

    \19\ This proposed pricing for Removed Sub-Dollar Volume is 
referred to by the Exchange on the Fee Schedule under the existing 
descriptions ``Removed volume from MEMX Book'' with a Fee Code of 
``R'' and ``Removed volume from MEMX Book, Liquidity Removal Tier 
1'' with a Fee Code of ``R1'', as applicable.
    \20\ See, e.g., the Cboe BZX equities trading fee schedule on 
its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), which reflects a standard fee of 
0.30% of the total dollar value of the transaction for executions of 
orders in securities priced below $1.00 per share that remove 
liquidity.
---------------------------------------------------------------------------

    Currently, the Exchange provides a standard rebate of 0.05% of the 
total dollar value of the transaction for executions of orders 
(including Midpoint Peg orders) of Added Non-Displayed Sub-Dollar 
Volume. Now, the Exchange proposes to modify this standard pricing to 
provide for free executions of orders (including Midpoint Peg orders) 
of Added Non-Displayed Sub-Dollar Volume.\21\ The purpose of 
eliminating the standard rebate for executions of orders (including 
Midpoint Peg orders) of Added Non-Displayed Sub-Dollar Volume is for 
business and competitive reasons, as the Exchange believes the 
elimination of such rebate would decrease the Exchange's expenditures 
with respect to the Exchange's transaction pricing in a manner that is 
still consistent with the Exchange's overall pricing philosophy of 
encouraging added displayed liquidity. The Exchange notes that multiple 
other equities exchanges currently provide standard pricing of free 
executions of orders in securities priced below $1.00 per share that 
add non-displayed liquidity.\22\
---------------------------------------------------------------------------

    \21\ This proposed pricing for Added Non-Displayed Sub-Dollar 
Volume is referred to by the Exchange on the Fee Schedule under the 
existing descriptions ``Added non-displayed volume'' with a Fee Code 
of ``H'' and ``Added non-displayed volume, Midpoint Peg'' with a Fee 
Code of ``M'', as applicable.
    \22\ See, e.g., the Cboe BZX equities trading fee schedule on 
its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), which reflects free executions as the 
standard pricing for orders in securities priced below $1.00 per 
share that add non-displayed liquidity; the Cboe EDGA Exchange, Inc. 
equities trading fee schedule on its public website (available at 
https://www.cboe.com/us/equities/membership/fee_schedule/edga/), 
which reflects free executions as the standard pricing for orders in 
securities priced below $1.00 per share that add non-displayed 
liquidity.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\23\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\24\ 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

[[Page 2659]]

discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f.
    \24\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    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.'' \25\
---------------------------------------------------------------------------

    \25\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------

    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 to 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, 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 to the Exchange, which the Exchange believes would enhance 
liquidity and market quality on the Exchange to the benefit of all 
Members, as well as to decrease the Exchange's expenditures and 
generate additional revenue with respect to its transaction pricing in 
a manner that is still consistent with the Exchange's overall pricing 
philosophy of encouraging added displayed liquidity.
    Regarding the proposed changes to the standard rates, the Exchange 
believes that reducing the standard rebate for executions of Added 
Displayed Volume, increasing the standard fee for executions of Removed 
Sub-Dollar Volume (including for Members that qualify for Liquidity 
Removal Tier 1), and eliminating the standard rebate (i.e., to provide 
free executions) for executions of orders (including Midpoint Peg 
orders) of Added Non-Displayed Sub-Dollar Volume are reasonable 
because, as indicated above, in order to operate in the highly 
competitive equities markets, the Exchange and its competing exchanges 
seek to offer similar pricing structures, including assessing 
comparable standard fees and rebates, as applicable, for executions of 
Added Displayed Volume, Removed Sub-Dollar Volume, and Added Non-
Displayed Sub-Dollar Volume. Thus, the Exchange believes the proposed 
standard rate changes for executions of Added Displayed Volume, Removed 
Sub-Dollar Volume, and Added Non-Displayed Sub-Dollar Volume proposed 
herein are reasonable, as such rates are comparable to, and competitive 
with, the standard fees and rebates, as applicable, assessed for such 
executions on other equity exchanges.\26\ Further, the Exchange 
believes the proposed changes to reduce the standard rebates for 
executions of Added Displayed Volume and Added Non-Displayed Sub-Dollar 
Volume, as well as the proposed change to increase the standard fee for 
executions of Removed Sub-Dollar Volume, are reasonable because, as 
noted above, the Exchange believes such changes would decrease the 
Exchange's expenditures and generate additional revenue with respect to 
its transaction pricing in a manner that is still consistent with the 
Exchange's overall pricing philosophy of encouraging added displayed 
liquidity. The Exchange also believes that the proposed changes to 
these standard rates represents an equitable allocation of fees and are 
not unfairly discriminatory because such standard rates will continue 
to apply equally to all Members.
---------------------------------------------------------------------------

    \26\ See supra notes 7, 20, and 22.
---------------------------------------------------------------------------

    As noted above, volume-based incentives and discounts have been 
widely adopted by exchanges, including the Exchange, and are 
reasonable, equitable, and not unfairly discriminatory because they are 
open to all members on an equal basis and provide additional benefits 
or discounts that are reasonably related to: (i) The value to an 
exchange's market quality; (ii) associated higher levels of market 
activity, such as high levels of liquidity provision and/or growth 
patterns; and (iii) the introduction of higher volumes of orders into 
the price and volume discovery processes.
    In particular, the Exchange believes the proposed new Liquidity 
Provision Tier 3 is reasonable, equitable, and not unfairly 
discriminatory for these same reasons, as it provides Members with an 
additional incentive to achieve a certain volume threshold on the 
Exchange, is available to all Members and, as noted above, is designed 
to encourage Members to maintain or increase their orders that add 
liquidity on the Exchange in order to qualify for an enhanced rebate 
for executions of Added Displayed Volume, which, in turn, the Exchange 
believes would encourage the submission of additional Added Displayed 
Volume to the Exchange, thereby promoting price discovery and 
contributing to a deeper and more liquid market to the benefit of all 
market participants. Moreover, the Exchange believes the proposed new 
Liquidity Provision Tier 3 is a reasonable means to incentivize such 
increased activity, as it provides Members with an additional 
opportunity to qualify for an enhanced rebate for executions of Added 
Displayed Volume with less stringent criteria than Liquidity Provision 
Tiers 1 and 2. The Exchange also believes that providing a rebate of 
0.05% of the total dollar value of the transaction for executions of 
orders in securities priced below $1.00 per share that add displayed 
liquidity to the Exchange under proposed new Liquidity Provision Tier 3 
is reasonable, equitable, and not unfairly discriminatory, as this is 
the same rebate that is applicable to such executions for all Members 
(i.e., including those that do not qualify for any Liquidity Provision 
Tier), which is also the case under the Exchange's current pricing.
    The Exchange also believes the proposed changes to Liquidity 
Provision Tiers 1 and 2, including to reduce the rebate for executions 
of Added Displayed Volume and modify the required criteria under 
Liquidity Provision Tier 1 and to modify the required criteria under 
Liquidity Provision Tier 2, are reasonable, equitable, and not unfairly 
discriminatory for the same reasons applicable to volume-based 
incentives and discounts described above. Specifically, the Exchange 
believes the proposed new required criteria under Liquidity Provision 
Tiers 1 and 2 is reasonable, equitable, and not unfairly discriminatory 
because all Members will continue to be eligible to qualify for such 
tiers and have the opportunity to receive the corresponding enhanced 
rebates for executions of Added Displayed Volume if such criteria is 
achieved and, as noted above, such criteria is designed to encourage 
Members to maintain or increase their orders that add liquidity on the

[[Page 2660]]

Exchange in order to qualify for an enhanced rebate for executions of 
Added Displayed Volume, which, in turn, the Exchange believes would 
encourage the submission of additional Added Displayed Volume to the 
Exchange, thereby promoting price discovery and contributing to a 
deeper and more liquid market to the benefit of all market 
participants. The Exchange also believes the proposed reduced rebate 
for executions of Added Displayed Volume and proposed new required 
criteria under Liquidity Provision Tier 1 and the proposed new required 
criteria under Liquidity Provision Tier 2 are reasonable and consistent 
with an equitable allocation of fees and rebates, in that such reduced 
rebate represents only a modest decrease from the current rebate for 
executions of Added Displayed Volume under Liquidity Provision Tier 1 
(i.e., from $0.00335 per share to $0.00325 per share) and would 
decrease the Exchange's expenditures with respect to its transaction 
pricing in a manner that is still consistent with the Exchange's 
overall pricing philosophy of encouraging added displayed liquidity, 
and the more stringent criteria under such tiers correlates to, and is 
commensurate with, the corresponding tier's higher rebate.
    Without having a view of activity on other markets and off-exchange 
venues, the Exchange has no way of knowing whether this proposed rule 
change would definitely result in any Members qualifying for the 
proposed Liquidity Provision Tiers. While the Exchange has no way of 
predicting with certainty how the proposed tiers will impact Member 
activity, the Exchange anticipates that multiple Members that currently 
qualify for Liquidity Provision Tiers 1 and 2 would be able to satisfy 
the proposed new required criteria under such tiers, which the Exchange 
believes continues to be commensurate with the fees under such tiers, 
and that multiple additional Members would be able to satisfy the 
required criteria under proposed new Liquidity Provision Tier 3. The 
Exchange also notes that the proposed tiers will not adversely impact 
any Member's ability to qualify for reduced fees or enhanced rebates 
offered under other pricing tiers. Should a Member not meet the 
proposed new criteria, the Member will merely not receive that 
corresponding enhanced rebate.
    The Exchange also believes the proposed changes to Liquidity 
Removal Tier 1, including to increase the fee charged for executions of 
Removed Volume and modify the required criteria under such tier, are 
reasonable, equitable, and not unfairly discriminatory for the same 
reasons applicable to volume-based incentives and discounts described 
above. Specifically, the Exchange believes the proposed new required 
criteria under Liquidity Removal Tier 1 is reasonable, equitable, and 
not unfairly discriminatory because all Members will continue to be 
eligible to qualify for such tier and have the opportunity to receive 
the corresponding lower fee for executions of Removed Volume if such 
criteria is achieved and, as noted above, such criteria is designed to 
encourage Members to maintain or increase their order flow to the 
Exchange, thereby promoting price discovery and contributing to a 
deeper and more liquid market to the benefit of all market 
participants. The Exchange also believes the proposed increased fee for 
executions of Removed Volume and proposed new required criteria under 
Liquidity Removal Tier 1 are reasonable and consistent with an 
equitable allocation of fees and rebates, in that such proposed fee 
represents only a modest increase from the current fee charged for 
executions of Removed Volume under Liquidity Removal Tier 1 (i.e., from 
$0.0027 per share to $0.0028 per share) and would generate additional 
revenue to offset some of the costs associated with the Exchange's 
current transaction pricing in a manner that is still consistent with 
the Exchange's overall pricing philosophy of encouraging added 
displayed liquidity.
    Additionally, while the Exchange has no way of predicting with 
certainty how the proposed new required criteria under such tier will 
impact Member activity, the Exchange anticipates that most, if not all, 
of the Members that currently qualify for Liquidity Removal Tier 1 
would continue to qualify under the proposed new criteria, which the 
Exchange believes continues to be commensurate with the proposed new 
fee under such tier. The Exchange also notes that the proposed tier 
will not adversely impact any Member's ability to qualify for reduced 
fees or enhanced rebates offered under other pricing tiers. Should a 
Member not meet the proposed new criteria, the Member will merely not 
be charged the corresponding lower fee.
    The Exchange believes the proposed changes to reduce the rebates 
for executions of Added Displayed Volume under DLI Tiers 1 and 2 are 
reasonable, equitable, and not unfairly discriminatory for the same 
reasons applicable to volume-based incentives and discounts described 
above, as such rebates would continue to apply equally to all Members, 
in that all Members would continue to have the opportunity to achieve 
the required criteria under such tiers, which the Exchange is not 
proposing to modify with this proposal, and in turn, qualify for an 
enhanced rebate for executions of Added Displayed Volume, and the 
rebate provided under DLI Tier 1 will remain higher than the rebate 
provided under DLI Tier 2 commensurate with the more stringent criteria 
of DLI Tier 1 than of DLI Tier 2. The Exchange further believes that 
such proposed changes are reasonable and consistent with an equitable 
allocation of fees and rebates, as such reduced rebates are designed to 
decrease the Exchange's expenditures with respect to its transaction 
pricing in a manner that is still consistent with the Exchange's 
overall pricing philosophy of encouraging added displayed liquidity and 
promoting the price discovery and market quality objectives of the DLI 
Tiers described above.
    The Exchange also believes the proposed change to revise the 
``Displayed Liquidity Incentive Tiers'' heading on the Fee Schedule to 
read ``Displayed Liquidity Incentive (DLI) Tiers'' (i.e., to include 
the ``DLI'' abbreviation in a parenthetical) is reasonable, equitable, 
and not unfairly discriminatory in that it is designed to make clear 
for all Members that references to ``DLI'' on the Fee Schedule are 
references to the Displayed Liquidity Incentive.
    As noted above, the Exchange believes that the proposed DLI 
Additive Rebate is similar to other volume-based incentives and 
discounts, which have been widely adopted by exchanges, including the 
Exchange,\27\ and thus, the Exchange believes the proposed new DLI 
Additive Rebate is reasonable, equitable, and not unfairly 
discriminatory for the same reasons applicable to volume-based 
incentives and discounts described above. Specifically, the Exchange 
believes the proposed DLI Additive Rebate is reasonable, equitable, and 
not unfairly discriminatory, as it provides Members that consistently 
quote at the NBBO on the Exchange (i.e., Members that qualify for DLI 
Tier 1 or DLI Tier 2) with an additional incentive to achieve a certain 
volume threshold on the Exchange, is available to all such Members, 
and, as noted above, is designed to encourage such Members to maintain 
or increase their orders that add liquidity on the Exchange in order to 
qualify for an additive rebate for executions of Added Displayed 
Volume, which, in turn, the Exchange believes would encourage the 
submission of additional Added

[[Page 2661]]

Displayed Volume to the Exchange, thereby promoting price discovery and 
contributing to a deeper and more liquid market to the benefit of all 
market participants.
---------------------------------------------------------------------------

    \27\ See supra note 18.
---------------------------------------------------------------------------

    The Exchange also believes the proposed additive rebate for 
executions of Added Displayed Volume under the proposed DLI Additive 
Rebate (i.e., $0.0001 per share) is reasonable, in that it represents 
only a modest addition to the rebates otherwise applicable to 
executions of Added Displayed Volume for Members that qualify for DLI 
Tiers 1 or 2 and, in conjunction with the other changes proposed 
herein, would not provide for a rebate that is higher than the current 
maximum rebate provided by the Exchange. While the proposed DLI 
Additive Rebate is only available to Members that also qualify for DLI 
Tiers 1 or 2, the Exchange believes that it is reasonable, consistent 
with an equitable allocation of fees, and not unfairly discriminatory 
to provide such additive rebate only to such Members in recognition of 
the benefits that such Members provide to the Exchange and market 
participants by consistently quoting at the NBBO on the Exchange, as 
described above, particularly as the magnitude of the additive rebate 
is not unreasonably high and is, instead, reasonably related to the 
enhanced liquidity and market quality that such additive rebate is 
designed to achieve.
    Additionally, while the Exchange has no way of predicting with 
certainty how the proposed new DLI Additive Rebate will impact Member 
activity, the Exchange anticipates that several of the Members that 
currently qualify for DLI Tiers 1 or 2 would also satisfy the required 
criteria for the corresponding DLI Additive Rebate, which the Exchange 
believes to be commensurate with the proposed additive rebate in each 
case. The Exchange also notes that the proposed DLI Additive Rebate 
will not adversely impact any Member's ability to qualify for reduced 
fees or enhanced rebates offered under other pricing tiers or 
incentives. Should a Member not meet the proposed required criteria, 
the Member will merely not receive the additive rebate.
    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 \28\ 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 and rebates described herein are appropriate to address 
such forces.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

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 and 
generate additional revenue with respect to its transaction pricing and 
to encourage Members to maintain or increase their order flow on the 
Exchange, thereby contributing to a deeper and more liquid market to 
the benefit of all market participants and enhancing the attractiveness 
of the Exchange as a trading venue. 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.'' \29\
---------------------------------------------------------------------------

    \29\ See supra note 25.
---------------------------------------------------------------------------

Intramarket Competition
    As discussed above, the Exchange believes that the proposal would 
incentivize Members to maintain or increase their order flow on the 
Exchange, thereby contributing to a deeper and more liquid market to 
the benefit of all market participants and enhancing the attractiveness 
of the Exchange as a trading venue, which the Exchange believes, in 
turn, would continue to encourage market participants to direct 
additional order flow to the Exchange. Greater liquidity benefits all 
Members by providing more trading opportunities and encourages Members 
to send additional orders to the Exchange, thereby contributing to 
robust levels of liquidity, which benefits all market participants. The 
opportunity to qualify for the Liquidity Provision Tiers, the DLI 
Tiers, and Liquidity Removal Tier 1, and thus receive the proposed 
enhanced rebates for executions of Added Displayed Volume or be charged 
the proposed lower fee for executions of Removed Volume, as applicable, 
would be available to all Members that meet the associated volume 
requirements in any month. As noted above, the Exchange believes that 
meeting the proposed new volume requirements of the Liquidity Provision 
Tiers and Liquidity Removal Tier 1 is attainable for several market 
participants, and the Exchange believes such thresholds are reasonably 
related to the enhanced liquidity and market quality that such tiers 
are designed to promote. Similarly, as described above, the Exchange 
anticipates that several of the Members that currently qualify for DLI 
Tiers 1 or 2 would also satisfy the required criteria for the 
corresponding DLI Additive Rebate, which the Exchange believes to be 
commensurate with the proposed additive rebate in each case, and the 
Exchange believes that it is appropriate for the proposed DLI Additive 
Rebate to be available only to Members that qualify for DLI Tier 1 or 
DLI Tier 2 in recognition of the benefits that such Members provide to 
the Exchange and market participants, particularly as the magnitude of 
the additive rebate is not unreasonably high and is, instead, 
reasonably related to the enhanced liquidity and market quality that 
such additive rebate is designed to achieve. Lastly, as noted above, 
the proposed reduced standard rebates for executions of Added Displayed 
Volume and Added Non-Displayed Sub-Dollar Volume, as well as the 
proposed increased standard fee for executions of Removed Volume, would 
apply equally to all Members. 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 15 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 17% 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

[[Page 2662]]

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 discontinue to 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 executions of Added Displayed Volume, Removed Volume, 
Removed Sub-Dollar Volume, and Added Non-Displayed Sub-Dollar 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 is a competitive proposal through which the Exchange is seeking 
to decrease the Exchange's expenditures and generate additional revenue 
with respect to its transaction pricing and to encourage additional 
order flow to the Exchange through volume-based incentives and 
discounts, which have been widely adopted by exchanges, and standard 
pricing that are comparable to, and competitive with, pricing for 
similar executions in place at other exchanges.\30\ 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 standard pricing for executions of Added 
Displayed Volume, Removed Sub-Dollar Volume, and Added Non-Displayed 
Sub-Dollar Volume and similar pricing incentives and discounts to 
market participants that achieve certain volume criteria and 
thresholds.
---------------------------------------------------------------------------

    \30\ See supra notes 7, 20, and 22.
---------------------------------------------------------------------------

    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.'' \31\ 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'. . . .''.\32\ 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.
---------------------------------------------------------------------------

    \31\ See supra note 25.
    \32\ 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)).
---------------------------------------------------------------------------

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 \33\ and Rule 19b-4(f)(2) \34\ thereunder.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \34\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MEMX-2021-21 on the subject line.

Paper Comments

     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-2021-21. 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 (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. All submissions should refer to 
File Number SR-MEMX-2021-21 and should be submitted on or before 
February 8, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
---------------------------------------------------------------------------

    \35\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00750 Filed 1-14-22; 8:45 am]
BILLING CODE 8011-01-P


