[Federal Register Volume 88, Number 23 (Friday, February 3, 2023)]
[Notices]
[Pages 7484-7486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02237]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96773; File No. SR-MEMX-2023-01]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Extend the 
Exchange's Post-Market Session To End at 8:00 p.m. Eastern Time

January 30, 2023.
    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 January 17, 2023, MEMX LLC (``MEMX'' or the ``Exchange'') filed 
with the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposal as 
a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 Exchange Rule 1.5(w), which defines the Post-Market Session, 
to allow trading until 8:00 p.m. Eastern Time. The text of the proposed 
rule change is provided in Exhibit 5.

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 Exchange offers three distinct trading sessions during in which 
the Exchange accepts orders from Users \5\ for potential execution: (1) 
the ``Pre-Market Session,'' which begins at 7:00 a.m. Eastern Time 
(``ET'') and continues until 9:30 a.m. ET,\6\ (2) ``Regular Trading 
Hours,'' which begin at 9:30 a.m. ET and continue until 4:00 p.m. 
ET,\7\ and (3) the ``Post-Market Session,'' which begins at 4:00 p.m. 
ET and continues until 5:00 p.m. ET.\8\ Members may designate when 
their orders are eligible for execution by selecting their desired 
Time-in-Force instruction.\9\
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    \5\ See Exchange Rule 1.5(jj).
    \6\ See Exchange Rule 1.5(x).
    \7\ See Exchange Rule 1.5(bb).
    \8\ See Exchange Rule 1.5(w).
    \9\ See Exchange Rule 11.6(o).
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    The purpose of the proposed rule change is to extend the length of 
the Exchange's after-hours trading session by amending Exchange Rule 
1.5(w), which defines Post-Market Session, to allow trading until 8:00 
p.m. ET. The Exchange notes that it allowed trading in the Post-Market 
Session until 8:00 p.m. ET under the Exchange's initial rules \10\ when 
it commenced trading operations in September 2020 until the Exchange 
modified its operating hours to end trading in the Post-Market Session 
at 5:00 p.m. ET in October 2020.\11\ The Exchange shortened its 
operating hours to end trading in the Post-Market Session at 5:00 p.m. 
ET, instead of 8:00 p.m. ET, because it was a new entrant to the market 
at that time and did not believe that the trading volume it was 
experiencing during those hours justified the costs to the Exchange to 
operate during those hours; however, the Exchange noted in its proposal 
to shorten the Post-Market Session to end at 5:00 p.m. ET that ``[t]o 
the extent the Exchange in the future believes there is adequate demand 
to justify operating a longer after-hours trading session, it will 
consider again extending its hours to accommodate such demand.'' \12\ 
The Exchange now believes that there is adequate demand to justify 
operating the Post-Market Session until 8:00 p.m. ET.
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    \10\ See Securities Exchange Act Release No. 88806 (May 4, 
2020), 85 FR 27451 (May 8, 2020).
    \11\ See Securities Exchange Act Release No. 90119 (October 7, 
2020), 85 FR 64536 (October 13, 2020) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Shorten the 
Exchange's Post-Market Session To End at 5:00 p.m. Eastern Time).
    \12\ See id. at 64537.
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    As proposed, orders entered for participation in the Post-Market 
Session will continue to be handled in the same manner as today, with 
the exception that the Exchange will now accept those orders until 8:00 
p.m. ET, thereby providing additional time for market participants to 
source liquidity outside of Regular Trading Hours. The Exchange 
therefore believes that amending Rule 1.5(w) to extend the Exchange's 
trading hours will benefit market participants, which will now be able 
to trade on the Exchange later in the day. The Exchange also notes that 
having a Post-Market Session that lasts from 4:00 p.m. ET until 8:00 
p.m. ET, as proposed, is consistent with the after-hours sessions 
currently available on several other exchanges, including each of the 
equity exchanges operated by Cboe Global Markets, Inc.\13\
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    \13\ See e.g., Cboe BZX Rule 1.5(c); Cboe BYX Rule 1.5(c); Cboe 
EDGX Rule 1.5(r); Cboe EDGA Rule 1.5(r).
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    In connection with the change described above, the Exchange also 
proposes to make conforming changes to Exchange Rules 1.5(k) and 
11.1(a) to reflect the Post-Market Session ending at 8:00 p.m. ET. 
Specifically, the Exchange proposes to amend Exchange Rule 1.5(k), 
which defines ``Exchange Operating Hours'' or ``Exchange Hours,'' to 
reflect that the Exchange's daily trading hours, comprised of all three 
trading sessions offered by the Exchange, would begin at 7:00 a.m. ET 
and continue until 8:00 p.m. ET. The Exchange also proposes to amend 
Exchange Rule 11.1(a) to update the hours of operations referenced in 
that Rule consistent with the changes described above.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\14\ in general, and 
furthers the objectives of Sections and 6(b)(5) of the Act,\15\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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. Additionally, the Exchange believes the proposed rule 
change is consistent with the Section 6(b)(5) requirement that the 
rules of an

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exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposed rule change 
will benefit market participants by providing additional opportunities 
to transact on the Exchange later in the trading day. As described 
above, the Exchange currently accepts orders in its Post-Market Session 
until 5:00 p.m. ET, while several other exchanges currently have after-
hours sessions that end at 8:00 p.m. ET.\16\ The Exchange believes that 
market participants would benefit from a longer Post-Market Session on 
the Exchange too, and it is therefore proposing to extend its Post-
Market Session to allow trading until 8:00 p.m. ET. The Exchange 
believes that this change will provide additional opportunities for 
firms to source liquidity for their orders on the Exchange later in the 
trading day and will enable the Exchange to better compete with other 
exchanges that offer trading in after-hours sessions until 8:00 p.m. 
ET. For the reasons set forth above, the Exchange believes the proposal 
would promote just and equitable principles of trade, foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, protect investors and the public interest.
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    \16\ See supra note 13.
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    The Exchange also believes that the proposed rule change would not 
permit unfair discrimination between customers, issuers, brokers, or 
dealers because it would affect all Members and market participants in 
the same way and to the same extent, in that all Members would be 
allowed to submit orders to the Exchange in the Post-Market Session 
until 8:00 p.m. ET, and it is therefore consistent with Section 6(b)(5) 
of the Act. Moreover, as described above, the Exchange previously 
operated the Post-Market Session until 8:00 p.m. ET under its initial 
rules,\17\ other exchanges allow trading in after-hours sessions from 
4:00 p.m. ET until 8:00 p.m. ET,\18\ and there is precedent for an 
exchange extending the end of its after-hours trading session from 5:00 
p.m. ET to 8:00 p.m. ET,\19\ so this aspect of the proposed rule change 
does not raise any new or novel issues that have not previously been 
considered by the Commission.
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    \17\ See supra note 10.
    \18\ See supra note 13.
    \19\ See Securities Exchange Act Release No. 83809 (August 9, 
2018), 83 FR 40599 (August 15, 2018) (notice of filing and immediate 
effectiveness of a proposed rule change by Cboe BZX Exchange, Inc. 
to extend the end of its After Hours Trading Session from 5:00 p.m. 
to 8:00 p.m.).
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    In addition, the Exchange believes the proposed amendments to 
Exchange Rules 1.5(k) and 11.1(a) are consistent with the Act because 
such amendments would update those rules to reference the proposed 8:00 
p.m. ET time as the time until which the Exchange would accept orders 
in the Post-Market Session. No further substantive changes to those 
rules are proposed. The Exchange believes that it is appropriate to 
update all of its rules that specifically reference the Exchange's 
operating hours so that the Exchange's rules properly reflect the 
change to the Post-Market Session to be implemented with this proposed 
rule change.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the Act. The Exchange does not believe 
that the proposed rule change would have any significant impact on 
intermarket competition, as there are other equity exchanges that 
already allow after-hours trading until 8:00 p.m. ET, and other markets 
are free to provide similar trading hours. Furthermore, the Exchange 
does not believe that the proposed rule change would have any 
significant impact on intramarket competition, as all Members would be 
subject to the modified hours of the Post-Market Session.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \20\ and Rule 19b-4(f)(6) thereunder.\21\ 
Because the foregoing proposed rule change does not: (i) significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A) of the Act \22\ and Rule 19b-4(f)(6) \23\ 
thereunder.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange asked 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The Exchange 
states the proposed rule change extends the Post-Market Session on the 
Exchange to provide additional opportunities for market participants to 
source liquidity later in the day and that its Members would benefit 
from the same after-hours trading hours available on other exchanges 
(including each of the equity exchanges operated by Cboe Global 
Markets, Inc.), which already offer after-hours trading until 8:00 p.m. 
ET.\26\ For these reasons, and because the proposed rule change does 
not raise any novel regulatory issues,\27\ the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest. Therefore, the Commission hereby 
waives the operative delay and designates the proposal operative upon 
filing.\28\
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    \24\ 17 CFR 240.19b-4(f)(6).
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
    \26\ See supra note 13.
    \27\ See Securities Exchange Act Release No. 88806 (May 4, 
2020), 85 FR 27451 (May 8, 2020) at note 155 (noting that MEMX's 
initial rulebook when the Commission granted MEMX's registration as 
a national securities exchange provided for a Post-Market Session 
that ran until 8:00 p.m. ET).
    \28\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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.

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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     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-2023-01 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-2023-01. 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. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MEMX-2023-01 and should be submitted on 
or before February 24, 2023.
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    \29\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-02237 Filed 2-2-23; 8:45 am]
BILLING CODE 8011-01-P


