Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Exchange Rule 13.4(a) Regarding the Exchange's Usage of Data Feeds, 59148-59150 [2022-21069]
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59148
Federal Register / Vol. 87, No. 188 / Thursday, September 29, 2022 / Notices
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
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:
khammond on DSKJM1Z7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2022–017 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–BX–2022–017. 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 (https://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 such
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
VerDate Sep<11>2014
17:52 Sep 28, 2022
Jkt 256001
Number SR–BX–2022–017 and should
be submitted on or before October 20,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–21065 Filed 9–28–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95903; File No. SR–MEMX–
2022–27]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Update Exchange Rule
13.4(a) Regarding the Exchange’s
Usage of Data Feeds
September 23, 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
September 19, 2022, 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 ‘‘noncontroversial’’ 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.
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
update Exchange Rule 13.4(a) regarding
the sources of data that the Exchange
utilizes for the handling, execution and
routing of orders, as well as for
surveillance necessary to monitor
compliance with applicable securities
laws and Exchange rules, with respect
to certain market centers. The text of the
proposed rule change is provided in
Exhibit 5.
35 17
CFR 200.30–3(a)(12).
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).
1 15
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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 Exchange proposes to update
Exchange Rule 13.4(a) regarding the
sources of data that the Exchange
utilizes for the handling, execution and
routing of orders, as well as for
surveillance necessary to monitor
compliance with applicable securities
laws and Exchange rules, with respect
to certain market centers. Specifically,
the Exchange proposes to amend
Exchange Rule 13.4(a) to reflect that it
no longer utilizes direct data feeds and
instead will utilize market data from the
Consolidated Quotation System
(‘‘CQS’’)/UTP Quotation Data Feed
(‘‘UQDF’’) for such purposes with
respect to the following markets centers:
Cboe BYX, Cboe EDGA, Nasdaq BX,
Nasdaq PSX, NYSE American, NYSE
Chicago, and NYSE National.5 The
Exchange does not have a secondary
source for data for these market centers.
By making the changes set forth
above, the Exchange anticipates saving
approximately $30,000 per month, or
$360,000 annually, by discontinuing
receipt of direct data feeds from the
markets listed above. The Exchange
determined the list of markets from
which to discontinue direct data feeds
because such markets represent the U.S.
national securities exchanges that
charge for market data but have less
5 The Exchange previously filed the proposal,
which was effective on filing prior to August 1,
2022, the date that the Exchange transitioned over
to use CQS/UQDF for the market centers listed
above. See Securities Exchange Act Release No.
95395 (July 29, 2022), 87 FR 47799 (August 4, 2022)
(SR–MEMX–2022–20) (the ‘‘Original Proposal’’).
The Exchange withdrew the Original Proposal and
re-filed this proposal in order to provide additional
transparency and respond to a comment letter
received on the Original Proposal. See Letter from
Christopher Nagy, Research Director, Healthy
Markets Association, to Vanessa Countryman,
Secretary, Securities and Exchange Commission
dated August 16, 2022.
E:\FR\FM\29SEN1.SGM
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Federal Register / Vol. 87, No. 188 / Thursday, September 29, 2022 / Notices
than 2% market share (the majority of
these exchanges have less than 1%
market share). In addition, the Exchange
notes that it does not anticipate that the
change will negatively impact its
operations or negatively impact
investors. To the contrary, given the
relative size of these markets and
quality of quoting on such markets as
compared to size and quality of quoting
on the Exchange and the markets from
which it continues to receive direct data
feeds,6 the Exchange does not anticipate
a significant difference with respect to
its implementation of applicable
requirements of Regulation NMS,
including SEC Rule 611 (i.e., the Order
Protection Rule).7 Furthermore, with
respect to the Exchange’s routing
services, the Exchange does not route to
the markets from which it has
discontinued direct data feeds nearly as
much as it does to larger markets, again
likely due to differences in quote quality
and available liquidity at such markets.
Furthermore, the Exchange’s routing
services are completely optional.
Finally, the Exchange notes that other
exchanges have made similar
determinations to use direct data feeds
from some markets, primarily larger
markets or their own affiliates, and
market data from the CQS/UQDF data
feeds for other markets.8
The Exchange proposes for this
proposed rule change to become
operative on filing with the
Commission.9
khammond on DSKJM1Z7X2PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,11 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
6 Based on publicly available information, the
Exchange maintained quotations at the national best
bid or offer (‘‘NBBO’’) over 25% of the time, which
is third amongst all exchanges and only behind the
Nasdaq Stock Market and NYSE Arca Equities. In
contrast, none of the markets from which the
Exchange has discontinued direct data feeds
maintained a quotation at the NBBO more than 10%
of the time. See Cboe Global Markets NBBO Quote
Quality Statistics, available at: https://
www.cboe.com/us/equities/market_statistics/.
7 17 CFR 242.611.
8 See, e.g., Cboe BZX Exchange, Inc. (‘‘BZX’’) Rule
11.26 (listing IEX, MEMX, MIAX Pearl, NYSE
American, NYSE Chicago, and NYSE National as
exchanges for which BZX uses CQS/UQDF data
even though such markets offer direct data feeds);
see also NYSE Arca Equities (‘‘Arca’’) Rule 7.37–
E.(d) (listing IEX, MEMX, and MIAX Pearl as
exchanges for which Arca uses CQS/UQDF data
even though such markets offer direct data feeds).
9 See supra note 5.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
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.
The Exchange believes that its
proposal to update Exchange Rule
13.4(a) to reflect that it will utilize
market data from the CQS/UQDF with
respect to Cboe BYX, Cboe EDGA,
Nasdaq BX, Nasdaq PSX, NYSE
American, NYSE Chicago, and NYSE
National is consistent with the Act
because it will ensure that the Rule
correctly identifies and publicly states
on a market-by-market basis all of the
specific network processor and
proprietary data feeds that the Exchange
utilizes for the handling, routing, and
execution of orders, and for performing
the regulatory compliance checks
related to each of those functions. As
noted above, the Exchange does not
anticipate that the change will
negatively impact its operations or
negatively impact investors. The
proposed rule change also removes
impediments to and perfects the
mechanism of a free and open market
and protects investors and the public
interest because it provides additional
specificity, clarity and transparency.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes its proposed
rule change would not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the Exchange believes the
proposal would enhance competition
because disclosing the primary and
secondary data sources utilized by the
Exchange with respect to all of the
exchanges enhances transparency and
enables investors to better assess the
quality of the Exchange’s execution and
routing services.
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
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
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59149
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 12 and Rule 19b–
4(f)(6) thereunder.13
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 14 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 15
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay.
The proposed rule change updates the
sources of data the Exchange utilizes
when performing: (i) order handling; (ii)
order routing; (iii) order execution; and
(iv) related compliance processes to
reflect the use of CQS/UQDF rather than
direct data feeds with respect to the
market centers identified above. The
Exchange states that the proposed
change will ensure that the Rule
correctly identifies and publicly states
on a market-by-market basis all of the
specific network processor and
proprietary data feeds that the Exchange
utilizes for the handling, routing, and
execution of orders, and for performing
the regulatory compliance checks
related to each of those functions. The
Exchange states that the proposed rule
change is similar to the rules of other
exchanges.16
The Commission believes that waiver
of the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposed rule change does
not raise any novel issues. Therefore,
the Commission hereby waives the
operative delay and designates the
proposal as operative upon filing.17
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of 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.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 See supra note 8.
17 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).
13 17
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59150
Federal Register / Vol. 87, No. 188 / Thursday, September 29, 2022 / Notices
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
under Section 19(b)(2)(B) 18 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
khammond on DSKJM1Z7X2PROD with NOTICES
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:
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–2022–27 and
should be submitted on or before
October 20, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–21069 Filed 9–28–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MEMX–2022–27 on the subject line.
[Release No. 34–95902; File No. SR–
NASDAQ–2022–052]
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–2022–27. 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 (https://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
September 23, 2022.
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Nasdaq Equity 11, Rule 11890
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 20, 2022, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II, below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Nasdaq Equity 11, Rule 11890 (Clearly
Erroneous Transactions).
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
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
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
18 15
U.S.C. 78s(b)(2)(B).
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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
On September 1, 2022, the
Commission approved the proposal of
Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’)
to (1) adopt on a permanent basis the
pilot program for clearly erroneous
executions in Cboe BZX Rule 11.17 and
(2) limit the circumstances where
clearly erroneous review would
continue to be available during regular
trading hours (i.e., Market Hours) 3
when the Limit Up-Limit Down
(‘‘LULD’’) Plan to Address Extraordinary
Market Volatility (the ‘‘LULD Plan’’) 4
already provides similar protections for
trades occurring at prices that may be
deemed erroneous.5
The Exchange now proposes to adopt
the same changes in Equity 11, Rule
11890 (Clearly Erroneous Transactions).
The Exchange believes that these
changes are appropriate as the LULD
Plan has been approved by the
Commission on a permanent basis,6 and
in light of amendments to the LULD
Plan, including changes to the
applicable Price Bands 7 around the
open and close of trading.
Proposal To Make the Clearly Erroneous
Pilot Permanent
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to Equity 11, Rule 11890 that,
among other things: (i) provided for
uniform treatment of clearly
erroneous execution reviews in multi3 See Securities Exchange Act Release No. 95658
(September 1, 2022) (SR–CboeBZX–2022–037).
4 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012).
5 The term ‘‘Market Hours’’ means the period of
time beginning at 9:30 a.m. ET and ending at 4:00
p.m. ET (or such earlier time as may be designated
by Nasdaq on a day when Nasdaq closes early). See
Equity 1, Section 1(a)(9). The Exchange will make
conforming changes throughout Rule 11890 to
replace references to ‘‘Regular Trading Hours’’ and
‘‘Regular Market Session’’ with ‘‘Market Hours,’’
which is the correct defined term.
6 See Securities Exchange Act Release No. 84843
(December 18, 2018), 83 FR 66464 (December 26,
2018) (‘‘Notice’’); 85623 (April 11, 2019), 84 FR
16086 (April 17, 2019) (File No. 4–631)
(‘‘Amendment Eighteen’’).
7 ‘‘Price Bands’’ refers to the term provided in
Section V of the LULD Plan.
E:\FR\FM\29SEN1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 188 (Thursday, September 29, 2022)]
[Notices]
[Pages 59148-59150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21069]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95903; File No. SR-MEMX-2022-27]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Update Exchange
Rule 13.4(a) Regarding the Exchange's Usage of Data Feeds
September 23, 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 September 19, 2022, 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 update Exchange Rule 13.4(a) regarding the sources of data that the
Exchange utilizes for the handling, execution and routing of orders, as
well as for surveillance necessary to monitor compliance with
applicable securities laws and Exchange rules, with respect to certain
market centers. 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 proposes to update Exchange Rule 13.4(a) regarding the
sources of data that the Exchange utilizes for the handling, execution
and routing of orders, as well as for surveillance necessary to monitor
compliance with applicable securities laws and Exchange rules, with
respect to certain market centers. Specifically, the Exchange proposes
to amend Exchange Rule 13.4(a) to reflect that it no longer utilizes
direct data feeds and instead will utilize market data from the
Consolidated Quotation System (``CQS'')/UTP Quotation Data Feed
(``UQDF'') for such purposes with respect to the following markets
centers: Cboe BYX, Cboe EDGA, Nasdaq BX, Nasdaq PSX, NYSE American,
NYSE Chicago, and NYSE National.\5\ The Exchange does not have a
secondary source for data for these market centers.
---------------------------------------------------------------------------
\5\ The Exchange previously filed the proposal, which was
effective on filing prior to August 1, 2022, the date that the
Exchange transitioned over to use CQS/UQDF for the market centers
listed above. See Securities Exchange Act Release No. 95395 (July
29, 2022), 87 FR 47799 (August 4, 2022) (SR-MEMX-2022-20) (the
``Original Proposal''). The Exchange withdrew the Original Proposal
and re-filed this proposal in order to provide additional
transparency and respond to a comment letter received on the
Original Proposal. See Letter from Christopher Nagy, Research
Director, Healthy Markets Association, to Vanessa Countryman,
Secretary, Securities and Exchange Commission dated August 16, 2022.
---------------------------------------------------------------------------
By making the changes set forth above, the Exchange anticipates
saving approximately $30,000 per month, or $360,000 annually, by
discontinuing receipt of direct data feeds from the markets listed
above. The Exchange determined the list of markets from which to
discontinue direct data feeds because such markets represent the U.S.
national securities exchanges that charge for market data but have less
[[Page 59149]]
than 2% market share (the majority of these exchanges have less than 1%
market share). In addition, the Exchange notes that it does not
anticipate that the change will negatively impact its operations or
negatively impact investors. To the contrary, given the relative size
of these markets and quality of quoting on such markets as compared to
size and quality of quoting on the Exchange and the markets from which
it continues to receive direct data feeds,\6\ the Exchange does not
anticipate a significant difference with respect to its implementation
of applicable requirements of Regulation NMS, including SEC Rule 611
(i.e., the Order Protection Rule).\7\ Furthermore, with respect to the
Exchange's routing services, the Exchange does not route to the markets
from which it has discontinued direct data feeds nearly as much as it
does to larger markets, again likely due to differences in quote
quality and available liquidity at such markets. Furthermore, the
Exchange's routing services are completely optional. Finally, the
Exchange notes that other exchanges have made similar determinations to
use direct data feeds from some markets, primarily larger markets or
their own affiliates, and market data from the CQS/UQDF data feeds for
other markets.\8\
---------------------------------------------------------------------------
\6\ Based on publicly available information, the Exchange
maintained quotations at the national best bid or offer (``NBBO'')
over 25% of the time, which is third amongst all exchanges and only
behind the Nasdaq Stock Market and NYSE Arca Equities. In contrast,
none of the markets from which the Exchange has discontinued direct
data feeds maintained a quotation at the NBBO more than 10% of the
time. See Cboe Global Markets NBBO Quote Quality Statistics,
available at: https://www.cboe.com/us/equities/market_statistics/.
\7\ 17 CFR 242.611.
\8\ See, e.g., Cboe BZX Exchange, Inc. (``BZX'') Rule 11.26
(listing IEX, MEMX, MIAX Pearl, NYSE American, NYSE Chicago, and
NYSE National as exchanges for which BZX uses CQS/UQDF data even
though such markets offer direct data feeds); see also NYSE Arca
Equities (``Arca'') Rule 7.37-E.(d) (listing IEX, MEMX, and MIAX
Pearl as exchanges for which Arca uses CQS/UQDF data even though
such markets offer direct data feeds).
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The Exchange proposes for this proposed rule change to become
operative on filing with the Commission.\9\
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\9\ See supra note 5.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\11\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that its proposal to update Exchange Rule
13.4(a) to reflect that it will utilize market data from the CQS/UQDF
with respect to Cboe BYX, Cboe EDGA, Nasdaq BX, Nasdaq PSX, NYSE
American, NYSE Chicago, and NYSE National is consistent with the Act
because it will ensure that the Rule correctly identifies and publicly
states on a market-by-market basis all of the specific network
processor and proprietary data feeds that the Exchange utilizes for the
handling, routing, and execution of orders, and for performing the
regulatory compliance checks related to each of those functions. As
noted above, the Exchange does not anticipate that the change will
negatively impact its operations or negatively impact investors. The
proposed rule change also removes impediments to and perfects the
mechanism of a free and open market and protects investors and the
public interest because it provides additional specificity, clarity and
transparency.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes its proposed rule change would not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes the proposal would enhance competition because disclosing the
primary and secondary data sources utilized by the Exchange with
respect to all of the exchanges enhances transparency and enables
investors to better assess the quality of the Exchange's execution and
routing services.
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
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 \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of 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 pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay.
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
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The proposed rule change updates the sources of data the Exchange
utilizes when performing: (i) order handling; (ii) order routing; (iii)
order execution; and (iv) related compliance processes to reflect the
use of CQS/UQDF rather than direct data feeds with respect to the
market centers identified above. The Exchange states that the proposed
change will ensure that the Rule correctly identifies and publicly
states on a market-by-market basis all of the specific network
processor and proprietary data feeds that the Exchange utilizes for the
handling, routing, and execution of orders, and for performing the
regulatory compliance checks related to each of those functions. The
Exchange states that the proposed rule change is similar to the rules
of other exchanges.\16\
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\16\ See supra note 8.
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The Commission believes that waiver of the 30-day operative delay
is consistent with the protection of investors and the public interest
because the proposed rule change does not raise any novel issues.
Therefore, the Commission hereby waives the operative delay and
designates the proposal as operative upon filing.\17\
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\17\ 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
[[Page 59150]]
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 under
Section 19(b)(2)(B) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(2)(B).
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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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-MEMX-2022-27 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-2022-27. 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 (https://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-2022-27 and should be submitted on
or before October 20, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21069 Filed 9-28-22; 8:45 am]
BILLING CODE 8011-01-P
