Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule To Waive Membership Fees for New Members Temporarily, 46285-46287 [2023-15261]
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Federal Register / Vol. 88, No. 137 / Wednesday, July 19, 2023 / Notices
listing venues, to the benefit of investors
and the marketplace.
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
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the Exchange consents, the Commission
will:
A. by order approve or disapprove
such proposed rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be 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, as modified by Amendment No.
2, is consistent with the Act. Comments
may be submitted by any of the
following methods:
ddrumheller on DSK120RN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include file
number SR–CboeBZX–2023–044 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–CboeBZX–2023–044. 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
VerDate Sep<11>2014
00:36 Jul 19, 2023
Jkt 259001
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBZX–2023–044 and should be
submitted on or before August 9, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.113
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–15267 Filed 7–18–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97893; File No. SR–MEMX–
2023–13]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Exchange’s Fee
Schedule To Waive Membership Fees
for New Members Temporarily
July 13, 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 June 30,
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, 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.
PO 00000
46285
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 waive the membership fees
(‘‘Membership Fees’’) for approximately
the next six months for all new
Members of the Exchange. The
Exchange will implement the
membership fee waiver (the
‘‘Membership Fee Waiver’’) for the
period of time commencing
immediately and ending on December
31, 2023. 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 modify its
fee schedule in order to waive the
Membership Fees for all new Members
of the Exchange who join the Exchange
through December 31, 2023. The
Exchange will implement the
Membership Fee Waiver (as defined
above) until December 31, 2023. The
Exchange notes that the proposed
change does not amend any existing fee
or rebate for equities transactions,
market data or connectivity fees. The
sole change proposed herein is to waive
membership fees for new Members of
the Exchange, as described below.
MEMX currently charges $200 per
month to maintain active membership.
In preparation for the launch of the
Exchange’s options market (‘‘MEMX
Options’’),4 the Exchange wishes to
3 See
113 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Frm 00159
Fmt 4703
Sfmt 4703
Exchange Rule 1.5(p).
August 8, 2022, the Commission approved
SR–MEMX–2022–10, which proposed rules for the
trading of options on the Exchange. See Securities
4 On
Continued
E:\FR\FM\19JYN1.SGM
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46286
Federal Register / Vol. 88, No. 137 / Wednesday, July 19, 2023 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
encourage additional participants to join
the Exchange by waiving the Exchange’s
membership fee for such new
participants. The Exchange proposes to
apply the Membership Fee Waiver to all
new Members ending on December 31,
2023. Specifically, the Exchange is
proposing to add a description under
‘‘Membership’’ in the Exchange’s Fee
Schedule, noting that Membership Fees
will be waived for new Members of the
Exchange until January 1, 2024.
Although the Exchange notes that the
proposed change is intended primarily
to encourage new participants to join
the Exchange in order to participate on
the MEMX Options market and the
Exchange believes the participants that
will benefit from this waiver are firms
that will do so, the Exchange is
intentionally proposing the waiver to
apply broadly to all new participants on
the Exchange, including firms that
would trade only on the Exchange’s
market for equity securities or on both
the Exchange’s market for equity
securities and MEMX Options.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,5
in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,6
in particular, in that it provides for the
equitable allocation of reasonable dues,
fees and other charges among members
and issuers and other persons using its
facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Exchange believes it is reasonable
to waive the Membership Fee for new
Members of the Exchange, primarily to
provide an incentive for options trading
firms to apply for Exchange membership
in advance of the launch of MEMX
Options. The options markets are quotedriven markets and are dependent on
liquidity providers for liquidity and
price discovery. The proposal will be of
particular importance in encouraging
liquidity providers to become members
of the Exchange, which may result in
more trading opportunities, enhanced
competition, and improved overall
market quality on the Exchange.
Although the proposed change is
intended primarily to encourage new
participants to join the Exchange in
order to participate on the MEMX
Options market and the Exchange
believes the participants that will
Exchange Act Release No. 95445 (August 9, 2022)
[sic], 87 FR 49884 (August 12, 2022) (SR–MEMX–
2022–010). The Exchange plans to launch MEMX
Options in September of 2023.
5 15 U.S.C. 78f.
6 15 U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
00:36 Jul 19, 2023
Jkt 259001
benefit from this waiver are firms that
will do so, the Exchange also believes
that it is reasonable to adopt the waiver
in a manner that applies broadly to all
new participants on the Exchange,
including firms that would trade only
on the Exchange’s market for equity
securities or on both the Exchange’s
market for equity securities and MEMX
Options.
In addition, the Exchange believes
that the proposed Membership Fee
Waiver is equitable and not unfairly
discriminatory in that it will apply
uniformly to all new Members of the
Exchange. Further, the Exchange
believes that the waiver is reasonable,
equitable and not unfairly
discriminatory to current Members of
the Exchange because the majority of
the Exchange’s current Members joined
at a time when the Exchange did not
impose membership fees (also to
incentivize such participants to join),
and thus have already received this
benefit.
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 purposes of the Act. Instead, as
discussed above, the Exchange believes
that the proposed change would
encourage market participants who have
not already done so to join the
Exchange. As a result, if such
participants do join the Exchange and
route their orders to the Exchange or
support other Members that route orders
(i.e., clearing firms) the Exchange
believes the proposal would enhance its
competitiveness as a market.
Encouraging additional participants to
join the Exchange will enable a greater
number of participants to be onboard
when MEMX Options launches.
Attracting a greater number of
participants will foster greater
competition on the Exchange,
particularly in the case of MEMX
Options which is a quote-driven market.
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.’’ 7
7 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
PO 00000
Frm 00160
Fmt 4703
Sfmt 4703
Intramarket Competition
As discussed above, the Exchange
believes that the proposal would
encourage new participants to apply for
Exchange membership, thereby
enhancing liquidity and market quality
on the Exchange, as well as enhancing
the attractiveness of the Exchange as a
trading venue, which the Exchange
believes, in turn, would continue to
encourage market participants to direct
additional order flow to the Exchange.
The Exchange does not believe that
the proposed changes would impose
any burden on intramarket competition
because such changes will incentivize
new participants to join the Exchange
and the majority of the Exchange’s
current members joined at a time when
the Exchange did not impose
membership fees (also to incentivize
such participants to join), and thus have
already received this benefit. The
options markets are quote-driven
markets and are dependent on liquidity
providers for liquidity and price
discovery. The proposal will be of
particular importance in encouraging
liquidity providers to become members
of the Exchange, which may result in
more trading opportunities, enhanced
competition, and improved overall
market quality on the Exchange. 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 described above, the proposed
Membership Fee Waiver will incentive
market participants to join the Exchange
during the Membership Fee Waiver
period. Accordingly, the Exchange
believes the proposal would not burden,
but rather promote, intermarket
competition by enabling it to better
compete with other options exchanges
at the time MEMX Options launches. In
addition, as noted above, the Exchange
has intentionally proposed to adopt the
waiver broadly so that it is also
applicable to new Members that will
participate on the Exchange’s market for
equity securities or that will participate
on such market as well as MEMX
Options, and thus, the proposal may
also better enable the Exchange to
compete with other equities exchanges.
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.
E:\FR\FM\19JYN1.SGM
19JYN1
Federal Register / Vol. 88, No. 137 / Wednesday, July 19, 2023 / Notices
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 8 and Rule 19b–
4(f)(2) 9 thereunder.
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:
ddrumheller on DSK120RN23PROD with NOTICES1
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–2023–13 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–2023–13. 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
8 15
9 17
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–MEMX–2023–13 and should be
submitted on or before August 9, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–15261 Filed 7–18–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97890; File No. SR–FICC–
2023–008]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Clearing Agency Model Risk
Management Framework
July 13, 2023.
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 June 30,
2023, Fixed Income Clearing
Corporation (‘‘FICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. FICC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(4) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amends the Clearing Agency Model Risk
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
00:36 Jul 19, 2023
Jkt 259001
PO 00000
10 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).
4 17 CFR 240.19b–4(f)(4).
1 15
Frm 00161
Fmt 4703
Sfmt 4703
46287
Management Framework (‘‘Framework’’)
of FICC and its affiliates National
Securities Clearing Corporation
(‘‘NSCC’’), a central counterparty,
together with FICC, the ‘‘CCPs,’’ and the
CCPs together with The Depository
Trust Company (‘‘DTC,’’) the ‘‘Clearing
Agencies’’).5 The Framework was
adopted by the Clearing Agencies to
support their compliance with Rule
17Ad–22(e) (the ‘‘Covered Clearing
Agency Standards’’) under the Act,6
and, in this regard, applies solely to
models 7 utilized by the Clearing
Agencies that are subject to the model
risk management requirements set forth
in Rules 17Ad–22(e)(4), (e)(6), and (e)(7)
under the Act.,8 as described in greater
detail below.9
5 The Framework sets forth the model risk
management practices that the Clearing Agencies
follow to identify, measure, monitor, and manage
the risks associated with the design, development,
implementation, use, and validation of quantitative
models. The Framework is filed as a rule of the
Clearing Agencies. See Securities Exchange Act
Release Nos. 81485 (August 25, 2017), 82 FR 41433
(August 31, 2017) (SR–DTC–2017–008, SR–FICC–
2017–014, SR–NSCC–2017–008) (‘‘2017 Notice’’);
88911 (May 20, 2020), 85 FR 31828 (May 27, 2020)
(SR–DTC–2020–008, SR–FICC–2020–004, SR–
NSCC–2020–008); 92379 (July 13, 2021), 86 FR
38143 (July 19, 2021) (SR–DTC–2021–013); 92381
(July 13, 2021), 86 FR 38163 (July 19, 2021) (SR–
NSCC–2021–008); 92380 (July 13, 2021), 86 FR
38140 (July 19, 2021) (SR–FICC–2021–006); 94273
(February 17, 2022), 87 FR 10395 (February 24,
2022) (SR–DTC–2022–001); 94272 (February 17,
2022), 87 FR 10419 (February 24, 2022) (SR–NSCC–
2022–001); and 94271 (February 17, 2022), 87 FR
10411 (February 24, 2022) (SR–FICC–2022–001)
(collectively, the ‘‘MRMF Filings’’).
6 17 CFR 240.17Ad–22(e). Each of DTC, NSCC
and FICC is a ‘‘covered clearing agency’’ as defined
in Rule 17Ad–22(a)(5) under the Act and must
comply with Rule 17Ad–22(e).
7 Pursuant to Section 3.1 (Model Inventory) of the
Framework, the Clearing Agencies have adopted the
following definition of ‘‘model’’: ‘‘[M]odel’’ refers to
a quantitative method, system, or approach that
applies statistical, economic, financial, or
mathematical theories, techniques, and
assumptions to process input data into quantitative
estimates. A ‘‘model’’ consists of three components:
(i) an information input component, which delivers
assumptions and data to the model; (ii) a processing
component, which transforms inputs into estimates;
and (iii) a reporting component, which translates
the estimates into useful business information. The
definition of model also covers quantitative
approaches whose inputs are partially or wholly
qualitative or based on expert judgment, provided
that the output is quantitative in nature. See 2017
Notice, supra note 9. See also Supervisory
Guidance on Model Risk Management, SR Letter
11–7 Attachment, dated April 4, 2011, issued by the
Board of Governors of the Federal Reserve System
and the Office of the Comptroller of the Currency,
available at https://www.federalreserve.gov/
supervisionreg/srletters/sr1107a1.pdf, page 3.
8 17 CFR 240.17Ad–22(e)(4), (e)(6) and (e)(7).
References to Rule 17Ad–22(e)(6) and compliance
therewith apply to the CCPs only and not to DTC
because DTC is not a central counterparty.
9 Capitalized terms used herein and not defined
shall have the meaning assigned to such terms in
the FICC Rules, available at https://www.dtcc.com/
legal/rules-and-procedures.aspx.
E:\FR\FM\19JYN1.SGM
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]]>Agencies
[Federal Register Volume 88, Number 137 (Wednesday, July 19, 2023)]
[Notices]
[Pages 46285-46287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15261]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97893; File No. SR-MEMX-2023-13]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Fee Schedule To Waive Membership Fees for New Members
Temporarily
July 13, 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 June 30, 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, 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 waive the membership fees (``Membership Fees'')
for approximately the next six months for all new Members of the
Exchange. The Exchange will implement the membership fee waiver (the
``Membership Fee Waiver'') for the period of time commencing
immediately and ending on December 31, 2023. 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 Exchange proposes to modify its fee schedule in order to waive
the Membership Fees for all new Members of the Exchange who join the
Exchange through December 31, 2023. The Exchange will implement the
Membership Fee Waiver (as defined above) until December 31, 2023. The
Exchange notes that the proposed change does not amend any existing fee
or rebate for equities transactions, market data or connectivity fees.
The sole change proposed herein is to waive membership fees for new
Members of the Exchange, as described below.
MEMX currently charges $200 per month to maintain active
membership. In preparation for the launch of the Exchange's options
market (``MEMX Options''),\4\ the Exchange wishes to
[[Page 46286]]
encourage additional participants to join the Exchange by waiving the
Exchange's membership fee for such new participants. The Exchange
proposes to apply the Membership Fee Waiver to all new Members ending
on December 31, 2023. Specifically, the Exchange is proposing to add a
description under ``Membership'' in the Exchange's Fee Schedule, noting
that Membership Fees will be waived for new Members of the Exchange
until January 1, 2024.
---------------------------------------------------------------------------
\4\ On August 8, 2022, the Commission approved SR-MEMX-2022-10,
which proposed rules for the trading of options on the Exchange. See
Securities Exchange Act Release No. 95445 (August 9, 2022) [sic], 87
FR 49884 (August 12, 2022) (SR-MEMX-2022-010). The Exchange plans to
launch MEMX Options in September of 2023.
---------------------------------------------------------------------------
Although the Exchange notes that the proposed change is intended
primarily to encourage new participants to join the Exchange in order
to participate on the MEMX Options market and the Exchange believes the
participants that will benefit from this waiver are firms that will do
so, the Exchange is intentionally proposing the waiver to apply broadly
to all new participants on the Exchange, including firms that would
trade only on the Exchange's market for equity securities or on both
the Exchange's market for equity securities and MEMX Options.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and
furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\
in particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among members and issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes it is reasonable to waive the Membership Fee
for new Members of the Exchange, primarily to provide an incentive for
options trading firms to apply for Exchange membership in advance of
the launch of MEMX Options. The options markets are quote-driven
markets and are dependent on liquidity providers for liquidity and
price discovery. The proposal will be of particular importance in
encouraging liquidity providers to become members of the Exchange,
which may result in more trading opportunities, enhanced competition,
and improved overall market quality on the Exchange. Although the
proposed change is intended primarily to encourage new participants to
join the Exchange in order to participate on the MEMX Options market
and the Exchange believes the participants that will benefit from this
waiver are firms that will do so, the Exchange also believes that it is
reasonable to adopt the waiver in a manner that applies broadly to all
new participants on the Exchange, including firms that would trade only
on the Exchange's market for equity securities or on both the
Exchange's market for equity securities and MEMX Options.
In addition, the Exchange believes that the proposed Membership Fee
Waiver is equitable and not unfairly discriminatory in that it will
apply uniformly to all new Members of the Exchange. Further, the
Exchange believes that the waiver is reasonable, equitable and not
unfairly discriminatory to current Members of the Exchange because the
majority of the Exchange's current Members joined at a time when the
Exchange did not impose membership fees (also to incentivize such
participants to join), and thus have already received this benefit.
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 purposes of the Act. Instead, as
discussed above, the Exchange believes that the proposed change would
encourage market participants who have not already done so to join the
Exchange. As a result, if such participants do join the Exchange and
route their orders to the Exchange or support other Members that route
orders (i.e., clearing firms) the Exchange believes the proposal would
enhance its competitiveness as a market. Encouraging additional
participants to join the Exchange will enable a greater number of
participants to be onboard when MEMX Options launches. Attracting a
greater number of participants will foster greater competition on the
Exchange, particularly in the case of MEMX Options which is a quote-
driven market. 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.'' \7\
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\7\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Intramarket Competition
As discussed above, the Exchange believes that the proposal would
encourage new participants to apply for Exchange membership, thereby
enhancing liquidity and market quality on the Exchange, as well as
enhancing the attractiveness of the Exchange as a trading venue, which
the Exchange believes, in turn, would continue to encourage market
participants to direct additional order flow to the Exchange.
The Exchange does not believe that the proposed changes would
impose any burden on intramarket competition because such changes will
incentivize new participants to join the Exchange and the majority of
the Exchange's current members joined at a time when the Exchange did
not impose membership fees (also to incentivize such participants to
join), and thus have already received this benefit. The options markets
are quote-driven markets and are dependent on liquidity providers for
liquidity and price discovery. The proposal will be of particular
importance in encouraging liquidity providers to become members of the
Exchange, which may result in more trading opportunities, enhanced
competition, and improved overall market quality on the Exchange. 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 described above, the proposed Membership Fee Waiver will
incentive market participants to join the Exchange during the
Membership Fee Waiver period. Accordingly, the Exchange believes the
proposal would not burden, but rather promote, intermarket competition
by enabling it to better compete with other options exchanges at the
time MEMX Options launches. In addition, as noted above, the Exchange
has intentionally proposed to adopt the waiver broadly so that it is
also applicable to new Members that will participate on the Exchange's
market for equity securities or that will participate on such market as
well as MEMX Options, and thus, the proposal may also better enable the
Exchange to compete with other equities exchanges.
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.
[[Page 46287]]
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 \8\ and Rule 19b-4(f)(2) \9\ thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
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-2023-13 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-2023-13. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-MEMX-2023-13 and should be
submitted on or before August 9, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-15261 Filed 7-18-23; 8:45 am]
BILLING CODE 8011-01-P
