Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule To Extend the Membership Fee Waiver, 972-975 [2024-00079]
Download as PDF
<![CDATA[
972
Federal Register / Vol. 89, No. 5 / Monday, January 8, 2024 / Notices
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
(Authority: 5 U.S.C. 552b.)
Dated: January 4, 2024.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–00246 Filed 1–4–24; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–139, OMB Control No.
3235–0128]
ddrumheller on DSK120RN23PROD with NOTICES1
Submission for OMB Review;
Comment Request; Extension: Rule
12f–1
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 12f–1 (17 CFR 240.12f–1) under
the Securities Exchange Act of 1934
(‘‘Act’’) (15 U.S.C. 78a et seq.).
Rule 12f–1 (‘‘Rule’’), originally
adopted in 1979 pursuant to Sections
12(f) and 23(a) of the Act, and as further
modified in 1995 and 2005, sets forth
the requirements for filing an exchange
application to reinstate unlisted trading
privileges (‘‘UTP’’) in a security in
which UTP has been suspended by the
Commission pursuant to Section
12(f)(2)(A) of the Act. Under Rule 12f–
1, an exchange must submit one copy of
an application for reinstatement of UTP
to the Commission that contains
specified information, as set forth in the
Rule. The application for reinstatement,
pursuant to the Rule, must provide the
name of the issuer, the title of the
security, the name of each national
securities exchange, if any, on which
the security is listed or admitted to
unlisted trading privileges, whether
transaction information concerning the
VerDate Sep<11>2014
16:46 Jan 05, 2024
Jkt 262001
security is reported pursuant to an
effective transaction reporting plan
contemplated by Rule 601 of Regulation
NMS, the date of the Commission’s
suspension of unlisted trading
privileges in the security on the
exchange, and any other pertinent
information related to whether the
reinstatement of UTP in the subject
security is consistent with the
maintenance of fair and orderly markets
and the protection of investors. Rule
12f–1 further requires a national
securities exchange seeking to reinstate
its ability to extend unlisted trading
privileges in a security to indicate that
it has provided a copy of such
application to the issuer of the security,
as well as to any other national
securities exchange on which the
security is listed or admitted to unlisted
trading privileges.
The information required by Rule
12f–1 enables the Commission to make
the necessary findings under the Act
prior to granting applications to
reinstate unlisted trading privileges.
This information is also made available
to members of the public who may wish
to comment upon the applications.
Without the Rule, the Commission
would be unable to fulfill these
statutory responsibilities.
There are currently 24 national
securities exchanges subject to Rule
12f–1. The burden of complying with
Rule 12f–1 arises when a potential
respondent seeks to reinstate its ability
to extend unlisted trading privileges to
any security for which unlisted trading
privileges have been suspended by the
Commission, pursuant to Section
12(f)(2)(A) of the Act. The staff estimates
that each application would require
approximately one hour to complete.
Thus, each potential respondent would
incur on average one burden hour in
complying with the Rule.
The Commission staff estimates that
there could be as many as 24 responses
annually for an aggregate annual hour
burden for all respondents of
approximately 24 hours (24 responses ×
1 hour per response). Each respondent’s
related internal cost of compliance for
Rule 12f–1 would be approximately
$242.00 (the cost of one hour of
professional work of a paralegal needed
to complete the application). The total
annual cost of compliance for all
potential respondents, therefore, is
approximately $5,808 (24 responses ×
$242.00 per response).
Compliance with Rule 12f–1 is
mandatory. Rule 12f–1 does not have a
record retention requirement per se.
However, responses made pursuant to
Rule 12f–1 are subject to the
recordkeeping requirements of Rules
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
17a–3 and 17a–4 of the Act. Information
received in response to Rule 12f–1 shall
not be kept confidential; the information
collected is public information.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent by
February 7, 2024 to (i) www.reginfo.gov/
public/do/PRAMain and (ii) David
Bottom, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by
sending an email to: PRA_Mailbox@
sec.gov.
Dated: January 3, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–00120 Filed 1–5–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99261; File No. SR–MEMX–
2023–42]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Exchange’s Fee
Schedule To Extend the Membership
Fee Waiver
January 2, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
28, 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
2 17
E:\FR\FM\08JAN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
08JAN1
Federal Register / Vol. 89, No. 5 / Monday, January 8, 2024 / Notices
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 (the
‘‘Fee Schedule’’) pursuant to Exchange
Rules 15.1(a) and (c). The Exchange
proposes to extend the waiver (the
‘‘Membership Fee Waiver’’) of
membership fees (‘‘Membership Fees’’)
which is currently in place for all new
Members 3 of the Exchange, for an
additional month beyond the program’s
current expiration on December 31,
2023. The Exchange will continue to
waive Membership Fees for new
Members who join the Exchange
through January 31, 2024. 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.
ddrumheller on DSK120RN23PROD with NOTICES1
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to extend the
time period for the waiver of
Membership Fees until January 31,
2024. The Exchange will continue to
implement the Membership Fee Waiver
(as defined above) for all new Members
who join the Exchange prior to and
including January 31, 2024. 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
extend the timeframe during which the
Exchange will waive Membership Fees
for new Members of the Exchange.
Currently, MEMX applies a
Membership Fee Waiver to all new
Members of the Exchange which is set
to expire on December 31, 2023. Under
the current Membership Fee Waiver,
new Members who join the Exchange
3 See
Exchange Rule 1.5(p).
VerDate Sep<11>2014
16:46 Jan 05, 2024
Jkt 262001
after December 31, 2023, would be
assessed Membership Fees of $200 per
month to maintain active membership,
and new Members whose Membership
Fees were waived during the Waiver
Period would be assessed Membership
Fees of $200 per month beginning
January 1, 2024. In addition, in
September of 2023 the Exchange
adopted specific fees applicable to
participation on the Exchange’s
platform for trading equity options
(‘‘MEMX Options’’).4 The current
Membership Fee Waiver has also been
applied to new Members of MEMX
Options, and thus such fees have not
been imposed on such Members to date.
The Exchange believes that the
existing Membership Fee Waiver has
been effective in incentivizing options
market participants to join MEMX
Options. MEMX Options launched in
September of 2023, and has been
conducting a staged rollout of options
available for trading on the Exchange
since that time. The Exchange believes
that its rollout will be complete in
January of 2024 and would like to
extend the Membership Fee Waiver
until after its rollout is complete in the
event there are options firms that are
waiting to join the Exchange until after
such rollout is complete. In addition,
the Exchange believes the Membership
Fee Waiver is a proper incentive for new
participants on MEMX Options to
continue to increase their participation
as they become accustomed to the new
trading platform.
Accordingly, the Exchange proposes
to extend the time period of the
Membership Fee Waiver to expire on
January 31, 2024. The Exchange
proposes to continue to waive
Membership Fees for all new Members
who join the exchange on or before
January 31, 2024. Under the proposed
Membership Fee Waiver, new Members
who join the Exchange after January 31,
2024, will be assessed Membership Fees
to maintain active membership and if
applicable, Members who participate on
MEMX Options will be assessed the
specific Additional Fees applicable to
such participation. Similarly, new
Members whose Membership Fees have
been waived since joining the Exchange
will be assessed Membership Fees,
including Additional Fees applicable to
participation on MEMX Options, if
applicable, beginning February 1, 2024.
In addition, new Members of MEMX
Options who join after January 31, 2024,
will be assessed Membership Fees of
$200 per month to maintain active
4 See Securities Exchange Act Release No. 98648
(September 29, 2023), 88 FR 68762 (October 4,
2023) (SR–MEMX–2023–26).
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
973
membership, and new Members whose
Membership Fees were waived will be
assessed Membership Fees of $200 per
month beginning February 1, 2024.
Specifically, the Exchange is proposing
to amend the description under
‘‘Membership’’ in the Exchange’s Fee
Schedule, noting that Membership Fees
will be waived for new Members of the
Exchange until February 1, 2024.
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 extend the timeframe of the
Membership Fee Waiver for new
Members of the Exchange, primarily to
continue to provide an incentive for
options trading firms to continue to
apply for Exchange membership during
the current phase of the rollout of
MEMX Options. The options markets
are quote-driven markets and are
dependent on liquidity providers for
liquidity and price discovery. Extending
the timeframe of the Membership Fee
Waiver will continue to encourage
additional 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 extension of the
Membership Fee Waiver timeframe 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 continue
applying the Membership Fee Waiver
broadly to all new participants on the
Exchange during the timeframe
extension, 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 extension of the
Membership Fee Waiver is equitable
and not unfairly discriminatory in that
it will apply uniformly to all new
5 15
6 15
E:\FR\FM\08JAN1.SGM
U.S.C. 78f.
U.S.C. 78f(b)(4) and (5).
08JAN1
974
Federal Register / Vol. 89, No. 5 / Monday, January 8, 2024 / Notices
Members of the Exchange. Further, the
Exchange believes that the proposed
extension of the waiver is reasonable,
equitable and not unfairly
discriminatory to current Members of
the Exchange because the majority of
the Exchange’s existing 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.
ddrumheller on DSK120RN23PROD with NOTICES1
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 further
enhance its competitiveness as a market.
Encouraging additional participants to
join the Exchange will enable a greater
number of participants to participate on
MEMX Options during the continued
rollout of the platform. Further, the
Exchange believes that by continuing to
make the Membership Fee Waiver
applicable to both the Exchange’s
options platform and the Exchange’s
equity platform for an extended time
period, the proposal will enhance the
competitiveness of both platforms.
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
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
7 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
VerDate Sep<11>2014
16:46 Jan 05, 2024
Jkt 262001
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
additional 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
extension of the Membership Fee
Waiver timeframe will incent market
participants to join the Exchange during
the extended 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
during the continued rollout of MEMX
Options. In addition, as noted above, the
Exchange has intentionally proposed to
apply the waiver broadly so that it
continues to be 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 options
exchanges and 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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
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:
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–2023–42 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–2023–42. 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
8 15
9 17
E:\FR\FM\08JAN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
08JAN1
Federal Register / Vol. 89, No. 5 / Monday, January 8, 2024 / Notices
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–2023–42 and should be
submitted on or before January 29, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–00079 Filed 1–5–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
[Release No. 34–99264; File No. SR–DTC–
2023–014]
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change to the DTC
Fee Schedule To Revise Certain Fees
Charged to Participants for (i)
Participants Fund Maintenance; (ii)
Underwriting Services; (iii) Asset
Services; and (iv) Settlement Services
Purpose
The proposed rule change would
modify the Fee Guide to revise certain
fees charged to Participants for (i)
Participants Fund Maintenance; (ii)
Underwriting Services; (iii) Asset
Services; and (iv) Settlement Services,
as described below.
January 2, 2024.
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 December
21, 2023, The Depository Trust
Company (‘‘DTC’’) 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. DTC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
ddrumheller on DSK120RN23PROD with NOTICES1
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change 5 would
modify the DTC Fee Schedule 6 (‘‘Fee
Guide’’) to revise certain fees charged to
Participants for (i) Participants Fund
Maintenance; (ii) Underwriting
Services; 7 (iii) Asset Services; and (iv)
Settlement Services, as described below.
5 Each capitalized term not otherwise defined
herein has its respective meaning as set forth the
Rules, By-Laws and Organization Certificate of DTC
(the ‘‘Rules’’), available at www.dtcc.com/legal/
rules-and-procedures.aspx.
6 Available at www.dtcc.com/-/media/Files/
Downloads/legal/fee-guides/DTC-Fee-Schedule.pdf.
7 Pursuant to Rule 2, Section 1, each Participant
shall pay to DTC the compensation due it for
services rendered to the Participant based on DTC’s
fee schedules. See Rule 2, supra note 5.
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)(2).
1 15
VerDate Sep<11>2014
16:46 Jan 05, 2024
Overview
DTC operates a ‘‘low cost’’ pricing
model and has in place procedures to
control costs and to regularly review
pricing levels against costs of operation.
It reviews pricing levels against its costs
of operation during the annual budget
process. The budget is approved
annually by the Board. DTC’s fees are
cost-based plus a low-margin markup,
as approved by the Board or
management (pursuant to authority
delegated by the Board), as applicable.
The markup is applied to recover
development costs and operating
expenses, and to accumulate capital
sufficient to meet regulatory and
economic requirements. When
estimating expected revenues and costs,
Jkt 262001
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
975
DTC typically uses historical, current,
and expected usage and market trends
to determine revenue outlook and apply
current budgeted assumptions on costs.
In addition to assessing the overall
impact of fee changes at DTC, the Board
also considers impacts of fee changes
from an individual product/service
category (e.g., Underwriting, Asset
Services, Participants Fund
Maintenance) perspective, taking cost
and capital considerations relating to a
given category into account. After
evaluation of DTC’s short-term and
long-term financial position in
consideration of expected Participant
activity, revenues, cost of funding,
market volatility, and the financial
markets more broadly, DTC has
determined that it should increase the
overall amount it collects from
Participants through fees. In this regard,
the proposed rule change would
increase certain fees relating to
Participants Fund maintenance and
Underwriting Services, and it would
eliminate and consolidate other Asset
Services fees included in the Fee Guide,
to better align cost and revenue, as
described below.
Participant Fund Maintenance Fee
Increase
DTC maintains a pool of funds used
for liquidity purposes consisting of
mandatory and voluntary contributions
by Participants (‘‘Participants Fund’’).
The Participants Fund creates liquidity
and collateral resources to support the
business of DTC and to cover losses and
liabilities incident to that business. For
this purpose, every Participant has a
Required Participants Fund Deposit
based on the Participant’s activity at
DTC. The Participants Fund is held in
cash at DTC and is used in the event a
Participant fails to settle.
In support of maintaining the
Participants Fund, DTC charges a
Participants Fund Maintenance Fee,
which is a monthly fee calculated, in
arrears, as the product of (A) 0.25
percent and (B) the average of each
Participant’s Actual Participants Fund
Deposit, as of the end of each day, for
the month, multiplied by the number of
days for that month and divided by
360.8 DTC proposes to increase the rate
used to calculate the Participants Fund
Maintenance Fee by 10 basis points
from 0.25 percent to 0.35 percent. DTC
is proposing this increase in order to
cover its costs for servicing the fund and
to maintain the appropriate low-margin
markup above costs.
All 193 Participants are projected to
incur a 40 percent increase to their
8 See
E:\FR\FM\08JAN1.SGM
Fee Guide, supra note 6 at 20.
08JAN1
]]>Agencies
[Federal Register Volume 89, Number 5 (Monday, January 8, 2024)]
[Notices]
[Pages 972-975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00079]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99261; File No. SR-MEMX-2023-42]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Fee Schedule To Extend the Membership Fee Waiver
January 2, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 28, 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.
---------------------------------------------------------------------------
[[Page 973]]
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 (the ``Fee Schedule'') pursuant to
Exchange Rules 15.1(a) and (c). The Exchange proposes to extend the
waiver (the ``Membership Fee Waiver'') of membership fees (``Membership
Fees'') which is currently in place for all new Members \3\ of the
Exchange, for an additional month beyond the program's current
expiration on December 31, 2023. The Exchange will continue to waive
Membership Fees for new Members who join the Exchange through January
31, 2024. 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 extend the time period for the waiver of
Membership Fees until January 31, 2024. The Exchange will continue to
implement the Membership Fee Waiver (as defined above) for all new
Members who join the Exchange prior to and including January 31, 2024.
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 extend the timeframe during
which the Exchange will waive Membership Fees for new Members of the
Exchange.
Currently, MEMX applies a Membership Fee Waiver to all new Members
of the Exchange which is set to expire on December 31, 2023. Under the
current Membership Fee Waiver, new Members who join the Exchange after
December 31, 2023, would be assessed Membership Fees of $200 per month
to maintain active membership, and new Members whose Membership Fees
were waived during the Waiver Period would be assessed Membership Fees
of $200 per month beginning January 1, 2024. In addition, in September
of 2023 the Exchange adopted specific fees applicable to participation
on the Exchange's platform for trading equity options (``MEMX
Options'').\4\ The current Membership Fee Waiver has also been applied
to new Members of MEMX Options, and thus such fees have not been
imposed on such Members to date.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 98648 (September 29,
2023), 88 FR 68762 (October 4, 2023) (SR-MEMX-2023-26).
---------------------------------------------------------------------------
The Exchange believes that the existing Membership Fee Waiver has
been effective in incentivizing options market participants to join
MEMX Options. MEMX Options launched in September of 2023, and has been
conducting a staged rollout of options available for trading on the
Exchange since that time. The Exchange believes that its rollout will
be complete in January of 2024 and would like to extend the Membership
Fee Waiver until after its rollout is complete in the event there are
options firms that are waiting to join the Exchange until after such
rollout is complete. In addition, the Exchange believes the Membership
Fee Waiver is a proper incentive for new participants on MEMX Options
to continue to increase their participation as they become accustomed
to the new trading platform.
Accordingly, the Exchange proposes to extend the time period of the
Membership Fee Waiver to expire on January 31, 2024. The Exchange
proposes to continue to waive Membership Fees for all new Members who
join the exchange on or before January 31, 2024. Under the proposed
Membership Fee Waiver, new Members who join the Exchange after January
31, 2024, will be assessed Membership Fees to maintain active
membership and if applicable, Members who participate on MEMX Options
will be assessed the specific Additional Fees applicable to such
participation. Similarly, new Members whose Membership Fees have been
waived since joining the Exchange will be assessed Membership Fees,
including Additional Fees applicable to participation on MEMX Options,
if applicable, beginning February 1, 2024. In addition, new Members of
MEMX Options who join after January 31, 2024, will be assessed
Membership Fees of $200 per month to maintain active membership, and
new Members whose Membership Fees were waived will be assessed
Membership Fees of $200 per month beginning February 1, 2024.
Specifically, the Exchange is proposing to amend the description under
``Membership'' in the Exchange's Fee Schedule, noting that Membership
Fees will be waived for new Members of the Exchange until February 1,
2024.
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 extend the timeframe of
the Membership Fee Waiver for new Members of the Exchange, primarily to
continue to provide an incentive for options trading firms to continue
to apply for Exchange membership during the current phase of the
rollout of MEMX Options. The options markets are quote-driven markets
and are dependent on liquidity providers for liquidity and price
discovery. Extending the timeframe of the Membership Fee Waiver will
continue to encourage additional 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 extension of the Membership Fee Waiver
timeframe 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 continue applying the Membership Fee Waiver broadly to
all new participants on the Exchange during the timeframe extension,
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 extension of
the Membership Fee Waiver is equitable and not unfairly discriminatory
in that it will apply uniformly to all new
[[Page 974]]
Members of the Exchange. Further, the Exchange believes that the
proposed extension of the waiver is reasonable, equitable and not
unfairly discriminatory to current Members of the Exchange because the
majority of the Exchange's existing 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
further enhance its competitiveness as a market. Encouraging additional
participants to join the Exchange will enable a greater number of
participants to participate on MEMX Options during the continued
rollout of the platform. Further, the Exchange believes that by
continuing to make the Membership Fee Waiver applicable to both the
Exchange's options platform and the Exchange's equity platform for an
extended time period, the proposal will enhance the competitiveness of
both platforms. 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'').
---------------------------------------------------------------------------
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 additional 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 extension of the Membership Fee
Waiver timeframe will incent market participants to join the Exchange
during the extended 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 during the continued rollout of MEMX Options. In
addition, as noted above, the Exchange has intentionally proposed to
apply the waiver broadly so that it continues to be 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 options exchanges and 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.
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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-MEMX-2023-42 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-2023-42. 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
[[Page 975]]
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-2023-42
and should be submitted on or before January 29, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00079 Filed 1-5-24; 8:45 am]
BILLING CODE 8011-01-P
