Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 21.17(e), 18689-18691 [2024-05367]
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Federal Register / Vol. 89, No. 51 / Thursday, March 14, 2024 / Notices
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
Options Application Session Fee Waiver
will allow current Members and nonMembers added flexibility and time in
determining the appropriate number of
application sessions they wish to
purchase in order to participate on the
Exchange. Accordingly, the Exchange
believes the proposal would not burden,
but rather promote, intermarket
competition by enabling it to better
compete with other options exchanges
following the recent completion of the
final phased rollout on MEMX Options.
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 is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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
under Section 19(b)(2)(B) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
ddrumheller on DSK120RN23PROD with NOTICES1
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–2024–08 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–2024–08. 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–2024–08 and should be
submitted on or before April 4, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–05366 Filed 3–13–24; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99700; File No. SR–MEMX–
2024–09]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Rule 21.17(e)
March 8, 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 February
29, 2024, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
amend Exchange Rule 21.17(e) to
modify the manner in which the
Exchange’s System will handle Market
Orders received in an option series after
it is open for trading with a National
Best Bid (‘‘NBB’’) of zero. 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.
BILLING CODE 8011–01–P
1 15
10 15
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(2).
12 15 U.S.C. 78s(b)(2)(B).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4.
2 17
13 17
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Federal Register / Vol. 89, No. 51 / Thursday, March 14, 2024 / Notices
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 purpose of the proposed rule
change is to amend Rule 21.17(e)
regarding the description of how the
System 5 handles a Market Order 6 when
there is no bid against which the order
may execute. Currently, Rule
21.17(e)(1)(A) states that if the System
receives a sell Market Order in a series
after it is open for trading with an NBB
of zero, if the National Best Offer
(‘‘NBO’’) in the series is less than or
equal to $0.50, then the System converts
the Market Order to a Limit Order with
a limit price equal to the minimum
trading (emphasis added) increment
applicable to the series and enters the
order into the MEMX Options Book
with a timestamp based on the time it
enters the book. The Exchange proposes
to modify this provision of the rule to
state that if the System receives a sell
Market Order in a series after it is open
for trading with an NBB of zero, if the
NBO in the series is less than or equal
to $0.50, then the System converts the
Market Order to a Limit Order with a
limit price equal to the minimum
quoting (emphasis added) increment
applicable to the series and enters the
order into the MEMX Options Book
with a timestamp based on the time it
enters the book. The Exchange is not
proposing to change any other
provisions of Rule 21.17(e).
The proposed rule change maintains
the functionality of converting a Market
Order to a Limit Order in an options
series with an NBB of zero, (if the NBO
is less than or equal to $0.50), but in a
manner consistent with the Exchange’s
minimum quoting increments for
options on the Exchange, which are set
forth under Rule 21.5(a). Specifically,
under Rule 21.5(a), the minimum
quoting increments for options contracts
traded on MEMX Options are: (1) if the
options series is trading at less than
$3.00, five (5) cents; (2) if the options
series is trading at $3.00 or higher, ten
(10) cents; and (3) if the options series
is trading pursuant to the Penny Interval
Program one (1) cent if the options
series is trading at less than $3.00, five
(5) cents if the options series is trading
at $3.00 or higher, unless for QQQ, SPY,
or IWM where the minimum quoting
5 The Exchange’s Rule 16.1 defines the terms
‘‘Trading System’’ and ‘‘System’’ as the automated
trading system used by MEMX Options for the
trading of options contracts.
6 A Market Order is an order to buy or sell at the
best price available at the time of execution. See
Rule 21.1(d)(2).
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increment will be one cent for all series
regardless of price.
As previously stated, currently, if a
Member enters a Market Order to sell in
an options series with an NBB of zero,
if the NBO is less than or equal to $0.50,
Rule 21.17(e) provides that the System
will convert this Market Order to a
Limit Order to sell with a limit price
that is equal to the minimum trading
increment for all options series, which
per Rule 21.5(b), is $0.01. While Rule
21.5(b) permits trading in all options
series at $0.01 intervals, Rule 21.5(a)
above does not permit quoting at $0.01
intervals in all options series, as any
options series not trading pursuant to
the Penny Interval Program have
minimum quoting increments of either
$0.05 or $0.10 depending on the price
at which the option is trading. Given
this inconsistency, the Exchange is
proposing to modify Rule 21.17(e)(1)(A)
so that the System will convert a Market
Order to sell in an options series with
an NBB of zero and an NBO that is less
than or equal to $0.50 to a Limit Order
to sell with a limit price that conforms
with the minimum quoting increments
under Rule 21.5(a) (i.e., the minimum
quoting requirement applicable to the
series). The Exchange notes that the
System currently operates consistent
with the modified Rule as described
above, namely, by converting a Market
Order to sell in an options series with
an NBB of zero and an NBO that is less
than or equal to $0.50 to a Limit Order
to sell with a limit price that conforms
with the minimum quoting increments,
rather than at a price that could
contradict the quoting increments set
forth in Rule 21.15.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,8 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.
In particular, the Exchange believes
the proposed rule change regarding the
handling of sell Market Orders in no-bid
7 15
8 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00101
Fmt 4703
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series assists with the maintenance of
fair and orderly markets and protects
investors and the public interest
because it eliminates the potential
conflict that exists within Rule 21.17(e)
and the Exchange’s minimum quoting
increments under Rule 21.5(a). The
proposal considers the fact that there are
certain instances in which an options
series cannot quote at the minimum
trading increment, and as such,
modifies the rule such that the System
will not convert a Market Order to a
Limit Order with a limit price at which
it cannot quote. The Exchange believes
that its proposal is consistent with the
Act because it is in the interest of
market participants to have orders
entered into the MEMX Options book
with limit prices that conform with the
minimum quoting increments defined
under Rule 21.5(a), whether that price is
equal to the minimum trading
increment of $0.01or higher based on
the specific options series.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposal will result in any burden
on competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. More specifically,
the Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition
because it will be applicable to all
Members trading on the Exchange. In
addition, the Exchange does not believe
that the proposed change will impose
any intermarket burden because the
Exchange will provide the same type of
functionality related to the conversion
of sell side Market Orders in no-bid
options as other exchanges, but will
convert those Market Orders to Limit
Orders with limit prices that conform
with its Rules in all instances.
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)(iii) 9 of the Act and Rule
19b–4(f)(6) thereunder 10 in that it
9 15
U.S.C. 78s(b)(3)(A)(iii).
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
10 17
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Federal Register / Vol. 89, No. 51 / Thursday, March 14, 2024 / Notices
effects a change that: (i) does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) by its terms, does
not become operative for 30 days after
the date of the filing, or such shorter
time as the Commission may designate
if consistent with the protection of
investors and the public interest.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(ii), the Commission
may 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
contained in Rule 19b–4(f)(6)(iii).11 The
Exchange stated that waiver of the 30day operative delay will permit the
Exchange to immediately correct this
rule in a manner that does not conflict
with its Rules. The Commission believes
that the correction of this typographical
error does not raise any novel issues and
that waiver of the 30-day operative
delay to correct the error promptly to
ensure MEMX’s rules reflect how the
System currently operates is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.12
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: (i) necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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.
ddrumheller on DSK120RN23PROD with NOTICES1
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:
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.
11 17 CFR 240.19b–4(f)(6)(iii).
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
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16:47 Mar 13, 2024
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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–2024–09 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–2024–09. 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–2024–09 and should be
submitted on or before April 4, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–05367 Filed 3–13–24; 8:45 am]
BILLING CODE 8011–01–P
13 17
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18691
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99696; File No. SR–FINRA–
2023–010]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Approving a
Proposed Rule Change To Provide
Relief Relating to Specified Option
Transactions Under FINRA Rule 4210
(Margin Requirements)
March 8, 2024.
I. Introduction
On June 30, 2023, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities and Exchange
Act of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend FINRA Rule 4210
(Margin Requirements) to provide
margin relief for specified index option
transactions, known as ‘‘protected
options,’’ and to make other minor
conforming revisions with regard to the
margin relief. The proposed rule change
was published for comment in the
Federal Register on July 19, 2023.3 On
August 31, 2023, FINRA extended the
time period in which the Commission
must approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to approve or disapprove the
proposed rule change to October 17,
2023.4 On September 28, 2023, the
Commission published an order
instituting proceedings to determine
whether to approve or disapprove the
proposed rule change.5 On January 9,
2024, the Commission designated a
longer period for Commission action on
the proposed rule change.6 The
Commission received comment letters
on the proposed rule change.7 This
order approves the proposed rule
change.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Act Release No. 97898 (July 13,
2023), 88 FR 46204 (‘‘Notice’’).
4 See Letter from Adam Arkel, Associate General
Counsel, FINRA, to Sheila Swartz, Division of
Trading and Markets, Commission (Aug. 31, 2023).
5 See Exchange Act Release No. 98628 (Sept. 28,
2023), 88 FR 68855 (Oct. 4, 2023).
6 See Exchange Act Release No. 99304, 89 FR
2659 (Jan. 16, 2024). The Commission designated
March 15, 2024, as the date by which the
Commission shall approve or disapprove the
proposed rule change.
7 All comments received on the proposed rule
change are available at https://www.sec.gov/
comments/sr-finra-2023-010/srfinra2023010.htm.
2 17
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]]>Agencies
[Federal Register Volume 89, Number 51 (Thursday, March 14, 2024)]
[Notices]
[Pages 18689-18691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05367]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99700; File No. SR-MEMX-2024-09]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend Rule
21.17(e)
March 8, 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 February 29, 2024, 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).
\4\ 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 Exchange Rule 21.17(e) to modify the manner in which the
Exchange's System will handle Market Orders received in an option
series after it is open for trading with a National Best Bid (``NBB'')
of zero. 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.
[[Page 18690]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend Rule 21.17(e)
regarding the description of how the System \5\ handles a Market Order
\6\ when there is no bid against which the order may execute.
Currently, Rule 21.17(e)(1)(A) states that if the System receives a
sell Market Order in a series after it is open for trading with an NBB
of zero, if the National Best Offer (``NBO'') in the series is less
than or equal to $0.50, then the System converts the Market Order to a
Limit Order with a limit price equal to the minimum trading (emphasis
added) increment applicable to the series and enters the order into the
MEMX Options Book with a timestamp based on the time it enters the
book. The Exchange proposes to modify this provision of the rule to
state that if the System receives a sell Market Order in a series after
it is open for trading with an NBB of zero, if the NBO in the series is
less than or equal to $0.50, then the System converts the Market Order
to a Limit Order with a limit price equal to the minimum quoting
(emphasis added) increment applicable to the series and enters the
order into the MEMX Options Book with a timestamp based on the time it
enters the book. The Exchange is not proposing to change any other
provisions of Rule 21.17(e).
---------------------------------------------------------------------------
\5\ The Exchange's Rule 16.1 defines the terms ``Trading
System'' and ``System'' as the automated trading system used by MEMX
Options for the trading of options contracts.
\6\ A Market Order is an order to buy or sell at the best price
available at the time of execution. See Rule 21.1(d)(2).
---------------------------------------------------------------------------
The proposed rule change maintains the functionality of converting
a Market Order to a Limit Order in an options series with an NBB of
zero, (if the NBO is less than or equal to $0.50), but in a manner
consistent with the Exchange's minimum quoting increments for options
on the Exchange, which are set forth under Rule 21.5(a). Specifically,
under Rule 21.5(a), the minimum quoting increments for options
contracts traded on MEMX Options are: (1) if the options series is
trading at less than $3.00, five (5) cents; (2) if the options series
is trading at $3.00 or higher, ten (10) cents; and (3) if the options
series is trading pursuant to the Penny Interval Program one (1) cent
if the options series is trading at less than $3.00, five (5) cents if
the options series is trading at $3.00 or higher, unless for QQQ, SPY,
or IWM where the minimum quoting increment will be one cent for all
series regardless of price.
As previously stated, currently, if a Member enters a Market Order
to sell in an options series with an NBB of zero, if the NBO is less
than or equal to $0.50, Rule 21.17(e) provides that the System will
convert this Market Order to a Limit Order to sell with a limit price
that is equal to the minimum trading increment for all options series,
which per Rule 21.5(b), is $0.01. While Rule 21.5(b) permits trading in
all options series at $0.01 intervals, Rule 21.5(a) above does not
permit quoting at $0.01 intervals in all options series, as any options
series not trading pursuant to the Penny Interval Program have minimum
quoting increments of either $0.05 or $0.10 depending on the price at
which the option is trading. Given this inconsistency, the Exchange is
proposing to modify Rule 21.17(e)(1)(A) so that the System will convert
a Market Order to sell in an options series with an NBB of zero and an
NBO that is less than or equal to $0.50 to a Limit Order to sell with a
limit price that conforms with the minimum quoting increments under
Rule 21.5(a) (i.e., the minimum quoting requirement applicable to the
series). The Exchange notes that the System currently operates
consistent with the modified Rule as described above, namely, by
converting a Market Order to sell in an options series with an NBB of
zero and an NBO that is less than or equal to $0.50 to a Limit Order to
sell with a limit price that conforms with the minimum quoting
increments, rather than at a price that could contradict the quoting
increments set forth in Rule 21.15.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\8\ 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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In particular, the Exchange believes the proposed rule change
regarding the handling of sell Market Orders in no-bid series assists
with the maintenance of fair and orderly markets and protects investors
and the public interest because it eliminates the potential conflict
that exists within Rule 21.17(e) and the Exchange's minimum quoting
increments under Rule 21.5(a). The proposal considers the fact that
there are certain instances in which an options series cannot quote at
the minimum trading increment, and as such, modifies the rule such that
the System will not convert a Market Order to a Limit Order with a
limit price at which it cannot quote. The Exchange believes that its
proposal is consistent with the Act because it is in the interest of
market participants to have orders entered into the MEMX Options book
with limit prices that conform with the minimum quoting increments
defined under Rule 21.5(a), whether that price is equal to the minimum
trading increment of $0.01or higher based on the specific options
series.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposal will result in any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. More specifically, the Exchange
does not believe that the proposed rule change will impose any burden
on intramarket competition because it will be applicable to all Members
trading on the Exchange. In addition, the Exchange does not believe
that the proposed change will impose any intermarket burden because the
Exchange will provide the same type of functionality related to the
conversion of sell side Market Orders in no-bid options as other
exchanges, but will convert those Market Orders to Limit Orders with
limit prices that conform with its Rules in all instances.
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)(iii) \9\ of the Act and Rule 19b-4(f)(6) thereunder \10\ in
that it
[[Page 18691]]
effects a change that: (i) does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 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 under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(ii), the Commission may 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 contained in Rule 19b-
4(f)(6)(iii).\11\ The Exchange stated that waiver of the 30-day
operative delay will permit the Exchange to immediately correct this
rule in a manner that does not conflict with its Rules. The Commission
believes that the correction of this typographical error does not raise
any novel issues and that waiver of the 30-day operative delay to
correct the error promptly to ensure MEMX's rules reflect how the
System currently operates is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\12\
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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:
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-2024-09 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-2024-09. 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-2024-09 and should be
submitted on or before April 4, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-05367 Filed 3-13-24; 8:45 am]
BILLING CODE 8011-01-P
