82554 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 

1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90654; File No. SR– 

NASDAQ–2020–084] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

NOM’s Pricing Schedule at Options 7, 

Section 2 and Options 7, Section 3 

December 14, 2020. 

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 

1, 2020, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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 Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend The 

NASDAQ Options Market LLC’s 

(‘‘NOM’’) Pricing Schedule at Options 7, 

Section 2, ‘‘Nasdaq Options Market Fees 

and Rebates’’ and Options 7, Section 3, 

‘‘Nasdaq Options Market—Ports and 

Other Services.’’ 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

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 amend 

NOM’s Pricing Schedule at Options 7, 

Section 2, ‘‘Nasdaq Options Market Fees 

and Rebates’’ and Options 7, Section 3, 

‘‘Nasdaq Options Market—Ports and 

Other Services.’’ Each change will be 

described below. 

Options 7, Section 2 

Today, the Exchange pays certain 

Rebates to Add Liquidity in Penny 

Symbols according to the below table. 

REBATES TO ADD LIQUIDITY IN PENNY SYMBOLS

Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 

Customer 1 8 9 10 ............................................................... ($0.20) ($0.25) ($0.42) ($0.43) ($0.45) 7($0.48) 

Professional 1 9 10 ............................................................. ($0.25) ($0.42) ($0.43) ($0.45) ($0.48) 

Broker-Dealer ................................................................... ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10)

Firm .................................................................................. ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) 

Non-NOM Market Maker .................................................. ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) 

NOM Market Maker 3 ....................................................... ($0.20) ($0.25) 4($0.30) 4($0.32) 11($0.44) ($0.48) 

Specifically, NOM Market Maker 

Rebates to Add Liquidity in Penny 

Symbols are paid according to the below 

tier qualifications. 

Monthly Volume 

Tier 1: Participant adds NOM Market 

Maker liquidity in Penny Symbols and/ 

or Non-Penny Symbols of up to 0.10% 

of total industry customer equity and 

ETF option average daily volume 

(‘‘ADV’’) contracts per day in a month. 

Tier 2: Participant adds NOM Market 

Maker liquidity in Penny Symbols and/ 

or Non-Penny Symbols above 0.10% to 

0.20% of total industry customer equity 

and ETF option ADV contracts per day 

in a month. 

Tier 3: Participant: (a) Adds NOM 

Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols 

above 0.20% to 0.60% of total industry 

customer equity and ETF option ADV 

contracts per day in a month: Or (b)(1) 

transacts in all securities through one or 

more of its Nasdaq Market Center MPIDs 

that represent 0.70% or more of 

Consolidated Volume (‘‘CV’’) which 

adds liquidity in the same month on 

The Nasdaq Stock Market, (2) transacts 

in Tape B securities through one or 

more of its Nasdaq Market Center MPIDs 

that represent 0.18% or more of CV 

which adds liquidity in the same month 

on The Nasdaq Stock Market, and (3) 

executes greater than 0.01% of CV via 

Market-on- Close/Limit-on-Close 

(‘‘MOC/LOC’’) volume within The 

Nasdaq Stock Market Closing Cross in 

the same month. 

Tier 4: Participant adds NOM Market 

Maker liquidity in Penny Symbols and/ 

or Non-Penny Symbols of above 0.60% 

to 0.90% of total industry customer 

equity and ETF option ADV contracts 

per day in a month. 

Tier 5: Participant adds NOM Market 

Maker liquidity in Penny Symbols and/ 

or Non-Penny Symbols of above 0.40% 

of total industry customer equity and 

ETF option ADV contracts per day in a 

month and transacts in all securities 

through one or more of its Nasdaq 

Market Center MPIDs that represent 

0.40% or more of Consolidated Volume 

(‘‘CV’’) which adds liquidity in the same 

month on The Nasdaq Stock Market. 

Tier 6: Participant: (a)(1) Adds NOM 

Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols 

above 0.95% of total industry customer 

equity and ETF option ADV contracts 

per day in a month, (2) executes Total 

Volume of 250,000 or more contracts 

per day in a month, of which 30,000 or 

more contracts per day in a month must 

be removing liquidity, and (3) adds 

Firm, Broker-Dealer and Non-NOM 

Market Maker liquidity in Non-Penny 

Symbols of 10,000 or more contracts per 

day in a month; or (b)(1) adds NOM 

Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols 

above 1.50% of total industry customer 

equity and ETF option ADV contracts 

per day in a month, and (2) executes 

Total Volume of 250,000 or more 

contracts per day in a month, of which 

15,000 or more contracts per day in a 

month must be removing liquidity. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 82555 

3Penny Pilot NOM Market Maker Tier 4 pays a 

rebate of $0.43 per contract to Customers and 

Professionals, $0.10 per contract to Broker-Dealers, 

Firms and Non-NOM Market Makers and $0.32 per 

contract to NOM Market Makers. Further, pursuant 

to footnote 4, Participants who achieve the NOM 

Market Maker Tier 3 or Tier 4 Rebate to Add 

Liquidity will receive $0.40 per contract to add 

liquidity in the following symbols: AAPL, SPY, 

QQQ, IWM, and VXX. 

4See note 3 of Options 7, Section 2. 

5Penny Pilot NOM Market Maker Tier 5 pays a 

rebate of $0.45 per contract to Customers and 

Professionals, $0.10 per contract to Broker-Dealers, 

Firms and Non-NOM Market Makers and $0.44 per 

contract to NOM Market Makers. Further, pursuant 

to footnote 11, NOM Participants that qualify for the 

Tier 5 NOM Market Maker Rebate to Add Liquidity 

in Penny Symbols and add NOM Market Maker 

liquidity in Penny Symbols and/or Non-Penny 

Symbols of above 0.50% of total industry customer 

equity and ETF option ADV contracts per day in a 

month, will receive a $0.46 per contract rebate to 

add liquidity in Penny Symbols as Market Maker 

in lieu of the Tier 5 rebate. 

6Penny Pilot NOM Market Maker Tier 6 provides, 

‘‘Participant: (a)(1) Adds NOM Market Maker 

liquidity in Penny Symbols and/or Non-Penny 

Symbols above 0.95% of total industry customer 

equity and ETF option ADV contracts per day in a 

month, (2) executes Total Volume of 250,000 or 

more contracts per day in a month, of which 30,000 

or more contracts per day in a month must be 

removing liquidity, and (3) adds Firm, BrokerDealer and Non-NOM Market Maker liquidity in 

Non-Penny Symbols of 10,000 or more contracts per 

day in a month; or (b)(1) adds NOM Market Maker 

liquidity in Penny Symbols and/or Non-Penny 

Symbols above 1.50% of total industry customer 

equity and ETF option ADV contracts per day in a 

month, and (2) executes Total Volume of 250,000 

or more contracts per day in a month, of which 

15,000 or more contracts per day in a month must 

be removing liquidity.’’ 

7 15 U.S.C. 78 f(b). 

8 15 U.S.C. 78f(b)(4) and (5). 

9NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 

10Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

The Exchange proposes to amend 

Penny Pilot NOM Market Maker Tier 4 

which currently provides, ‘‘Participant 

adds NOM Market Maker liquidity in 

Penny Symbols and/or Non-Penny 

Symbols of above 0.60% to 0.90% of 

total industry customer equity and ETF 

option ADV contracts per day in a 

month.’’ 3 The Exchange proposes to 

amend Penny Pilot NOM Market Maker 

Tier 4 to provide, ‘‘Participant adds 

NOM Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols of 

above 0.60% of total industry customer 

equity and ETF option ADV contracts 

per day in a month.’’ This proposed rule 

change will not impact NOM’s pricing. 

Today, NOM Market Maker Rebates to 

Add Liquidity in Penny Symbols are 

paid per the highest tier achieved.4

Current Penny Pilot NOM Market Maker 

Tier 5 requires Participants to add NOM 

Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols of 

above 0.40% of total industry customer 

equity and ETF option ADV contracts 

per day in a month and transact in all 

securities through one or more of its 

Nasdaq Market Center MPIDs that 

represent 0.40% or more of 

Consolidated Volume (‘‘CV’’) which 

adds liquidity in the same month on 

The Nasdaq Stock Market in order to 

achieve a rebate.5 Therefore, a 

Participant that adds NOM Market 

Maker liquidity in Penny Symbols and/ 

or Non-Penny Symbols of above 0.60% 

to 0.90% of total industry customer 

equity and ETF option ADV contracts 

per day in a month volume would 

qualify for Penny Pilot NOM Market 

Maker Tier 4 today, and may qualify for 

Penny Pilot NOM Market Maker Tier 5 

if the additional criteria was met. Penny 

Pilot NOM Market Maker Tier 6 

requires, among other things, that a 

Participant adds NOM Market Maker 

liquidity in Penny Symbols and/or NonPenny Symbols above 0.95% of total 

industry customer equity and ETF 

option ADV contracts per day in a 

month.6

The Exchange believes that this 

proposal will bring greater clarity to the 

Penny Pilot NOM Market Maker tiers as 

any volume above 0.60% would qualify 

a Participant for Penny Pilot NOM 

Market Maker Tier 4, as is the case 

today unless the Participant qualified 

for Penny Pilot NOM Market Maker 

Tiers 5 or 6, as is also the case today. 

Stating, ‘‘above 0.60%’’ within the rule 

text will make the aforementioned 

opportunities clearer for all Participants. 

Options 7, Section 3 

The Exchange proposes to amend 

Options 7, Section 3, ‘‘Nasdaq Options 

Market—Ports and Other Services,’’ to 

remove obsolete text which reflects 

timeframes which have passed. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,8 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 any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its Pricing Schedule are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . ..’’ 9

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 10

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of sixteen options 

exchanges to which market participants 

may direct their order flow. Within this 

environment, market participants can 

freely and often do shift their order flow 

among the Exchange and competing 

venues in response to changes in their 

respective pricing schedules. As such, 

the proposal represents a reasonable 

attempt by the Exchange to increase its 

liquidity and market share relative to its 

competitors. 

Options 7, Section 2 

The Exchange’s proposal to amend 

Penny Pilot NOM Market Maker Tier 4 

to change the current volume 

requirement from ‘‘Participant adds 

NOM Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols of 

above 0.60% to 0.90% of total industry 

customer equity and ETF option ADV 

contracts per day in a month’’ to 

‘‘Participant adds NOM Market Maker 

liquidity in Penny Symbols and/or NonPenny Symbols of above 0.60% of total 

industry customer equity and ETF 

option ADV contracts per day in a 


khammond on DSKJM1Z7X2PROD with NOTICES
82556 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 

11See note 3 of Options 7, Section 2. 

12See note 5. 

13See note 6. 

14See Options 2, Section 5. 

15See Options 2, Section 4. 

16See Options 2, Section 5. 

17See Options 2, Section 4. 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

month,’’ is reasonable. This proposed 

rule change will not impact NOM’s 

pricing. Today, NOM Market Maker 

Rebates to Add Liquidity in Penny 

Symbols are paid per the highest tier 

achieved.11 Current Penny Pilot NOM 

Market Maker Tier 5 requires 

Participants to add NOM Market Maker 

liquidity in Penny Symbols and/or NonPenny Symbols of above 0.40% of total 

industry customer equity and ETF 

option ADV contracts per day in a 

month and transact in all securities 

through one or more of its Nasdaq 

Market Center MPIDs that represent 

0.40% or more of CV which adds 

liquidity in the same month on The 

Nasdaq Stock Market in order to achieve 

a rebate.12 Therefore, a Participant that 

adds NOM Market Maker liquidity in 

Penny Symbols and/or Non-Penny 

Symbols of above 0.60% to 0.90% of 

total industry customer equity and ETF 

option ADV contracts per day in a 

month volume would qualify for Penny 

Pilot NOM Market Maker Tier 4 today, 

and may qualify for Penny Pilot NOM 

Market Maker Tier 5 if the additional 

criteria was met. Penny Pilot NOM 

Market Maker Tier 6 requires, among 

other things, that a Participants adds 

NOM Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols 

above 0.95% of total industry customer 

equity and ETF option ADV contracts 

per day in a month.13 This proposal will 

make clear that any volume above 

0.60% would qualify a Participant for 

Penny Pilot NOM Market Maker Tier 4, 

as is the case today, unless the 

Participant qualified for Penny Pilot 

NOM Market Maker Tiers 5 or 6, as is 

also the case today. Any NOM Market 

Maker may qualify for a NOM Market 

Maker Penny Pilot rebate provided the 

requisite criteria has been met. 

The Exchange’s proposal to amend 

Penny Pilot NOM Market Maker Tier 4 

to change the current volume 

requirement from ‘‘Participant adds 

NOM Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols of 

above 0.60% to 0.90% of total industry 

customer equity and ETF option ADV 

contracts per day in a month’’ to 

‘‘Participant adds NOM Market Maker 

liquidity in Penny Symbols and/or NonPenny Symbols of above 0.60% of total 

industry customer equity and ETF 

option ADV contracts per day in a 

month,’’ is equitable and not unfairly 

discriminatory as all NOM Market 

Makers may uniformly qualify for these 

NOM Market Maker Penny Pilot rebates, 

provided they submit the requisite 

qualifying criteria. NOM Market Makers 

add value through continuous quoting 14

and are subject to additional 

requirements and obligations 15 that 

other market participants are not. 

Incentivizing Market Makers to provide 

greater liquidity benefits all market 

participants through the quality of order 

interaction. 

Options 7, Section 3 

The Exchange’s proposal to amend 

Options 7, Section 3, ‘‘Nasdaq Options 

Market—Ports and Other Services,’’ is 

reasonable, equitable and not unfairly 

discriminatory as the rule text is 

obsolete in that the text reflects 

timeframes which have passed. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Inter-Market Competition 

The proposal does not impose an 

undue burden on inter-market 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets and will offer 

market participants another choice of 

where to transact options. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues if they deem fee levels at a 

particular venue to be excessive, or 

rebate opportunities available at other 

venues to be more favorable. In such an 

environment, the Exchange must 

continually adjust its fees to remain 

competitive with other exchanges that 

have been exempted from compliance 

with the statutory standards applicable 

to exchanges. Because competitors are 

free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

Intra-Market Competition 

The proposed amendments do not 

impose an undue burden on intramarket competition. 

The Exchange’s proposal to amend 

Penny Pilot NOM Market Maker Tier 4 

to change the current volume 

requirement from ‘‘Participant adds 

NOM Market Maker liquidity in Penny 

Symbols and/or Non-Penny Symbols of 

above 0.60% to 0.90% of total industry 

customer equity and ETF option ADV 

contracts per day in a month’’ to 

‘‘Participant adds NOM Market Maker 

liquidity in Penny Symbols and/or NonPenny Symbols of above 0.60% of total 

industry customer equity and ETF 

option ADV contracts per day in a 

month,’’ does not impose an undue 

burden on competition as all NOM 

Market Makers may uniformly qualify 

for these NOM Market Maker Penny 

Pilot rebates, provided they submit the 

requisite qualifying criteria. NOM 

Market Makers add value through 

continuous quoting 16 and are subject to 

additional requirements and 

obligations 17 that other market 

participants are not. Incentivizing 

Market Makers to provide greater 

liquidity benefits all market participants 

through the quality of order interaction. 

Options 7, Section 3 

The Exchange’s proposal to amend 

Options 7, Section 3, ‘‘Nasdaq Options 

Market—Ports and Other Services,’’ 

does not impose an undue burden on 

competition as the rule text is obsolete 

in that the text reflects timeframes 

which have passed. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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.18

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) Uecessary 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 82557 

19 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b-4. 

3See Exchange Rule 1.5(p). 

4Market share percentage calculated as of 

December 3, 2020. The Exchange receives and 

processes data made available through consolidated 

data feeds (i.e., CTS and UTDF). 

5See Securities Exchange Act Release No. 90555 

(December 3, 2020) (SR–MEMX–2020–13) [sic]. 

6This pricing is referred to by the Exchange on 

the fee schedule under the existing description 

‘‘Removed volume from MEMX Book’’ with a fee 

code of ‘‘RB’’ or ‘‘RrB’’, as applicable, assigned by 

the Exchange. 

7This pricing is referred to by the Exchange on 

the fee schedule under ‘‘Added displayed volume’’, 

‘‘Added non-displayed volume’’ or ‘‘Added 

displayed volume, Retail Order’’, as applicable, 

with a fee code of ‘‘BB’’, ‘‘BrB’’, ‘‘DB’’, ‘‘DrB’’, ‘‘JB’’, 

‘‘JrB’’, ‘‘HB’’, ‘‘HrB’’, ‘‘MB’’ or ‘‘MrB’’, as applicable, 

assigned by the Exchange. 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2020–084 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–NASDAQ–2020–084. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2020–084 and 

should be submitted on or before 

January 8, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant todelegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27837 Filed 12–17–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90660; File No. SR–MEMX– 

2020–15] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change to Amend the Exchange’s Fee 

Schedule 

December 14, 2020. 

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 

4, 2020, 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. 

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 fee schedule applicable to 

Members 3 pursuant to Exchange Rules 

15.1(a) and (c) in order to modify its 

pricing for transactions in securities 

priced below $1.00 per share that are 

executed on the Exchange. 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 to modify the fees and 

rebates applicable to transactions in 

securities priced below $1.00 per share 

(‘‘Sub-Dollar Securities’’) that are 

executed on the Exchange, effective as 

of December 4, 2020. 

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues, 

to which market participants may direct 

their order flow. Based on publicly 

available information, no single 

registered equities exchange currently 

has more than approximately 16% of 

the total market share of executed 

volume of equities trading.4 Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

The Exchange recently adopted a 

proposal 5 to charge a standard fee of 

0.30% of the total dollar value of any 

transaction in Sub-Dollar Securities that 

removes liquidity from the Exchange 

(‘‘Removed Sub-Dollar Volume’’).6 The 

Exchange also adopted pricing to 

provide a standard rebate of 0.30% of 

the total dollar value of any transaction 

in Sub-Dollar Securities that adds 

liquidity, displayed or non-displayed, to 

the Exchange (‘‘Added Sub-Dollar 

Volume’’).7

The current rebate for executions of 

Added Sub-Dollar Volume was adopted 

to increase order flow in Sub-Dollar 

Securities to the Exchange by 

incentivizing Members to increase the 

liquidity-providing orders in Sub-Dollar 

Securities they submit to the Exchange, 

which would support price discovery 

on the Exchange and provide additional 

liquidity for incoming orders. The 

current fee for executions of Removed 

Sub-Dollar Volume, in turn, was 

intended to be a direct offset of the 


khammond on DSKJM1Z7X2PROD with NOTICES