Federal Register / Vol. 86, No. 30 / Wednesday, February 17, 2021 / Notices 9963 

10The parameters for the base case of the mailbox 

monopoly model are that the entrant offers a 10 

percent discount, has a 10 percent cost advantage, 

delivers 1 day a week, and potentially skims 100 

percent of the eligible contestable mail on profitable 

routes. 

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

2 17 CFR 240.19b–4. 

BILLING CODE 7710–FW–C 

To test the sensitivity of the FY 2019 

base case combined monopoly estimate, 

the value of the combined monopoly 

estimate is shown below in Table 2 for 

the full range of each parameter while 

holding the other variables to their base 

case values. 

To the extent that the Commission’s 

additional analysis and this information 

may affect comments already filed in 

this docket or create new areas of 

interest for parties, the Commission is 

opening up a second comment period. 

Interested persons are invited to 

comment on any or all aspects of 

existing and potential methodology 

changes. Comments are due March 26, 

2021. 

It is ordered: 

1. The Commission provides notice of 

filing its Analysis of the Value of the 

Postal and Mailbox Monopolies in 

Library Reference PRC–LR–PI2020–1– 

NP1. 

2. Interested persons may submit 

written comments on any or all aspects 

of the Commission’s estimation 

methodology no later than March 26, 

2021. 

3. The Secretary shall arrange for 

publication of this Order in the Federal 

Register. 

By the Commission. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2021–03103 Filed 2–16–21; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91094; File No. SR–MEMX– 

2021–02] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule 

February 10, 2021. 

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 January 

29, 2021, 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 


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9964 Federal Register / Vol. 86, No. 30 / Wednesday, February 17, 2021 / Notices 

3See Exchange Rule 1.5(p). 

4A ‘‘Retail Order’’ means an agency or riskless 

principal order that meets the criteria of FINRA 

Rule 5320.03 that originates from a natural person 

and is submitted to the Exchange by a Retail 

Member Organization, provided that no change is 

made to the terms of the order with respect to price 

or side of market and the order does not originate 

from a trading algorithm or any other computerized 

methodology. See Exchange Rule 11.21(a). 

5Market share percentage calculated month-todate for January 2021 as of January 28, 2021. The 

Exchange receives and processes data made 

available through consolidated data feeds (i.e., CTS 

and UTDF). 

6 Id. 

7 ‘‘MEMX Book’’ refers to the Exchange system’s 

electronic file of orders. See Exchange Rule 1.5(q). 

8See Securities Exchange Act Release No. 90555 

(December 3, 2020), 85 FR 79244 (December 9, 

2020) (SR–MEMX–2020–14). 

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 Exchange’s fee schedule 

applicable to Members 3 (the ‘‘Fee 

Schedule’’) pursuant to Exchange Rules 

15.1(a) and (c). The Exchange proposes 

to implement the changes to the Fee 

Schedule pursuant to this proposal on 

February 1, 2021. 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 purpose of the proposed rule 

change is to amend the Fee Schedule to 

(i) increase the standard rebate for 

executions of orders (other than Retail 

Orders 4) in securities priced at or above 

$1.00 per share that add displayed 

liquidity to the Exchange; (ii) increase 

the standard rebate for executions of 

Retail Orders in securities priced at or 

above $1.00 per share that add 

displayed liquidity to the Exchange; (iii) 

increase the standard fee for executions 

of orders in securities priced at or above 

$1.00 per share that remove liquidity 

from the Exchange; and (iv) adopt a fee 

for executions of orders in securities 

priced below $1.00 per share that are 

routed to and executed on an away 

market and that remove liquidity from 

the market to which they are routed. 

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 

rebates/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 15% of 

the total market share of executed 

volume of equities trading.5 Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

trading venue possesses significant 

pricing power in the execution of order 

flow, and the Exchange currently 

represents less than 1% of the overall 

market share.6

Increased Standard Rebate for Added 

Displayed Volume 

The Exchange proposes to increase 

the standard rebate provided for 

executions of orders (other than Retail 

Orders) in securities priced at or above 

$1.00 per share that are displayed on the 

MEMX Book 7 and add liquidity to the 

Exchange (‘‘Added Displayed Volume’’). 

Currently, the Exchange provides a 

standard rebate of $0.0029 per share for 

executions of Added Displayed Volume. 

The Exchange now proposes to increase 

the standard rebate provided for 

executions of Added Displayed Volume 

to $0.0034 per share. 

Increased Standard Rebate for Added 

Displayed Retail Volume 

The Exchange also proposes to 

increase the standard rebate provided 

for executions of Retail Orders in 

securities priced at or above $1.00 per 

share that are displayed on the MEMX 

Book and add liquidity to the Exchange 

(‘‘Added Displayed Retail Volume’’). 

Currently, the Exchange provides a 

standard rebate of $0.0034 per share for 

executions of Added Displayed Retail 

Volume. The Exchange now proposes to 

increase the standard rebate provided 

for executions of Added Displayed 

Retail Volume to $0.0037 per share. As 

a recent entrant in the equities market 

and to attract additional order flow to 

the Exchange to help it compete with 

other equities trading venues, the 

Exchange previously adopted a higher 

standard rebate for executions of Added 

Displayed Retail Volume relative to the 

standard rebate for executions of Added 

Displayed Volume to incentivize 

Members to submit additional order 

flow in the form of Retail Orders to the 

Exchange.8 The proposed increase 

rebate for executions of Added 

Displayed Retail Volume is designed to 

maintain a higher rebate for such orders 

relative to the standard rebate for Added 

Displayed Volume, which the Exchange 

is proposing to increase from $0.0029 

per share to $0.0034 per share, as 

described above. 

Increased Standard Fee for Removed 

Volume 

The Exchange also proposes to 

increase the standard fee charged for 

executions of orders in securities priced 

at or above $1.00 per share that remove 

liquidity from the Exchange (‘‘Removed 

Volume’’). Currently, the Exchange 

charges a standard fee of $0.0025 per 

share for executions of Removed 

Volume. The Exchange now proposes to 

increase the standard fee charged for 

executions of Removed Volume to 

$0.0026 per share. 

Adoption of Standard Fee for Routed 

Removed Sub-Dollar Volume 

Lastly, the Exchange proposes to 

adopt a standard fee for executions of 

orders in securities priced below $1.00 

per share that are routed to and 

executed on an away market and that 

remove liquidity from the market to 

which they are routed (‘‘Routed 

Removed Sub-Dollar Volume’’). 

Currently, the Exchange does not charge 

a fee or provide a rebate for executions 

of Routed Removed Sub-Dollar Volume. 

The Exchange now proposes to charge a 

standard fee of 0.30% of the total dollar 

value of each execution of Routed 

Removed Sub-Dollar Volume. The 

Exchange notes that the routing services 

offered by the Exchange and its 

affiliated broker-dealer are completely 

optional and market participants can 

readily select between various providers 

of routing services, including other 

exchanges and broker-dealers. 

Additional Discussion 

The purpose of the proposed 

increased standard rebates for 

executions of Added Displayed Volume 


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9 15 U.S.C. 78f. 

10 15 U.S.C. 78f(b)(4) and (5). 

11Securities Exchange Act Release No. 51808 

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

12See, e.g., the MIAX PEARL, LLC equities 

trading fee schedule on its public website (available 

at https://www.miaxoptions.com/sites/default/files/ 

fee_schedule-files/MIAX_PEARL_Equities_Fee_

Schedule_01012021.pdf), which reflects a standard 

rebate of $0.0032 per share to add displayed 

liquidity in Tape A and Tape C securities priced at 

or above $1.00 per share and a standard rebate of 

$0.0035 per share to add displayed liquidity in 

Tape B securities priced at or above $1.00 per share; 

the NYSE Arca, Inc. (‘‘NYSE Arca’’) equities trading 

fee schedule on its public website (available at 

https://www.nyse.com/publicdocs/nyse/markets/ 

nyse-arca/NYSE_Arca_Marketplace_Fees.pdf), 

which reflects rebates up to $0.0033 per share to 

add displayed liquidity in Tape A and Tape C 

securities priced at or above $1.00 per share 

depending on the applicable tier and rebates up to 

$0.0034 per share to add displayed liquidity in 

Tape B securities priced at or above $1.00 per share 

depending on the applicable tier. 

13 Id. 

and Added Displayed Retail Volume is 

for business and competitive reasons, as 

the Exchange believes such increased 

rebates would incentivize Members to 

submit additional displayed liquidityadding order flow (including both Retail 

Orders and non-retail orders) to the 

Exchange, which the Exchange believes 

would promote price discovery and 

price formation, provide more trading 

opportunities and tighter spreads, and 

deepen liquidity that is subject to the 

Exchange’s transparency, regulation and 

oversight, thereby enhancing market 

quality to the benefit of all Members and 

investors. 

The purpose of the proposed 

increased standard fee for executions of 

Removed Volume and the proposed 

adoption of a standard fee for 

executions of Routed Removed SubDollar Volume is also for business and 

competitive reasons, as the Exchange 

believes such fees would generate 

additional revenue to offset some of the 

costs associated with the proposed 

increased rebates for executions of 

Added Displayed Volume and Added 

Displayed Retail Volume described 

above, and the Exchange’s operations 

generally, in a manner that is consistent 

with the Exchange’s overall pricing 

philosophy of encouraging added 

displayed liquidity. The proposed 

standard fee for executions of Routed 

Removed Sub-Dollar Volume is also 

intended to recoup some of the 

Exchange’s costs associated with 

handling such orders, including the 

costs of operating the Exchange’s 

affiliated routing broker-dealer and the 

applicable fees charged by the away 

market for removing liquidity, as the 

current pricing structure would require 

the Exchange to absorb all such costs. 

The proposed rule change does not 

include different fees or rebates that 

depend on the amount of orders 

submitted to, and/or transactions routed 

or executed on or through, the Exchange 

or its affiliated routing broker-dealer. 

Accordingly, all fees and rebates 

described above are applicable to all 

Members, regardless of the overall 

volume of a Member’s routing or trading 

activities on or through the Exchange or 

its affiliated routing broker-dealer. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,9

in general, and with Sections 6(b)(4) and 

(5) of the Act,10 in particular, in that it 

is designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members and 

other persons using its facilities and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

As discussed above, the Exchange 

operates in a highly fragmented and 

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, and the Exchange 

represents only a small percentage of 

the overall market. 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, 

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.’’ 11

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products, in response to new or 

different pricing structures being 

introduced into the market. The 

Exchange also reiterates that the routing 

services offered by the Exchange and its 

affiliated broker-dealer are completely 

optional and that the Exchange operates 

in a highly competitive market in which 

market participants can readily select 

between various providers of routing 

services with different product offerings 

and different pricing. Accordingly, 

competitive forces constrain the 

Exchange’s transaction fees and rebates 

generally, including with respect to 

Added Displayed Volume, Added 

Displayed Retail Volume, Removed 

Volume and Routed Removed SubDollar Volume, and market participants 

can readily trade on and/or or utilize the 

routing services of competing venues if 

they deem pricing levels or product 

offerings at those other venues to be 

more favorable. The Exchange believes 

the proposed rule change reflects a 

reasonable and competitive pricing 

structure designed to incentivize market 

participants to add aggressively priced 

displayed liquidity and direct their 

order flow to the Exchange, which the 

Exchange believes would promote price 

discovery and price formation, provide 

more trading opportunities and tighter 

spreads, and deepen liquidity that is 

subject to the Exchange’s transparency, 

regulation and oversight, thereby 

enhancing market quality to the benefit 

of all Members and investors. 

Increased Standard Rebate for Added 

Displayed Volume 

The Exchange believes the proposed 

increased standard rebate for executions 

of Added Displayed Volume is 

reasonable, equitable and consistent 

with the Act because it is designed to 

incentivize Members to submit 

additional displayed liquidity-adding 

orders to the Exchange, which would 

enhance liquidity on the Exchange and 

promote price discovery and price 

formation. The Exchange further 

believes the proposed increased 

standard rebate is reasonable and 

appropriate because it is comparable to, 

and competitive with, the rebates 

provided by other exchanges for 

executions of liquidity-adding displayed 

non-retail orders in securities priced at 

or above $1.00 per share.12 However, the 

Exchange notes that certain of these 

exchanges provide a tiered pricing 

structure that provides a comparable 

rebate for executions of liquidity-adding 

displayed non-retail orders in securities 

priced at or above $1.00 per share only 

when certain volume thresholds are 

met.13 The Exchange believes that, 

consistent with the Exchange’s existing 

pricing structure, it is reasonable, 

equitable and not unfairly 

discriminatory to provide a higher 

rebate for executions of displayed orders 

that add liquidity than to non-displayed 

orders as this rebate structure is 

designed to incentivize Members to 

submit displayed orders to the 

Exchange, thereby contributing to price 

discovery and price formation, 

consistent with the overall goal of 

enhancing market quality. The 


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14See e.g., the NYSE Arca equities trading fee 

schedule on its public website (available at https:// 

www.nyse.com/publicdocs/nyse/markets/nyse-arca/ 

NYSE_Arca_Marketplace_Fees.pdf), which reflects 

rebates ranging from $0.0033–$0.0038 per share, 

depending on the applicable tier, for retail orders 

in securities priced at or above $1.00 per share that 

add displayed liquidity; the Cboe EDGX Exchange, 

Inc. (‘‘Cboe EDGX’’) equities trading fee schedule on 

its public website (available at https://

markets.cboe.com/us/equities/membership/fee_

schedule/edgx/), which reflects rebates ranging 

from $0.0032–$0.0037 per share, depending on the 

applicable tier, for retail orders in securities priced 

at or above $1.00 per share that add liquidity. 

15 Id. 

16 15 U.S.C. 78f(b)(5). 

17See, e.g., the Cboe EDGX equities trading fee 

schedule on its public website (available at https:// 

markets.cboe.com/us/equities/membership/fee_

schedule/edgx/), which reflects a standard fee of 

$0.0027 per share to remove liquidity in securities 

priced at or above $1.00 per share; The Nasdaq 

Stock Market LLC (‘‘Nasdaq’’) trading fee schedule 

on its public website (available at http://

www.nasdaqtrader.com/ 

trader.aspx?id=pricelisttrading2), which reflects a 

standard fee of $0.0030 per share to remove 

liquidity in securities priced at or above $1.00 per 

share. 

Exchange further believes that this fee is 

equitably allocated and not unfairly 

discriminatory because it applies 

equally to all Members and, when 

coupled with lower fees for removing 

liquidity, is designed to facilitate 

increased activity on the Exchange to 

the benefit of all Members by providing 

more trading opportunities and 

promoting price discovery. 

The Exchange notes that under this 

proposal the Exchange will continue to 

pay a higher rebate for Added Displayed 

Volume than the fee it charges for 

removing such volume, and as such the 

Exchange will continue to have a 

negative net capture (i.e., will lose 

money) with respect to such 

transactions. The Exchange notes that, 

as a recent entrant in the equities 

market, it will only utilize a pricing 

structure whereby it maintains a 

negative net capture with respect to 

such transactions for a limited time in 

an effort to encourage market 

participants to join, connect to, and 

participate on the Exchange. As noted 

above, the Exchange operates in a highly 

competitive market, and the Exchange 

believes this pricing structure will 

enable it to effectively compete with 

other exchanges by attracting Members 

and order flow to the Exchange, which 

will help the Exchange to gain market 

share for executions. The Exchange 

expects to modify its pricing structure 

after it has gained sufficient 

participation from market participants 

and market share for executions to 

eliminate the negative net capture and 

instead be profitable with respect to 

such transactions. 

Increased Standard Rebate for Added 

Displayed Retail Volume 

Similarly, the Exchange believes the 

proposed increased standard rebate for 

executions of Added Displayed Retail 

Volume is reasonable, equitable and 

consistent with the Act because it is 

designed to incentivize Members to 

submit additional displayed liquidityadding Retail Orders to the Exchange, 

which would enhance liquidity in Retail 

Orders on the Exchange and promote 

price discovery and price formation. 

The Exchange further believes the 

proposed increased standard rebate is 

reasonable and appropriate because it is 

comparable to, and competitive with, 

the rebates provided by other exchanges 

for executions of liquidity-adding 

displayed retail orders in securities 

priced at or above $1.00 per share.14

However, the Exchange notes that these 

exchanges provide a tiered pricing 

structure that provides a comparable 

rebate for executions of liquidity-adding 

displayed retail orders in securities 

priced at or above $1.00 per share only 

when certain volume thresholds are 

met.15 The Exchange believes that it is 

reasonable, equitable and not unfairly 

discriminatory to provide a higher 

rebate for executions of displayed Retail 

Orders that add liquidity than to nondisplayed Retail Orders as this rebate 

structure is designed to incentivize 

Members to submit displayed orders to 

the Exchange, thereby contributing to 

price discovery and price formation, 

consistent with the overall goal of 

enhancing market quality. 

The Exchange understands that 

Section 6(b)(5) of the Act 16 prohibits an 

exchange from establishing rules that 

are designed to permit unfair 

discrimination between market 

participants. However, Section 6(b)(5) of 

the Act does not prohibit exchange 

members or other broker-dealers from 

discriminating, so long as their activities 

are otherwise consistent with the federal 

securities laws. While the Exchange 

believes that markets and price 

discovery optimally function through 

the interactions of diverse flow types, it 

also believes that growth in 

internalization has required 

differentiation of Retail Order flow from 

other order flow types. The 

differentiation proposed herein by the 

Exchange to maintain a higher rebate for 

Added Displayed Retail Volume relative 

to the standard rebate for Added 

Displayed Volume (i.e., non-retail 

orders) is not designed to permit unfair 

discrimination, but instead to promote a 

competitive process around Retail Order 

executions such that retail investors 

would continue to receive better rebates 

on the Exchange than comparable nonretail orders in order to encourage entry 

of Retail Orders to the Exchange. 

Accordingly, the Exchange believes the 

proposed increased standard rebate for 

executions of Added Displayed Retail 

Volume is equitably allocated and not 

unfairly discriminatory. 

Increased Standard Fee for Removed 

Volume 

The Exchange believes the proposed 

increased standard fee for executions of 

Removed Volume is reasonable, 

equitable and consistent with the Act 

because it is designed to generate 

additional revenue to offset some of the 

costs associated with the proposed 

increased standard rebates for 

executions of Added Displayed Volume 

and Added Displayed Retail Volume in 

a manner that is consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added displayed 

liquidity. The Exchange further believes 

this proposed standard fee is reasonable 

and appropriate because it represents a 

modest increase from the current fee 

and remains lower than or comparable 

to, and competitive with, the fees 

charged by other exchanges for 

executions of orders in securities priced 

at or above $1.00 per share that remove 

liquidity.17 The Exchange further 

believes that this proposed standard fee 

is equitably allocated and not unfairly 

discriminatory because it will apply 

equally to all Members. 

Adoption of Standard Fee for Routed 

Removed Sub-Dollar Volume 

The Exchange believes the proposed 

adoption of a standard fee of 0.30% of 

the total dollar value of executions of 

Routed Removed Sub-Dollar Volume is 

reasonable, equitable and consistent 

with the Act because it is designed to 

generate additional revenue to offset 

some of the costs associated with the 

proposed increased standard rebates for 

executions of Added Displayed Volume 

and Added Displayed Retail Volume, as 

well as to recoup some of the 

Exchange’s costs associated with 

handling such orders, including the 

costs of operating the Exchange’s 

affiliated routing broker-dealer and the 

applicable fees charged by the away 

market for removing liquidity, as the 

current pricing structure would require 

the Exchange to absorb all such costs, in 

a manner that is consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added displayed 

liquidity. The Exchange further believes 

this proposed standard fee is reasonable 


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18See, e.g., the Cboe EDGX equities trading fee 

schedule on its public website (available at https:// 

markets.cboe.com/us/equities/membership/fee_

schedule/edgx/), which reflects a standard fee of 

0.30% of the total dollar value of executions of 

routed orders in securities priced below $1.00 per 

share that remove liquidity from the destination 

venue; the Cboe EDGA Exchange, Inc. equities 

trading fee schedule on its public website (available 

at https://markets.cboe.com/us/equities/ 

membership/fee_schedule/edga/), which reflects a 

standard fee of 0.30% of the total dollar value of 

executions of routed orders in securities priced 

below $1.00 per share that remove liquidity from 

the destination venue; the Nasdaq equities trading 

fee schedule on its public website (available at 

http://www.nasdaqtrader.com/ 

trader.aspx?id=pricelisttrading2), which reflects a 

standard fee of 0.30% of the total dollar value of 

executions of routed orders in securities priced 

below $1.00 per share that remove liquidity from 

the destination venue. 19See supra note 11. 

20 Id. 

21NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSE–2006–21)). 

and appropriate because it is identical 

to the fees charged by several other 

exchanges for executions of orders in 

securities priced below $1.00 per share 

that are routed to and executed on an 

away market and that remove liquidity 

from the market to which they are 

routed.18 The Exchange further believes 

that this proposed standard fee is 

equitably allocated and not unfairly 

discriminatory because it will apply 

equally to all Members that choose to 

use the Exchange’s routing services. 

The Exchange also notes that the 

proposal does not include different fees 

or rebates that depend on the amount of 

orders submitted to, and/or transactions 

routed or executed on or through, the 

Exchange or its affiliated routing brokerdealer. Accordingly, the Exchange 

believes the proposed pricing changes 

are reasonable, equitable, and nondiscriminatory as such changes are 

applicable to all Members, regardless of 

the overall volume of a Member’s 

routing or trading activities on or 

through the Exchange or its affiliated 

broker-dealer. 

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 changes would 

encourage the submission of additional 

order flow to the Exchange, thereby 

promoting market depth, enhanced 

execution opportunities, as well as price 

discovery and transparency for all 

Members. Furthermore, the Exchange 

believes that the proposed changes 

would allow the Exchange to continue 

to compete with other routing and 

execution venues by providing 

competitive pricing for transactions in 

Added Displayed Volume, Added 

Displayed Retail Volume, Removed 

Volume, and Routed Removed SubDollar Volume, thereby making it a 

desirable destination venue for its 

customers. As a result, the Exchange 

believes that the proposed change 

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.’’ 19

Intramarket Competition 

The Exchange believes that the 

proposed changes would continue to 

incentivize market participants to direct 

order flow to the Exchange. Greater 

liquidity benefits all Members by 

providing more trading opportunities 

and encourages Members to send orders 

to the Exchange, thereby contributing to 

robust levels of liquidity, which benefits 

all Members. The proposed fees and 

rebates for transactions in Added 

Displayed Volume, Added Displayed 

Retail Volume, Removed Volume, and 

Routed Removed Sub-Dollar Volume 

would be available to all similarlysituated market participants, and, as 

such, the proposed change would not 

impose a disparate burden on 

competition among market participants 

on the Exchange. As such, 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 

The Exchange operates in a highly 

competitive market with respect to 

execution and routing services. 

Members have numerous alternative 

venues that they may participate on and 

direct their order flow to, including 15 

other equities exchanges and numerous 

alternative trading systems and other 

off-exchange venues. As noted above, no 

single registered equities exchange 

currently has more than approximately 

15% of the total market share of 

executed volume of equities trading. 

Thus, in such a low-concentrated and 

highly competitive market, no single 

equities trading venue possesses 

significant pricing power in the 

execution of order flow. Moreover, the 

Exchange believes that the ever-shifting 

market share among the exchanges from 

month to month demonstrates that 

market participants can shift order flow 

or discontinue to reduce use of certain 

categories of products, in response to 

new or different pricing structures being 

introduced into the market. 

Additionally, market participants can 

readily select between various providers 

of routing services with different 

product offerings and different pricing. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates generally, including 

with respect to Added Displayed 

Volume, Added Displayed Retail 

Volume, Removed Volume, and Routed 

Removed Sub-Dollar Volume, and 

market participants can readily choose 

to send their orders to other exchange 

and off-exchange venues for execution 

and/or routing services if they deem fee 

levels or product offerings at those other 

venues to be more favorable. As 

described above, the proposed changes 

are competitive proposals through 

which the Exchange is seeking to 

encourage certain order flow to be sent 

to the Exchange. 

Additionally, the Commission has 

repeatedly expressed its preference for 

competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, 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.’’ 20 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. SEC, 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 brokerdealers 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’. . . .’’.21 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 


jbell on DSKJLSW7X2PROD with NOTICES
9968 Federal Register / Vol. 86, No. 30 / Wednesday, February 17, 2021 / Notices 

22 15 U.S.C. 78s(b)(3)(A)(ii). 

23 17 CFR 240.19b–4(f)(2). 

24 17 CFR 200.30–3(a)(12). 

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(f)(2). 

5Available at http://www.dtcc.com/∼/media/ 

Files/Downloads/legal/fee-guides/dtcfeeguide.pdf. 

6See id at 6–8. 

7Pursuant to the Rules, the term ‘‘MMI Program’’ 

means the Program for transactions in MMI 

Securities, as provided in Rule 9(C) and as specified 

in the Procedures. See Rule 1, supra note 1. 

Pursuant to the Rules, the term ‘‘MMI Securities’’ 

means an Eligible Security described in the second 

paragraph of Section 1 of Rule 5, that would, upon 

a determination of eligibility by the Corporation, be 

assigned an Acronym by DTC. Id. Under the Rules, 

MMI Securities are processed differently than other 

Securities. See Rule 9(C), supra note 1; and DTC 

Operational Arrangements (Necessary for Securities 

to Become and Remain Eligible for DTC Services), 

at 3, available at http://www.dtcc.com/∼/media/ 

Files/Downloads/legal/issue-eligibility/eligibility/ 

operational-arrangements.pdf. The Procedures 

applicable to settlement processing of MMI 

Securities are set forth in the DTC Settlement 

Service Guide (‘‘Settlement Guide’’), available at 

http://www.dtcc.com/∼/media/Files/Downloads/ 

legal/service-guides/Settlement.pdf. 

8Each capitalized term not otherwise defined 

herein has its respective meaning as set forth in the 

Rules, By-Laws and Organization Certificate of DTC 

(the ‘‘Rules’’), available at http://dtcc.com/∼/media/ 

Files/Downloads/legal/rules/dtc_rules.pdf. 

9See supra note 5. 

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 22 and Rule 

19b–4(f)(2) 23 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 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MEMX–2021–02 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–2021–02. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MEMX–2021–02, and 

should be submitted on or before March 

10, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–03087 Filed 2–16–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91098; File No. SR–DTC– 

2021–001)] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Add New 

Fees for DTC’s Money Market 

Instrument Program 

February 10, 2021. 

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 February 

1, 2021, 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 DTC. 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. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The purpose of the proposed rule 

change is to amend the Guide to the 

DTC Fee Schedule 5 (‘‘Fee Guide’’) to 

add new fees within the Corporate 

Actions section,6 and specifically as that 

section relates to the DTC’s Money 

Market Instrument program (‘‘MMI 

Program’’),7 as described in greater 

detail below.8

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. 

A. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(1) Purpose 

The proposed rule change would 

amend the Fee Guide to add new fees 

within the Corporate Actions section,9

and specifically as that section relates to 

the MMI Program, as described below. 


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