71894 Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices 

10 15 U.S.C. 78s(b)(3)(A)(ii). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The proposed fee change is based on a recent 

proposal by Nasdaq Phlx LLC (‘‘Phlx’’) to adopt fees 

for purge ports. See Securities Exchange Act 

Release No. 97825 (June 30, 2023), 88 FR 43405 

(July 7, 2023) (SR–Phlx–2023–28). 

continually adjust its fees to remain 

competitive with other exchanges and 

with alternative trading systems 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. 

The proposed change is reflective of 

this competition because, as a threshold 

issue, the Exchange is a relatively small 

market so its ability to burden 

intermarket competition is limited. In 

this regard, even the largest U.S. 

equities exchange by volume has less 

than 20% market share, which in most 

markets could hardly be categorized as 

having enough market power to burden 

competition. Moreover, as noted above, 

price competition between exchanges is 

fierce, with liquidity and market share 

moving freely between exchanges in 

reaction to fee and credit changes. This 

is in addition to free flow of order flow 

to and among off-exchange venues 

which comprises more than 40% of 

industry volume. 

In sum, the Exchange intends for the 

proposed changes to its fees to increase 

member incentives to engage in the 

addition of liquidity on the Exchange. If 

the changes proposed herein are 

unattractive to market participants, it is 

likely that the Exchange will lose 

market share as a result. Accordingly, 

the Exchange does not believe that the 

proposed changes will impair the ability 

of members or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. 

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.10

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 rule-comments@

sec.gov. Please include file number 

SR–BX–2023–024 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–BX–2023–024. 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–BX–2023–024 and should be 

submitted on or before November 8, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22926 Filed 10–17–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98734; File No. SR– 

EMERALD–2023–26] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Fee 

Schedule for Purge Ports 

October 12, 2023. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 29, 2023, MIAX Emerald, 

LLC (‘‘MIAX Emerald’’ 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 

MIAX Emerald Options Exchange Fee 

Schedule (the ‘‘Fee Schedule’’) to 

amend fees for Purge Ports.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-options/emerald-options/rule-filings, 

at MIAX’s principal office, 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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices 71895 

4The term ‘‘Market Makers’’ refers to Lead Market 

Makers (‘‘LMMs’’), Primary Lead Market Makers 

(‘‘PLMMs’’), and Registered Market Makers 

(‘‘RMMs’’) collectively. See Exchange Rule 100. 

5The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

6See Cboe BXZ Exchange, Inc. (‘‘BZX’’) Options 

Fee Schedule, Options Logical Port Fees, Purge 

Ports ($750 per purge port per month); Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’) Options Fee Schedule, 

Options Logical Port Fees, Purge Ports ($750 per 

purge port per month); Cboe Exchange, Inc. 

(‘‘Cboe’’) Fee Schedule ($850 per purge port per 

month). See also Nasdaq GEMX, Options 7, Pricing 

Schedule, Section 6.C.(3). Nasdaq GEMX, LLC 

(‘‘Nasdaq GEMX’’) assesses its members $1,250 per 

SQF Purge Port per month, subject to a monthly cap 

of $17,500 for SQF Purge Ports and SQF Ports, 

applicable to market makers. See also Securities 

Exchange Act Release No. 97825 (June 30, 2023), 88 

FR 43405 (July 7, 2023) (SR–Phlx–2023–28). 

7 Id. 

8Members seeking to become registered as a 

Market Maker must comply with the applicable 

requirements of Chapter VI of the Exchange’s Rules. 

9See Exchange Rule 519C(a) and (b). 

10Current Exchange port functionality supports 

cancelation rates that exceed one thousand 

messages per second and the Exchange’s research 

indicates that certain market participants rely on 

such functionality and at times utilize such 

cancelation rates. 

11See Exchange Rule 516C(c). 

12See Exchange Rule 532. 

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 is proposing to amend 

the fees for Purge Ports, which is a 

function enabling Market Makers 4 to 

cancel all open quotes or a subset of 

open quotes through a single cancel 

message. The Exchange currently 

provides Market Makers the option to 

purchase Purge Ports to assist in their 

quoting activity. Purge Ports provide 

Market Makers with the ability to send 

purge messages to the Exchange 

System.5 Purge Ports are not capable of 

sending or receiving any other type of 

messages or information. The use of 

Purge Ports is completely optional and 

no rule or regulation requires that a 

Market Maker utilize them. 

Unlike other options exchanges that 

charge fees for Purge Ports on a per port 

basis,6 the Exchange assesses a flat fee 

of $1,500 per month, regardless of the 

number of Purge Ports. Today, a Market 

Maker may request and be allocated two 

(2) Purge Ports per Matching Engine to 

which it connects and not all Market 

Makers connect to all Matching Engines. 

The Exchange now proposes to amend 

the fee for Purge Ports to align more 

with other exchanges who charge on a 

per port basis by providing two (2) 

Purge Ports per Matching Engine for a 

monthly flat fee of $600 per month per 

Matching Engine. The only difference 

with a per port structure being is that 

Market Makers receive two (2) Purge 

Ports per Matching Engine for the same 

proposed monthly fee, rather than be 

charged separate fee for each Purge Port. 

The Exchange proposes to charge the 

proposed fee for Purge Ports per 

Matching Engine, instead on a per Purge 

Port basis, due to its system architecture 

which provides two (2) Purge Ports per 

Matching Engine for redundancy 

purposes. In addition, the proposed fee 

would be lower than what other 

exchanges charge on a per port basis, 

notwithstanding that the Exchange is 

providing up to two (2) Purge Ports for 

that same low fee.7

Similar to a per port charge, Market 

Makers would be also able to elect the 

number of Matching Engines they 

connect to and pay the applicable fee. 

The Exchange believes the proposed fee 

provides Market Makers with flexibility 

to control their Purge Ports costs based 

on the number of Matching Engines it 

elects to connect to. 

* * * * * 

A logical port represents a port 

established by the Exchange within the 

Exchange’s system for trading and 

billing purposes. Each logical port 

grants a Member the ability to 

accomplish a specific function, such as 

order entry, order cancellation, access to 

execution reports, and other 

administrative information. 

Purge Ports are designed to assist 

Market Makers 8 in the management of, 

and risk control over, their quotes, 

particularly if the firm is dealing with 

a large number of securities. For 

example, if a Market Maker detects 

market indications that may influence 

the execution potential of their quotes, 

the Market Maker may use Purge Ports 

to reduce uncertainty and to manage 

risk by purging all quotes in a number 

of securities. This allows Market Makers 

to seamlessly avoid unintended 

executions, while continuing to evaluate 

the market, their positions, and their 

risk levels. Purge Ports are used by 

Market Makers that conduct business 

activity that exposes them to a large 

amount of risk across a number of 

securities. Purge Ports enable Market 

Makers to cancel all open quotes, or a 

subset of open quotes through a single 

cancel message. The Exchange notes 

that Purge Ports increase efficiency of 

already existing functionality enabling 

the cancellation of quotes. 

The Exchange operates highly 

performant systems with significant 

throughput and determinism which 

allows participants to enter, update and 

cancel quotes at high rates. Market 

Makers may currently cancel individual 

quotes through the existing 

functionality, such as through the use of 

a mass cancel message by which a 

Market Maker may request that the 

Exchange remove all or a subset of its 

quotations and block all or a subset of 

its new inbound quotations.9As a result, 

Market Makers can currently cancel 

quotes in rapid succession across their 

existing logical ports 10 or through a 

single cancel message, all open quotes 

or a subset of open quotes. 

Similarly, Market Makers may also 

use cancel-on-disconnect control when 

they experience a disruption in 

connection to the Exchange to 

automatically cancel all quotes, as 

configured or instructed by the Member 

or Market Maker.11 In addition, the 

Exchange already provides similar 

ability to mass cancel quotes through 

the Exchange’s risk controls, which are 

offered at no charge that enables Market 

Makers to establish pre-determined 

levels of risk exposure, and can be used 

to cancel all open quotes.12

Accordingly, the Exchange believes that 

the Purge Ports provide an efficient 

option as an alternative to already 

available services and enhance the 

Participant’s ability to manage their risk. 

The Exchange believes that market 

participants benefit from a dedicated 

purge mechanism for specific Market 

Makers and to the market as a whole. 

Market Makers will have the benefit of 

efficient risk management and purge 

tools. The market will benefit from 

potential increased quoting and 

liquidity as Market Makers may use 

Purge Ports to manage their risk more 

robustly. Only Market Makers that 

request Purge Ports would be subject to 

the proposed fees, and other Market 

Makers can continue to operate in 

exactly the same manner as they do 

today without dedicated Purge Ports, 

but with the additional purging 

capabilities described above. 

Implementation Date 

The proposed fees will be effective 

October 1, 2023. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 


ddrumheller on DSK120RN23PROD with NOTICES1
71896 Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 15 U.S.C. 78f(b)(4). 

16See supra notes 3 and 6. See also Securities 

Exchange Act Release No. 77613 (April 13, 2016), 

81 FR 23023 (April 19, 2016). See also Securities 

Exchange Act Release Nos. 79956 (February 3, 

2017), 82 FR 10102 (February 9, 2017) (SR– 

BatsBZX–2017–05); 79957 (February 3, 2017), 82 FR 

10070 (February 9, 2017) (SR–BatsEDGX–2017–07); 

83201 (May 9, 2018), 83 FR 22546 (May 15, 2018) 

(SR–C2–2018–006). 

17See Exchange Rule 604. See also generally 

Chapter VI of the Exchange’s Rules. 

18 Id. 

19See supra notes 3 and 6. 

20See supra note 6. 

21Current Exchange port functionality supports 

cancelation rates that exceed one thousand 

messages per second and the Exchange’s research 

indicates that certain Participants rely on such 

functionality and at times utilize such cancelation 

rates. 

22See Exchange Rule 532. 

23See Exchange Rule 516C(c). 

section 6(b) of the Act,13 in general, and 

furthers the objectives of section 6(b)(5) 

of the Act,14 in particular, in that it is 

not designed to permit unfair 

discrimination among customers, 

brokers, or dealers. The Exchange also 

believes that its proposed fee is 

consistent with section 6(b)(4) of the 

Act 15 because it represents an equitable 

allocation of reasonable dues, fees and 

other charges among market 

participants. 

The Exchange believes that the 

proposed rule change would promote 

just and equitable principles of trade 

and remove impediments to and perfect 

the mechanism of a free and open 

market because offering Market Makers 

optional service and flexible fee 

structures promotes choice, flexibility, 

efficiency, and competition. The 

Exchange believes Purge Ports enhance 

Market Makers’ ability to manage 

quotes, which would, in turn, improve 

their risk controls to the benefit of all 

market participants. The Exchange 

believes that Purge Ports foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities because 

designating Purge Ports for purge 

messages may encourage better use of 

such ports. This may, concurrent with 

the ports that carry quotes and other 

information necessary for market 

making activities, enable more efficient, 

as well as fair and reasonable, use of 

Market Makers’ resources. Similar 

connectivity and functionality is offered 

by options exchanges, including the 

Exchange’s own affiliated options 

exchanges, and other equities 

exchanges.16 The Exchange believes that 

proper risk management, including the 

ability to efficiently cancel multiple 

quotes quickly when necessary, is 

similarly valuable to firms that trade in 

the equities market, including Market 

Makers that have heightened quoting 

obligations that are not applicable to 

other market participants. 

Purge Ports do not relieve Market 

Makers of their quoting obligations or 

firm quote obligations under Regulation 

NMS Rule 602.17 Specifically, any 

interest that is executable against a 

Member’s or Market Maker’s quotes that 

is received by the Exchange prior to the 

time of the removal of quotes request 

will automatically execute. Market 

Makers that purge their quotes will not 

be relieved of the obligation to provide 

continuous two- sided quotes on a daily 

basis, nor will it prohibit the Exchange 

from taking disciplinary action against a 

Market Maker for failing to meet their 

continuous quoting obligation each 

trading day.18

The Exchange is not the only 

exchange to offer this functionality and 

to charge associated fees.19 The 

Exchange believes the proposed fee for 

Purge Ports is reasonable because it is 

lower than that currently charged by 

other exchanges. For example, BZX and 

EDGX charge a fee of $750 per purge 

port per month, Cboe charges $850 per 

purge port per month, Nasdaq GEMX 

assesses its members $1,250 per SQF 

Purge Port per month, subject to a 

monthly cap of $17,500 for SQF Purge 

Ports and SQF Ports.20

The Exchange believes it is reasonable 

to charge $600 per month for Purge 

Ports as such ports represent targeted 

enhancement of technology and were 

specially developed to allow for the 

sending of a single message to cancel 

multiple quotes, thereby assisting firms 

in effectively managing risk. The 

Exchange also believes that a Member 

that chooses to utilize Purge Ports may, 

in the future, reduce their need for 

additional ports by consolidating cancel 

messages to the Purge Port and thus 

freeing up some capacity of the existing 

logical ports and, therefore, allowing for 

increased message traffic without 

paying for additional logical ports. 

Purge Ports provide the ability to cancel 

multiple quotes across multiple ports 

with less messaging from the firms 

using the ports and therefore may create 

efficiencies for firms and provide a more 

economical solution to their risk 

management needs. In addition, Purge 

Port requests may cancel quotes 

submitted over numerous ports and 

contain added functionality to purge 

only a subset of these quotes. Effective 

risk management is important both for 

individual market participants that 

choose to utilize risk features provided 

by the Exchange, as well as for the 

market in general. As a result, the 

Exchange believes that it is appropriate 

to charge fees for such functionality as 

doing so aids in the maintenance of a 

fair and orderly market. 

The Exchange also believes that its 

ability to set fees for Purge Ports is 

subject to significant substitution-based 

forces because Market Makers are able 

to rely on currently available services 

both free and those they receive when 

using existing trading protocols. If the 

value of the efficiency introduced 

through the Purge Port functionality is 

not worth the proposed fees, Market 

Makers will simply continue to rely on 

the existing functionality and not pay 

for Purge Ports. In that regard, Market 

Makers may currently cancel individual 

quotes through the existing 

functionality, such as through the use of 

a mass cancel message by which a 

Market Maker may request that the 

Exchange remove all or a subset of its 

quotations and block all or a subset of 

its new inbound quotations. Market 

Makers already can also cancel quotes 

individually and by utilizing Exchange 

protocols that allow them to develop 

proprietary systems that can send cancel 

messages at a high rate.21 In addition, 

the Exchange already provides similar 

ability to mass cancel quotes through 

the Exchange’s risk controls, which are 

offered at no charge that enables Market 

Makers to establish pre-determined 

levels of risk exposure, and can be used 

to cancel all open quotes.22

Similarly, Market Makers may use 

cancel-on-disconnect control when they 

experience a disruption in connection to 

the Exchange to immediately cancel all 

pending Exchange.23 Finally, this 

existing purging functionality will allow 

Participants to achieve essentially the 

same outcome in canceling quotes as 

they would by utilizing the Purge Ports. 

Accordingly, the Exchange believes that 

the proposed Purge Ports fee is 

reasonable because it is related to the 

efficiency of Purge Ports related to other 

means and services already available 

which are either free or already a part 

of a fee assessed to the Participant’s for 

existing connectivity. Accordingly, 

because Purge Ports provide additional 

optional functionality, excessive fees 

would simply serve to reduce or 

eliminate demand for this optional 

product. 

The Exchange also believes that 

offering Purge Ports at the Matching 

Engine level promotes risk management 

across the industry, and thereby 

facilitates investor protection. Some 

market participants, in particular the 

larger firms, could and do build similar 

risk functionality (as described above) 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices 71897 

24 15 U.S.C. 78s(b)(3)(A)(ii). 

25 17 CFR 240.19b–4(f)(2). 

in their trading systems that permit the 

flexible cancellation of quotes entered 

on the Exchange at a high rate. Offering 

Matching Engine level protections 

ensures that such functionality is 

widely available to all firms, including 

smaller firms that may otherwise not be 

willing to incur the costs and 

development work necessary to support 

their own customized mass cancel 

functionality. 

As noted above, the Exchange is not 

the only exchange to offer dedicated 

Purge Ports, and the proposed rate is 

lower than that charged by other 

exchanges for similar functionality. The 

Exchange also believes that moving to a 

per Matching Engine fee is reasonable 

due to the Exchange’s architecture that 

provides it the ability to provide two (2) 

Purge Ports per Matching Engine for a 

fee that would still be lower than other 

exchanges that charge on a per port 

basis. Generally speaking, restricting the 

Exchange’s ability to charge fees for 

these services discourages innovation 

and competition. Specifically in this 

case, the Exchange’s inability to offer 

similar services to those offered by other 

exchanges, and charge reasonable and 

equitable fees for such services, would 

put the Exchange at a significant 

competitive disadvantage and, therefore, 

serve to restrict competition in the 

market—especially when other 

exchanges assess comparable fees higher 

than those proposed by the Exchange. 

The Exchange believes that the 

proposed Purge Port fees are equitable 

because the proposed Purge Ports are 

completely voluntary as they relate 

solely to optional risk management 

functionality. 

The Exchange also believes that the 

proposed amendments to its fee 

schedule are not unfairly discriminatory 

because they will apply uniformly to all 

Market Makers that choose to use the 

optional Purge Ports. Purge Ports are 

completely voluntary and, as they relate 

solely to optional risk management 

functionality, no Market Maker is 

required or under any regulatory 

obligation to utilize them. All Market 

Makers that voluntarily select this 

service option will be charged the same 

amount for the same services. All 

Market Makers have the option to select 

any connectivity option, and there is no 

differentiation among Market Makers 

with regard to the fees charged for the 

services offered by the Exchange. 

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. Purge Ports 

are completely voluntary and are 

available to all Market Makers on an 

equal basis at the same cost. While the 

Exchange believes that Purge Ports 

provide a valuable service, Market 

Makers can choose to purchase, or not 

purchase, these ports based on their 

own determination of the value and 

their business needs. No Market Makers 

is required or under any regulatory 

obligation to utilize Purge Ports. 

Accordingly, the Exchange believes that 

Purge Ports offer appropriate risk 

management functionality to firms that 

trade on the Exchange without imposing 

an unnecessary or inappropriate burden 

on competition. 

Furthermore, the Exchange operates 

in a highly competitive environment, 

and its ability to price the Purge Ports 

is constrained by competition among 

exchanges that offer similar 

functionality. As discussed, there are 

currently a number of similar offers 

available to market participants for 

higher fees at other exchanges. 

Proposing fees that are excessively 

higher than established fees for similar 

functionality would simply serve to 

reduce demand for the Purge Ports, 

which as discussed, market participants 

are under no obligation to utilize. It 

could also cause firms to shift trading to 

other exchanges that offer similar 

functionality at a lower costs, adversely 

impacting the overall trading on the 

Exchange and reducing market share. In 

this competitive environment, potential 

purchasers are free to choose which, if 

any, similar product to purchase to 

satisfy their need for risk management. 

As a result, the Exchange believes this 

proposed rule change permits fair 

competition among national securities 

exchanges. 

The Exchange also does not believe 

the proposal would cause any 

unnecessary or in appropriate burden 

on intermarket competition as other 

exchanges are free to introduce their 

own purge port functionality and lower 

their prices to better compete with the 

Exchange’s offering. The Exchange does 

not believe the proposed rule change 

would cause any unnecessary or 

inappropriate burden on intramarket 

competition. Particularly, the proposal 

would apply uniformly to any market 

participant, in that it does not 

differentiate between Market Makers. 

The proposal would allow any 

interested Market Makers to purchase 

Purge Port functionality based on their 

business needs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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,24 and Rule 

19b–4(f)(2) 25 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

EMERALD–2023–26 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–EMERALD–2023–26. 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 


ddrumheller on DSK120RN23PROD with NOTICES1
71898 Federal Register / Vol. 88, No. 200 / Wednesday, October 18, 2023 / Notices 

26 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). 

4See Exchange Rule 1.5(jj). 

5See, e.g., Interpretations and Policies .01 and 

.02(a) of Rule 11.13 of the BYX Exchange Rulebook, 

available at https://cdn.cboe.com/resources/ 

regulation/rule_book/BYX_Rulebook.pdf; 

Interpretations and Policies .01 and .02(a) of Rule 

11.13 of the BZX Exchange Rulebook, available at 

https://cdn.cboe.com/resources/regulation/rule_

book/BZX_Exchange_Rulebook.pdf; Interpretations 

and Policies .01 and .02(a) of Rule 11.10 the EDGA 

Exchange Rulebook, available at https://

cdn.cboe.com/resources/regulation/rule_book/ 

EDGA_Rulebook.pdf; and Interpretations and 

Policies .01 and .02(a) of Rule 11.10 the EDGX 

Exchange Rulebook, available at https://

cdn.cboe.com/resources/regulation/rule_book/ 

EDGX_Rulebook.pdf. 

6See Exchange Rule 21.1(d)(2). 

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–EMERALD–2023–26 and should be 

submitted on or before November 8, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22929 Filed 10–17–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98730; File No. SR–MEMX– 

2023–28] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Adopt Risk Settings Rules 

Applicable to Options Trading 

October 12, 2023. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 29, 2023, MEMX LLC 

(‘‘MEMX’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 to amend 

the Exchange’s risk settings rules 

applicable to Options trading. The 

Exchange has designated this proposal 

as ‘‘non-controversial’’ pursuant to 

section 19(b)(3)(A)(iii) of the Act and 

provided the Commission with the 

notice required by Rule 19b–4(f)(6)(iii) 

thereunder. The Exchange has 

commenced operations of MEMX 

Options on September 27, 2023. As 

such, the Exchange proposes to 

implement the changes to its options 

risk controls immediately. 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 provide optional risk 

controls for Members 3 who participate 

in the Exchange’s options market (such 

market, ‘‘MEMX Options’’ and such 

Members, ‘‘Options Members’’), under 

proposed Interpretation and Policies .01 

and .02 of Exchange Rule 21.17, and to 

provide clarifying language in proposed 

Interpretation and Policy .03 of 

Exchange Rule 21.17. In order to help 

Options Users 4 to manage their risk, the 

Exchange proposes to add certain risk 

settings on MEMX Options which the 

Exchange already offers to Users in its 

market for equity securities (‘‘MEMX 

Equities’’). Under the proposed 

Interpretation and Policies .01 and .02 

of Exchange Rule 21.17, Users will have 

the same ability to manage their risk 

with respect to orders on the MEMX 

Options platform as Users currently 

have on the MEMX Equities platform (as 

set forth in Interpretation and Policies 

.01 and .02 of Exchange Rule 11.10). 

Lastly, the Exchange proposes to add 

Interpretation and Policy .03 of 

Exchange Rule 21.17 to clarify that the 

risk controls described in Exchange 

Rule 21.17 are meant to supplement, 

and not replace, a User’s internal risk 

monitoring and management systems. 

The Exchange proposes to add 

controls which will be exercisable and 

configurable by individual Users, and 

the thresholds of the controls may be 

adjusted within certain limits away 

from the assigned default values. The 

Exchange notes that other national 

securities exchanges have similar risk 

settings rules in their rulebooks.5 As 

previously noted, these risk settings will 

largely mirror the MEMX Equities 

settings rules in Interpretation and 

Policies .01 and .02 to Rule 11.10. The 

Exchange additionally proposes to add 

clarifying language in proposed 

Interpretation and Policy .03 of 

Exchange Rule 21.17. 

Specifically, in proposed 

Interpretation and Policy .01 of 

Exchange Rule 21.17, the Exchange 

proposes to offer risk settings that will 

result in orders being cancelled on 

entry, including: (i) controls related to 

the maximum dollar amount for a single 

order and the maximum number of 

contracts that may be included in a 

single order; (ii) controls related to order 

types or modifiers that can be utilized 

as well as when the market is crossed; 

(iii) controls to restrict the options 

classes for which a User may enter 

orders or to restrict activity to test 

symbols only; (iv) controls prohibiting 

the entry of duplicative orders; (v) 

controls restricting the overall rate of 

order entry; and (vi) credit controls 

measuring both gross and net exposure 

that warn when approached, and when 

breached, prevent submission of either 

all new orders or Market Orders 6 only. 

The Exchange further proposes, in 

proposed Interpretation and Policy .02 

of Exchange Rule 21.17, to offer (vii) 

risk functionality that permits a User to 


ddrumheller on DSK120RN23PROD with NOTICES1