80796 Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices 

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

2 17 CFR 240.19b–4. 

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 (‘‘RMO’’), 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 as of 

October 31, 2023. The Exchange receives and 

processes data made available through consolidated 

data feeds (i.e., CTS and UTDF). 6 Id. 

7The proposed base rebate for executions of 

Added Displayed Retail Volume is referred to by 

the Exchange on the Fee Schedule under the 

existing description ‘‘Added displayed volume, 

Retail Order’’ with a Fee Code of ‘‘Br’’, ‘‘Dr’’ or ‘‘Jr’’, 

as applicable, on execution reports. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98938; File No. SR–MEMX– 

2023–30] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule Concerning Transaction 

Fees 

November 14, 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 November 

1, 2023, MEMX LLC (‘‘MEMX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

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 

November 1, 2023. 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) reduce the base rebate for executions 

of Retail Orders 4 in securities priced at 

or above $1.00 per share that add 

displayed liquidity to the Exchange 

(such orders, ‘‘Added Displayed Retail 

Volume’’); (ii) modify the Liquidity 

Provision Tiers by: modifying the 

required criteria under Liquidity 

Provision Tiers 1, 2, 3, 4, and 5; 

decreasing the rebate for executions of 

orders in securities priced at or above 

$1.00 per share that add displayed 

liquidity to the Exchange (such orders, 

‘‘Added Displayed Volume’’) under 

Liquidity Provision Tiers 2, 3, and 5; 

modifying the method by which the 

Exchange provides the rebate under 

Liquidity Provision Tiers 4 and 5; and 

eliminating Liquidity Provision Tier 6; 

(iii) adopt a new Retail Tier that 

provides an enhanced rebate for 

executions of Added Displayed Retail 

Volume priced at or above $1.00 per 

share; (iv) modify the required criteria 

under Liquidity Removal Tier 1; (v) 

modify the required criteria under NonDisplay Add Tier 1; (vi) modify the 

NBBO Setter/Joiner Tiers by reducing 

the additive rebate per share under 

NBBO Setter/Joiner Tier 1, renaming 

such tier to ‘‘NBBO Setter Tier 1’’ and 

eliminating NBBO Setter/Joiner Tier 2; 

(vii) adopt a new Tape B Volume Tier 

that provides an additive rebate for 

executions of Added Displayed Volume 

in Tape B securities priced at or above 

$1.00 per share and add a corresponding 

relevant defined term to the 

‘‘Definitions’’ section of the Fee 

Schedule; and (viii) adopt a new 

additive rebate for executions of Added 

Displayed Volume applicable to 

Displayed Liquidity Incentive (‘‘DLI’’) 

Tier 1 and Liquidity Provision Tier 1 or 

Liquidity Provision Tier 2; as further 

described below. 

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 15.5% 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 

exchange possesses significant pricing 

power in the execution of order flow, 

and the Exchange currently represents 

approximately 3% of the overall market 

share.6 The Exchange in particular 

operates a ‘‘Maker-Taker’’ model 

whereby it provides rebates to Members 

that add liquidity to the Exchange and 

charges fees to Members that remove 

liquidity from the Exchange. The Fee 

Schedule sets forth the standard rebates 

and fees applied per share for orders 

that add and remove liquidity, 

respectively. Additionally, in response 

to the competitive environment, the 

Exchange also offers tiered pricing, 

which provides Members with 

opportunities to qualify for higher 

rebates or lower fees where certain 

volume criteria and thresholds are met. 

Tiered pricing provides an incremental 

incentive for Members to strive for 

higher tier levels, which provides 

increasingly higher benefits or discounts 

for satisfying increasingly more 

stringent criteria. 

Reduce Base Rebate for Added 

Displayed Retail Volume 

Currently, the Exchange provides a 

base rebate of $0.0034 per share for 

executions of Added Displayed Retail 

Volume. The Exchange now proposes to 

reduce the base rebate for executions of 

Added Displayed Retail Volume to 

$0.0032 per share.7 The purpose of 

reducing the base rebate for executions 

of Added Displayed Retail Volume is for 

business and competitive reasons, as the 

Exchange believes that reducing such 

rebate as proposed would decrease the 

Exchange’s expenditures with respect to 

its transaction pricing in a manner that 

is still consistent with the Exchange’s 

overall pricing philosophy of 


ddrumheller on DSK120RN23PROD with NOTICES1
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8See, e.g., the Cboe BZX equities trading fee 

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

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

schedule/bzx/), which reflects a base rebate of 

$0.0032 per share for executions of attested retail 

orders in securities priced at or above $1.00 per 

share that add displayed liquidity, and the Cboe 

EDGX Exchange, Inc. (‘‘Cboe EDGX’’) equities 

trading fee schedule on its public website (available 

at https://www.cboe.com/us/equities/membership/ 

fee_schedule/edgx/), which reflects a base rebate of 

$0.0032 per share for executions of attested retail 

orders in securities priced at or above $1.00 per 

share that add displayed liquidity. 

9The base rebate for executions of Added 

Displayed Volume is referred to by the Exchange on 

the Fee Schedule under the existing description 

‘‘Added displayed volume’’ with a Fee Code of ‘‘B’’, 

‘‘D’’ or ‘‘J’’, as applicable, on execution reports. 

10As set forth on the Fee Schedule, ‘‘ADAV’’ 

means the average daily added volume calculated 

as the number of shares added per day, which is 

calculated on a monthly basis, and ‘‘Displayed 

ADAV’’ means ADAV with respect to displayed 

orders. 

11As set forth on the Fee Schedule, ‘‘TCV’’ means 

total consolidated volume calculated as the volume 

reported by all exchanges and trade reporting 

facilities to a consolidated transaction reporting 

plan for the month for which the fees apply. 

12As set forth on the Fee Schedule, ‘‘Step-Up 

ADAV’’ means ADAV in the relevant baseline 

month subtracted from current ADAV. 

13As set forth on the Fee Schedule, ‘‘ADV’’ means 

average daily volume calculated as the number of 

shares added or removed, combined, per day. ADV 

is calculated on a monthly basis. 

14As set forth on the Fee Schedule, ‘‘NonDisplayed ADAV’’ means ADAV with respect to 

non-displayed orders (including orders subject to 

Display-Price Sliding that receive price 

improvement when executed and Midpoint Peg 

orders). 

15The pricing for Liquidity Provision Tier 1 is 

referred to by the Exchange on the Fee Schedule 

under the existing description ‘‘Added displayed 

volume, Liquidity Provision Tier 1’’ with a Fee 

Code of ‘‘B1’’, ‘‘D1’’ or ‘‘J1’’, as applicable, to be 

provided by the Exchange on the monthly invoices 

provided to Members. 

16The proposed pricing for Liquidity Provision 

Tier 2 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

displayed volume, Liquidity Provision Tier 2’’ with 

a Fee Code of ‘‘B2’’, ‘‘D2’’ or ‘‘J2’’, as applicable, to 

be provided by the Exchange on the monthly 

invoices provided to Members. 

17The proposed pricing for Liquidity Provision 

Tier 3 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

displayed volume, Liquidity Provision Tier 3’’ with 

a Fee Code of ‘‘B3’’, ‘‘D3’’ or ‘‘J3’’, as applicable, to 

be provided by the Exchange on the monthly 

invoices provided to Members. 

encouraging added displayed liquidity. 

The Exchange notes that despite the 

reduction proposed herein, the 

proposed base rebate for executions of 

Added Displayed Retail Volume 

remains competitive with the base 

rebates provided by other exchanges for 

executions of Retail Orders in securities 

priced at or above $1.00 per share that 

add displayed liquidity.8

Liquidity Provision Tiers 

The Exchange currently provides a 

base rebate of $0.0015 per share for 

executions of Added Displayed 

Volume.9 The Exchange also currently 

offers Liquidity Provision Tiers 1–6 

under which a Member may receive an 

enhanced rebate for executions of 

Added Displayed Volume by achieving 

the corresponding required volume 

criteria for each such tier. The Exchange 

now proposes to modify the Liquidity 

Provision Tiers by modifying the 

required criteria under Liquidity 

Provision Tier 1 and Liquidity Provision 

Tier 4, reducing the rebate for 

executions of Added Displayed Volume 

and modifying the required criteria 

under Liquidity Provision Tier 2, 

Liquidity Provision Tier 3, and 

Liquidity Provision Tier 5, and 

eliminating Liquidity Provision Tier 6, 

as further described below. 

First, with respect to Liquidity 

Provision Tier 1, the Exchange currently 

provides an enhanced rebate of $0.0033 

per share for executions of Added 

Displayed Volume for Members that 

qualify for such tier by achieving an 

ADAV 10 (excluding Retail Orders) that 

is equal to or greater than 0.45% of the 

TCV.11 Now, the Exchange proposes to 

modify the required criteria such that 

Member would now qualify for 

Liquidity Provision Tier 1 by achieving: 

(1) an ADAV (excluding Retail Orders) 

that is equal to or greater than 0.45% of 

the TCV; or (2) a Step-Up ADAV 12

(excluding Retail Orders) of the TCV 

from September 2023 that is equal to or 

greater than .05%, an ADV 13 that is 

equal to or greater than 0.50% of the 

TCV, and a Non-Displayed ADAV 14 that 

is equal to or greater than 5,000,000 

shares; or (3) an ADAV that is equal to 

or greater than 0.30% of the TCV and a 

Non-Displayed ADAV that is equal to or 

greater than 7,000,000 shares. Thus, 

such proposed changes would keep the 

existing criteria intact as the first 

alternative, and add two additional 

alternative criteria, the first involving a 

combination of Step-Up ADAV, ADV, 

and Non-Displayed ADAV thresholds, 

and the second involving a combination 

of ADAV and Non-Displayed ADAV 

thresholds, all of which are designed to 

encourage the submission of additional 

liquidity-adding order flow to the 

Exchange.15 Additionally, the Exchange 

is proposing that criteria (2) of Liquidity 

Provision Tier 1 will expire no later 

than March 31, 2024, and the Exchange 

will indicate this in a note under the 

Liquidity Provision Tiers pricing table 

on the Fee Schedule. The Exchange is 

not proposing to change the rebate 

provided under such tier. 

With respect to Liquidity Provision 

Tier 2, the Exchange currently provides 

an enhanced rebate of $0.00325 per 

share for executions of Added Displayed 

Volume for Members that qualify for 

such tier by achieving: (1) an ADAV that 

is equal to or greater than 0.25% of the 

TCV; and (2) a Non-Displayed ADAV 

that is equal to or greater than 4,000,000 

shares. The Exchange now proposes to 

reduce the rebate for executions of 

Added Displayed Volume under 

Liquidity Provision Tier 2 to $0.0032 

per share and to modify the required 

criteria such that a Member would 

qualify for such tier by achieving: (1) an 

ADAV that is equal to or greater than 

0.25% of the TCV and a Non-Displayed 

ADAV that is equal to or greater than 

4,000,000 shares; or (2) a Step-Up 

Displayed ADAV of the TCV from 

September 2023 that is equal to or 

greater than 0.10% and a Displayed 

ADAV (excluding Retail Orders) that is 

equal to or greater than 0.20% of the 

TCV.16 Thus, such proposed changes 

would keep the existing criteria intact 

and add an alternative criteria (2) that 

includes a Step-Up Displayed ADAV 

threshold and a Displayed ADAV 

(excluding Retail Orders) threshold, 

which is designed to encourage the 

submission of additional liquidityadding order flow to the Exchange. 

Additionally, the Exchange is proposing 

that criteria (2) of Liquidity Provision 

Tier 2 will expire no later than March 

31, 2024, and the Exchange will indicate 

this in a note under the Liquidity 

Provision Tiers pricing table on the Fee 

Schedule. 

With respect to Liquidity Provision 

Tier 3, the Exchange currently provides 

an enhanced rebate of $0.0031 per share 

for executions of Added Displayed 

Volume for Members that qualify for 

such tier by achieving an ADAV that is 

equal to or greater than 0.20% of the 

TCV. The Exchange now proposes to 

reduce the rebate for executions of 

Added Displayed Volume under 

Liquidity Provision Tier 3 to $0.0030 

per share and to modify the required 

criteria such that a Member would now 

qualify for such tier by achieving an 

ADAV that is equal to or greater than 

0.175% of the TCV.17 Thus, such 

proposed change reduces the TCV 

threshold as well as the applicable 

rebate. 

With respect to Liquidity Provision 

Tier 4, the Exchange currently provides 

an enhanced rebate of $0.0029 per share 

for executions of Added Displayed 

Volume for Members that qualify for 

such tier by achieving: (1) an ADAV that 

is equal to or greater than 0.15% of the 

TCV; or (2) a Displayed ADAV that is 

equal to or greater than 0.02% of the 

TCV and a Step-Up Displayed ADAV of 

the TCV from April 2023 that is equal 


ddrumheller on DSK120RN23PROD with NOTICES1
80798 Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices 

18The proposed pricing for Liquidity Provision 

Tier 4 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

displayed volume, Liquidity Provision Tier 4’’ with 

a Fee Code of ‘‘B4’’, ‘‘D4’’ or ‘‘J4’’, as applicable, to 

be provided by the Exchange on the monthly 

invoices provided to Members. 

19The proposed pricing for Liquidity Provision 

Tier 5 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

displayed volume, Liquidity Provision Tier 5’’ with 

a Fee Code of ‘‘B5’’, ‘‘D5’’ or ‘‘J5’’, as applicable, to 

be provided by the Exchange on the monthly 

invoices provided to Members. 

20See Securities Exchange Act Release No. 97724 

(June 14, 2023), 88 FR 40361 (June 21, 2023) (SR– 

MEMX–2023–10). 

to or greater than 50% of the Member’s 

April 2023 Displayed ADAV of the TCV. 

The Exchange now proposes modify the 

required criteria such that a Member 

would now qualify for such tier by 

achieving (1) an ADAV (excluding 

Retail Orders) that is equal to or greater 

than 0.09% of the TCV; or (2) an ADAV 

that is equal to or greater than 0.06% of 

the TCV and a Step-Up ADAV from June 

2023 that is equal to or greater than 40% 

of the Member’s June 2023 Displayed 

ADAV.18 Thus, such proposed change 

would lower the ADAV threshold in the 

first alternative criteria (and exclude 

Retail Orders), and modify the 

alternative ADAV and Step-Up ADAV 

thresholds in criteria (2). Additionally, 

the Exchange is proposing that criteria 

(2) of Liquidity Provision Tier 4 will 

expire no later than December 31, 2023. 

The Exchange is not proposing to 

change the rebate provided under such 

tier. 

With respect to Liquidity Provision 

Tier 5, the Exchange currently provides 

an enhanced rebate of $0.0027 per share 

for executions of Added Displayed 

Volume for Members that qualify for 

such tier by achieving an ADAV that is 

equal to or greater than 0.075% of the 

TCV. The Exchange now proposes to 

reduce the rebate for executions of 

Added Displayed Volume under 

Liquidity Provision Tier 5 to $0.0025 

per share and to modify the required 

criteria such that a Member would now 

qualify for such tier by achieving: (1) an 

ADAV that is equal to or greater than 

0.06% of the TCV; or (2) a Displayed 

ADAV that is equal to or greater than 

0.007% of the TCV and a Step-Up 

Displayed ADAV from May 2023 that is 

equal to or greater than 50% of the 

Member’s May 2023 Displayed ADAV of 

the TCV.19 Thus, such proposed change 

would lower the ADAV threshold in the 

existing criteria and add an alternative 

criteria (2) that includes a Displayed 

ADAV and a Step-Up Displayed ADAV 

threshold. Additionally, the Exchange is 

proposing that criteria (2) of Liquidity 

Provision Tier 5 will expire no later 

than November 30, 2023, and the 

Exchange will indicate this in a note 

under the Liquidity Provision Tiers 

pricing table on the Fee Schedule. 

With respect to Liquidity Provision 

Tier 6, the Exchange currently provides 

an enhanced rebate of $0.0024 per share 

for executions of Added Displayed 

Volume for Members that qualify for 

such tier by achieving a Displayed 

ADAV that is equal to or greater than 

0.007% of the TCV and a Step-Up 

Displayed ADAV of the TCV from May 

2023 that is equal to or greater than 50% 

of the Member’s May 2023 Displayed 

ADAV of the TCV. As noted above, the 

criteria under this Tier has been shifted 

into criteria (2) of Liquidity Provision 

Tier 5. As such, the Exchange now 

proposes to eliminate Liquidity 

Provision Tier 6, as the Exchange no 

longer wishes to, nor is it required to, 

maintain such tier. 

Lastly, the Exchange is proposing to 

delete the language on the Fee Schedule 

that indicates Members that qualify for 

Liquidity Provision Tiers 4, 5, or 6 

based on activity in a given month will 

also receive the associated Tier 4, 5 or 

6 rebate during the following month. 

This method of providing the rebate 

under such Tiers was implemented on 

June 1, 2023,20 and differed from the 

previous practice applicable to those 

tiers (and current practice with respect 

to all incentives and pricing tiers on the 

Exchange’s Fee Schedule) whereby a 

Member receives the applicable rebate 

at the end of the month if it achieved 

the applicable criteria during that 

month. The Exchange implemented this 

method on a trial basis in an effort to 

encourage Members to increase their 

liquidity-adding order flow with an 

added layer of certainty in the rebate 

they would receive the next month, if 

applicable. However, the Exchange does 

not believe that the revised method 

incentivized Members to achieve 

Liquidity Provisions 4, 5, or 6 in a 

manner that was material enough to 

continue the trial further, and it would 

rather redirect the associated resources 

into other programs and tiers intended 

to incentivize increased order flow or 

enhance market quality. As such, the 

Exchange proposes to discontinue this 

method and provide the applicable 

rebate under Liquidity Provision Tiers 4 

and 5 (as noted above, it is proposing to 

eliminate Liquidity Provision Tier 6) in 

the same manner in which it provides 

rebates under all other pricing tiers. 

The purpose of reducing the rebates 

for executions of Added Displayed 

Volume under Liquidity Provision Tiers 

2, 3 and 5 as proposed, which the 

Exchange believes in each case 

represents a modest reduction and 

remains commensurate with the 

required criteria as modified, and 

eliminating Liquidity Provision Tier 6 is 

for business and competitive reasons, as 

the Exchange believes that such rebate 

reductions and tier elimination would 

decrease the Exchange’s expenditures 

with respect to its transaction pricing in 

a manner that is still consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added liquidity. The 

purpose of modifying the required 

criteria under Liquidity Provision Tiers 

1–5 provides an incremental incentive 

for Members to strive for higher volume 

thresholds to receive higher enhanced 

rebates for such executions and, as such, 

is intended to encourage Members to 

maintain or increase their order flow, 

primarily in the form of liquidity-adding 

volume, to the Exchange, thereby 

contributing to a deeper and more liquid 

market to the benefit of all Members and 

market participants. The Exchange 

believes that the Liquidity Provision 

Tiers, as modified by the proposed 

changes described above, reflect a 

reasonable and competitive pricing 

structure that is right-sized and 

consistent with the Exchange’s overall 

pricing philosophy of encouraging 

added and/or displayed liquidity. 

Specifically, the Exchange believes that, 

after giving effect to the proposed 

changes described above, the rebate for 

executions of Added Displayed Volume 

provided under each of the Liquidity 

Provision Tiers 1–5 and the manner in 

which it is provided remains 

commensurate with the corresponding 

required criteria under each such tier 

and is reasonably related to the market 

quality benefits that each such tier is 

designed to achieve. 

Retail Tier 

As described above, the Exchange is 

proposing to provide a base rebate of 

$0.0032 per share for executions of 

Added Displayed Retail Volume. In 

addition, the Exchange is proposing to 

adopt a new tiered pricing structure 

applicable to the rebate provided for 

executions of Added Displayed Retail 

Volume. Specifically, the Exchange 

proposes to adopt a new volume-based 

tier, referred to by the Exchange as the 

Retail Tier, in which the Exchange will 

provide an enhanced rebate for 

executions of Added Displayed Retail 

Volume that meet a certain specified 

volume threshold on the Exchange. 

Under the proposed Retail Tier 1, the 

Exchange will provide an enhanced 

rebate of $0.0034 per share for 

executions of Added Displayed Retail 

Volume for a Member that qualifies for 


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Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices 80799 

21The proposed pricing for the Retail Tier is 

referred to by the Exchange on the Fee Schedule 

under the description ‘‘Added displayed volume, 

Retail Tier 1’’ with a Fee Code of ‘‘Br1’’, ‘‘Dr1’’ or 

‘‘Jr1’’, as applicable, to be provided by the Exchange 

on the monthly invoices provided to Members. 

22See, e.g., the Retail Volume Tiers reflected on 

the Cboe BZX equities trading fee schedule 

(available at https://www.cboe.com/us/equities/ 

membership/fee_schedule/bzx/), and the Retail 

Volume Tiers reflected on the Cboe EDGX equities 

trading fee schedule (available at https://

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

schedule/edgx/). 

23As set forth on the Fee Schedule, ‘‘Remove 

ADV’’ means ADV with respect to orders that 

remove liquidity. 

24The proposed pricing for Liquidity Removal 

Tier 1 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Removed 

volume from MEMX Book, Liquidity Removal Tier 

1’’ with a Fee Code of ‘‘R1’’ assigned on the 

monthly invoices provided by the Exchange. The 

Exchange is not proposing to change the fee charged 

under Liquidity Removal Tier 1 for executions of 

securities priced below $1.00 per share. 

25The pricing for Non-Display Add Tier 1 is 

referred to by the Exchange on the Fee Schedule 

under the existing description ‘‘Added nondisplayed volume, Non-Display Add Tier 1’’ with 

a Fee Code of ‘‘H1’’, ‘‘M1’’ or ‘‘P1’’, as applicable, 

to be provided by the Exchange on the monthly 

invoices provided to Members. 

26The Exchange notes that orders with Fee Code 

B include orders, other than Retail Orders, that 

establish the NBBO. 

the Retail Tier 1 by achieving a Retail 

Order ADAV that is equal to or greater 

than 0.07% of the TCV. The $0.0003 per 

share additive rebate will be provided in 

addition to the rebate that is otherwise 

applicable to each of a qualifying 

Members’ orders that constitutes Setter 

Volume (including a rebate provided 

under another pricing tier/incentive).21

The Exchange proposes to provide 

Members that qualify for the proposed 

new Retail Tier 1 a rebate of 0.075% of 

the total dollar volume of the 

transaction for executions of orders in 

securities priced below $1.00 per share 

that add displayed liquidity to the 

Exchange, which is the same rebate that 

is currently applicable to such 

executions for all Members. 

The proposed Retail Tier is designed 

to encourage growth in Retail Order 

flow to the Exchange by providing an 

additional rebate for executions of 

Added Displayed Retail Volume, 

thereby promoting increased liquidity 

and providing for overall enhanced 

price discovery and market quality on 

the Exchange. The Exchange notes that 

the proposed Retail Tier is comparable 

to other volume-based incentives and 

discounts, which have been widely 

adopted by exchanges (including the 

Exchange).22

Liquidity Removal Tier 

The Exchange currently charges a 

standard fee of $0.0030 per share for 

executions of orders in securities priced 

at or above $1.00 per share that remove 

liquidity from the Exchange (such 

orders, ‘‘Removed Volume’’). The 

Exchange also currently offers Liquidity 

Removal Tier 1 under which qualifying 

Members are charged a discounted fee 

of $0.00295 per share for executions of 

Removed Volume by achieving (1) an 

ADV that is equal to or greater than 

0.50% of the TCV; or (2) a Remove 

ADV 23 that is equal to or greater than 

0.30% of the TCV. Now, the Exchange 

proposes to modify the required criteria 

under Liquidity Removal Tier 1 such 

that a Member would qualify for such 

tier by achieving (1) an ADV that is 

equal to or greater than 0.60% of the 

TCV; and (2) a Remove ADV that is 

equal to or greater than 0.30% of the 

TCV.24 Thus, such proposed change 

would increase the ADV threshold in 

the first required criteria and keep the 

second required criteria intact with no 

changes except that, as proposed, a 

Member would be required to achieve 

both criteria, rather than one or the 

other. The Exchange is not proposing to 

change the rebate provided under such 

tier. 

The proposed change to the Liquidity 

Removal Tier 1 is designed to encourage 

Members to maintain or increase their 

order flow, including in the form of 

orders that remove liquidity, to the 

Exchange in order to qualify for the 

discounted fee for executions of 

Removed Volume. While the Exchange’s 

overall pricing philosophy generally 

encourages adding liquidity over 

removing liquidity, the Exchange 

believes that providing alternative 

criteria that are based on different types 

of volume that Members may choose to 

achieve, such as the proposed new 

criteria under Liquidity Removal Tier 1, 

contributes to a more robust and wellbalanced market ecosystem on the 

Exchange to the benefit of all Members. 

Non-Display Add Tier 1 

The Exchange currently offers NonDisplay Add Tiers 1–4 under which a 

Member may receive an enhanced 

rebate for executions of Added NonDisplayed Volume by achieving the 

corresponding required volume criteria 

for each such tier. Currently, a Member 

qualifies for Non-Display Add Tier 1, 

and thus receives an enhanced rebate of 

$0.0028 per share for executions of 

Added Non-Displayed Volume under 

such tier, by achieving: (1) a NonDisplayed ADAV that is equal to or 

greater than 8,000,000 shares; or (2) an 

ADAV (excluding Retail Orders) that is 

equal to or greater than 0.45% of the 

TCV.25 The Exchange now proposes to 

modify Non-Display Add Tier 1 such 

that a Member would now qualify for 

such tier by achieving a Non-Displayed 

ADAV that is equal to or greater than 

8,000,000 shares. Thus, such proposed 

change would keep the first existing 

criteria intact without changes and 

eliminate the second alternative criteria, 

which the Exchange believes would 

make the tier easier for Members to 

achieve, and, in turn, while the 

Exchange has no way of predicting with 

certainty how the proposed new criteria 

will impact Member activity, the 

Exchange expects that more Members 

will qualify, or strive to qualify, for such 

tier than currently do, resulting in the 

submission of additional order flow to 

the Exchange. The Exchange is not 

proposing to change the rebate provided 

under this tier. 

The tiered pricing structure for 

executions of Added Non-Displayed 

Volume under the Non-Display Add 

Tiers provides an incremental incentive 

for Members to strive for higher volume 

thresholds to receive higher enhanced 

rebates for such executions and, as such, 

is intended to encourage Members to 

maintain or increase their order flow, 

particularly in the form of liquidityadding non-displayed volume, to the 

Exchange, thereby contributing to a 

deeper and more robust and wellbalanced market ecosystem to the 

benefit of all Members and market 

participants. 

NBBO Setter/Joiner Tiers 

The Exchange currently offers NBBO 

Setter/Joiner Tiers 1–2 under which a 

Member may receive an additive rebate 

for a qualifying Member’s executions of 

Added Displayed Volume (other than 

Retail Orders) that establish the NBBO 

(such orders, ‘‘Setter Volume’’) and 

executions of Added Displayed Volume 

(other than Retail Orders) that establish 

a new best bid or offer on the Exchange 

that matches the NBBO first established 

on an away market (such orders, ‘‘Joiner 

Volume’’). The Exchange now proposes 

to modify the NBBO Setter/Joiner Tiers 

by decreasing the additive rebate 

provided for executions of Setter and 

Joiner Volume under NBBO Setter/ 

Joiner Tier 1 and renaming such tier 

‘‘NBBO Setter Tier 1’’ and eliminating 

NBBO Setter/Joiner Tier 2, as further 

described below. 

With respect to NBBO Setter/Joiner 

Tier 1, the Exchange currently provides 

an additive rebate of $0.0004 per share 

for executions of Setter Volume for 

Members that qualify for such tier by 

achieving an ADAV equal to or greater 

than 0.10% of the TCV with respect to 

orders with Fee Code B.26 Now, the 

Exchange proposes to reduce the rebate 


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27The Exchange notes that orders with Fee Code 

J include orders, other than Retail Orders, that 

establish a new BBO on the Exchange that matches 

the NBBO first established on an away market. 

28The Exchange notes that orders with Fee Code 

D include orders that add displayed liquidity to the 

Exchange but that are not Fee Code B or J, and thus, 

orders with Fee Code B, D or J include all orders, 

other than Retail Orders, that add displayed 

liquidity to the Exchange. 

29The Exchange proposes to define ‘‘Step-Up 

Tape B ADAV’’ in the Fee Schedule as the ADAV 

in Tape B securities as a percentage of the TCV in 

the relevant baseline month subtracted from the 

current ADAV in Tape B securities as a percentage 

of the TCV. 

30The proposed pricing for the Tape B Volume 

Tier is referred to by the Exchange on the Fee 

Schedule under the new description ‘‘Tape B 

Volume Tier’’ with a Fee Code of ‘‘b’’ to be 

appended to the otherwise applicable Fee Code 

assigned by the Exchange on the monthly invoices 

for qualifying executions. 

31See, e.g., Securities Exchange Act Release No. 

73813 (September 11, 2015), 80 FR 55882 

(September 17, 2015) (SR–BATS–2015–74) (notice 

of filing and immediate effectiveness of a proposed 

rule change related to fees to adopt a Tape B 

Volume Tier that provides an enhanced rebates for 

executions of orders in Tape B Securities to BZX 

(formerly BATS Exchange, Inc.) members that 

qualify for such tiers by achieving a specified Tape 

B ADAV threshold). 

32See the Exchange’s Fee Schedule (available at: 

https://info.memxtrading.com/equities-tradingresources/us-equities-fee-schedule) for additional 

details regarding the Exchange’s DLI Tiers and DLI 

Target Securities. 

33This proposed pricing is referred to by the 

Exchange on the Fee Schedule under the new 

description ‘‘DLI Additive Rebate’’ with a Fee Code 

of ‘‘q’’ to be appended to the otherwise applicable 

Fee Code for qualifying executions. 

34The enhanced rebate provided under DLI Tier 

1 is $0.0031 per share for executions of Added 

Displayed Volume. 

for NBBO Setter/Joiner Tier 1 to $0.0002 

per share. The Exchange believes that 

the additive rebate remains 

commensurate with the required criteria 

under such tier, as modified, and is 

reasonably related to the market quality 

benefits that such tier is designed to 

achieve. 

With respect to NBBO/Setter Joiner 

Tier 2, the Exchange currently provides 

an additive rebate of $0.0002 per share 

for executions of Setter Volume and 

Joiner Volume for Members that qualify 

for such tier by achieving an ADAV that 

is equal to or greater than 0.05% of the 

TCV and a Displayed ADAV with 

respect to orders with Fee Code B or J 27

that is equal to or greater than 40% of 

the Member’s Displayed ADAV with 

respect to orders with Fee Code B, D or 

J.28 The Exchange now proposes to 

eliminate NBBO Setter/Joiner Tier 2, as 

the Exchange no longer wishes to, nor 

is it required to, maintain such tier. 

Finally, after the proposed 

elimination of NBBO Setter/Joiner Tier 

2, only one relevant Tier remains, and 

that tier only applies to orders with a 

Fee Code B that establish the NBBO. As 

such, the Exchange proposes to rename 

this tier category ‘‘NBBO Setter Tier’’, 

and the relevant Tier 1 ‘‘NBBO Setter 

Tier 1’’. 

Adoption of Tape B Volume Tier 

The Exchange proposes to adopt a 

new volume-based tier, referred to by 

the Exchange as the Tape B Volume 

Tier, in which the Exchange will 

provide an additive rebate for 

executions of Added Displayed Volume 

(excluding Retail Orders) in Tape B 

Securities (such orders, ‘‘Tape B 

Volume’’). Under the proposed Tape B 

Volume Tier 1, the Exchange will 

provide an additive rebate of $0.0001 

per share for executions of Tape B 

Volume for a Member that qualifies for 

the Tape B Volume Tier 1 by achieving: 

(1) a Step-Up Tape B ADAV 29 of the 

Tape B TCV from October 2023 that is 

equal to or greater than 

0.10%(excluding Retail Orders); and (2) 

a Tape B ADAV that is equal to or 

greater than 0.25% of the Tape B TCV 

(excluding Retail Orders). The $0.0001 

per share additive rebate will be 

provided in addition to the rebate that 

is otherwise applicable to each of a 

qualifying Members’ orders that 

constitutes Tape B Volume (including a 

rebate provided under another pricing 

tier/incentive).30 Additionally, the 

Exchange is proposing Tape B Volume 

Tier 1 will expire no later than April 30, 

2024, and the Exchange will indicate 

this in a note under the Tape B Volume 

Tier pricing table on the Fee Schedule. 

The Exchange notes that the additive 

rebate will not apply to executions of 

orders in Tape B securities priced below 

$1.00 per share. 

The proposed Tape B Volume Tier is 

designed to attract displayed liquidity to 

the Exchange in Tape B securities by 

providing an additional rebate for 

executions of Tape B Volume to 

Members, thereby promoting price 

discovery and market quality on the 

Exchange. The Exchange notes that the 

proposed Tape B Volume Tier is 

comparable to other volume-based 

incentives and discounts, which have 

been widely adopted by exchanges 

(including the Exchange), including 

similar pricing incentives applicable to 

Tape B securities.31

DLI Additive Rebate 

The Exchange currently offers DLI 

Tiers 1 and 2 in which qualifying 

Members are provided an enhanced 

rebate for executions of Added 

Displayed Volume. The DLI Tiers are 

designed to encourage Members, 

through the provision of such enhanced 

rebates for executions of Added 

Displayed Volume, to promote price 

discovery and market quality by quoting 

at the NBBO for a significant portion of 

each day in a large number of securities, 

thereby benefitting the Exchange and 

investors by providing improved trading 

conditions for all market participants 

through narrower bid-ask spreads and 

increased depth of liquidity available at 

the NBBO in a broad base of securities, 

and committing capital to support the 

execution of orders.32 The Exchange is 

not proposing to modify the DLI Tiers 

at this time, however, the Exchange is 

proposing to adopt a new additive 

rebate for executions of Added 

Displayed Volume applicable to DLI 

Tier 1 and Liquidity Provision Tier 1 or 

Liquidity Provision Tier 2 (the ‘‘DLI 

Additive Rebate’’). Specifically, the 

proposed DLI Additive Rebate would 

provide an additive rebate of $0.0001 

per share for executions of Added 

Displayed Volume that otherwise 

qualify for the applicable rebate under 

Liquidity Provision Tier 1 or Liquidity 

Provision Tier 2 as well as the 

applicable criteria under DLI Tier 1,33 as 

described more fully below. 

First, a Member qualifies for DLI Tier 

1 by having (1) an NBBO time of at least 

25% in an average of at least 1,000 

securities per trading day during the 

month; and (2) an ADAV that is equal 

to or greater than 0.10% of the TCV.34

Under Liquidity Provision Tier 1, the 

Exchange is proposing (as described 

above) to provide an enhanced rebate of 

$0.0033 per share for executions of 

Added Displayed Volume for Members 

that qualify for such tier by achieving: 

(1) an ADAV (excluding Retail Orders) 

that is equal to or greater than 0.45% of 

the TCV; or (2) a Step-Up ADAV from 

September 2023 that is equal to or 

greater than 0.05% of the TCV, an ADV 

that is equal to or greater than 0.50% of 

the TCV, and a Non-Displayed ADAV 

that is equal to or greater than 5,000,000 

shares; or (3) an ADAV that is equal to 

or greater than 0.30% of the TCV and a 

Non-Displayed ADAV that is equal to or 

greater than 7,000,000 shares. Under 

Liquidity Provision Tier 2, the Exchange 

is proposing (as described above) to 

provide an enhanced rebate of $0.0032 

for executions of Added Displayed 

Volume for Members that qualify for 

such tier by having: (1) an ADAV that 

is greater than or equal to 0.25% of the 

TCV and a Non-Displayed ADAV that is 

equal to or greater than 4,000,000 

shares; or (2) a Step-Up Displayed 

ADAV of the TCV from September 2023 

that is equal to or greater than 0.10% 

and a Displayed ADAV (excluding 

Retail Orders) that is equal to or greater 

than 0.20% of the TCV. Members would 


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35Thus, a Member that qualifies for Liquidity 

Provision Tier 1 and the DLI Additive Rebate (by 

achieving the criteria under DLI Tier 1) would 

receive a rebate of $0.0034 per share (which is the 

$0.0033 per share rebate under Liquidity Provision 

Tier 1, as described above, plus the $0.0001 per 

share DLI Additive Rebate) for executions of Added 

Displayed Volume, and a Member that qualifies for 

Liquidity Provision Tier 2 and the DLI Additive 

Rebate (by achieving the criteria under DLI Tier 1) 

would receive a rebate of $0.0033 per share (which 

is the proposed $0.0032 per share rebate under 

Liquidity Provision Tier 2, as described above, plus 

the $0.0001 per share DLI Additive Rebate) for 

executions of Added Displayed Volume. 

36See Securities Exchange Act Release No. 93949 

(January 11, 2022), 87 FR 2655 (January 18, 2022) 

(SR–MEMX–2021–21) (Notice of filing and 

immediate effectiveness of fee changes adopted by 

the Exchange, including the adoption of a DLI 

Additive Rebate). The Exchange subsequently 

eliminated the DLI Additive Rebate on July 1, 2022. 

See Securities Exchange Act Release No. 95211 

(July 7, 2022), 87 FR 41839 (July 13, 2022) (SR– 

MEMX–2022–16). 

37 15 U.S.C. 78f. 

38 15 U.S.C. 78f(b)(4) and (5). 

39Securities Exchange Act Release No. 51808 

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

40See supra note 8. 

qualify for the DLI Additive rebate and 

by achieving both the criteria under DLI 

Tier 1 and either Liquidity Provision 

Tier 1 or Liquidity Tier 2.35

The purpose of the proposed DLI 

Additive Rebate is to encourage 

Members that consistently quote at the 

NBBO on the Exchange (i.e., Members 

that qualify for DLI Tier 1) to also 

maintain or increase their orders that 

add liquidity on the Exchange in order 

to qualify for an additive rebate for 

executions of Added Displayed Volume, 

which, in turn, the Exchange believes 

would encourage the submission of 

additional Added Displayed Volume to 

the Exchange, thereby promoting price 

discovery and contributing to a deeper 

and more liquid market to the benefit of 

all market participants. The Exchange 

notes that the proposed DLI Additive 

Rebate is comparable to other volumebased incentives and discounts, which 

have been widely adopted by 

exchanges, including the Exchange, 

such as pricing tiers that provide a 

supplemental incentive for firms that 

achieve a specified volume threshold.36

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,37

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

6(b)(5) of the Act,38 in particular, in that 

it provides 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.’’ 39

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. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates, and market 

participants can readily trade on 

competing venues if they deem pricing 

levels at those other venues to be more 

favorable. The Exchange believes the 

proposal reflects a reasonable and 

competitive pricing structure designed 

to incentivize market participants to 

direct additional order flow, including 

displayed, non-displayed, liquidityadding and/or liquidity-removing 

orders, to the Exchange, which the 

Exchange believes would promote price 

discovery and enhance liquidity and 

market quality on the Exchange to the 

benefit of all Members and market 

participants. 

The Exchange believes that the 

proposed change to reduce the base 

rebate provided for executions Added 

Displayed Retail Volume is reasonable 

because, as described above, such 

change is designed to decrease the 

Exchange’s expenditures with respect to 

its transaction pricing in a manner that 

is still consistent with the Exchange’s 

overall pricing philosophy of 

encouraging added and/or displayed 

liquidity, and the proposed new base 

rebate for executions of Added 

Displayed Retail Volume remains in 

competitive with, the base rebates 

provided by other exchanges in each 

case for executions of similar orders.40

The Exchange also believes the 

proposed base rebate for executions of 

Added Displayed Retail Volume is 

equitable and not unfairly 

discriminatory, as such base rebate will 

apply equally to all Members submitting 

Retail Orders to the Exchange. 

The Exchange notes that volumebased incentives and discounts (such as 

tiers) have been widely adopted by 

exchanges, including the Exchange, and 

are reasonable, equitable and not 

unfairly discriminatory because they are 

open to all members on an equal basis 

and provide additional benefits or 

discounts that are reasonably related to 

the value to an exchange’s market 

quality associated with higher levels of 

market activity, such as higher levels of 

liquidity provision and/or growth 

patterns, and the introduction of higher 

volumes of orders into the price and 

volume discovery process. The 

Exchange believes that each of the 

Liquidity Provision Tiers 1–5, Liquidity 

Removal Tier 1, Non-Display Add Tier 

1, NBBO Setter Tier 1, each as modified 

by the changes proposed herein, as well 

as the proposed new Retail Tier, Tape 

B Volume Tier, and DLI Additive 

Rebate, are reasonable, equitable and 

not unfairly discriminatory for these 

same reasons, as such tiers would 

provide Members with an incremental 

incentive to achieve certain volume 

thresholds on the Exchange, are 

available to all Members on an equal 

basis, and, as described above, are 

designed to encourage Members to 

maintain or increase their order flow, 

including in the form of displayed, nondisplayed, liquidity-adding and/or 

liquidity removing orders under the 

required criteria, as applicable, to the 

Exchange, which the Exchange believes 

would promote price discovery, 

enhance liquidity and market quality, 

and contribute to a more robust and 

well balanced market ecosystem on the 

Exchange to the benefit of all Members 

and market participants. 

The Exchange also believes that such 

tiers reflect a reasonable and equitable 

allocation of fees and rebates, as the 

Exchange believes that, after giving 

effect to the changes proposed herein, 

the enhanced rebate for executions of 

Added Displayed Volume, Added 

Displayed Retail Volume, Added NonDisplayed Volume, Setter Volume, 

Added Tape B Volume, as well as the 

discounted fee for executions of 

Removed Volume under the modified 

Liquidity Removal Tier 1, each remains 

commensurate with the corresponding 

required criteria under each such tier 

and is reasonably related to the market 

quality benefits that each such tier is 

designed to achieve, as described above. 


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41 15 U.S.C. 78f(b)(4) and (5). 42See supra note 39. 

With respect to the proposed changes 

to eliminate Liquidity Provision Tier 6 

and NBBO Setter/Joiner Tier 2, the 

Exchange believes such changes are 

reasonable because, as noted above, they 

would enable the Exchange to redirect 

the associated resources and funding 

into other programs and tiers intended 

to incentivize increased order flow or 

enhance market quality, and the 

Exchange is not required to maintain 

such tiers or provide Members any 

opportunities to receive additive 

rebates. The Exchange believes the 

proposal to eliminate such tiers is also 

equitable and not unfairly 

discriminatory because it would apply 

equally to all Members, in that the 

incentives would no longer be available 

for any Member. 

Similarly, the Exchange believes the 

proposed discontinuance of the current 

method by which it is providing the 

enhanced rebates under Liquidity 

Provision Tiers 4 and 5 (each as 

modified by the proposed changes 

herein) is reasonable because, as noted 

above, the Exchange implemented this 

novel method on a trial basis and 

determined that it did not incentivize 

members to meet the applicable 

Liquidity Provision Tiers to the extent 

that it believes would support 

continuation. Further, the method by 

which the Exchange provides rebates 

does not affect any criteria or rebates 

provided under Liquidity Provision 

Tiers 4 and 5, and as such, modifying 

the method again does not alter the 

Exchange’s reasonable and competitive 

pricing structure designed to incentivize 

market participants to direct additional 

flow to the Exchange. The Exchange 

believes the proposal to discontinue this 

method is also equitable and not 

unfairly discriminatory because it 

would apply equally to Members, in 

that the Exchange would instead 

provide the rebates to all Members for 

all pricing tiers under the same 

methodology whereby a Member is 

awarded a rebate based on its activity 

for the current month. 

For the reasons discussed above, the 

Exchange submits that the proposal 

satisfies the requirements of Sections 

6(b)(4) and 6(b)(5) of the Act 41 in that 

it provides 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 unfairly discriminate 

between customers, issuers, brokers, or 

dealers. As described more fully below 

in the Exchange’s statement regarding 

the burden on competition, the 

Exchange believes that its transaction 

pricing is subject to significant 

competitive forces, and that the 

proposed fees and rebates described 

herein are appropriate to address such 

forces. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposal will result in any burden 

on competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. Instead, as 

discussed above, the proposal is 

intended to incentivize market 

participants to direct additional order 

flow to the Exchange, thereby enhancing 

liquidity and market quality on the 

Exchange to the benefit of all Members 

and market participants, as well as to 

generate additional revenue and 

decrease the Exchange’s expenditures 

with respect to its transaction pricing in 

a manner that is still consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added displayed 

liquidity. As a result, the Exchange 

believes the proposal would enhance its 

competitiveness as a market that attracts 

actionable orders, thereby making it a 

more desirable destination venue for its 

customers. For these reasons, the 

Exchange believes that the proposal 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 42

Intramarket Competition 

As discussed above, the Exchange 

believes that the proposal would 

decrease the Exchange’s expenditures 

and generate additional revenue with 

respect to its transaction pricing in a 

manner that is still consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added and/or displayed 

liquidity and would incentivize market 

participants to direct additional order 

flow to the Exchange through volumebased tiers, thereby enhancing liquidity 

and market quality on the Exchange to 

the benefit of all Members, as well as 

enhancing the attractiveness of the 

Exchange as a trading venue, which the 

Exchange believes, in turn, would 

continue to encourage market 

participants to direct additional order 

flow to the Exchange. Greater liquidity 

benefits all Members by providing more 

trading opportunities and encourages 

Members to send additional orders to 

the Exchange, thereby contributing to 

robust levels of liquidity, which benefits 

all market participants. 

The Exchange does not believe that 

the proposed change to reduce the base 

rebate for executions of Added 

Displayed Retail Volume would impose 

any burden on intramarket competition 

because such change will apply to all 

Members uniformly, in that the 

proposed base rebate for such 

executions would be the base rebate 

applicable to all Members, and the 

opportunity to qualify for enhanced 

rebate, as applicable, is available to all 

Members. The opportunity to qualify for 

each of the Liquidity Provision Tiers 1– 

5, NBBO Setter Tier 1, Non-Display Add 

Tier 1, and Liquidity Removal Tier 1, 

each as modified by the changes 

proposed herein, as well as the 

proposed new Retail Tier, Tape B 

Volume Tier, and DLI Additive Rebate, 

and thus receive the corresponding 

enhanced rebates or discounted fees, as 

applicable, would be available to all 

Members that meet the associated 

volume and/or quoting requirements in 

any month. As described above, the 

Exchange believes that the required 

criteria under each such tier are 

commensurate with the corresponding 

rebate under such tier and are 

reasonably related to the enhanced 

liquidity and market quality that such 

tier is designed to promote. 

Additionally, the Exchange does not 

believe that the proposal to eliminate 

the method by which the Exchange 

currently provides the enhanced rebate 

under the Liquidity Provision Tiers 4 

and 5 (each as modified by the changes 

proposed herein), would impose any 

burden on intramarket competition 

because such change will apply to all 

Members uniformly, and the 

methodology by which the Exchange 

provides rebates will be the same for all 

pricing tiers. For the foregoing reasons, 

the Exchange believes the proposed 

changes would not impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intermarket Competition 

As noted above, the Exchange 

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. 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 

15.5% of the total market share of 


ddrumheller on DSK120RN23PROD with NOTICES1
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43See supra note 39. 

44NetCoalition 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)). 

45 15 U.S.C. 78s(b)(3)(A)(ii). 

46 17 CFR 240.19b–4(f)(2). 47 17 CFR 200.30–3(a)(12). 

executed volume of equities trading. 

Thus, in such a low-concentrated and 

highly competitive market, no single 

equities exchange 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. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates, including with respect 

to executions of Added Displayed 

Volume, Added Displayed Retail 

Volume, Added Non-Displayed Volume 

and Removed Volume, and market 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. As described above, the 

proposed changes represent a 

competitive proposal through which the 

Exchange is seeking to generate 

additional revenue with respect to its 

transaction pricing and to encourage the 

submission of additional order flow to 

the Exchange through volume-based 

tiers, which have been widely adopted 

by exchanges, including the Exchange. 

Accordingly, the Exchange believes the 

proposal would not burden, but rather 

promote, intermarket competition by 

enabling it to better compete with other 

exchanges that offer similar pricing 

incentives to market participants. 

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.’’ 43 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 

broker-dealers that act as their orderrouting 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’. . . .’’.44 Accordingly, the 

Exchange does not believe its proposed 

pricing changes impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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 45 and Rule 

19b–4(f)(2) 46 thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MEMX–2023–30 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–MEMX–2023–30. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MEMX–2023–30 and should be 

submitted on or before December 11, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.47

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25549 Filed 11–17–23; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Meeting of the Advisory Committee on 

Veterans Business Affairs 

AGENCY: Small Business Administration 

(SBA). 

ACTION: Notice of open Federal advisory 

committee meeting. 

SUMMARY: The SBA is issuing this notice 

to announce the date, time, and agenda 

for a meeting of the Advisory Committee 

on Veterans Business Affairs (ACVBA). 


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