[Federal Register Volume 87, Number 92 (Thursday, May 12, 2022)]
[Notices]
[Pages 29197-29201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10148]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94863; File No. SR-MEMX-2022-11]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Fee Schedule

May 6, 2022.
    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 April 29, 2022, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 May 2, 2022. The text of the proposed rule change 
is provided in Exhibit 5.
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    \3\ See Exchange Rule 1.5(p).
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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) Adopt a new volume-based pricing incentive, referred 
to by the Exchange as the Step-Up Additive Rebate, in which a 
qualifying Member will receive an additive rebate for executions of 
certain orders in securities priced at or above $1.00 per share that 
add displayed liquidity to the Exchange; (ii) reduce the rebate 
provided under Liquidity Provision Tier 1 for executions of orders in 
securities priced at or above $1.00 per share that add displayed 
liquidity to the Exchange; and (iii) reduce the rebate provided under 
DLI Tier 2 for executions of orders in securities priced at or above 
$1.00 per share that add displayed liquidity to the Exchange.
    The Exchange first notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 16 registered equities exchanges, as well as a 
number of alternative trading systems and other off-exchange venues, to 
which market participants may direct their order flow. Based on 
publicly available information, no single registered equities exchange 
currently has more than approximately 16% of the total market share of 
executed volume of equities trading.\4\ Thus, in such a low-
concentrated and highly competitive market, no single equities

[[Page 29198]]

exchange possesses significant pricing power in the execution of order 
flow, and the Exchange currently represents approximately 4% of the 
overall market share.\5\ 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.
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    \4\ Market share percentage calculated as of April 27, 2022. The 
Exchange receives and processes data made available through 
consolidated data feeds (i.e., CTS and UTDF).
    \5\ Id.
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Adoption of Step-Up Additive Rebate
    The Exchange currently provides a standard rebate of $0.0020 per 
share 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''). The Exchange also currently offers various 
volume-based tiers and incentives in which a Member may receive an 
enhanced or additive rebate for executions of Added Displayed Volume by 
achieving the specified volume criteria that corresponds to a 
particular tier/incentive. The Exchange now proposes to adopt a new 
volume-based incentive, referred to by the Exchange as the Step-Up 
Additive Rebate, in which the Exchange will provide an additive rebate 
of $0.0002 per share for executions of certain orders that constitute 
Added Displayed Volume for a Member that qualifies for the Step-Up 
Additive Rebate by achieving a Step-Up ADAV (other than Retail Orders) 
\6\ from April 2022 of at least 0.07% of the TCV.\7\ As proposed, a 
Member that qualifies for the Step-Up Additive Rebate will receive the 
additive rebate of $0.0002 per share \8\ in addition to the rebate that 
is otherwise applicable (including a rebate provided under another 
pricing tier/incentive) for each of such Member's executions of orders 
that constitute Added Displayed Volume, except: (i) Orders that 
establish the national best bid or offer (``NBBO'') if such Member 
qualifies for the Exchange's NBBO Setter Tier; \9\ and (ii) and Retail 
Orders.\10\ The Exchange notes that the Step-Up Additive Rebate will 
not apply to executions of orders in securities priced below $1.00 per 
share.
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    \6\ As 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 ``Step-Up ADAV'' means 
ADAV in the relevant baseline month subtracted from current ADAV. As 
set forth in Exchange Rule 11.21(a), a ``Retail Order'' means an 
agency or riskless principal order that meets the criteria of FINRA 
Rule 5320.03 that originates from a natural person and is submitted 
to the Exchange by a Retail Member Organization, provided that no 
change is made to the terms of the order with respect to price or 
side of market and the order does not originate from a trading 
algorithm or any other computerized methodology. As proposed, Retail 
Orders that add volume are not included in the calculations of ADAV 
and Step-Up ADAV for purposes of determining whether a Member 
qualifies for the Step-Up Additive Rebate.
    \7\ As 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.
    \8\ The proposed pricing for the Step-Up Additive Rebate is 
referred to by the Exchange on the Fee Schedule under the new 
description ``Step-Up Additive Rebate'' with a Fee Code of ``X'' to 
be appended to the otherwise applicable Fee Code assigned by the 
Exchange on the monthly invoices for qualifying executions. The 
Exchange notes that because the determination of whether a Member 
qualifies for a certain pricing tier/incentive (including the Step-
Up Additive Rebate) for a particular month will not be made until 
after the month-end, the Exchange will provide the Fee Codes 
otherwise applicable to such transactions on the execution reports 
provided to Members during the month and will only designate the Fee 
Codes applicable to the achieved pricing tier/incentive on the 
monthly invoices, which are provided after such determination has 
been made, as the Exchange does for its tier/incentive pricing 
today.
    \9\ The Exchange notes that a Member that qualifies for the 
Exchange's NBBO Setter Tier currently receives an additive rebate of 
$0.0003 per share for executions of Added Displayed Volume (other 
than Retail Orders) that establish the NBBO (``Setter Volume''). See 
the Exchange's Fee Schedule. Because executions of Setter Volume 
already receive this relatively high additive rebate under the NBBO 
Setter Tier, the Exchange proposes that the Step-Up Additive Rebate 
would not apply to such transactions. Thus, as proposed, a Member 
that qualifies for the NBBO Setter Tier would continue to receive 
the additive rebate of $0.0003 per share for executions of Setter 
Volume under the NBBO Setter Tier but would not also receive the 
additive rebate of $0.0002 per share under the Step-Up Additive 
Rebate even if the Member qualifies for the Step-Up Additive Rebate.
    \10\ The Exchange notes that it currently provides a rebate of 
$0.0035 per share for executions of Retail Orders that constitute 
Added Displayed Volume, which is the highest base rebate (i.e., 
excluding any enhanced and/or additive rebates resulting from 
pricing tiers/incentives) that the Exchange currently provides with 
respect to any type of transaction effected on the Exchange. Because 
the base rebate for this type of transaction is already high 
relative to other types of transactions, the Exchange proposes that 
the Step-Up Additive Rebate would not apply to such transactions. 
This is consistent with the Exchange's application of the $0.0003 
per share additive rebate provided under NBBO Setter Tier, which 
also does not apply to executions of Retail Orders. See the 
Exchange's Fee Schedule.
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    The Exchange believes that the proposed Step-Up Additive Rebate 
provides an incremental incentive for Members to strive for higher ADAV 
on the Exchange (above their ADAV in the month immediately preceding 
the effectiveness of this proposal--i.e., April 2022) to receive the 
proposed additive rebate for qualifying executions of Added Displayed 
Volume. As such, the proposed Step-Up Additive Rebate is designed to 
incentivize Members that provide liquidity on the Exchange to increase 
their orders that add liquidity to the Exchange in order to qualify for 
the $0.0002 per share additive rebate for qualifying 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 
and enhancing the attractiveness of the Exchange as a trading venue. 
The Exchange notes that the proposed Step-Up Tier Additive Rebate is 
comparable to other volume-based incentives and discounts, which have 
been widely adopted by exchanges (including the Exchange), including 
pricing incentives that provide an enhanced rebate for firms that 
achieve a specified Step-Up ADAV threshold.\11\
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    \11\ See, e.g., the Exchange's Fee Schedule, which reflects 
enhanced rebates for executions of Added Displayed Volume for 
Members that qualify for the Liquidity Provision Tiers by achieving 
certain specified volume thresholds, including thresholds based on 
Step-Up ADAV; see also the Cboe BZX Exchange, Inc. equities trading 
fee schedule on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), which 
reflects enhanced rebates for executions of added displayed volume 
for firms that qualify for the ``Step-Up Tiers'' by achieving 
certain specified volume thresholds, including thresholds based on 
Step-Up ADAV.
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Reduced Rebate Under Liquidity Provision Tier 1
    The Exchange also proposes to reduce the rebate provided under 
Liquidity Provision Tier 1 for executions of Added Displayed Volume 
from $0.00325 per share to $0.0032 per share.\12\ The Exchange believes 
that the proposed rebate represents only a modest decrease from the 
current rebate provided under Liquidity Provision Tier 1 for executions 
of Added Displayed Volume. The purpose of reducing the enhanced rebate 
for executions of Added Displayed Volume under Liquidity Provision Tier 
1 is for business and competitive reasons, as the

[[Page 29199]]

Exchange believes the reduction of such rebate 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 displayed liquidity. The Exchange does 
not propose to change the required criteria for a Member to qualify for 
Liquidity Provision Tier 1 or the rebate provided under Liquidity 
Provision Tier 1 for executions of orders in securities priced below 
$1.00 per share.
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    \12\ The proposed 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.
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Reduced Rebate Under DLI Tier 2
    Lastly, the Exchange proposes to reduce the rebate provided under 
DLI Tier 2 for executions of Added Displayed Volume from $0.0031 per 
share to $0.0030 per share.\13\ The Exchange believes that the proposed 
rebate represents only a modest decrease from the current rebate 
provided under DLI Tier 2 for executions of Added Displayed Volume. The 
Exchange does not propose to change the required criteria for a Member 
to qualify for DLI Tier 2 or the rebate provided under DLI Tier 2 for 
executions of orders in securities priced below $1.00 per share.
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    \13\ The proposed pricing for DLI Tier 2 is referred to by the 
Exchange on the Fee Schedule under the existing description ``Added 
displayed volume, DLI Tier 2'' with a Fee Code of ``Bq2'', ``Dq2'' 
or ``Jq2'', as applicable, to be provided by the Exchange on the 
monthly invoices provided to Members.
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    The DLI Tiers are designed to encourage Members 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, generally, and in 
a targeted group of securities (i.e., the DLI Target Securities), in 
particular, 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, including the DLI Target 
Securities specifically, and committing capital to support the 
execution of orders.\14\ The purpose of reducing the enhanced rebate 
for executions of Added Displayed Volume under DLI Tier 2 is for 
business and competitive reasons, as the Exchange believes the 
reduction of such rebate 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 displayed liquidity and promoting the price discovery 
and market quality objectives of the DLI Tiers described above.
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    \14\ See the Exchange's Fee Schedule for additional details 
regarding the Exchange's DLI Tiers and DLI Target Securities. See 
also Securities Exchange Act Release No. 92150 (June 10, 2021), 86 
FR 32090 (June 16, 2021) (SR-MEMX-2021-07) (notice of filing and 
immediate effectiveness of fee changes adopted by the Exchange, 
including the adoption of DLI).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\15\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\16\ 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.
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    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(4) and (5).
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    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.'' \17\
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    \17\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005).
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    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, 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 orders 
that add liquidity to the Exchange, which the Exchange believes would 
deepen liquidity and promote market quality on the Exchange to the 
benefit of all market participants, as well as 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 displayed liquidity.
    As noted above, volume-based incentives and discounts have been 
widely adopted by exchanges (including the Exchange),\18\ 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 the proposed Step-Up 
Additive Rebate is comparable to other incentives currently offered by 
other exchanges, as well as the Exchange,\19\ and is reasonable, 
equitable and not unfairly discriminatory for these same reasons, as it 
provides Members with an additional incentive to achieve a certain 
volume threshold on the Exchange, is available to all Members and, as 
noted above, is designed to encourage Members to increase their orders 
that add liquidity on the Exchange in order to qualify for an additive 
rebate for qualifying 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. As such, the Exchange believes 
the proposed additive rebate for qualifying executions of Added 
Displayed Volume provided under the Step-Up Additive Rebate for 
qualifying Members is reasonably related to the market quality benefits 
that such incentive is designed to promote.
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    \18\ See supra note 11.
    \19\ Id.
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    The Exchange also believes it is reasonable, equitable and not 
unfairly discriminatory for the $0.0002 additive rebate provided under 
the Step-Up Additive Rebate to not apply to executions of Setter Volume 
or Retail Orders that constitute Added Displayed Volume, as such orders 
already receive

[[Page 29200]]

a relatively high additive rebate and base rebate, respectively.\20\ 
However, the Exchange notes that the proposed Step-Up Additive Rebate 
will not adversely impact any Member's ability to qualify for reduced 
fees or enhanced rebates offered under other pricing tiers/incentives; 
should a Member not meet the required criteria, the Member will merely 
not receive the corresponding additive rebate.
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    \20\ See supra notes 9 and 10.
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    The Exchange also believes that the proposed reduced rebates for 
executions of Added Displayed Volume provided under Liquidity Provision 
Tier 1 and DLI Tier 2 are reasonable and consistent with an equitable 
allocation of fees and rebates, in that the Exchange believes that each 
such reduced rebate represents only a modest decrease from the current 
rebate provided under the respective tier for executions of Added 
Displayed Volume (i.e., from $0.00325 per share to $0.0032 per share 
under Liquidity Provision Tier 1 and from $0.0031 per share to $0.0030 
per share under DLI Tier 2), and such changes are 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 displayed liquidity. The Exchange 
further believes that such proposed reduced rebates are equitably 
allocated and not unfairly discriminatory because they will continue to 
apply equally to all Members, in that all Members will continue to have 
the opportunity to achieve the required criteria under such tiers, 
which the Exchange is not proposing to modify with this proposal, and, 
in turn, qualify for an enhanced rebate for executions of Added 
Displayed Volume, and the more stringent criteria under the Liquidity 
Provision Tiers and the DLI Tiers would continue to correlate to, and 
remain commensurate with, the corresponding tier's higher rebate.
    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 \21\ 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.
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    \21\ 15 U.S.C. 78f(b)(4) and (5).
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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 orders that add liquidity to the Exchange, thereby deepening 
liquidity and promoting market quality on the Exchange to the benefit 
of all market participants, as well as 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 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.'' \22\
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    \22\ See supra note 17.
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Intramarket Competition
    As discussed above, the Exchange believes that the proposal would 
incentivize Members to submit additional orders that add liquidity to 
the Exchange, thereby contributing to a deeper and more liquid market 
and promoting price discovery and market quality on the Exchange to the 
benefit of all market participants and 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. As 
described above, the opportunity to qualify for the proposed new Step-
Up Additive Rebate, and thus receive the proposed additive rebate for 
qualifying executions of Added Displayed Volume, would be available to 
all Members that meet the associated volume requirement, and the 
Exchange believes the proposed additive rebate provided under such 
incentive is reasonably related to the enhanced market quality that it 
is designed to promote. Additionally, as noted above, the proposed 
reduced rebates for executions of Added Displayed Volume under 
Liquidity Provision Tier 1 and DLI Tier 2 would continue to apply 
equally to all Members in the same manner that the rebates provided 
under such tiers currently do today, and the Exchange believes that 
each such reduced rebate represents only a modest decrease from the 
current rebate provided under the respective tier for executions of 
Added Displayed Volume. 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 16% of the total market share of 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, and market participants can readily choose to 
send their orders to other exchange and off-exchange 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 decrease the Exchange's 
expenditures with respect to its transaction pricing

[[Page 29201]]

and to encourage additional order flow to the Exchange through a 
volume-based incentive that is comparable to volume-based incentives 
adopted by other exchanges and the Exchange.\23\ 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 
that achieve certain volume criteria and thresholds.
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    \23\ See supra note 11.
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    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.'' \24\ 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 order-
routing agents, have a wide range of choices of where to route orders 
for execution'; [and] `no exchange can afford to take its market share 
percentages for granted' because `no exchange possesses a monopoly, 
regulatory or otherwise, in the execution of order flow from broker 
dealers' . . . .''.\25\ 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.
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    \24\ See supra note 17.
    \25\ NetCoalition 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)).
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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 \26\ and Rule 19b-4(f)(2) \27\ thereunder.
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    \26\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \27\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is 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

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#e496918881c9878b8989818a9097a4978187ca838b92"><span class="__cf_email__" data-cfemail="fc8e899099d19f9391919992888fbc8f999fd29b938a">[email protected]</span></a>. Please include 
File Number SR-MEMX-2022-11 on the subject line.

Paper Comments

    <bullet> 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-2022-11. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MEMX-2022-11 and should be submitted on 
or before June 2, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10148 Filed 5-11-22; 8:45 am]
BILLING CODE 8011-01-P


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