31022 Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 

2Exchange Act Section 3(h)(1)(C) permits us to 

impose, as part of our authority to exempt funding 

portals from broker registration, ‘‘such other 

requirements under [the Exchange Act] as the 

Commission determines appropriate.’’ 

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

2 17 CFR 240.19b–4. 

3See, generally, Exchange Rule 531(d). 

Funding Portal helps ensure that the 

Commission can make information 

about funding portals transparent and 

easily accessible to the investing public, 

including issuers and obligated persons 

who engage funding portals; investors 

who may purchase securities through 

offerings on funding portals; and other 

regulators. Further, the information 

provided on Form Funding Portal 

expands the amount of publicly 

available information about funding 

portals, including disciplinary history. 

Consequently, the rules and forms 

allows issuers and the investing public, 

as well as others, to become more fully 

informed about funding portals in a 

more efficient manner. 

Rule 400 requires each person 

applying for registration with the 

Commission as a funding portal to file 

electronically with the Commission 

Form Funding Portal. Rule 400(a) 

requires a funding portal to become a 

member of a national securities 

association registered under Section 

15A of the Exchange Act. Rule 400(b) 

requires a funding portal to file an 

amendment to Form Funding Portal if 

any information previously submitted 

on Form Funding Portal becomes 

inaccurate for any reason. Rule 400(c) 

provides that a funding portal can 

succeed to the business of a predecessor 

funding portal upon the successor filing 

a registration on Form Funding Portal 

and the predecessor filing a withdrawal 

on Form Funding Portal. 

Rule 400(d) requires a funding portal 

to promptly file a withdrawal of 

registration on Form Funding Portal 

upon ceasing to operate as a funding 

portal. Rule 400(e) states that duplicate 

originals of the applications and reports 

provided for in this section must be 

filed with surveillance personnel 

designated by any registered national 

securities association of which the 

funding portal is a member. Rule 400(f) 

requires a nonresident funding portal to: 

(1) Obtain a written consent and power 

of attorney appointing an agent for 

service of process in the United States; 

(2) furnish the Commission with the 

name and address of its agent for 

services of process on Schedule C of 

Form Funding Portal; (3) certify that it 

can, as a matter of law, and will provide 

the Commission and any registered 

national securities association of which 

it becomes a member with prompt 

access to its books and records and can, 

as a matter of law, and will submit to 

onsite inspection and examination by 

the Commission and any registered 

national securities association of which 

it becomes a member; and (4) provide 

the Commission with an opinion of 

counsel and certify on Schedule C on 

Form Funding Portal that the firm can, 

as a matter of law, provide the 

Commission and registered national 

securities association of which it 

becomes a member with prompt access 

to its books and records and can, as a 

matter of law, submit to onsite 

inspection and examination by the 

Commission and any registered national 

securities association of which it 

becomes a member.2

Rule 403(a) requires a funding portal 

to implement written policies and 

procedures reasonably designed to 

achieve compliance with the federal 

securities laws and the rules and 

regulations thereunder relating to its 

business as a funding portal. Rule 403(b) 

provides that a funding portal must 

comply with privacy rules. Rule 404 

requires all registered funding portals to 

maintain certain books and records 

relating to their funding portal 

activities, for not less than five years, 

the first two in an easily accessible 

place. Rule 404(e) requires funding 

portals to furnish promptly to the 

Commission, its representatives, and the 

registered national securities association 

of which the funding portal is a member 

true, correct, complete and current 

copies of such records of the funding 

portal that are requested by the 

representatives of the Commission and 

the registered national securities 

association. 

The Commission staff estimates that 

annualized industry burden would be 

36,775 hours to comply with Rules 400– 

404. The Commission staff estimates 

that the costs associated with complying 

with Rules 400–404 are estimated to be 

approximately a total amount of 

$671,793. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent by 

June 21, 2022 to (i) 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, c/ 

o John Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: May 16, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10817 Filed 5–19–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94915; File No. SR– 

EMERALD–2022–16] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX 

Emerald Fee Schedule To Adopt Fees 

for the High Precision Network Time 

Signal Service 

May 16, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on May 5, 

2022, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a 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 a proposal to 

amend the MIAX Emerald Fee Schedule 

(the ‘‘Fee Schedule’’) to adopt fees for a 

new service known as the ‘‘High 

Precision Network Time Signal 

Service.’’ 3

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 31023 

4See Securities Exchange Act Release No. 94335 

(March 1, 2022), 87 FR 12756 (March 7, 2022) (SR– 

EMERALD–2021–38) (Notice of Filing of 

Amendment No. 1 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 1, To Amend Exchange Rule 

531 To Provide for a New Service Called the High 

Precision Network Time Signal Service) (‘‘Approval 

Order’’). 

5See Exchange Rule 531(d). 

6See Amendment No. 1 at note 26 and 

accompanying text available on the Commission’s 

website at https://www.sec.gov/comments/sremerald-2021-38/sremerald202138-20116580- 

268058.pdf. See also Chapter XIV of the Exchange’s 

Rules, which incorporates by reference Rule 1401, 

Order Protection, of the Exchange’s affiliate, Miami 

International Securities Exchange, LLC (‘‘MIAX’’). 

7See Securities Exchange Act Release No. 94697 

(April 12, 2022), 87 FR 23000 (April 18, 2022) (SR– 

EMERALD–2022–12). 

8The Exchange did not provide a new 

connectivity option to receive time signals via the 

Service. The Service is not a connectivity product 

and subscribers would only need to utilize an 

existing connectivity method offered by the 

Exchange to utilize the Service via a dedicated 

connection. See Approval Order, supra note 4 at 

note 22 and accompanying text. See also MIAX 

Emerald Options Alert, ‘‘Update: The Introduction 

of the High Precision Network Time Signal 

(Enhanced PTP/White Rabbit) Beginning April 1, 

2022,’’ March 3, 2022 (notifying potential 

subscribers that the Service requires a dedicated 

1Gb connection), available at https://

www.miaxoptions.com/alerts/2022/03/03/miaxemerald-options-update-introduction-highprecision-network-time-signal. See Fee Schedule, 

Section 5, System Connectivity Fees, for 

information regarding 1Gb connectivity. A Members 

that subscribes to the Service would also have to 

pay $1,400 per month for a 1Gb connections. Id. 

9See supra note 4 for a detailed description of the 

Service. See also MIAX Emerald Options—Update: 

The Introduction of the High Precision Network 

Time Signal (Enhanced PTP/White Rabbit) 

Beginning April 1, 2022 (March 3, 2022), available 

at https://www.miaxoptions.com/alerts/2022/03/03/ 

miax-emerald-options-update-introduction-highprecision-network-time-signal. 

10An Enhanced PTP clock synchronization 

device captures time and coordinates time 

synchronization within a network at a subnanosecond level. 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Exchange provides a resilient and

robust technology platform, 

deterministic functionality, transparent 

trading platform, and a culture of 

technological innovation to the U.S. 

options market. In keeping with its 

culture of innovation, the Exchange 

recently established a new service 

known as the ‘‘High Precision Network 

Time Signal Service’’ (‘‘HPNTSS’’ or the 

‘‘Service’’),4 which is available for 

purchase by subscribers on a voluntary 

basis. The Exchange now proposes to 

adopt fees for the Service, which is 

described under Exchange Rule 531(d).5

In sum, Members are able to utilize the 

Service to synchronize their time 

recording systems to those of the 

Exchange at sub-nanosecond level 

accuracy for correlated latency 

measurements between the Exchange’s 

and the Members’ systems time 

measurements related to the same 

message or order. The Service is an 

optional product available to any 

Member that chooses to subscribe. 

However, the Exchange anticipates that 

latency sensitive Members would 

primarily subscribe to the Service to 

help them measure latency in a manner 

consistent with their trading behavior 

and the evolving pace of trading and 

technology in today’s markets. The 

Exchange anticipates that Members that 

employ business models that are not 

latency sensitive, such as those that 

only enter resting liquidity, may not 

find interest in the Service and elect not 

to subscribe to it. The Service may also 

not be useful for order routing firms that 

connect to the Exchange solely as part 

of their best execution obligations or to 

comply with the trade-through 

requirements under Chapter XIV of the 

Exchange’s Rules.6

The Exchange proposes to assess a 

monthly fee of $3,600 for subscribing to 

the Service. As such, the Exchange 

proposes to amend the Fee Schedule to 

adopt new Section 8), Services, to 

provide that subscribers may purchase 

the Service for a monthly fee of $3,600. 

Subscribers may cancel their 

subscription at any time. The Exchange 

proposes to specify that for mid-month 

subscriptions to the Service, new 

subscribers will be charged for the full 

calendar month for which they 

subscribe. A second time signal is 

available with each subscription to the 

Service for redundancy and disaster 

recovery purposes. The Exchange 

initially filed the proposed fee change 

on March 30, 2022 with the fees being 

effective on April 1, 2022.7 The 

Exchange withdrew that proposed fee 

change and submitted this filing on May 

5, 2022. The purpose of this revised 

filing is to provide additional 

description and justification for the 

proposed fee. 

In sum, the Service enables 

subscribers to synchronize their own 

primary clock devices to the Exchange’s 

primary clock device, by receiving time 

signals from the Exchange via a separate 

and dedicated 1 gigabit (‘‘Gb’’) 

connection that is currently offered by 

the Exchange and utilized by market 

participants to connect to the 

Exchange’s System.8 The Service simply 

provides subscribers with the 

Exchange’s time signal at a subnanosecond level and nothing else. The 

sub-nanosecond time signal would tell 

the subscriber the Exchange’s time at a 

sub-nanosecond level at a particular 

point in time. The subscriber may then 

use that time signal to synchronize their 

own primary clock to the Exchange’s 

primary clock at the more acute subnanosecond level.9 Subscribers would 

utilize their own Enhanced PTP 

device 10 to synchronize the clocks 

within the subscriber’s computer and 

network infrastructure, as appropriate, 

at a sub-nanosecond level. This would 

enable the subscriber to record certain 

times an order or message traveled 

through and leaves the subscriber’s 

system at a sub-nanosecond level. 

The Service is not a connectivity 

product and subscribers are able to 

utilize an existing connectivity method 

(separate and dedicated 1Gb 

connection) offered by the Exchange to 

utilize the Service. The Service simply 

provides enhanced time 

synchronization that may be utilized by 

a subscriber to adjust their own systems. 

The Service is not a market data product 

or access/connectivity service. 

Subscribers may continue to use their 

existing methods to connect to and send 

orders to the Exchange. The Service will 

not include any trading data regarding 

the subscriber’s activity on the 

Exchange or include any data from other 

trading activity on the Exchange. 

The Exchange established the Service 

in response to demand for tighter and 

more accurate clock synchronization 

options with the Exchange’s network 

and requests for tools that would enable 

Members to better measure traversal 

times between their network and that of 

the Exchange at a more granular level. 

As described above, the Exchange 

anticipates that a small subset of 

Members who are latency sensitive 

would find the Service useful. The 

Service is offered to subscribers on a 

completely voluntary basis in that the 

Exchange is not required by any rule or 

regulation to make the Service available. 

It is a business decision of each Member 

whether to subscribe to the Service and 

each Member may choose to do so based 

on their business models and needs. 

The Exchange began to offer the 

Service and charge the proposed fees on 

April 1, 2022. The Exchange anticipates 

that at most five to six Members may 

find the Service useful and ultimately 

choose to subscribe. 


khammond on DSKJM1Z7X2PROD with NOTICES
31024 Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 

11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). 13 15 U.S.C. 78f(b)(4). 14See ‘‘The Market at a Glance,’’ (last visited 

April 26, 2022), available at https://

www.miaxoptions.com/. 15See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

16The Exchange sends subscribers an 

acknowledgement message that their order or 

message was received by the Exchange. This 

acknowledgement includes the time of receipt at a 

nanosecond level. 

17Based on their business models and needs, 

Members may elect to purchase an enhanced PTP 

device from a third party and use that devise to 

measure latency at a sub-nanosecond level within 

their own systems. In such case, the Member would 

be limited to time measurements within its own 

system and would not be privy to the Exchange’s 

own sub-nanosecond timestamp. 

18See, e.g., Chapter III of the Exchange’s Rules, 

which incorporates by reference Rule 301, 

Interpretation and Policy .02 (Just and Equitable 

Principles of Trade), of the Exchange’s affiliate, 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,11 in general, and 

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

of the Act,12 in particular, in that it is 

not designed to permit unfair 

discrimination among customers, 

brokers, or dealers. The Exchange also 

believes that its proposal to adopt fees 

for the Service is consistent with 

Section 6(b)(4) of the Act 13 because it 

represents an equitable allocation of 

reasonable dues, fees and other charges 

among market participants. 

The Exchange operates in a highly 

competitive environment in which 16 

U.S. registered equity options exchanges 

compete for market share. Based on 

publicly available information, no single 

options exchange has more than 13% of 

the equity options market share and 

currently the Exchange represents only 

approximately 3.97% of the market 

share.14 The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. 

Particularly, in Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and 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.’’ 15 The 

Service provides subscribing Members 

with a tool to assist them in 

recalibrating their own models and 

trading strategies to improve their 

overall experience on the Exchange, 

thereby potentially improving execution 

and order fill rates. This may improve 

the Exchange’s overall market quality 

through increased liquidity and 

improved execution opportunities for 

resting orders, enhancing the 

Exchange’s overall competitive position. 

The proposed fees are a result of the 

competitive environment of the U.S. 

options industry as the Exchange seeks 

to adopt fees to attract purchasers of the 

recently introduced Service. 

If the Exchange proposed fees that 

market participants viewed as 

excessively high, then the proposed fees 

would simply serve to reduce demand 

for the Exchange’s Service, which as 

noted, is entirely optional. Other 

options exchanges are also free to 

introduce their own comparable 

products with lower prices to better 

compete with the Exchange’s offering. 

The Service may not provide utility to 

all Members based on their business 

models, and such Members may choose 

to use existing time synchronization 

methods, or rely on other methods, 

including similar products potentially 

offered by other exchanges, to measure 

latency between the Member’s system 

and an exchange’s system or to test their 

systems’ performance to ensure it is 

operating as intended. As such, the 

Exchange believes that the proposed 

fees are reasonable and set at a level to 

compete with other options exchanges 

that may choose to offer similar 

services. Moreover, if a market 

participant views another exchange’s 

potential service as more attractive, then 

such market participant can merely 

choose not to subscribe to the 

Exchange’s Service and instead 

subscribe to another exchange’s similar 

product, which may offer similar data 

points, albeit based on that other 

market’s trading systems. 

The Exchange also believes the 

proposed fees are reasonable as they 

would support the introduction of a 

new product to subscribers. As 

discussed above, the Service is an 

optional product available to any 

Member that chooses to subscribe. To 

date, no Member has elected to 

subscribe to the Service and the 

Exchange anticipates that five to six 

latency sensitive Members may find the 

Service useful and ultimately choose to 

subscribe. If the Exchange prices the 

fees for the Service too high, these 

Members may choose not to subscribe 

and potentially utilize other methods to 

measure latency or monitor the health of 

their systems. Members that employ 

business models that are not latency 

sensitive, such as those that only enter 

resting liquidity and order routing firms 

that connect to the Exchange solely as 

part of their best execution obligations 

or to comply with the trade-through 

requirements, may not find the Service 

useful for their business models and 

elect not to subscribe to it regardless of 

the level of the fee. The Exchange 

anticipates a small subset of its overall 

membership would find utility in the 

Service and must consider this fact 

when pricing the Service to encourage 

those Members to subscribe. 

The Exchange believes the proposed 

fees are reasonable in order to support 

the introduction of the new Service, 

which may be used for numerous 

optional purposes. For example, the 

Service would allow subscribers to more 

precisely measure latency between their 

network and that of the Exchange at a 

sub-nanosecond level, allowing 

subscribers to better understand the 

times at which their order or message 

reached certain points when traveling 

from their network to the Exchange. The 

Service would also allow subscribers to 

analyze the efficiency of their network 

and connections when not only routing 

orders to the Exchange, but also when 

receiving messages back from the 

Exchange (including communications 

regarding whether their order was 

accepted, rejected, or executed). 

Subscribers utilizing the Service may 

measure message traversal times by 

comparing their messages’ (e.g., order, 

quote, cancellation) timestamps to the 

Exchange’s matching engine timestamps 

from the Exchange-generated 

acknowledgement messages (e.g., order 

acknowledgment, quote 

acknowledgment, cancellation 

acknowledgment).16 Subscribers would 

then be able to enhance their own 

systems to ensure that they are receiving 

such communications in a timelier 

manner and to verify that their systems 

are working as intended. 

In addition, subscribers may utilize 

these enhanced latency measurements 

to better analyze latencies within their 

own systems and use this analysis to 

optimize their network, models and 

trading patterns to potentially improve 

their interactions with the Exchange.17

In particular, subscribers may use these 

metrics to better assess the health of 

their network and that their systems are 

working as intended. For example, a 

subscriber may use this information 

when analyzing the efficacy of their 

various connections and whether a 

connection is performing as expected or 

experiencing a delay. A subscriber may 

then decide to rebalance the amount of 

orders and/or messages over its various 

connections to ensure each connection 

is operating with maximum efficiency. 

Subscribers may also use the Service for 

other purposes, such as enhancing their 

ability to determine compliance with 

certain regulatory requirements 18 and 


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Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 31025 

MIAX; and Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) Rule 5320. 

19For example, the Exchange does not currently 

pro-rate mid-month subscriptions to its Open-Close 

Report or its Liquidity Taker Event Report. See 

Sections (6) and (7) of the Exchange’s Fee Schedule, 

available at https://www.miaxoptions.com/sites/ 

default/files/fee_schedule-files/MIAX_Emerald_

Fee_Schedule_04182022.pdf. Cboe BZX Exchange, 

Inc. (‘‘BZX’’) and Cboe EDGX Exchange, Inc. 

(‘‘EDGX’’) also do not pro-rate mid-month 

subscriptions for certain products. See, e.g., the 

Market Data and Cboe LiveVol, LLC Market Data 

Fees sections of BZX’s options fee schedule and 

EDGX’s options fee schedule, available at https:// 

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

schedule/bzx/ (last visited April 26, 2022) and 

https://www.cboe.com/us/options/membership/fee_

schedule/edgx/ (last visited April 26, 2022). 

20The ‘‘Simple Order Book’’ is the Exchange’s 

regular electronic book of orders and quotes. See 

Exchange Rule 518(a)(15). 

21The ‘‘Strategy Book’’ is the Exchange’s 

electronic book of complex orders and complex 

quotes. See Exchange Rule 518(a)(17). 

trade surveillance. Subscribers may also 

utilize time synchronization to assist 

them in better evaluating compliance 

with certain clock synchronization 

requirements. The Exchange therefore 

believes the proposed fees are 

reasonable because of the numerous 

benefits provided to subscribers that 

subscribe to the Service. Selling 

different products and services, such as 

HPNTSS, is also a means by which 

exchanges compete to attract business. 

To the extent that the Exchange is 

successful in attracting subscribers for 

the Service, it may earn trading 

revenues and further enhance market 

participants’ interactions on the 

Exchange, which would increase value 

of its products and services. If the 

market deems the proposed fees to be 

unfair or inequitable, firms can choose 

not to use or discontinue their use of the 

Service. The Exchange therefore 

believes that the proposed fees for the 

Service reflect the competitive 

environment of U.S. exchanges and 

would be properly assessed to market 

participants that subscribe to the 

Service. The Exchange also believes the 

proposed fees are equitable and not 

unfairly discriminatory as the fees 

would apply equally to all users who 

choose to subscribe to the Service. It is 

a business decision of each market 

participant that chooses to subscribe to 

the Service. The Exchange’s proposed 

fees would not differentiate between 

subscribers that purchase the Service 

and are set at a modest level that would 

allow any interested market participant 

to purchase the Service based on their 

business needs. 

The Exchange reiterates that the 

decision as to whether or not to 

purchase the Service is entirely optional 

for all potential subscribers. Indeed, no 

market participant is required to 

purchase the Service and the Exchange 

is not required to make the Service 

available to all investors. It is entirely a 

business decision of each market 

participant to subscribe to the Service. 

The Exchange offers the Service as a 

convenience to market participants to 

provide them with the ability to 

synchronize their own primary clock 

devices to the Exchange’s primary clock 

device at a sub-nanosecond level. A 

market participant that chooses to 

subscribe to the Service may 

discontinue the use of the Service at any 

time if that market participant 

determines that the synchronization of 

its primary clock devices to the 

Exchange’s primary clock device is no 

longer useful. 

The Exchange believes it is reasonable 

to not pro-rate mid-month subscriptions 

and to charge mid-month subscribers for 

the full month in which they initially 

subscribe to the Service. The Exchange 

seeks to encourage Members to 

subscribe to the Service at the beginning 

of each month to ease the strain on 

administrative resources and 

synchronize potential new subscriptions 

to the Service. The Exchange believes 

not pro-rating mid-month subscriptions 

is a reasonable means to achieve this 

goal. Members that elect to subscribe 

mid-month would be aware that they 

would be liable for the full monthly fee 

and may elect to wait until the first of 

the next month to subscribe if they wish 

to receive the Service for the first full 

month they subscribe. Lastly, not prorating mid-month subscriptions is not 

novel and is currently done by the 

Exchange for other products and other 

exchanges.19

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange made the Service available in 

order to keep pace with changes in the 

industry and evolving customer needs 

and demands, and believes the product 

will contribute to robust competition 

among national securities exchanges. As 

a result, the Exchange believes this 

proposed rule change permits fair 

competition among national securities 

exchanges. 

The Exchange believes the proposed 

fees would not cause any unnecessary 

or inappropriate burden on intermarket 

competition as other exchanges are free 

to introduce their own comparable 

product with lower prices to better 

compete with the Exchange’s offering. 

The Exchange operates in a highly 

competitive environment, and its ability 

to price the Service is constrained by 

the optional nature of the Service and 

competition among exchanges who 

choose to adopt a similar product. The 

Exchange must consider this in its 

pricing discipline in order to compete 

for market share. The Exchange 

anticipates that most, if not all, 

subscribers to the Service would be 

those Members whose trading models 

are latency sensitive and primarily seek 

to remove liquidity. These Members 

may increase their volume of liquidity 

removing orders as a result of recalibrating their trading models based 

on their use of the Service. The increase 

in incoming liquidity removing orders 

may result in higher execution rates for 

Members who are less latency sensitive 

and primarily place resting orders on 

the Exchange’s Simple Order Book 20

and/or Strategy Book.21 The proposed 

Service may benefit those market 

participants who would receive greater 

fill rates, thereby improving the 

Exchange’s competitive standing 

through increased order flow, execution 

rates, and enhancing the quality of the 

Exchange’s market. 

The Exchange believes that if it were 

to propose fees that are excessively 

higher than fees for potentially similar 

products, it would simply serve to 

reduce demand for the Exchange’s 

product, which as discussed, market 

participants are under no obligation to 

utilize. In this competitive environment, 

potential purchasers are free to choose 

which, if any, similar product to 

purchase to satisfy their need for time 

synchronization. As a result, the 

Exchange believes this proposed rule 

change permits fair competition among 

national securities exchanges. 

The Exchange does not believe the 

proposed rule change would cause any 

unnecessary or inappropriate burden on 

intramarket competition. Particularly, 

the proposed product and fees apply 

uniformly to any purchaser in that the 

Exchange does not differentiate between 

subscribers that purchase the Service. 

The proposed fees are set at a modest 

level that would allow any interested 

market participant to purchase the 

Service based on their business needs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 


khammond on DSKJM1Z7X2PROD with NOTICES
31026 Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 

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

23 17 CFR 240.19b–4(f)(2). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Rule 1.5(p). 

4The Exchange received one comment letter on 

the Initial Proposal, which asserted that the 

Exchange did not address the Exchange’s 

ownership structure and that revenues from 

connectivity services could have a ‘‘disparate 

impact’’ on certain Members. See Letter from Tyler 

Gellasch, Healthy Markets Association, dated 

January 26, 2022. The Exchange notes that the 

ownership of an exchange by members is not 

unprecedented and that the ownership structure of 

the Exchange and related issues were addressed 

during the process of the Exchange’s registration as 

a national securities exchange. See Securities 

Exchange Act Release No. 88806 (May 4, 2020), 85 

FR 27451 (May 8, 2020) (approval order related to 

the application of MEMX LLC to register as a 

national securities exchange). The Exchange does 

not believe that the Initial Proposal or this proposal 

raises any new issues that have not been previously 

addressed. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,22 and Rule 

19b–4(f)(2) 23 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

EMERALD–2022–16 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–EMERALD–2022–16. 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–EMERALD–2022–16 and 

should be submitted on or before June 

10, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10800 Filed 5–19–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94924; File No. SR–MEMX– 

2022–13] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Adopt Connectivity Fees 

May 16, 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 May 6, 

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. 

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 and nonMembers (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 immediately. The text of 

the proposed rule change is provided in 

Exhibit 5. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

The Exchange is re-filing its proposal 

to amend the Fee Schedule regarding 

fees the Exchange charges to Members 

and non-Members for physical 

connectivity to the Exchange and for 

application sessions (otherwise known 

as ‘‘logical ports’’) that a Member 

utilizes in connection with their 

participation on the Exchange (together 

with physical connectivity, collectively 

referred to in this proposal as 

‘‘connectivity services,’’ as described in 

greater detail below and in Exhibit 5). 

The Exchange is proposing to 

implement the proposed fees 

immediately. 

The Exchange filed its Initial Proposal 

on December 30, 2021,4 and began 

charging fees for connectivity services 

for the first time in January of 2022. On 

February 28, 2022, the Commission 

suspended the Initial Proposal and 

asked for comments on several 


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