Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 30305 

58 15 U.S.C. 78s(b)(3)(A). 

59 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 60 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

functionality would no longer be 

available to any Member. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 58 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.59

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– 

ISE–2022–11 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–ISE–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–ISE–2022–11 and should be 

submitted on or before June 8, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.60

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10612 Filed 5–17–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94901; File No. SR–MRX– 

2022–04] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend MRX’s Pricing 

Schedule at Options 7 To Assess 

Membership, Port and Market Data 

Fees 

May 12, 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 2, 

2022, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

MRX’s Pricing Schedule at Options 7 to 

assess membership, port and market 

data fees. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 

office of the Exchange, 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 

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. 


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3See, e.g., Securities Exchange Act Release No 

88211 (February 14, 2020), 85 FR 9847 (February 

20, 2020) (SR–NYSENAT–2020–05), also available 

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

nyse-national/rule-filings/filings/2020/SRNYSENat-2020-05.pdf. (initiating market data fees 

for the NYSE National exchange after initially 

setting such fees at zero); see also Securities 

Exchange Act Release No. 93927 (January 7, 2022), 

87 FR 2191 (January 13, 2022) (SR–MEMX–2021– 

19) (introduction of membership fees by MEMX). 

4For example, MIAX Emerald commenced 

operations as a national securities exchange 

registered on March 1, 2019. See Securities 

Exchange Act Release No. 84891 (December 20, 

2018), 83 FR 67421 (December 28, 2018) (File No. 

10–233) (order approving application of MIAX 

Emerald, LLC for registration as a national 

securities exchange). MIAX Emerald filed to adopt 

its transaction fees and certain of its nontransaction fees in its filing SR–EMERALD–2019– 

15. See Securities Exchange Act Release No. 85393 

(March 21, 2019), 84 FR 11599 (March 27, 2019) 

(SR–EMERALD–2019–15) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Establish the MIAX Emerald Fee Schedule). 

MIAX Emerald waived its one-time application fee 

and monthly Trading Permit Fees assessable to 

EEMs and Market Makers among other fees within 

SR–EMERALD–2019–15. 

5Nasdaq recently announced that, beginning in 

2022, Nasdaq plans to migrate its North American 

markets to Amazon Web Services in a phased 

approach, starting with Nasdaq MRX, a U.S. options 

market. The proposed fee changes are entirely 

unrelated to this effort. 

6The term ‘‘Electronic Access Member’’ or 

‘‘EAM’’ means a Member that is approved to 

exercise trading privileges associated with EAM 

Rights. See General 1, Section 1(a)(6). 

7The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(21). The term ‘‘Competitive Market Maker’’ 

means a Member that is approved to exercise 

trading privileges associated with CMM Rights. See 

Options 1, Section 1(a)(12). The term ‘‘Primary 

Market Maker’’ means a Member that is approved 

to exercise trading privileges associated with PMM 

Rights. See Options 1, Section 1(a)(35). 

8 In the case where a single Member has multiple 

MRX memberships, the monthly access fee is 

charged for each membership. For example, if a 

single member firm is both an EAM and a CMM, 

or owns multiple CMM memberships, the firm is 

subject to the access fee for each of those 

memberships. 

9See GEMX Options 7, Section 6.A. (Access 

Fees). 

10See GEMX Options 7, Section 6.B. (CMM 

Trading Rights Fees). 

11A CMM may request changes to its 

appointments at any time upon advance 

notification to the Exchange in a form and manner 

prescribed by the Exchange. See MRX Options 2, 

Section 3(c)(3). 

12These trading rights are referred to as CMM 

Rights. See MRX Options 2, Section 3. 

13See GEMX Options 7, Section 6.B. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

MRX proposes to amend its Pricing 

Schedule at Options 7 to assess 

membership, port and market data fees, 

which are not assessed today, and 

which have not been assessed since 

MRX’s inception in 2016. The proposed 

changes are designed to update fees for 

MRX’s data and services to reflect their 

current value—rather than their value 

when it was a new exchange six years 

ago—based on MRX’s ability to deliver 

value to its customers through 

technology, liquidity and functionality. 

Newly-opened exchanges often charge 

no fees for certain services such as 

membership, ports and market data in 

order to attract order flow to an 

exchange, and later amend their fees to 

reflect the true value of those services.3

Allowing newly-opened exchanges time 

to build and sustain market share before 

charging non-transactional fees 

encourages market entry and promotes 

competition. The proposed changes fall 

into three categories, discussed in detail 

below: Membership fees (Options 7, 

Section 5; Other Options Fees and 

Rebates); port fees (Options 7, Section 6; 

Ports and Other Services); and market 

data fees (Options 7, Section 7 Market 

Data). 

This Proposal reflects MRX’s 

assessment that it has gained sufficient 

market share to compete effectively 

against the other 15 options exchanges 

without waiving fees for membership, 

ports or market data. These types of fees 

are assessed by options exchanges that 

compete with MRX in the sale of 

exchange services—indeed, MRX is the 

only options exchange (out of the 16 

current options exchanges) not assessing 

membership, port and market data fees 

today. New exchanges commonly waive 

connectivity, data and membership fees 

to attract market participants, 

facilitating their entry into the market 

and, once there is sufficient depth and 

breadth of liquidity, ‘‘graduate’’ to 

compete against established exchanges 

and charge fees that reflect the value of 

their services.4 If MRX is incorrect in 

this assessment, that error will be 

reflected in MRX’s ability to compete 

with other options exchanges.5

Options 7, Section 5 

As noted above, MRX Members are 

not assessed fees for membership today. 

Under the proposed fee change, MRX 

Members will be required to pay a 

monthly Access Fee, which entitles 

MRX Members to trade on the Exchange 

based on their membership type. 

Specifically, MRX proposes to assess 

Electronic Access Members 6 an Access 

Fee of $200 per month, per membership. 

The Exchange proposes to assess Market 

Makers 7 Access Fees depending on 

whether they are a Primary Market 

Maker (‘‘PMM’’) or a Competitive 

Market Maker (‘‘CMM’’). A PMM would 

be assessed an Access Fee of $200 per 

month, per membership. A CMM would 

be assessed an Access Fee of $100 per 

month, per membership.8 The proposed 

fees are identical to access fees on 

Nasdaq GEMX, LLC (‘‘GEMX’’).9

In order to receive market making 

appointments to quote in any options 

class, CMMs will also be assessed a 

CMM Trading Right Fee identical to 

GEMX.10 CMM trading rights entitle a 

CMM to enter quotes in options symbols 

that comprise a certain percentage of 

industry volume. On a quarterly basis, 

the Exchange assigns points to each 

options class equal to its percentage of 

overall industry volume (not including 

exclusively traded index options), 

rounded down to the nearest one 

hundredth of a percentage with a 

maximum of 15 points. A new listing is 

assigned a point value of zero for the 

remainder of the quarter in which it was 

listed. CMMs may seek appointments to 

options classes that total 20 points for 

the first CMM Right it holds, and 10 

points for the second and each 

subsequent CMM Right it holds.11 In 

order to encourage CMMs to quote on 

the Exchange, MRX launched CMM 

trading rights without any fees, allowing 

CMMs to freely quote in all options 

classes. 

The Exchange is now proposing to 

adopt a monthly CMM Trading Rights 

Fee. Under the proposed fee structure, 

CMMs will be assessed a Trading Rights 

Fee of $850 per month for the first 

trading right, which will entitle the 

CMM to quote in 20 percent of industry 

volume.12 Each additional CMM Right 

will cost $500 per month, and will 

entitle the CMM to quote an additional 

10 percent of volume. Similar to 

GEMX’s trading rights fee,13 a new 

CMM would pay $850 for the first 

trading right and all CMMs would 

thereafter pay $500 for each additional 

trading right. The Exchange is proposing 

this pricing model because each 

subsequent CMM Right costs less than 

the first trading right. All CMMs have 

the opportunity to purchase additional 

CMM Rights beyond the initial trading 

right in order to quote in additional 

options series. The Exchange notes that 

it is not proposing trading right fees for 


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14PMMs are required to provide two-sided 

quotations in 90% of cumulative number of 

seconds, or such higher percentage as the Exchange 

may announce in advance. In contrast, a CMM is 

not required to enter quotations in the options 

classes to which it is appointed; however, if a CMM 

initiates quoting in an options class, the CMM is 

required to provide two-sided quotations in 60% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce in 

advance. See Options 2, Section 5(e)(2). 

Additionally, PMMs are required to submit a Valid 

Width Quote to open their assigned options series. 

See Options 3, Section 8(c)(1) and 8(c)(3). 

15The Exchange notes that all MRX Members may 

submit orders; however, only Market Makers may 

submit quotes. The Exchange surveils Market 

Makers quotes in addition to any orders transacted 

on MRX and conducts surveillance on Market 

Maker quotes to ensure these participants have met 

their quoting and other market making obligations. 

The regulatory oversight for Market Makers is in 

addition to the regulatory oversight which is 

administered for all EAMs. 

16 ‘‘Financial Information eXchange’’ or ‘‘FIX’’ is 

an interface that allows Members and their 

Sponsored Customers to connect, send, and receive 

messages related to orders and auction orders to the 

Exchange. Features include the following: (1) 

Execution messages; (2) order messages; (3) risk 

protection triggers and cancel notifications; and (4) 

post trade allocation messages. See Supplementary 

Material .03(a) to Options 3, Section 7. 

17 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an 

interface that allows Market Makers to connect, 

send, and receive messages related to quotes, 

Immediate-or-Cancel Orders, and auction responses 

to the Exchange. Features include the following: (1) 

Options symbol directory messages (e.g., underlying 

and complex instruments); (2) system event 

messages (e.g., start of trading hours messages and 

start of opening); (3) trading action messages (e.g., 

halts and resumes); (4) execution messages; (5) 

quote messages; (6) Immediate-or-Cancel Order 

messages; (7) risk protection triggers and purge 

notifications; (8) opening imbalance messages; (9) 

auction notifications; and (10) auction responses. 

The SQF Purge Interface only receives and notifies 

of purge requests from the Market Maker. Market 

Makers may only enter interest into SQF in their 

assigned options series. See Supplementary 

Material .03(c) to Options 3, Section 7. 

18SQF Purge is a specific port for the SQF 

interface that only receives and notifies of purge 

requests from the market maker. Dedicated SQF 

Purge Ports enable market makers to seamlessly 

manage their ability to remove their quotes in a 

swift manner. 19 ‘‘Ouch to Trade Options’’ or ‘‘OTTO’’ is an 

interface that allows Members and their Sponsored 

Customers to connect, send, and receive messages 

related to orders, auction orders, and auction 

responses to the Exchange. Features include the 

following: (1) Options symbol directory messages 

(e.g., underlying and complex instruments); (2) 

system event messages (e.g., start of trading hours 

messages and start of opening); (3) trading action 

messages (e.g., halts and resumes); (4) execution 

messages; (5) order messages; (6) risk protection 

triggers and cancel notifications; (7) auction 

notifications; (8) auction responses; and (9) post 

trade allocation messages. See Supplementary 

Material .03(b) to Options 3, Section 7. 

20Clearing Trade Interface (‘‘CTI’’) is a real-time 

cleared trade update message that is sent to a 

Member after an execution has occurred and 

contains trade details specific to that Member. The 

information includes, among other things, the 

following: (i) The Clearing Member Trade 

Agreement (‘‘CMTA’’) or The Options Clearing 

Corporation (‘‘OCC’’) number; (ii) badge or 

mnemonic; (iii) account number; (iv) information 

which identifies the transaction type (e.g., auction 

type) for billing purposes; and (v) market 

participant capacity. See Options 3, Section 

23(b)(1). 

21FIX DROP is a real-time order and execution 

update message that is sent to a Member after an 

order been received/modified or an execution has 

occurred and contains trade details specific to that 

Member. The information includes, among other 

things, the following: (i) Executions; (ii) 

cancellations; (iii) modifications to an existing 

order; and (iv) busts or post-trade corrections. See 

Options 3, Section 23(b)(3). 

22An ‘‘account number’’ shall mean a number 

assigned to a Member. Members may have more 

than one account number. See Options 1, Section 

1(a)(1). 23SQF’s Port Fees are assessed a higher dollar fee 

as compared to FIX and OTTO ports ($1,250 vs. 

$650) because the Exchange has to maintain options 

assignments within SQF and manage quoting 

traffic. Market Makers may utilize SQF Ports in 

their assigned options series. Market Maker badges 

are assigned to specific SQF ports to manage the 

option series in which a Market Maker may quote. 

Additionally, because of quoting obligations 

provided for within Options 2, Section 5, Market 

Makers are required to provide liquidity in their 

assigned options series which generates quote 

traffic. The Exchange notes because of the higher 

fee, SQF ports are billed per port, per month while 

FIX and OTTO ports are billed per port, per month, 

per account number. Members may have more than 

one account number. 

24This includes FIX, SQF, SQF Purge, OTTO, CTI 

and FIX Drop Disaster Recovery Ports. 

25Only Market Makers may quote on MRX. The 

Exchange is proposing non-substantive technical 

amendments to add commas within the Production 

column of the proposed rule text to separate terms. 

26The Exchange maintains ports in a number of 

ways to ensure that ports are properly connected to 

the Exchange at all times. This includes offering 

testing, ensuring all ports are up-to-date with the 

latest code releases, as well as ensuring that all 

ports meet the Exchange’s information security 

specifications. 

27See GEMX Options 7, Section 6.C. (Ports and 

Other Services). 

28Only Members may utilize ports on MRX. Any 

market participant that sends orders to a Member 

would not need to utilize a port. The Member can 

send all orders, proprietary and agency, through 

one port to MRX. Members may elect to obtain 

multiple account numbers to organize their 

business, however only one account number and 

one port is necessary for a Member to trade on 

MRX. 

PMMs, as the Exchange wishes to 

encourage Members to act as PMMs, 

which will benefit the market through, 

for example, more robust quoting 

requirements. PMMs have additional 

obligations on MRX as compared to 

CMMs.14 The Exchange is proposing 

only to charge the $200 access fee to 

EAMs, and no trading rights fee, as the 

technical, regulatory, and administrative 

services associated with an EAM’s use 

of the Exchange are not as 

comprehensive as those associated with 

Market Makers’ use.15

Options 7, Section 6 

The Exchange proposes to amend fees 

for the following ports within Options 7, 

Section 6: (1) FIX,16 (2) SQF; 17 (3) SQF 

Purge; 18 (4) OTTO; 19 (5) CTI; 20 and (6) 

FIX DROP.21 Currently, no fees are 

being assessed for these ports. The 

Exchange proposes to assess a FIX Port 

Fee and OTTO Port Fee of $650 per 

port, per month, per account number.22

The Exchange proposes to assess an 

SQF Port Fee and SQF Purge Port Fee 

of $1,250 per port, per month.23 The 

Exchange proposes to assess a CTI Port 

Fee and a FIX Drop Port Fee of $650 per 

port, per month. 

The OTTO Port, CTI Port, FIX Port, 

FIX Drop Port and all Disaster Recovery 

Ports 24 are available to all EAMs, and 

will be subject to a monthly cap of 

$7,500. 

The SQF Port and the SQF Purge Port 

will be subject to a monthly cap of 

$17,500. The SQF Port and SQF Purge 

Port are available to Market Makers.25

The Exchange is not amending the 

TradeInfo MRX Interface or the Nasdaq 

MRX Depth of Market, Nasdaq MRX 

Order Feed, Nasdaq MRX Top Quote 

Feed, Nasdaq MRX Trades Feed or 

Nasdaq MRX Spread Feed Ports, all of 

these aforementioned ports will 

continue to be assessed no fees. 

Additionally, as is the case today, the 

Disaster Recovery Ports for TradeInfo 

and the Nasdaq MRX Depth of Market, 

Nasdaq MRX Order Feed, Nasdaq MRX 

Top Quote Feed, Nasdaq MRX Trades 

Feed or Nasdaq MRX Spread Feed Ports 

will not be assessed a fee. 

Finally, the Exchange proposes to 

amend the Disaster Recovery Port Fee 

from $0 to $50 per port, per month, per 

account for FIX, SQF, SQF Purge and 

OTTO Ports and from $0 to $50 per port, 

per month for CTI, and FIX DROP Ports. 

Disaster Recovery ports provide 

connectivity to the Exchange’s disaster 

recovery data center, to be utilized in 

the event the Exchange should failover 

during a trading day. The Exchange 

proposes to assess the aforementioned 

Disaster Recovery Port Fees to 

encourage Members to be efficient when 

purchasing Disaster Recovery ports. 

Similar to all other ports, Disaster 

Recovery Ports need to be maintained 

by the Exchange.26 The proposed port 

fees are similar to fees assessed by 

GEMX.27

In order to submit orders into MRX, 

only one order protocol is required, 

either FIX or OTTO.28 A quoting 

protocol, such as SQF, is only required 

to the extent an MRX Member has been 

appointed as a Market Maker in an 

options series pursuant to Options 2, 

Section 1. Similarly, only one quoting 

protocol, or SQF Port, is necessary to 


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29For example, while the FIX protocol permits 

routing capability the OTTO protocol does not 

permit routing capability. This distinction may 

cause a Member to elect a certain protocol based on 

whether a Member desires to execute an order 

locally or route an order. The OTTO Port offers 

lower latency as compared to the FIX Port, which 

may be attractive to Members depending on their 

trading behavior. 

30For example, a Member may desire to utilize 

multiple FIX or OTTO ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that Member. 

31Nasdaq MRX Depth of Market Data Feed 

(‘‘Depth of Market Feed’’) provides aggregate quotes 

and orders at the top five price levels on MRX, and 

provides subscribers with a consolidated view of 

tradable prices beyond the BBO, showing additional 

liquidity and enhancing transparency for MRX 

traded options. The data provided for each option 

series includes the symbols (series and underlying 

security), put or call indicator, expiration date, the 

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. In addition, subscribers are provided with 

total aggregate quantity, Public Customer aggregate 

quantity, Priority Customer aggregate quantity, 

price, and side (i.e., bid/ask). This information is 

provided for each of the top five price levels on the 

Depth Feed. The feed also provides order 

imbalances on opening/reopening. See Options 3, 

Section 23(a)(1). 

32Nasdaq MRX Order Feed (‘‘Order Feed’’) 

provides information on new orders resting on the 

book (e.g., price, quantity and market participant 

capacity). In addition, the feed also announces all 

auctions. The data provided for each option series 

includes the symbols (series and underlying 

security), put or call indicator, expiration date, the 

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. The feed also provides order imbalances on 

opening/reopening. See Options 3, Section 23(a)(2). 

33Nasdaq MRX Top Quote Feed (‘‘Top Quote 

Feed’’) calculates and disseminates MRX’s best bid 

and offer position, with aggregated size (including 

total size in aggregate, for Professional Order size 

in the aggregate and Priority Customer Order size 

in the aggregate), based on displayable order and 

quote interest in the System. The feed also provides 

last trade information along with opening price, 

daily trading volume, high and low prices for the 

day. The data provided for each option series 

includes the symbols (series and underlying 

security), put or call indicator, expiration date, the 

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. The feed also provides order imbalances on 

opening/reopening. See Options 3, Section 23(a)(3). 

34Nasdaq MRX Trades Feed (‘‘Trades Feed’’) 

displays last trade information along with opening 

price, daily trading volume, high and low prices for 

the day. The data provided for each option series 

includes the symbols (series and underlying 

security), put or call indicator, expiration date, the 

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. See Options 3, Section 23(a)(4). 

35Nasdaq MRX Spread Feed (‘‘Spread Feed’’) is 

a feed that consists of: (1) Options orders for all 

Complex Orders (i.e., spreads, buy-writes, delta 

neutral strategies, etc.); (2) data aggregated at the 

top five price levels (BBO) on both the bid and offer 

side of the market; (3) last trades information. The 

Spread Feed provides updates, including prices, 

side, size and capacity, for every Complex Order 

placed on the MRX Complex Order Book. The 

Spread Feed shows: (1) Aggregate bid/ask quote 

size; (2) aggregate bid/ask quote size for 

Professional Customer Orders; and (3) aggregate 

bid/ask quote size for Priority Customer Orders for 

MRX traded options. The feed also provides 

Complex Order auction notifications. See Options 

3, Section 23(a)(5). 

36A ‘‘distributor’’ of Nasdaq MRX data is any 

entity that receives a feed or data file of data 

directly from Nasdaq MRX or indirectly through 

another entity and then distributes it either 

internally (within that entity) or externally (outside 

that entity). All distributors shall execute a Nasdaq 

Global Data Agreement. 

37A Professional Subscriber is any Subscriber 

that is not a Non-Professional Subscriber. 

38A Non-Professional Subscriber is a natural 

person who is neither: (i) Registered or qualified in 

any capacity with the Commission, the 

Commodities Futures Trading Commission, any 

state securities agency, any securities exchange or 

association, or any commodities or futures contract 

market or association; (ii) engaged as an 

‘‘investment adviser’’ as that term is defined in 

Section 201(11) of the Investment Advisors Act of 

1940 (whether or not registered or qualified under 

that Act); nor (iii) employed by a bank or other 

organization exempt from registration under federal 

or state securities laws to perform functions that 

would require registration or qualification if such 

functions were performed for an organization not so 

exempt. 

39For example, if a firm has one Professional 

(Non-Professional) Subscriber accessing Top of 

Market, Order, and Depth of Market Feed the firm 

would only report the Subscriber once and pay $25 

($1 for Non-Professional). 

40The Non-Display Enterprise License of $7,500 

per month is optional. A firm that does not have 

a sufficient number of subscribers to benefit from 

purchase of the license need not do so. 

41See 15 U.S.C. 78f(b). 

42See 15 U.S.C. 78f(b)(4) and (5). 

quote on MRX. Depending on a 

Member’s business model, one protocol 

may be better suited for a Member as 

compared to another protocol when 

determining which order entry protocol 

to select.29 Members may elect to utilize 

both order entry protocols, depending 

on how they organize their business. 

Only one protocol is necessary to 

submit orders into MRX; however, 

Members may choose to purchase a 

greater number of order entry ports, 

depending on that Member’s business 

model.30

The Exchange notes that FIX, and 

OTTO Ports, as well TradeInfo, are 

available to all Members and may be 

utilized to cancel orders. Further, FIX 

DROP, the Clearing Trade Interface, and 

TradeInfo are available to all Members 

and may be utilized to obtain order 

information. These different protocols 

are not all necessary to conduct 

business on MRX; a Member may 

choose among protocols based on their 

business workflow. 

Options 7, Section 7 

The Exchange proposes to amend fees 

for the following market data feeds 

within Options 7, Section 7: (1) Nasdaq 

MRX Depth of Market Data; 31 (2) 

Nasdaq MRX Order Feed; 32 (3) Nasdaq 

MRX Top Quote Feed; 33 (4) Nasdaq 

MRX Trades Feed; 34 and (5) Nasdaq 

MRX Spread Feed.35 Currently, no fees 

are being assessed for these feeds. 

The Exchange also proposes to assess 

an Internal Distributor Fee 36 of $1,500 

per month for the Nasdaq MRX Depth 

of Market Feed, Order Feed, and Top 

Quote Feed. The Exchange proposes to 

assess an Internal Distributor Fee of 

$750 per month for the Trades Feed. 

Finally, the Exchange proposes to assess 

an Internal Distributor Fee of $1,000 per 

month for the Spread Feed. If a Member 

subscribes to both the Trades Feed and 

the Spread Feed, both Internal 

Distributor Fees would be assessed. 

The Exchange proposes to assess an 

External Distributor Fee of $2,000 per 

month for the Nasdaq MRX Depth of 

Market Feed, Order Feed, and Top 

Quote Feed, an External Distributor Fee 

of $1,000 per month for the Trades 

Feed, and an External Distributor Fee of 

$1,500 per month for the Spread Feed. 

MRX does not currently assess 

subscriber fees, but proposes to begin 

assessing Professional 37 and NonProfessional 38 subscriber fees. The 

Exchange proposes to assess a 

Professional Subscriber of $25 per 

month, and a Non-Professional 

Subscriber of $1 per month. These 

subscriber fees (both Professional and 

Non-Professional) cover the usage of all 

five MRX data products identified above 

and would not be assessed separately 

for each data product.39

MRX also proposes a Non-Display 

Enterprise License of $7,500 per month. 

This license would lower costs for 

internal professional subscribers and 

lower administrative costs overall by 

permitting the distribution of all MRX 

proprietary direct data feed products to 

an unlimited number of internal nondisplay Subscribers without incurring 

additional fees for each internal 

Subscriber, or requiring the customer to 

count internal subscribers.40

The Non-Display Enterprise License is 

in addition to any other associated 

distributor fees for MRX proprietary 

direct data feed products. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,41 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,42 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 


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43See NetCoalition, 615 F.3d at 539 (D.C. Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 44See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 45See NetCoalition, 615 F.3d at 534–35; see also 

H.R. Rep. No. 94–229 at 92 (1975) (‘‘[I]t is the intent 

of the conferees that the national market system 

evolve through the interplay of competitive forces 

as unnecessary regulatory restrictions are 

removed.’’). 46See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

47 Id. 

48See U.S. Securities and Exchange Commission, 

‘‘Staff Guidance on SRO Rule filings Relating to 

Fees’’ (May 21, 2019), available at https://

www.sec.gov/tm/staff-guidance-sro-rule-filings-fees. 

49See e.g., Securities Exchange Act Release Nos. 

77292 (March 4, 2016), 81 FR 12770 (March 10, 

2016) (SR–ISEMercury–2016–02) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To Establish the Schedule of Fees); 77409 

(March 21, 2016), 81 FR 16240 (March 25, 2016) 

(SR–ISEMercury–2016–05) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Amend the Schedule of Fees); 81 FR 16238 

(March 21, 2016), 81 FR 16238 (March 25, 2016) 

(SR–ISEMercury–2016–06) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Amend the Schedule of Fees); 77841 (May 16, 

2016), 81 FR 31986 (SR–ISEMercury–2016–11) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the Schedule of 

Fees); 82537 (January 19, 2018), 83 FR 3784 

(January 26, 2018) (SR–MRX–2018–01) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change To Amend the Schedule of Fees To 

Introduce a New Pricing Model); 82990 (April 4, 

2018), 83 FR 15434 (April 10, 2018) (SR–MRX– 

2018–10) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Chapter IV of the Exchange’s Schedule of Fees); 

28677 (June 14, 2018), 83 FR 28677 (June 20, 2018) 

(SR–MRX–2018–19) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Increase Certain Route-Out Fees Set Forth in 

Section II.A of the Schedule of Fees); 84113 

(September 13, 2018), 83 FR 47386 (September 19, 

2018) (SR–MRX–2018–27) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Relocate the Exchange’s Schedule of Fees); 

85143 (February 14, 2019), 84 FR 5508 (February 

21, 2019) (SR–MRX–2019–02) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Amend the Pricing Schedule at Options 7, 

Section 3); 85313 (March 14, 2019), 84 FR 10357 

(March 20, 2019) (SR–MRX–2019–05) (Notice of 

Filing and Immediate Effectiveness of a Proposed 

Rule Change Relating to PIM Fees and Rebates); 

86326 (July 8, 2019), 84 FR 33300 (July 12, 2019) 

(SR–MRX–2019–14) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Adopt Complex Order Pricing); 88022 (January 

23, 2020), 85 FR 5263 (January 29, 2020) (SR–MRX– 

2020–02) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

MRX Pricing Schedule); 89046 (June 11, 2020), 85 

FR 36633 (June 17, 2020) (SR–MRX–2020–11) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its Pricing 

Schedule at Options 7); 89320 (July 15, 2020), 85 

FR 44135 (July 21, 2020) (SR–MRX–2020–14) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its Pricing 

Schedule at Options 7, Section 5, Other Options 

Fees and Rebates, in Connection With the Pricing 

for Orders Entered Into the Exchanges Price 

Improvement Mechanism); 90503 (November 24, 

2020), 85 FR 77317 (December 1, 2020) (SR–MRX– 

2020–18) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Its Pricing Schedule at Options 7 for Orders Entered 

Into the Exchange’s Price Improvement 

Mechanism); 90434 (November 16, 2020), 85 FR 

74473 (November 20, 2020) (SR–MRX–2020–19) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To the Exchange’s Pricing 

Schedule at Options 7 To Amend Taker Fees for 

Regular Orders); 90455 (November 18, 2020), 85 FR 

75064 (November 24, 2020) (SR–MRX–2020–21) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the Pricing 

Schedule); and 91687 (April 27, 2021), 86 FR 23478 

(May 3, 2021) (SR–MRX–2021–04) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To Amend the Exchange’s Pricing Schedule 

at Options 7). Note that ISE Mercury is an earlier 

name for MRX. 

50See Securities Exchange Act Release No. 86326 

(July 8, 2019), 84 FR 33300 (July 12, 2019) (SR– 

MRX–2019–14) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change to Adopt 

Complex Order Pricing). 

51One distinction is that ISE offered its Members 

access to Nasdaq Precise in 2019 and since that 

time. MRX has never offered Precise. ‘‘Nasdaq 

Precise’’ or ‘‘Precise’’ is a front-end interface that 

allows EAMs and their Sponsored Customers to 

send orders to the Exchange and perform other 

related functions. Features include the following: 

(1) Order and execution management: Enter, 

modify, and cancel orders on the Exchange, and 

manage executions (e.g., parent/child orders, 

inactive orders, and post-trade allocations); (2) 

market data: Access to real-time market data (e.g., 

NBBO and Exchange BBO); (3) risk management: 

Set customizable risk parameters (e.g., kill switch); 

and (4) book keeping and reporting: Comprehensive 

audit trail of orders and trades (e.g., order history 

and done away trade reports). See ISE 

Supplementary Material .03(d) of Options 3, 

Section 7. Precise is also available on GEMX. 

52 In 2019, ISE assessed the following Access 

Fees: $500 per month, per membership to an 

Electronic Access Member, $5,000 per month, per 

membership to a Primary Market Maker and $2,500 

per month, per membership to a Competitive 

Market Maker. ISE does not assess Trading Rights 

Fees to Competitive Market Makers. See Securities 

Exchange Act Release No. 82446 (January 5, 2018), 

83 FR 1446 (January 11, 2018) (SR–ISE–2017–112) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Certain NonTransaction Fees in the Exchange’s Schedule of 

Fees). Of note, ISE assessed Access Fees prior to 

2019 as well. 

53Unlike ISE, MRX does not offer Precise. See 

note 51, supra. 

The proposed changes to the pricing 

schedule are reasonable in several 

respects. As a threshold matter, the 

Exchange is subject to significant 

competitive forces in the market for 

order flow, which constrains its pricing 

determinations. The fact that the market 

for order flow is competitive has long 

been recognized by the courts. In 

NetCoalition v. Securities and Exchange 

Commission, the D.C. Circuit stated, 

‘‘[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’. . . .’’ 43

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention to determine prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, 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.’’ 44

Congress directed the Commission to 

‘‘rely on ‘competition, whenever 

possible, in meeting its regulatory 

responsibilities for overseeing the SROs 

and the national market system.’ ’’ 45 As 

a result, the Commission has 

historically relied on competitive forces 

to determine whether a fee proposal is 

equitable, fair, reasonable, and not 

unreasonably or unfairly discriminatory. 

‘‘If competitive forces are operative, the 

self-interest of the exchanges themselves 

will work powerfully to constrain 

unreasonable or unfair behavior.’’ 46

Accordingly, ‘‘the existence of 

significant competition provides a 

substantial basis for finding that the 

terms of an exchange’s fee proposal are 

equitable, fair, reasonable, and not 

unreasonably or unfairly 

discriminatory.’’ 47 In its 2019 guidance 

on fee proposals, Commission staff 

indicated that they would look at factors 

beyond the competitive environment, 

such as cost, only if a ‘‘proposal lacks 

persuasive evidence that the proposed 

fee is constrained by significant 

competitive forces.’’ 48

History of MRX Operations 

Over the years, MRX has amended its 

transactional pricing to remain 

competitive and attract order flow to the 

Exchange.49

In June 2019, MRX commenced 

offering complex orders.50 With the 

addition of complex order functionality, 

MRX offered Members certain order 

types, an opening process, auction 

capabilities and other trading 

functionality that was nearly identical 

to functionality available on ISE.51 By 

way of comparison, ISE, unlike MRX, 

assessed membership fees in 2019 52

while offering the same suite of 

functionality as MRX, with a limited 

exception.53 Additionally, by way of 


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30310 Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 

54Since 2019, ISE has assessed the following port 

fees: A FIX Port Fee of $300 per port, per month, 

per mnemonic, an SQF Port Fee and SQF Purge Port 

Fee of $1,100 per port, per month, an OTTO Port 

Fee of $400 per port, per month, per mnemonic 

with a monthly cap of $4,000, a CTI Port Fee and 

FIX DROP Port Fee of $500 per port, per month, per 

mnemonic. See Securities Exchange Act Release 

No. 82568 (January 23, 2018), 83 FR 4086 (January 

29, 2018) (SR–ISE–2018–07) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Assess Fees for OTTO Port, CTI Port, FIX Port, 

FIX Drop Port and Disaster Recovery Port 

Connectivity). Of note, ISE assessed port fees prior 

to 2019 as well. 

55See note 51, supra. 

56See e.g., Securities Exchange Act Release Nos. 

53212 (February 2, 2006), 71 FR 6803 (February 9, 

2006) (Notice of Filing and Immediate Effectiveness 

of Proposed Rule Change Establishing Fees for 

Historical Options Tick Market Data); 53390 

(February 28, 2006), 71 FR 11457 (March 7, 2006) 

(Order Granting Accelerated Approval of a 

Proposed Rule Change Establishing Fees for 

Historical Options Tick Market Data for NonMembers); 53756 (May 3, 2006), 71 FR 27526 (May 

11, 2006) (Order Granting Approval of a Proposed 

Rule Change Establishing Fees for Enhanced 

Sentiment Market Data); 56254 (August 15, 2007), 

72 FR 47104 (August 22, 2007) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

Relating to ISE Open/Close Trade Profile Fees; 

56315 (August 24, 2007), 72 FR 50148 (August 30, 

2007) (Order Approving a Proposed Rule Change 

Relating to ISEE Select Market Data Fees); 59679 

(April 1, 2009), 74 FR 15795 (April 7, 2009) (SR– 

ISE–2007–97) (Notice of Filing of Proposed Rule 

Change and Amendment No. 1 Thereto Relating to 

Market Data Fees);61086 (December 1, 2009), 74 FR 

64783 (December 8, 2009) (SR–ISE–2009–103) 

(Notice of Filing of Proposed Rule Change Relating 

to Market Data Fees); 65002 (August 1, 2011), 76 FR 

47630 (August 5, 2011) (SR–ISE–2011–50) (Notice 

of Filing and Immediate Effectiveness of Proposed 

Rule Change Relating to Market Data Fees); and 

65678 (November 10, 2011), 76 FR 70178 

(November 3, 2011) (SR–ISE–2011–67) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change Relating to Market Data Fees). 

57NYSE National stated that the proposed 

integrated feed included depth-of-book order data, 

last sale data, security status updates, and stock 

summary messages. See Securities Exchange Act 

Release No 88211 (February 14, 2020), 85 FR 9847 

(February 20, 2020) (SR–NYSENAT–2020–05), also 

available at https://www.nyse.com/publicdocs/nyse/ 

markets/nyse-national/rule-filings/filings/2020/SRNYSENat-2020-05.pdf. (‘‘Initial NYSE National 

Proposal’’) 

58See id. 

59See NetCoalition v. SEC, 615 F.3d 525, 535 

(D.C. 2010) (‘‘NetCoalition I’’). 

60See NYSE National Approval Order (citing 

NetCoalition I). 61See id. 

comparison, ISE assessed fees for 

ports 54 in 2019 while offering the same 

suite of functionality as MRX, with a 

limited exception.55 Finally, in 2019, 

unlike MRX, ISE assessed fees for its 

market data,56 while offering the same 

functionality suite as MRX, with a 

limited exception. 

Membership, Ports and Market Data Are 

Subject to Significant SubstitutionBased Competitive Forces 

An Exchange can show that a product 

is ‘‘subject to significant substitutionbased competitive forces’’ by 

introducing evidence that customers can 

substitute the product for products 

offered by other exchanges. 

NYSE National was able to prove 

exactly this when it sought approval for 

the ‘‘NYSE National Integrated Feed’’ 57

in 2020. NYSE National at the time of 

its filing was in a similar position to 

MRX today—the exchange had an 

approximately 1.9% market share of 

executed volume of equity trades.58 The 

Commission approved the proposal to 

establish fees for NYSE National based 

on a finding that the exchange ‘‘was 

subject to significant substitution-based 

competitive forces.’’ Citing NetCoalition 

I,59 the Commission stated that 

‘‘whether a market is competitive 

notwithstanding potential alternatives 

depends on factors such as the number 

of buyers who consider other products 

interchangeable and at what prices.’’ 60

Noting that ‘‘many market participants 

. . . do not subscribe to . . . the NYSE 

National Integrated Feed, even when the 

feed is offered without charge,’’ the 

Commission concluded that ‘‘NYSE 

National’s consistently low percentage 

of market share, the relatively small 

number of subscribers to the NYSE 

National Integrated Feed, and the 

sizeable portion of subscribers that 

terminated their subscriptions following 

the proposal of the fees,’’ demonstrated 

that the exchange ‘‘was subject to 

significant substitution-based 

competitive forces’’ in setting fees such 

that the proposed rule change was 

consistent with the Act.61

MRX today is essentially in the same 

position as NYSE National in 2020. 

MRX has a consistently low percentage 

of market share, starting at 

approximately 0.2 percent when it 

opened as an Exchange and ending in 

approximately 1.8 percent today. It has 

a small number of firms that are 

Members, subscribe to ports, or 

purchase market data relative to its 

affiliated options exchanges. Two firms 

that currently subscribe to MRX market 

data have terminated all of their 

subscriptions, and one additional firm 

that is currently a Member and 

purchases port services has told the 

Exchange that it will initiate a review of 

all of the services it purchases from 

MRX based on the all-in cost of trading 

on MRX. Based on prior experience, 

MRX may see additional cancellations 

of membership, ports and market data 

after May 2, 2022. 

Chart 1 below shows the January 2022 

market share for multiply-listed options 

by exchange. Of the 16 operating 

options exchanges, none currently has 

more than a 13.1% market share, and 

MRX has the smallest market share at 

1.8%. Customers widely distribute their 

transactions across exchanges according 

to their business needs and the ability 

of each exchange to meet those needs 

through technology, liquidity and 

functionality. Average market share for 

the 16 options exchanges is 6.26 

percent, with the median at 5.8, and a 

range between 1.8 and 13.1 percent. 

BILLING CODE 8011–01–P 


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62For example, a Member may desire to utilize 

multiple FIX or OTTO ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that Member. 

Market share is the percentage of 

volume on a particular exchange 

relative to the total volume across all 

exchanges, and indicates the amount of 

order flow directed to that exchange. 

High levels of market share enhance the 

value of trading, membership, ports and 

market data. 

Chart 2 below compares the number 

of firms purchasing FIX and SQF ports, 

memberships, and market data from 

MRX to the number of firms purchasing 

such services from the four MRXaffiliated options exchanges, GEMX, 

ISE, The Nasdaq Stock Market LLC 

(‘‘NOM’’) and Nasdaq PHLX, LLC 

(‘‘Phlx’’). 

BILLING CODE 8011–01–C 

Chart 2 shows that fewer firms 

purchased MRX ports in March 2022 

than the ports of its options exchange 

affiliates. As described in detail below, 

only one order protocol is required to 

submit orders to MRX, either FIX or 

OTTO. Quoting protocols are only 

required to the extent an MRX Member 

has been appointed as a Market Maker 

in an options series pursuant to Options 

2, Section 1, and only one quoting 

protocol (SQF) is necessary to quote on 

MRX. Members may choose a greater 

number of order entry ports, however, 

depending on that Member’s particular 

business model.62 With respect to the 

submission of orders, Members may also 

choose not to purchase any port at all 

from the Exchange, and instead rely on 

the port of a third party to submit an 


lotter on DSK11XQN23PROD with NOTICES1EN18MY22.000</GPH> EN18MY22.001</GPH>

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Chart 1: Market Share by Exchange for January 2022 

ARCA 

PHU< 

CSOI!. 

BATS 

NOM 

AMEX 

IS£ 

Market Share - Exchange 

8.7% 

18.1% 

BOX 

MlAX 

EDGX 

MPRL 

Option Exchanges - Parent Company 

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Chart 2: Number of Firms Purchasing Port, Membership, Market Data and 

Trading Services from Options Venues (March 2022) 

Nasdaq Option Venues - March 2022 

Ill 

Fix and SQF ports: Members Data Trading 

IIMRX 

IIIBXOP 

GEMX 

Ill !SE 

lmNOM 

PHLX 
30312 Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 

63Market Makers on MRX are required to obtain 

one SQF port to submit quotes into MRX. 

64A ‘‘badge’’ shall mean an account number, 

which may contain letters and/or numbers, 

assigned to Market Makers. A Market Maker 

account may be associated with multiple badges. 

See Options 1, Section 1(a)(5). 

65A ‘‘mnemonic’’ shall mean an acronym 

comprised of letters and/or numbers assigned to 

Electronic Access Members. An Electronic Access 

Member account may be associated with multiple 

mnemonics. See Options 1, Section 1(a)(23). 

66As noted above, one port (FIX) would be 

required to submit orders and one port (SQF) would 

be required to submit quotes. 

67Phlx only offers FIX and SQF ports while MRX 

offers FIX, OTTO and SQF ports for order and quote 

entry. 

68The data show that approximately 24 members 

purchased ports, while there are approximately 40 

members of the Exchange. As discussed above, 

some members may use third-party ports to trade, 

so the low ratio of ports to memberships indicates 

that some members are doing so. 

69Of course, that third party must itself become 

a member of MRX, so at least some market 

participants must become members of MRX for any 

trading to take place at all. Nevertheless, because 

some firms would be able to exercise the option of 

not becoming members, excessive membership fees 

would cause the Exchange to lose members. 

70Nasdaq MRX Depth of Market Data Feed 

(‘‘Depth of Market Feed’’) provides aggregate quotes 

and orders at the top five price levels on MRX, and 

provides subscribers with a consolidated view of 

tradable prices beyond the BBO, showing additional 

liquidity and enhancing transparency for MRX 

traded options. The data provided for each option 

series includes the symbols (series and underlying 

security), put or call indicator, expiration date, the 

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. In addition, subscribers are provided with 

total aggregate quantity, Public Customer aggregate 

quantity, Priority Customer aggregate quantity, 

price, and side (i.e., bid/ask). This information is 

provided for each of the top five price levels on the 

Depth Feed. The feed also provides order 

imbalances on opening/reopening. See Options 3, 

Section 23(a)(1). 

71See Options 3, Section 23(a)(2). 

72See Options 3, Section 23(a)(3). 

73See Options 3, Section 23(a)(4). 

74See Options 3, Section 23(a)(5). 

75See, e.g., Securities Exchange Act Release No. 

94466 (March 18, 2022), 87 FR 16811 (March 24, 

2022) (SR–Nasdaq–2022–024) (explaining that topof-book products from major exchanges are readily 

substitutable). 

76MRX General 3 incorporates by reference 

Nasdaq General 3. 

77The Exchange’s Membership Department must 

ensure, among other things, that an applicant is not 

statutorily disqualified. 

order.63 The Exchange assigns the 

Member a badge 64 and/or mnemonic 65

to submit quotes and/or orders to the 

Exchange on a particular port. Use of 

this badge or mnemonic by a Member 

would allow a Member to use a thirdparty port to trade on the Exchange. 

The experience of MRX’s affiliates 

shows that the number of ports that 

members choose to purchase varies 

widely. For example, a review of the 

Phlx exchange in April 2022 shows that, 

among its members that purchase ports, 

approximately 26 percent purchased 1 

SQF or FIX port, another 26 percent 

purchased between 2 and 5 ports, 21 

percent purchased between 6 and 10 

ports, and 28 percent purchased more 

than 11 ports. This means that any 

member has the option of reducing its 

purchase of port services without 

purchasing a substitute product by, for 

example, reconfiguring its systems to 

change the number of ports from 16 to 

14.66

By way of comparison, the number of 

ports that MRX Members purchased in 

April 2022 also varies widely. For 

example, approximately 23 percent 

purchased 1 SQF, FIX or OTTO port,67

another 43 percent purchased between 2 

and 5 ports, 13 percent purchased 

between 6 and 10 ports, and 20 percent 

purchased more than 11 ports. MRX 

Members, similar to Phlx members, 

have the option of reducing their port 

purchases without purchasing a 

substitute product. 

Chart 2 also shows that MRX has the 

smallest number of Members relative to 

its GEMX, ISE, NOM and Phlx affiliates, 

with approximately 40 members.68 This 

demonstrates that customers can and 

will choose where to become members, 

need not become members of all 

exchanges, and do not need to become 

Members of MRX and instead may 

utilize a third party.69

With respect to market data, Chart 2 

shows that approximately 34 firms 

subscribe to at least one market data 

product from MRX in the first quarter of 

2022. This is the second lowest number 

of firms purchasing market data from 

the Nasdaq-affiliated options exchanges. 

As explained above, Nasdaq proposes 

to introduce fees for five market data 

feeds: (i) Nasdaq MRX Depth of Market 

Data (aggregate quotes and orders at the 

top five price levels on MRX, and a 

consolidated view of tradable prices 

beyond the BBO); 70 (ii) the Nasdaq 

MRX Order Feed (new orders resting on 

the book); 71 (iii) Nasdaq MRX Top 

Quote Feed (best bid and offer position, 

with aggregated size based on 

displayable order and quote interest in 

the System; 72 (iv) Nasdaq MRX Trades 

Feed (last trade information along with 

opening price, daily trading volume, 

high and low prices for the day); 73 and 

(5) the Nasdaq MRX Spread Feed 

(orders for all Complex Orders, data 

aggregated at the top five price levels 

(BBO) on both the bid and offer side of 

the market and last trades 

information).74

The MRX Top Quote Feed and the 

MRX Trades Feed provide ‘‘top-ofbook’’ information. Such information is 

typically of interest to a broader 

audience than Members trading on 

exchanges, including retail investors, 

media, portfolio managers, competing 

exchanges and others. For this broader 

audience, top-of-book data from one 

exchange is, in general, readily 

substitutable with the top-of-book 

information from another exchange,75

and therefore the Exchange may lose 

customers if fees for top-of-book data are 

set too high. 

The other three market data feeds, the 

Depth of Market Data feed, the Order 

Feed, and the Spread Feed are generally 

of more interest to Members trading on 

the Exchange relative to other market 

participants but, as noted above, MRX 

has the smallest market share at 1.8%, 

and any Member can choose to trade on 

another exchange if fees for these other 

three feeds exceed their value. 

All of these statistics must be viewed 

in the context of a field with relatively 

low barriers to entry. MRX, like many 

new entrants to the field, offered 

membership, ports and market data for 

free to establish itself and gain market 

share. As new entrants enter the field, 

MRX can also expect competition from 

these new entrants. Those new entrants, 

like MRX, are likely to set membership, 

port, market data, or other fees to zero, 

increasing marketplace competition. 

In summary, MRX membership, port 

and market data fees are subject to 

significant substitution-based 

competitive forces due to its 

consistently low percentage of market 

share, the relatively small number of 

purchasers for each product, and the 

purchasers that either cancelled or are 

reviewing their subscriptions. 

Implementation of the proposed fees is 

therefore consistent with the Act. 

Fees for Membership, Ports and Market 

Data 

Each of the proposed membership, 

port and data fees described below are 

in line with those of other markets. 

Setting a fee above competitors is likely 

to drive away customers, so the most 

efficient price-setting strategy is to set 

prices at the same level as other firms. 

Options 7, Section 5—Membership 

The Exchange’s proposal to adopt 

membership fees is reasonable, 

equitable and not unfairly 

discriminatory. As a self-regulatory 

organization, MRX’s membership 

department reviews applicants to ensure 

that each application complies with the 

rules specified within MRX General 3 76

as well as other requirements for 

membership.77 Applicants must meet 

the Exchange’s qualification criteria 


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78See GEMX Options 7, Section 6A (Access Fees). 

79See Cboe’s Fees Schedule. Cboe assesses permit 

fees as follows: Market-Maker Electronic Access 

Permit of $5,000 per month; Electronic Access 

Permits of $3,000 per month; and Clearing TPH 

Permit of $2,000 per month. See also Miami 

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

Fee Schedule. MIAX assesses an Electronic 

Exchange Member Fee of $1,500 per month. 

80See Phlx, ISE, GEMX, MRX, Nasdaq BX, Inc. 

(‘‘BX’’) and NOM Options 2, Section 3; Cboe 

Exchange, Inc. (‘‘Cboe’’) Rule 5.50; BOX Exchange 

LLC (‘‘BOX’’) Rule 8030; MIAX Rule 602; and NYSE 

Arca, Inc. (‘‘NYSE Arca’’) Rule 6.35–O. 

81See ISE, GEMX and MRX, Phlx, BX and NOM 

Options 2, Section 5; Cboe Rule 5.52; BOX Rule 

8050; MIAX Rule 604; and NYSE Arca Rule 6.37A– 

O. 

82Options markets refer to the primary market 

maker on an exchange in several ways. 

83See BX Options 2, Section 4; ISE, GEMX and 

MRX, and Phlx Options 2, Section 5; BOX Rule 

8055; MIAX Rule 604; and NYSE Arca Rule 6.37A– 

O. 

84See BX Options 2, Section 4; ISE, GEMX and 

MRX, Phlx and NOM Options 2, Section 5; and 

Cboe Rule 5.52; BOX Rule 8040. 

85See ISE, GEMX, MRX, Phlx and BX Options 3, 

Section 13; MIAX Rule 515A; Cboe Rule 5.37; and 

BOX Rules 7150 and 7245. 

86See Phlx and ISE Options 3, Section 14; MIAX 

Rule 518; Cboe Rule 5.33; BOX Rule 7240; and 

NYSE Arca Rule 6.91–O. 

87See ISE, GEMX, MRX, Phlx, BX and NOM 

Options 3, Section 7; MIAX Rule 615; Cboe Rule 

5.6; BOX Rule 7110; and NYSE Arca Rule 6.62–O. 

88See Cboe Rule 5.85; BOX Rule 7130; and NYSE 

Arca Rule 6.76–O. 

89See Phlx, ISE, GEMX and MRX Options 3, 

Section 10; and BOX Rule 7135. 

90See BX Options 3, Section 10. While BX’s rule 

permits both price/time and size pro-rata allocation, 

all symbols on BX are currently designated as Price/ 

Time. See also BOX Rules 7130 and 7135. MIAX’s 

rule permits both Price-Time and Pro-Rata 

allocation. See also MIAX Rule 514. 

91See ISE, GEMX and MRX Options 3, Section 

11; NYSE American Rules 971.1NY and 971.2NY; 

and Cboe Rule 5.39. 

92See ISE, GEMX, MRX, Phlx, BX and NOM 

Options 3, Section 8; Cboe Rule 5.31, MIAX Rule 

503, BOX Rule 7070, and NYSE Arca Rule 6.64–O. 

93Today, Phlx, Cboe, BOX, NYSE Arca, and 

NYSE American LLC have a trading floor. Trading 

floors require an on-floor presence to execute 

options transactions. 

94There are certain features of open outcry 

trading that are difficult to replicate in an electronic 

trading environment. The Exchange has observed, 

and understands from various market participants, 

that they have had difficulty executing certain 

orders, such as larger orders and high-risk and 

complicated strategies, in an all-electronic trading 

configuration without the element of human 

interaction to negotiate pricing for these orders. 

95See e.g. options on the Nasdaq-100 Index®

available on ISE, GEMX and Phlx and Cboe’s 

Market Volatility Index®. Currently, MRX does not 

list any proprietary products. 

96See Miami International Securities Exchange, 

LLC Fee Schedule at 20 and 21: https://

www.miaxoptions.com/sites/default/files/fee_

schedule-files/MIAX_Options_Fee_Schedule_

03012022.pdf. 

prior to approval. The membership 

review includes, but is not limited to, 

the registration and qualification of 

associated persons, financial health, the 

validity of the required clearing 

relationship, and the history of 

disciplinary matters. Approved 

Members would be required to comply 

with MRX’s By-Laws and Rules and 

would be subject to regulation by MRX. 

The proposed membership fees are 

identical to membership fees on 

GEMX,78 and are lower than similar fees 

assessed on other options markets.79

The Exchange believes that there are 

many factors that may cause a market 

participant to decide to become a 

member of a particular exchange. 

Among various factors, the Exchange 

believes market participants consider: 

(i) An exchange’s available liquidity in 

options series; (ii) trading functionality 

offered on a particular market; (iii) 

product offerings; (iv) customer service 

on an exchange; and (v) transactional 

pricing. The Exchange believes that the 

decision to become a member of an 

exchange, particularly as a registered 

market maker, is a complex one that is 

not solely based on non-transactional 

costs assessed by an exchange. Market 

participants weigh the tradeoff between 

where they choose to deploy liquidity 

versus where trading opportunities 

exist. Of course, the cost of membership, 

ports and market data may factor into a 

decision to become a member of a 

certain exchange, but the Exchange 

believes it is by no means the only 

factor when comparing exchanges. 

Market Makers 

Market makers play an important role 

on options exchanges as they provide 

liquidity. In options markets, registered 

market makers are assigned options 

series 80 and are required to quote in 

those options series for a specified time 

period during the day.81 Typically, a 

lead or primary market maker 82 will be 

required to quote for a longer period of 

time during the day as compared to 

other market makers registered on an 

exchange.83 Additionally, market 

makers are typically required to quote 

within a certain width on options 

markets.84 Greater liquidity on options 

markets benefits all market participants 

by providing more trading opportunities 

and attracting greater participation by 

market makers. An increase in the 

activity of market makers in turn 

facilitates tighter spreads. Market 

participants are attracted to options 

markets that have ample liquidity and 

tighter spreads in options series. 

Trading Functionality 

An exchange’s trading functionality 

attracts market participants who may 

elect, for example, to submit an order 

into a price improving auction,85 enter 

a complex order,86 or utilize a particular 

order type.87 Different options 

exchanges offer different trading 

functionality to their members. For 

example, with respect to priority and 

allocation of an order book, some 

options exchanges have price/time 

allocation,88 some have a size pro-rata 

allocation,89 while other exchanges offer 

both allocation models.90 The allocation 

methodology on a particular options 

exchange’s order book may attract 

certain market participants. Also, the 

manner in which some options markets 

structure their solicitation auction,91 or 

opening process,92 may be attractive to 

certain market participants. Finally, 

some exchanges have trading floors 93

which may accommodate trading for 

certain market participants or trading 

firms.94

Product Offerings 

Introducing new and innovative 

products to the marketplace designed to 

meet customer demands may attract 

market participants to a particular 

options venue. New products in the 

options industry may allow market 

participants greater trading and hedging 

opportunities, as well as new avenues to 

manage risks. The listing of new options 

products enhances competition among 

market participants by providing 

investors with additional investment 

vehicles, as well as competitive 

alternatives, to existing investment 

products. An exchange’s proprietary 

product offering may attract order flow 

to a particular exchange to trade a 

particular options product.95

Transaction Pricing 

The pricing available on a particular 

exchange may impact a market 

participant’s decision to submit order 

flow to a particular options venue. The 

options industry is competitive. Clear 

substitutes to the Exchange exist in the 

market for options security transaction 

services; the Exchange is only one of 

sixteen options exchanges to which 

market participants may direct their 

order flow. Within this environment, 

market participants can freely, and often 

do, shift their order flow among the 

Exchange and competing venues in 

response to changes in their respective 

pricing schedules. 

With respect to the CMM Trading 

Rights Fee, the proposed fees compare 

favorably with those of other options 

exchanges. For example, a market maker 

on MIAX assesses Market Makers a 

$3,000 one-time fee and then a tiered 

monthly fee from $7,000 for up to 10 

classes to $22,000 for over 100 classes.96

By comparison, under the proposed fee 

structure, a CMM can be granted access 


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97See GEMX Options 7, Section 6.B. (CMM 

Trading Rights Fees). 

98See Securities Exchange Act Release No. 93927 

(January 7, 2022), 87 FR 2191 (January 13, 2022) 

(SR–MEMX–2021–19). The Monthly Membership 

Fee is assessed to each active Member at the close 

of business on the first day of each month. 

99See Options Order Protection and Locked/ 

Crossed Market Plan (August 14, 2009), available at 

https://www.theocc.com/getmedia/7fc629d9-4e54- 

4b99-9f11-c0e4db1a2266/options_order_protection_

plan.pdf. 

100MRX Members may elect to not route their 

orders by marking an order as ‘‘do-not-route.’’ In 

this case, the order would not be routed. 

101Service bureaus provide access to market 

participants to submit and execute orders on an 

exchange. On MRX, a Service Bureau may be a 

Member. Some MRX Members utilize a Service 

Bureau for connectivity and that Service Bureau 

may not be a Member. Some market participants 

utilize a Service Bureau who is a Member to submit 

orders. As noted herein only MRX Members may 

submit orders or quotes through ports. 

102Sponsored Access is an arrangement whereby 

a member permits its customers to enter orders into 

an exchange’s system that bypass the member’s 

trading system and are routed directly to the 

Exchange, including routing through a service 

bureau or other third-party technology provider. 

103This may include utilizing a Floor Broker and 

submitting the trade to one of the five options 

trading floors. 

on the Exchange for as little as $950 per 

month (i.e., a $100 access fee and an 

$850 trading right), and could quote in 

all options classes on the Exchange by 

paying the access fee and obtaining nine 

CMM trading rights for a total of $4,950 

per month. The Exchange notes that its 

tiered model for CMM trading rights is 

consistent with the pricing practices of 

other exchanges, such as NYSE Arca, 

which charges $6,000 per month for the 

first market maker trading permit, as 

mentioned above, down to $1,000 per 

month for the fifth and additional 

trading permits, with various tiers inbetween. Like other options exchanges, 

the Exchange is proposing a tiered 

pricing model because it may encourage 

CMM firms to purchase additional 

trading rights and quote more issues 

because subsequent trading rights are 

priced lower than the initial trading 

right. 

The Exchange does not believe that it 

is unfairly discriminatory to assess 

different fees for PMMs, CMMs, and 

EAMs. For PMMs on MRX, the fees 

required to access the Exchange are 

substantially lower than those of 

competing exchanges. For example, a 

PMM could quote on the Exchange for 

only $200 (i.e., the access fee), 

compared with the minimum $6,000 per 

month trading permit fee charged by 

NYSE Arca. The Exchange notes that it 

is not proposing trading right fees for 

PMMs, as the Exchange wishes to 

encourage Members to act as PMMs, 

which will benefit the market through, 

for example, more robust quoting 

requirements. Similarly, the Exchange is 

proposing only to charge the $200 

access fee to EAMs as the technical, 

regulatory, and administrative services 

associated with an EAM’s use of the 

Exchange are not as comprehensive as 

those associated with Market Makers. 

The CMM Trading Right Fee is identical 

to GEMX.97

Membership fees are charged by 

nearly all exchanges, and all established 

exchanges with sufficient order flow. In 

2022, MEMX LLC (‘‘MEMX’’) 

established a monthly membership fee 

of $200.98 MEMX reasoned in that rule 

change that there is value in becoming 

a Member of the Exchange. MEMX 

stated that it believed that its proposed 

membership fee ‘‘is not unfairly 

discriminatory because no broker-dealer 

is required to become a member of the 

Exchange.’’ Moreover, ‘‘neither the 

trade-through requirements under 

Regulation NMS nor broker-dealers’ best 

execution obligations require a brokerdealer to become a member of every 

exchange.’’ In this respect, MEMX is 

correct; a monthly membership fee is 

reasonable, equitably allocated and not 

unfairly discriminatory. Market 

participants may choose to become a 

member of one or more options 

exchanges based on the market 

participant’s business model. A very 

small number of market participants 

choose to become a member of all 

sixteen options exchanges. It is not a 

requirement for market participants to 

become members of all options 

exchanges, in fact, certain market 

participants conduct an options 

business as a member of only one 

options market. Most firms that actively 

trade on options markets are not 

currently members of MRX and do not 

purchase port services at MRX. Using 

options markets that Nasdaq operates as 

points of comparison, less than a third 

of the firms that are members of at least 

one of the options markets that Nasdaq 

operates are also members of MRX 

(approximately 29%). The Exchange 

notes that no firm that is a member of 

MRX only. Few, if any, firms have 

become members or purchased port 

services at MRX, notwithstanding the 

fact that both MRX membership and 

ports are currently free, because MRX 

currently has less liquidity than other 

options markets. As explained above, 

MRX has the smallest market share of 

the 16 options exchanges, representing 

only approximately 1.8% of the market, 

and, for certain market participants, the 

current levels of liquidity may be 

insufficient to justify the costs 

associated with becoming a member and 

connecting to the exchange, 

notwithstanding the fact that both are 

currently free. 

The decision to become a member of 

an exchange, particularly for registered 

market makers, is complex, and not 

solely based on the non-transactional 

costs assessed by an exchange. As noted 

herein, specific factors include, but are 

not limited to: (i) An exchange’s 

available liquidity in options series; (ii) 

trading functionality offered on a 

particular market; (iii) product offerings; 

(iv) customer service on an exchange; 

and (v) transactional pricing. Becoming 

a member of the exchange does not 

‘‘lock’’ a potential member into a market 

or diminish the overall competition for 

exchange services. The decision to 

become a member of an exchange is 

made at the beginning of the 

relationship, and is no less subject to 

competition than trading fees or market 

data. 

In lieu of becoming a member at each 

options exchange, a market participant 

may join one exchange and elect to have 

their orders routed in the event that a 

better price is available on an away 

market. Nothing in the Order Protection 

Rule requires a firm to become a 

Member at MRX.99 If MRX is not at the 

NBBO, MRX will route an order to any 

away market that is at the NBBO to 

prevent a trade-through and also ensure 

that the order was executed at a superior 

price.100

In lieu of joining an exchange, a thirdparty may be utilized to execute an 

order on an exchange. For example, a 

third-party broker-dealer Member of 

MRX may be utilized by a retail investor 

to submit orders into an Exchange. An 

institutional investor may utilize a 

broker-dealer, a service bureau,101 or 

request sponsored access 102 through a 

member of an exchange in order to 

submit a trade directly to an options 

exchange.103 A market participant may 

either pay the costs associated with 

becoming a member of an exchange or, 

in the alternative, a market participant 

may elect to pay commissions to a 

broker-dealer, pay fees to a service 

bureau to submit trades, or pay a 

member to sponsor the market 

participant in order to submit trades 

directly to an exchange. Market 

participants may elect any of the above 

models and weigh the varying costs 

when determining how to submit trades 

to an exchange. Depending on the 

number of orders to be submitted, 

technology, ability to control 

submission of orders, and projected 

revenues, a market participant may 


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104See GEMX Options 7, Section 6.C. (Ports and 

Other Services). 

105For example, while the FIX protocol permits 

routing capability the OTTO protocol does not 

permit routing capability. This distinction may 

cause a Member to elect a certain protocol based on 

whether they want the order executed locally or 

have the option to allow the order to route. The 

OTTO Port offer lower latency as compared to the 

FIX Port, which may be attractive to Members 

depending on their trading behavior. 

106For example, a Member may desire to utilize 

multiple FIX or OTTO ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that Member. 

107Service bureaus may obtain ports on behalf of 

members. The Exchange would only assign a badge 

and/or mnemonic to a Member to be utilized to 

submit quotes and/or orders to the Exchange. 

108See note 64, supra. 

109See note 65, supra. 

110Only Members and service bureaus may 

request ports on MRX, and only Members may 

utilize ports on MRX through their assigned badge 

or mnemonic. See Options 1, Section 1(a)(5) and 

(23). 

111 In lieu of joining an exchange, a third-party 

may be utilized to execute an order on an exchange 

as described above. 

112The Depth of Market Feed provides aggregate 

quotes and orders at the top five price levels on 

MRX, and provides subscribers with a consolidated 

view of tradable prices beyond the BBO, showing 

additional liquidity and enhancing transparency for 

MRX traded options. 

113The Order Feed provides information on new 

orders resting on the book (e.g. price, quantity and 

market participant capacity), and also announces all 

auctions. 

114The Top Quote Feed calculates and 

disseminates MRX’s best bid and offer position, 

with aggregated size (including total size in 

aggregate, for Professional Order size in the 

aggregate and Priority Customer Order size in the 

aggregate), based on displayable order and quote 

interest in the System. The feed also provides last 

trade information along with opening price, daily 

trading volume, high and low prices for the day. 

115The Trades Feed displays last trade 

information along with opening price, daily trading 

volume, high and low prices for the day. 

116The Spread Feed consists of: (1) Options 

orders for all Complex Orders (i.e., spreads, buywrites, delta neutral strategies, etc.); (2) data 

aggregated at the top five price levels (BBO) on both 

the bid and offer side of the market; (3) last trades 

information. 

determine one model is more cost 

efficient as compared to the alternatives. 

Options 7, Section 6—Ports 

The Exchange’s proposal to amend 

port fees is reasonable, equitable and 

not unfairly discriminatory. The 

proposed port fees are similar to the fees 

assessed by GEMX,104 and lower than 

the fees assessed by ISE. The proposed 

fees reflect the ongoing services 

provided to maintain and support the 

ports. In order to submit orders into 

MRX, only one order protocol is 

required, either FIX or OTTO. Quoting 

protocols are only required to the extent 

an MRX Member has been appointed as 

a Market Maker in an options series 

pursuant to Options 2, Section 1. 

Similarly, only one quoting protocol 

(SQF) is necessary to quote on MRX. 

Depending on a Member’s business 

model, one protocol may be better 

suited for a particular Member relative 

to another.105 Members may elect to 

utilize both order entry protocols, 

depending on how they organize their 

business. Only one protocol is necessary 

to submit orders into MRX. However, 

Members may choose a greater number 

of order entry ports, depending on that 

Member’s particular business model.106

Similarly, only one account number is 

necessary per Member, although 

Members may choose to have additional 

accounts number to organize their 

business. The Exchange notes that FIX, 

OTTO, FIX DROP, the Clearing Trade 

Interface, and TradeInfo are available to 

all Members and may be utilized to 

obtain order information. 

Members choose among the protocols 

based on their business workflow. The 

Exchange would uniformly assess the 

port fees to all Members and would 

uniformly apply monthly caps. 

Ports are only available to MRX 

Members or service bureaus, and only 

an MRX Member may utilize a port.107

Once an applicant is approved for 

membership on MRX and becomes a 

Member, the Exchange assigns the 

Member a badge 108 and/or 

mnemonic 109 to submit quotes and/or 

orders to the Exchange through the 

applicable port. An MRX Member may 

have one or more accounts numbers and 

may assign badges or mnemonics to 

those account numbers. Membership 

approval grants a Member a right to 

exercise trading privileges on MRX, 

which includes the submission of orders 

and/or quotes into the Exchange 

through a secure port by utilizing the 

badge and/or mnemonic assigned to a 

specific Member by the Exchange. The 

Exchange utilizes ports as a secure 

method for Members to submit orders 

into the Exchange’s match engine and 

for the Exchange to send messages 

related to those orders to its Members. 

MRX is obligated to regulate its 

Members and secure access to its 

environment. In order to properly 

regulate its Members and secure the 

trading environment, MRX takes 

measures to ensure access is monitored 

and maintained with various controls. 

Ports are a method utilized by the 

Exchange to grant Members secure 

access to communicate with the 

Exchange and exercise trading rights. 

When a market participant elects to be 

a Member of MRX, and is approved for 

membership by MRX, the Member is 

granted trading rights to enter orders 

into MRX through secure ports. 

As noted herein, there is no legal or 

regulatory requirement that a market 

participant become a Member of MRX, 

or, if it is a Member, to purchase port 

services beyond the one quoting 

protocol or one order entry protocol 

necessary to quote or submit orders on 

MRX.110 As noted above, Members may 

freely choose to rely on one or many 

ports, depending on their business 

model. A Member can only submit 

interest (quotes or orders) through a 

secure port. Only one port is required to 

submit an order (FIX or OTTO) to MRX 

and only one port is required to submit 

a quote (SQF) to MRX. A market 

participant may decide, in the 

alternative, not to become a member of 

an exchange and instead utilize a third 

party.111

The decision as to what types and 

number of ports to buy, like the decision 

to become a member of an exchange, is 

made at the beginning of that 

relationship, but that decision may be 

altered at any time as a market 

participant’s business strategy evolves 

or the manner in which the market 

participant interacts with the exchange 

changes over time. As noted herein, 

only one protocol is required to submit 

orders. Depending on a Member’s 

business model, one protocol may be 

better suited for a Member than another. 

Port selection is often made at the 

beginning of a trading relationship, like 

the decision whether to become a 

member, but a member is not ‘‘locked’’ 

into a particular number or type of ports 

over the course of the business 

relationship. 

Options 7, Section 7—Market Data 

The Exchange’s proposal to adopt 

market data fees is reasonable, equitable 

and not unfairly discriminatory. The 

five market data feeds at issue here—the 

Depth of Market Feed,112 Order Feed,113

Top Quote Feed,114 Trades Feed,115 and 

Spreads Feed 116—are used throughout 

the market by a variety of market 

participants for a variety of purposes. 

Users include regulators, market 

makers, competing exchanges, media, 

retail, academics, portfolio managers. 

Market data feeds will be available to 

members of all of these groups on a nondiscriminatory basis. With respect to the 

proposed Non-Display Enterprise 

License, the Exchange notes that 

enterprise licenses in general have been 

widely recognized as an effective and 

not unfairly discriminatory method of 

distributing market data. Enterprise 

licenses are widely employed by 

options exchanges, and the proposal 

here is typical of such licenses. 


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117See Cboe DataShop, available at https://

datashop.cboe.com/. 

118See MIAX Options Market Data & Offerings, 

available at https://www.miaxoptions.com/marketdata-offerings. 

119See NYSE Options Markets, available at 

https://www.nyse.com/options. 

120See Securities Exchange Act Release No. 

94466 (March 18, 2022), 87 FR 16811 (March 24, 

2022) (SR–NASDAQ–2022–024) (explaining that 

‘‘[a]ll of the top-of-book proprietary products 

offered by the exchanges are readily substitutable 

for each other.’’ ‘‘Top-of-book data can be used for 

many purposes—from a retail investor casually 

surveying the market to sophisticated market 

participants using it for a variety of applications, 

such as investment analysis, risk management, or 

portfolio valuation.’’ ‘‘All major exchange groups 

compete to sell top-of-book data.’’). 

121Today, MRX is the only options exchange that 

does not assess membership, port, and market data 

fees. 

122See GEMX Options 7, Section 6.A. (Access 

Fees) and Section 6.B. (CMM Trading Rights Fees). 

123See NYSE Arca Fees and Charges, General 

Options and Trading Permit (OTP) Fees (comparing 

CMM Trading Rights Fees to the Arca Market Maker 

fees). 

124See MRX Options 2, Section 5. PMMs, 

associated with the same Member, are collectively 

required to provide two-sided quotations in 90% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce. CMMs 

are not required to enter quotations in the options 

classes to which it is appointed, however if a CMM 

initiates quoting in an options class, the CMM, 

associated with the same Member, is collectively 

required to provide two-sided quotations in 60% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce. 

125See GEMX Options 7, Section 6.C. (Ports and 

Other Services). 

Market data, often mistakenly 

characterized as the ‘‘exhaust’’ of an 

exchange, is in fact the engine that 

drives liquidity: Firms are attracted by 

high levels of liquidity, diverse offerings 

and bids and offers close to the NBBO. 

Market data, unlike membership or 

ports, is not sold only to members, but 

rather is open to investors generally. 

Nasdaq is subject to direct 

competition in the sale of market data. 

As explained above, Nasdaq proposes to 

introduce fees for both top-of-book and 

depth-of-book feeds. Top-of-book feeds 

are generally of interest to a broader 

audience that can readily substitute the 

top-of-book feed of one exchange with 

that of another. Depth-of-book feeds are, 

for the most part, of more interest to 

Members trading on the Exchange than 

other market participants but MRX has 

the smallest market share at 1.8%, and 

any Member can choose to trade on 

another exchange if fees for these other 

three feeds exceed their value. 

Moreover, MRX lists no proprietary 

options products that are entirely 

unique to MRX. Firms can substitute 

MRX market data with feeds from 

exchanges that provide a high degree of 

functionality, including complex orders. 

Full market data options are available, 

for example, from Cboe,117 MIAX,118

and NYSE Arca Options.119

Top-of-book data—last trade and best 

bid and offer information—is sold 

broadly to a wide of market participants, 

including the media, the general 

investing public, retail broker-dealers, 

regulatory agencies, and many others in 

addition to broker-dealers routing order 

flow. Because MRX does not list options 

on products that are exclusively 

available on MRX, then these same 

types of general-interest consumers of 

data can substitute MRX data with data 

from any exchange that lists such 

multiply-listed options, or through 

OPRA, in the same sense that 

consumers of top-of-book data on equity 

exchanges compete with other sellers of 

top-of-book data.120 Top-of-book data is 

easily substitutable by many of its users, 

and therefore is subject to particularly 

fierce competition. 

All of this competition must be 

understood in the context of the fact 

that all broker-dealers involved in order 

routing must take consolidated data 

from OPRA, and proprietary data feeds 

cannot be used to meet that particular 

requirement. As such, all proprietary 

data feeds are optional. 

* * * * * 

After 6 years, MRX proposes to 

commence assessing membership, port, 

and market data fees, just as all other 

options exchanges.121 The introduction 

of these fees will not impede a 

Member’s access to MRX, but rather will 

allow MRX to continue to compete and 

grow its marketplace so that it may 

continue to offer a robust trading 

architecture, a quality opening process, 

an array of simple and complex order 

types and auctions, and competitive 

transaction pricing. If MRX is incorrect 

in its assessment of the value of its 

services, that assessment will be 

reflected in MRX’s ability to compete 

with other options exchanges. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange believes its proposal 

remains competitive with other options 

markets, and will offer market 

participants with another choice of 

venue to transact options. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues if they deem fee levels at a 

particular venue to be excessive, or 

rebate opportunities available at other 

venues to be more favorable. Because 

competitors are free to modify their own 

fees in response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

Options 7, Section 5—Membership 

The proposed membership fees are 

identical to membership fees assessed 

by GEMX.122 The proposed fees are 

designed to reflect the benefits of the 

technical, regulatory, and administrative 

services provided to a Member by the 

Exchange, and the fees remain 

competitive with similar fees offered on 

other options exchanges. The Exchange 

does not believe that assessing different 

fees for PMMs, CMMs, and EAMs 

creates an undue burden on 

competition. 

With respect to the CMM Trading 

Rights Fee, the proposed fees compare 

favorably with those of other options 

exchanges.123 Like other options 

exchanges, the Exchange is proposing a 

tiered pricing model because it may 

encourage CMM firms to purchase 

additional trading rights and quote more 

issues because subsequent trading rights 

are priced lower than the initial trading 

right. The Exchange notes that it is not 

proposing trading right fees for PMMs as 

the Exchange wishes to encourage 

Members to act as PMMs, which will 

benefit the market through, for example, 

more robust quoting. Additionally, as 

noted herein, PMMs have higher 

quoting obligations as compared to 

CMMs.124

Options 7, Section 6—Ports 

The proposed port fees are similar to 

port fees assessed by GEMX 125 for 

similar connectivity. As a consequence, 

competition will not be burdened by the 

proposed fees. In order to submit orders 

into MRX, only one order protocol is 

required, either FIX or OTTO. Likewise, 

only one quoting protocol, SQF, is 

necessary to quote on MRX. Finally, 

only one account number is necessary 

per Member. FIX, and OTTO Ports, as 

well TradeInfo, are available to all 

Members and may be utilized to cancel 

orders. Further, FIX, and OTTO Ports, as 

well TradeInfo, are available to all 

Members and may be utilized to cancel 

orders and FIX DROP, the Clearing 

Trade Interface, and TradeInfo are 

available to all Members and may be 

utilized to obtain order information. 

These different protocols are not all 

necessary to conduct business on MRX. 

Market participants may also connect to 


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Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 30317 

126See MRX Options 2, Section 5. 

127See MRX Options 2, Section 4. 

128See MRX Options 3, Section 15(a)(3). Market 

Makers are offered risk protections to permit them 

to manage their risk more effectively. 

129The Exchange notified market participants of 

the new fees on December 20, 2021. See Data News 

#2021–11 (December 20, 2021, available at http:// 

www.nasdaqtrader.com/TraderNews.aspx?

id=dn2021-11. As such, market participants have 

had ample notice of the proposed fee changes and 

will be able to adjust their purchases of exchange 

services accordingly. 130 15 U.S.C. 78s(b)(3)(A)(ii). 131 17 CFR 200.30–3(a)(12). 

third parties instead of directly to the 

Exchange. 

With respect to the higher fees 

assessed for SQF Ports and SQF Purge 

Ports, the Exchange notes that only 

Market Makers may utilize these ports. 

Market Makers are required to provide 

continuous two-sided quotes on a daily 

basis,126 and are subject to various 

obligations associated with providing 

liquidity.127 As a result of these quoting 

obligations, the SQF Port and SQF Purge 

Port are designed to handle higher 

throughput to permit Market Makers to 

bundle orders to meet their obligations. 

The technology to permit Market 

Makers to submit a greater number of 

quotes, in addition to the various risk 

protections 128 afforded to these market 

participants when quoting, accounts for 

the higher SQF Port and SQF Purge Port 

fees. Greater liquidity benefits all 

market participants by providing more 

trading opportunities and attracting 

greater participation by Market Makers. 

Also, an increase in the activity of 

Market Makers in turn facilitates tighter 

spreads. 

Options 7, Section 7—Market Data 

The initiation of market data fees will 

not impose an undue burden on intermarket competition. Since February 

2016, MRX has disseminated market 

data without charging a fee, allowing 

MRX time to build order flow. Now that 

order flow has increased from 

approximately 0.2 percent to 1.8 percent 

of the market, MRX proposes charging 

fees that reflect the value of that data. 

Permitting MRX to charge a fee for its 

data does not impose any burden on the 

ability of other options exchanges to 

compete. Each of the remaining 15 

options exchanges currently sells its 

market data, and is capable of modifying 

its fees response to the proposed 

changes by MRX. Moreover, allowing 

MRX, or any new market entrant, to 

waive fees for a period of time to allow 

it to become established encourages 

market entry and thereby ultimately 

promotes competition. 

If the changes proposed herein are 

unattractive to market participants, it is 

likely that the Exchange will lose 

market share.129 The Exchange does not 

believe that the proposed changes will 

impair the ability of members or 

competing order execution venues to 

maintain their competitive standing in 

the financial markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.130 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is: (i) 

Necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MRX–2022–04 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–MRX–2022–04. 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–MRX–2022–04 and should 

be submitted on or before June 8, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.131

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10617 Filed 5–17–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34583; File No. 812–15315] 

First Eagle Alternative Capital BDC, 

Inc., et al. 

May 13, 2022. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of application for an order 

(‘‘Order’’) under sections 17(d) and 57(i) 

of the Investment Company Act of 1940 

(the ‘‘Act’’) and rule 17d–1 under the 

Act to permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to amend a previous 

order granted by the Commission that 

permits certain business development 

companies (‘‘BDCs’’) and closed-end 

management investment companies to 

co-invest in portfolio companies with 

each other and with certain affiliated 

investment entities. 


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