35832 Federal Register / Vol. 87, No. 113 / Monday, June 13, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

3See Exchange Rule 1.5(p). 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rules 17h–1T and 17h–2T (17 CFR 

240.17h–1T and 17 CFR 240.17h–2T), 

under the Securities Exchange Act of 

1934 (15 U.S.C. 78a et seq.). 

Rule 17h–1T requires a covered 

broker-dealer to maintain and preserve 

records and other information 

concerning certain entities that are 

associated with the broker-dealer. This 

requirement extends to the financial and 

securities activities of the holding 

company, affiliates and subsidiaries of 

the broker-dealer that are reasonably 

likely to have a material impact on the 

financial or operational condition of the 

broker-dealer. Rule 17h–2T requires a 

covered broker-dealer to file with the 

Commission quarterly reports and a 

cumulative year-end report concerning 

the information required to be 

maintained and preserved under Rule 

17h–1T. 

The collection of information required 

by Rules 17h–1T and 17h–2T, 

collectively referred to as the ‘‘risk 

assessment rules,’’ is necessary to 

enable the Commission to monitor the 

activities of a broker-dealer affiliate 

whose business activities are reasonably 

likely to have a material impact on the 

financial or operational condition of the 

broker-dealer. Without this information, 

the Commission would be unable to 

assess the potentially damaging impact 

of the affiliate’s activities on the brokerdealer. 

There are currently 235 respondents 

that must comply with Rules 17h–1T 

and 17h–2T. Each of these 235 

respondents are estimated to require 10 

hours per year to maintain the records 

required under Rule 17h–1T, for an 

aggregate estimated annual burden of 

2,350 hours (235 respondents × 10 

hours). In addition, each of these 235 

respondents must make five annual 

responses under Rule 17h–2T. These 

five responses are estimated to require 

14 hours per respondent per year for an 

aggregate estimated annual burden of 

3,290 hours (235 respondents × 14 

hours). 

In addition, new respondents must 

draft an organizational chart required 

under Rule 17h–1T and establish a 

system for complying with the risk 

assessment rules. The staff estimates 

that drafting the required organizational 

chart requires one hour and establishing 

a system for complying with the risk 

assessment rules requires three hours. 

Based on the reduction in the number 

of filers in recent years, the staff 

estimates there will be zero new 

respondents, and thus, a corresponding 

estimated burden of zero hours for new 

respondents. Thus, the total compliance 

burden per year is approximately 5,640 

burden hours (2,350 hours + 3,290 

hours). 

The retention period for the 

recordkeeping requirement for the 

information, reports and records 

required under Rule 17h–1T is not less 

than three years. There is no specific 

retention period or recordkeeping 

requirement for Rule 17h–2T. The 

collection of information is mandatory. 

All information obtained by the 

Commission pursuant to the provisions 

of Rules 17h–1T and 17h–2T from a 

broker or dealer concerning a material 

associated person is deemed 

confidential information for the 

purposes of section 24(b) of the 

Exchange Act. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

>www.reginfo.gov<. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by July 13, 2022. 

>MBX.OMB.OIRA.SEC_desk_officer@

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

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o John Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: June 7, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12627 Filed 6–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95058; File No. SR–MEMX– 

2022–15] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule 

June 7, 2022. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on June 1, 

2022, MEMX LLC (‘‘MEMX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing with the 

Commission a proposed rule change to 

amend the Exchange’s fee schedule 

applicable to Members 3 (the ‘‘Fee 

Schedule’’) pursuant to Exchange Rules 

15.1(a) and (c). The Exchange proposes 

to implement the changes to the Fee 

Schedule pursuant to this proposal on 

June 1, 2022. The text of the proposed 

rule change is provided in Exhibit 5. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Fee Schedule to: 


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4Market share percentage calculated as of May 

31, 2022. The Exchange receives and processes data 

made available through consolidated data feeds 

(i.e., CTS and UTDF). 5 Id. 

6As set forth on the Fee Schedule, ‘‘ADAV’’ 

means the average daily added volume calculated 

as the number of shares added per day, which is 

calculated on a monthly basis, and ‘‘Displayed 

ADAV’’ means ADAV with respect to displayed 

orders. 

7As set forth on the Fee Schedule, ‘‘TCV’’ means 

total consolidated volume calculated as the volume 

reported by all exchanges and trade reporting 

facilities to a consolidated transaction reporting 

plan for the month for which the fees apply. The 

pricing for the proposed new Liquidity Provision 

Tier 1 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

displayed volume, Liquidity Provision Tier 1’’ with 

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

be provided by the Exchange on the monthly 

invoices provided to Members. The Exchange notes 

that because the determination of whether a 

Member qualifies for a certain pricing tier for a 

particular month will not be made until after the 

month-end, the Exchange will provide the Fee 

Codes otherwise applicable to such transactions on 

the execution reports provided to Members during 

the month and will only designate the Fee Codes 

applicable to the achieved pricing tier on the 

monthly invoices, which are provided after such 

determination has been made, as the Exchange does 

for its tier-based pricing today. The Exchange also 

notes that the pricing for Liquidity Provision Tiers 

2 and 3 will be referred to under the existing 

applicable descriptions and Fee Codes, and the 

pricing for Liquidity Provision Tier 4 will be 

referred to by the Exchange under the new 

description ‘‘Added displayed volume, Liquidity 

Provision Tier 4’’ with a Fee Code of ‘‘B4’’, ‘‘D4’’ 

or ‘‘J4’’, as applicable, to be provided by the 

Exchange on the monthly invoices provided to 

Members. 

8As set forth on the Fee Schedule, ‘‘Step-Up 

ADAV’’ means ADAV in the relevant baseline 

month subtracted from current ADAV. 

(i) adopt a new tier under the Liquidity 

Provision Tiers; (ii) modify the required 

criteria under one of the existing 

Liquidity Provision Tiers; and (iii) 

modify the required criteria and reduce 

the rebate provided under Non-Display 

Add Tier 1, each as further described 

below. 

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues, 

to which market participants may direct 

their order flow. Based on publicly 

available information, no single 

registered equities exchange currently 

has more than approximately 16% of 

the total market share of executed 

volume of equities trading.4 Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow, 

and the Exchange currently represents 

approximately 4% of the overall market 

share.5 The Exchange in particular 

operates a ‘‘Maker-Taker’’ model 

whereby it provides rebates to Members 

that add liquidity to the Exchange and 

charges fees to Members that remove 

liquidity from the Exchange. The Fee 

Schedule sets forth the standard rebates 

and fees applied per share for orders 

that add and remove liquidity, 

respectively. Additionally, in response 

to the competitive environment, the 

Exchange also offers tiered pricing, 

which provides Members with 

opportunities to qualify for higher 

rebates or lower fees where certain 

volume criteria and thresholds are met. 

Tiered pricing provides an incremental 

incentive for Members to strive for 

higher tier levels, which provides 

increasingly higher benefits or discounts 

for satisfying increasingly more 

stringent criteria. 

Adoption of New Liquidity Provision 

Tier 

The Exchange currently provides a 

standard rebate of $0.0020 per share for 

executions of orders in securities priced 

at or above $1.00 per share that add 

displayed liquidity to the Exchange 

(such orders, ‘‘Added Displayed 

Volume’’). The Exchange also currently 

offers Liquidity Provision Tiers 1, 2 and 

3, under which a Member may receive 

an enhanced rebate for executions of 

Added Displayed Volume by achieving 

the corresponding required volume 

criteria for each tier. The Exchange now 

proposes to adopt a new tier under the 

Liquidity Provision Tiers, which, as 

proposed, would be the new Liquidity 

Provision Tier 1, and the current 

Liquidity Provision Tiers 1, 2 and 3 

would be renumbered as Liquidity 

Provision Tiers 2, 3 and 4 (hereinafter 

referred to as such). The applicable 

rebates and required criteria under 

Liquidity Provision Tiers 2, 3 and 4 

would remain unchanged, except for the 

required criteria under Liquidity 

Provision Tier 2, which the Exchange is 

proposing to modify, as further 

described below. 

Under the proposed new Liquidity 

Provision Tier 1, the Exchange will 

provide an enhanced rebate of $0.00335 

per share for executions of Added 

Displayed Volume for Members that 

qualify for such tier by achieving a 

Displayed ADAV 6 that is equal to or 

greater than 0.40% of the TCV.7 The 

Exchange proposes to provide Members 

that qualify for the proposed new 

Liquidity Provision Tier 1 a rebate of 

0.05% of the total dollar volume of the 

transaction for executions of orders in 

securities priced below $1.00 per share 

that add displayed liquidity to the 

Exchange, which is the same rebate that 

is currently applicable to such 

executions for all Members. The 

proposed new Liquidity Provision Tier 

1 is designed to encourage Members to 

maintain or increase their order flow 

that adds displayed liquidity to the 

Exchange in order to qualify for the 

proposed enhanced rebate for 

executions of Added Displayed Volume, 

thereby promoting price discovery and 

contributing to a deeper and more liquid 

market to the benefit of all market 

participants. 

Modify Required Criteria Under 

Liquidity Provision Tier 2 

The Exchange is also proposing to 

modify the required criteria under 

Liquidity Provision Tier 2. Currently, a 

Member qualifies for such tier by 

achieving an ADAV that is equal to or 

greater than 0.25% of the TCV. The 

Exchange proposes to keep this criteria 

intact and adopt an additional (i.e., 

alternative) criteria that a Member may 

achieve in order to qualify for such tier. 

Specifically, the Exchange proposes to 

modify the required criteria such that a 

Member would also qualify for 

Liquidity Provision Tier 2 by achieving: 

(i) an ADAV that is equal to or greater 

than 0.15% of the TCV; and (ii) a StepUp ADAV 8 from May 2022 that is equal 

to or greater than 0.05% of the TCV. 

Thus, such proposed change would add 

an alternative criteria that includes a 

lower overall ADAV threshold but that 

also requires such Member to increase 

its ADAV above its May 2022 ADAV by 

a specified threshold. The Exchange 

notes that it is not proposing to change 

the rebates provided under Liquidity 

Provision Tier 2. 

The Exchange believes that the 

proposed alternative criteria provides an 

incremental incentive for Members to 

strive for higher ADAV on the Exchange 

(above their ADAV in the month 

immediately preceding the effectiveness 

of this proposal—i.e., May 2022) to 

receive the corresponding enhanced 

rebate for executions of Added 

Displayed Volume under such tier, and 

thus, it is designed to encourage 

Members that do not currently qualify 

for such tier to increase their orders that 

add liquidity to the Exchange. The 

Exchange believes that the tier, as 

proposed, would further incentivize 

increased order flow to the Exchange, 

thereby contributing to a deeper and 

more liquid market to the benefit of all 

market participants. The Exchange notes 

that, as the proposed change to the 


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9As set forth on the Fee Schedule, ‘‘NonDisplayed ADAV’’ means ADAV with respect to 

non-displayed orders (including Midpoint Peg 

orders). 

10The proposed pricing for Non-Display Add Tier 

1 is referred to by the Exchange on the Fee 

Schedule under the existing description ‘‘Added 

non-displayed volume, Non-Display Add Tier 1’’ 

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

to be provided by the Exchange on the monthly 

invoices provided to Members. 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(4) and (5). 

13Securities Exchange Act Release No. 51808 

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

required criteria under Liquidity 

Provision Tier 2 merely provides an 

alternative criteria and does not change 

the existing criteria, the Exchange 

believes that such change would make 

the tier easier for Members to achieve, 

and, in turn, while the Exchange has no 

way of predicting with certainty how 

the proposed new criteria will impact 

Member activity, the Exchange expects 

that more Members will strive to qualify 

for such tier than currently do, resulting 

in the submission of additional order 

flow to the Exchange. 

Reduce Rebate and Modify Criteria 

Under Non-Display Add Tier 1 

Lastly, the Exchange proposes to 

modify the required criteria and reduce 

the rebate provided under Non-Display 

Add Tier 1. Currently, a Member 

qualifies for Non-Display Add Tier 1 by 

achieving a Non-Displayed ADAV 9 that 

is equal to or greater than 5,000,000 

shares, and the Exchange provides a 

rebate of $0.0028 per share for a 

qualifying Member’s executions of 

orders in securities priced at or above 

$1.00 per share that add non-displayed 

liquidity to the Exchange (such orders, 

‘‘Added Non-Displayed Volume’’). Now, 

the Exchange proposes to lower the 

Non-Displayed ADAV threshold such 

that a Member would qualify for such 

tier by achieving a Non-Displayed 

ADAV that is equal to or greater than 

3,000,000 shares. The Exchange also 

proposes to reduce the rebate for a 

qualifying Member’s executions of 

Added Non-Displayed Volume to 

$0.0027 per share.10 The Exchange is 

not proposing to change the rebate 

provided under such tier for executions 

of orders in securities priced below 

$1.00 per share. 

The Exchange notes that the proposed 

change to the required criteria under 

Non-Display Add Tier 1 would lower 

the Non-Displayed ADAV threshold, 

which the Exchange believes would 

make such tier easier for Members to 

achieve, and, in turn, while the 

Exchange has no way of predicting with 

certainty how the proposed new criteria 

will impact Member activity, the 

Exchange expects that more Members 

will strive to qualify for such tier than 

currently do, resulting in the 

submission of additional order flow to 

the Exchange. The purpose of reducing 

the rebate provided for executions of 

Added Non-Displayed Volume under 

such tier as proposed (i.e., by $0.0001 

per share), which the Exchange believes 

is a modest reduction and is 

commensurate with the proposed lower 

Non-Displayed ADAV threshold, is for 

business and competitive reasons, as the 

Exchange believes that such reduction 

would decrease the Exchange’s 

expenditures with respect to its 

transaction pricing in a manner that is 

still consistent with the Exchange’s 

overall pricing philosophy of 

encouraging added liquidity. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,11

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

6(b)(5) of the Act,12 in particular, in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among its Members and other 

persons using its facilities and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

As discussed above, the Exchange 

operates in a highly fragmented and 

competitive market in which market 

participants can readily direct order 

flow to competing venues if they deem 

fee levels at a particular venue to be 

excessive or incentives to be 

insufficient, and the Exchange 

represents only a small percentage of 

the overall market. The Commission and 

the courts have repeatedly expressed 

their preference for competition over 

regulatory intervention in determining 

prices, products, and services in the 

securities markets. In Regulation NMS, 

the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and also recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 13

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products, in response to new or 

different pricing structures being 

introduced into the market. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates, and market 

participants can readily trade on 

competing venues if they deem pricing 

levels at those other venues to be more 

favorable. The Exchange believes the 

proposal reflects a reasonable and 

competitive pricing structure designed 

to incentivize market participants to 

direct additional orders that add 

liquidity to the Exchange, which the 

Exchange believes would deepen 

liquidity and promote price discovery 

and market quality on the Exchange to 

the benefit of all market participants, 

thereby enhancing the attractiveness of 

the Exchange as a trading venue. 

The Exchange notes that volumebased incentives and discounts have 

been widely adopted by exchanges, 

including the Exchange, and are 

reasonable, equitable and not unfairly 

discriminatory because they are open to 

all members on an equal basis and 

provide additional benefits or discounts 

that are reasonably related to the value 

to an exchange’s market quality 

associated with higher levels of market 

activity, such as higher levels of 

liquidity provision and/or growth 

patterns, and the introduction of higher 

volumes of orders into the price and 

volume discovery process. The 

Exchange believes that the proposed 

new Liquidity Provision Tier 1 is 

reasonable, equitable and not unfairly 

discriminatory for these same reasons, 

as it would provide Members with an 

additional incentive to achieve a certain 

volume threshold on the Exchange, is 

available to all Members on an equal 

basis, and, as noted above, is designed 

to encourage Members to maintain or 

increase their orders that add displayed 

liquidity to the Exchange in order to 

qualify for the enhanced rebate for 

executions of Added Displayed Volume, 

thereby promoting price discovery and 

contributing to a deeper and more liquid 

market to the benefit of all market 

participants. The Exchange also believes 

the enhanced rebate for executions of 

Added Displayed Volume under the 

proposed new Liquidity Provision Tier 

1 reflects a reasonable and equitable 

allocation of fees and rebates because it 

is higher than the rebates provided for 

such executions under Liquidity 

Provision Tiers 2, 3 and 4, which have 

lower volume thresholds as their 

required criteria, and is commensurate 

with its required criteria and the market 

quality benefits it is designed to 

achieve, as described above. 

The Exchange believes that the 

proposed change to modify the required 

criteria under Liquidity Provision Tier 2 

is reasonable because, as noted above, 

such change would keep the existing 


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Federal Register / Vol. 87, No. 113 / Monday, June 13, 2022 / Notices 35835 

14 15 U.S.C. 78f(b)(4) and (5). 15See supra note 13. 

ADAV threshold intact and also provide 

an alternative criteria that a Member 

may choose to achieve that includes a 

lower overall ADAV threshold but that 

also requires such Member to increase 

its ADAV above its May 2022 ADAV by 

a specified threshold, which would 

incentivize the submission of additional 

order flow to the Exchange, thereby 

contributing to a deeper and more liquid 

market to the benefit of all market 

participants. The Exchange also believes 

the proposed new criteria is equitable 

and not unfairly discriminatory because 

all Members will continue to be eligible 

to meet such criteria, including the 

Members that currently meet the 

existing ADAV threshold that is not 

changing. Further, as noted above, while 

the Exchange has no way of predicting 

with certainty how the proposed new 

criteria will impact Member activity, the 

Exchange expects that more Members 

will strive to qualify for such tier under 

the proposed new criteria, which is 

more expansive. 

The Exchange also believes that the 

proposed change to modify the required 

criteria under Non-Display Add Tier 1 

is reasonable, equitable and not unfairly 

discriminatory because, as noted above, 

it would lower the Non-Displayed 

ADAV threshold, which the Exchange 

believes would make such tier easier for 

Members to achieve, and all Members 

will continue to be eligible to meet such 

criteria. As described above, while the 

Exchange has no way of predicting with 

certainty how the proposed new criteria 

will impact Member activity, the 

Exchange expects that more Members 

will strive to qualify for such tier than 

currently do. The Exchange also 

believes that the proposed change to 

reduce the rebate provided under NonDisplay Add Tier 1 is reasonable, 

equitable and not unfairly 

discriminatory because, as noted above, 

the Exchange believes that reducing the 

rebate as proposed (i.e., by $0.0001 per 

share) is a modest reduction, is 

commensurate with the proposed lower 

Non-Displayed ADAV threshold, and 

would decrease the Exchange’s 

expenditures with respect to its 

transaction pricing in a manner that is 

still consistent with the Exchange’s 

overall pricing philosophy of 

encouraging added liquidity. 

For the reasons discussed above, the 

Exchange submits that the proposal 

satisfies the requirements of Sections 

6(b)(4) and 6(b)(5) of the Act 14 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among its Members and other 

persons using its facilities and is not 

designed to unfairly discriminate 

between customers, issuers, brokers, or 

dealers. As described more fully below 

in the Exchange’s statement regarding 

the burden on competition, the 

Exchange believes that its transaction 

pricing is subject to significant 

competitive forces, and that the 

proposed fees and rebates described 

herein are appropriate to address such 

forces. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposal will result in any burden 

on competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. Instead, as 

discussed above, the proposal is 

intended to incentivize market 

participants to direct additional orders 

that add liquidity to the Exchange, 

thereby deepening liquidity and 

promoting price discovery and market 

quality on the Exchange to the benefit 

of all market participants, as well as to 

decrease the Exchange’s expenditures 

with respect to its transaction pricing in 

a manner that is still consistent with the 

Exchange’s overall pricing philosophy 

of encouraging added displayed 

liquidity. As a result, the Exchange 

believes the proposal would enhance its 

competitiveness as a market that attracts 

actionable orders, thereby making it a 

more desirable destination venue for its 

customers. For these reasons, the 

Exchange believes that the proposal 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 15

Intramarket Competition 

As discussed above, the Exchange 

believes that the proposal would 

incentivize Members to submit 

additional orders that add liquidity to 

the Exchange, thereby contributing to a 

deeper and more liquid market and 

promoting price discovery and market 

quality on the Exchange to the benefit 

of all market participants as well as 

enhancing the attractiveness of the 

Exchange as a trading venue, which the 

Exchange believes, in turn, would 

continue to encourage market 

participants to direct additional order 

flow to the Exchange. Greater liquidity 

benefits all Members by providing more 

trading opportunities and encourages 

Members to send additional orders to 

the Exchange, thereby contributing to 

robust levels of liquidity, which benefits 

all market participants. The opportunity 

to qualify for the new Liquidity 

Provision Tier 1 and the modified 

criteria under Liquidity Provision Tier 2 

and Non-Display Add Tier 1, and thus 

receive the corresponding rebates for 

executions of Added Displayed Volume 

and Added Non-Displayed Volume, 

respectively, would be available to all 

Members that meet the associated 

volume requirements in any month. As 

described above, the Exchange believes 

that the proposed new required criteria 

under both Liquidity Provision Tier 2 

and Non-Display Add Tier 1 would 

make such tiers easier to qualify for, as 

the proposed changes either add an 

alternative criteria (while keeping the 

existing criteria intact) or lower the 

required volume threshold, and the 

Exchange believes that all such 

proposed new criteria are reasonably 

related to the enhanced liquidity and 

market quality that such tiers are 

designed to promote. Additionally, as 

noted above, the proposed reduced 

rebate for executions of Added NonDisplayed Volume under Non-Display 

Add Tier 1 would continue to apply 

equally to all Members in the same 

manner as it does today, except that 

qualification for the tier would be easier 

due to the lowered volume threshold, 

and the Exchange believes that such 

rebate represents only a modest 

reduction from the current rebate 

provided under the tier for executions of 

Added Non-Displayed Volume and is 

commensurate with the proposed 

lowered volume threshold. For the 

foregoing reasons, the Exchange believes 

the proposed changes would not impose 

any burden on intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Intermarket Competition 

As noted above, the Exchange 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. Members 

have numerous alternative venues that 

they may participate on and direct their 

order flow to, including 15 other 

equities exchanges and numerous 

alternative trading systems and other 

off-exchange venues. As noted above, no 

single registered equities exchange 

currently has more than approximately 

16% of the total market share of 

executed volume of equities trading. 

Thus, in such a low-concentrated and 

highly competitive market, no single 

equities exchange possesses significant 

pricing power in the execution of order 

flow. Moreover, the Exchange believes 


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16See supra note 13. 

17NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSE–2006–21)). 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

19 17 CFR 240.19b–4(f)(2). 

20 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

that the ever-shifting market share 

among the exchanges from month to 

month demonstrates that market 

participants can shift order flow or 

discontinue to reduce use of certain 

categories of products, in response to 

new or different pricing structures being 

introduced into the market. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates, including with respect 

to executions of Added Displayed 

Volume and Added Non-Displayed 

Volume, and market participants can 

readily choose to send their orders to 

other exchange and off-exchange venues 

if they deem fee levels at those other 

venues to be more favorable. As 

described above, the proposed changes 

represent a competitive proposal 

through which the Exchange is seeking 

to decrease the Exchange’s expenditures 

with respect to its transaction pricing 

and to encourage additional order flow 

to the Exchange through volume-based 

tiers, which have been widely adopted 

by exchanges, including the Exchange. 

Accordingly, the Exchange believes the 

proposal would not burden, but rather 

promote, intermarket competition by 

enabling it to better compete with other 

exchanges that offer similar pricing 

incentives to market participants that 

achieve certain volume criteria and 

thresholds. 

Additionally, the Commission has 

repeatedly expressed its preference for 

competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 16 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. SEC, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers 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’. . . .’’.17 Accordingly, the 

Exchange does not believe its proposed 

pricing changes impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 18 and Rule 

19b–4(f)(2) 19 thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MEMX–2022–15 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MEMX–2022–15. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MEMX–2022–15 and 

should be submitted on or before July 5, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12653 Filed 6–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95062; File No. SR– 

NYSENAT–2022–07] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule of Amendments to the 

Exchange’s Rules Regarding 

Continuing Education Requirements 

June 7, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on May 25, 

2022, NYSE National, Inc. (‘‘NYSE 


khammond on DSKJM1Z7X2PROD with NOTICES