35252 Federal Register / Vol. 87, No. 111 / Thursday, June 9, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

of PETs. This includes topics for 

research, hardware and software 

development, and educational and 

training programs. This also includes 

information about specific techniques 

and approaches that could be among the 

most promising technologies in this 

space. 

2. Specific technical aspects or 

limitations of PETs: Information about 

technical specifics of PETs that have 

implications for their development or 

adoption. This includes information 

about specific PET techniques that are 

promising, recent or anticipated 

advances in the theory and practice of 

PETs, constraints posed by limited data 

and computational resources, 

limitations posed by current approaches 

to de-identification and 

deanonymization techniques, 

limitations or tradeoffs posed when 

considering PETs as well as technical 

approaches to equity considerations 

such as fairness-aware machine 

learning, security considerations based 

on relevant advances in cryptography or 

computing architecture, and new or 

emerging privacy-enhancing techniques. 

This also includes technical 

specifications that could improve the 

benefits or privacy protections, or 

reduce the risks or costs of adopting 

PETs. 

3. Specific sectors, applications, or 

types of analysis that would particularly 

benefit from the adoption of PETs: 

Information about sectors, applications, 

or types of analysis that have high 

potential for the adoption of PETs. This 

includes sectors and applications where 

data are exceptionally decentralized or 

sensitive, where PETs could unlock 

insights or services of significant value 

to the public, where PETs can reduce 

the risk of unintentional disclosures, 

where PETs might assist in data 

portability and interoperability, and 

sectors and applications where the 

adoption of PETs might exacerbate risks, 

including in the areas of privacy, 

cybersecurity, accuracy of data analysis, 

equity for underserved communities, 

and economic competition. This topic 

covers opportunities to improve the 

effectiveness of data sharing among 

specific Federal agencies and between 

specific Federal agencies and entities 

outside the Federal Government, 

including the goals outlined in Section 

5 of Executive Order 14058: 

Transforming Federal Customer 

Experience and Service Delivery To 

Rebuild Trust in Government. 

4. Specific regulations or authorities 

that could be used, modified, or 

introduced to advance PETs: 

Information about Federal regulations or 

authorities that could be used, modified, 

or introduced to accelerate the 

development or adoption of PETs. This 

includes privacy-related rulemaking 

authorities under the Office of 

Management and Budget, the Federal 

Trade Commission, and financial 

regulatory bodies, as well as acquisition 

regulations under the Federal 

Acquisition Regulations. This also 

includes the Federal authority to set 

procedures for agencies to ensure the 

responsible sharing of data. This also 

covers hiring authorities to recruit 

Federal employees with expertise to 

advance PETs, as well as acquisition 

authorities (e.g., Other Transaction 

Authority) to procure PETs for 

development. 

5. Specific laws that could be used, 

modified, or introduced to advance 

PETs: Information about provisions in 

U.S. Federal law, including 

implementing regulations, that could be 

used, modified, or introduced to 

accelerate the development or adoption 

of PETs. This includes provisions, safe 

harbors, and definitions of use, 

disclosure, safeguards, and breaches. 

Information may also include comments 

on how to advance PETs as part of new 

or proposed legislation, such as that 

which would create a National Secure 

Data Service. Information may also 

include comments on State law or on 

international law as it applies to data 

sharing among international entities. 

6. Specific mechanisms, not covered 

above, that could be used, modified, or 

introduced to advance PETs: This 

includes the development of opensource protocols and technical 

guidance, the use of public-private 

partnerships, prize challenges, grants, 

testbeds, standards, collaborations with 

foreign countries and nongovernmental 

entities, the Federal Data Strategy, and 

data sharing procedures with State, 

local, tribal, and territorial governments. 

This also includes interpretations and 

modifications of standard nondisclosure agreements, confidentiality 

clauses, data use or sharing agreements, 

etc. 

7. Risks related to PETs adoption: 

Identification of risks or negative 

consequences resulting from PETs 

adoption as well as policy, governance, 

and technical measures that could 

mitigate those risks. This includes risks 

related to equity for underserved or 

marginalized groups, the complexity of 

implementation and resources required 

for adoption, as well as from conceptual 

misunderstandings of the technical 

guarantees provided by PETs. This also 

includes recommendations on how to 

measure risk of PETs adoption and 

conduct risk-benefit analyses of use. 

8. Existing best practices that are 

helpful for PETs adoption: Information 

about U.S. policies that are currently 

helping facilitate adoption as well as 

best practices that facilitate responsible 

adoption. This includes existing 

policies that support adoption, 

including in the areas of privacy, 

cybersecurity, accuracy of data analysis, 

equity for underserved communities, 

and economic competition. This also 

includes information about where and 

when PETs can be situated within tiered 

access frameworks for accessing 

restricted data, ranging from publicly 

accessible to fully restricted data. 

9. Existing barriers, not covered 

above, to PETs adoption: Information 

about technical, sociotechnical, 

usability, and socioeconomic barriers 

that have inhibited wider adoption of 

PETs, such as a lack of public trust. This 

includes recommendations on how such 

barriers could be overcome. Responses 

that focus on increasing equity for 

underserved or marginalized groups are 

especially welcome. 

10. Other information that is relevant 

to the adoption of PETs: Information 

that is relevant to the adoption of PETs 

that does not fit into any of the topics 

enumerated above. 

Dated: June 6, 2022. 

Stacy Murphy, 

Operations Manager. 

[FR Doc. 2022–12432 Filed 6–8–22; 8:45 am] 

BILLING CODE 3270–F2–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95036; File No. SR–MEMX– 

2022–14] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule To Adopt Market Data Fees 

June 3, 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 March 24, 

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 


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3See Exchange Rule 1.5(p). 

4See MEMX Rule 13.8(a). 

5See Market Data Definitions under the proposed 

MEMX Fee Schedule. The Exchange also proposes 

to adopt a definition for ‘‘Distributor’’, which would 

mean any entity that receives an Exchange Data 

product directly from the Exchange or indirectly 

through another entity and then distributes 

internally or externally to a third party. 

6See Market Data Definitions under the proposed 

MEMX Fee Schedule. 

7The Exchange proposes to define a Trading 

Platform as ‘‘any execution platform operated as or 

by a registered National Securities Exchange (as 

defined in Section 3(a)(1) of the Exchange Act), an 

Alternative Trading System (as defined in Rule 

300(a) of Regulation ATS), or an Electronic 

Communications Network (as defined in Rule 

600(b)(23) of Regulation NMS).’’ See Market Data 

Definitions under the proposed MEMX Fee 

Schedule. 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing with the 

Commission a proposed rule change to 

amend the Exchange’s fee schedule 

applicable to Members 3 and nonMembers (the ‘‘Fee Schedule’’) pursuant 

to Exchange Rules 15.1(a) and (c). The 

Exchange proposes to implement the 

changes to the Fee Schedule pursuant to 

this proposal immediately. The text of 

the proposed rule change is provided in 

Exhibit 5. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

The purpose of the proposed rule 

change is to amend the Fee Schedule to 

adopt fees the Exchange will charge to 

Members and non-Members for each of 

its three proprietary market data feeds, 

namely MEMOIR Depth, MEMOIR Top, 

and MEMOIR Last Sale (collectively, the 

‘‘Exchange Data Feeds’’). As set forth 

below, the Exchange believes that the 

proposed fees are fair and reasonable 

and has based its proposal on the fact 

that competitive forces exist with 

respect to the Exchange Data Feeds, a 

comparison to competitor pricing, as 

well as a cost analysis intended to 

provide transparency to the Commission 

and to the industry at large. The 

Exchange is proposing to implement the 

proposed fees immediately. 

Before setting forth the additional 

details regarding the existence of 

competitive forces, the comparison to 

competitor pricing and the Exchange’s 

cost analysis for transparency purposes, 

immediately below is a description of 

the proposed fees. 

Proposed Market Data Pricing 

The Exchange offers three separate 

data feeds to subscribers—MEMOIR 

Depth, MEMOIR Top and MEMOIR Last 

Sale. The Exchange notes that there is 

no requirement that any Firm subscribe 

to a particular Exchange Data Feed or 

any Exchange Data Feed whatsoever, 

but instead, a Firm may choose to 

maintain subscriptions to those 

Exchange Data Feeds they deem 

appropriate based on their business 

model. The proposed fee will not apply 

differently based upon the size or type 

of Firm, but rather based upon the 

subscriptions a Firm has to Exchange 

Data Feeds and their use thereof, which 

are in turn based upon factors deemed 

relevant by each Firm. The proposed 

pricing for each of the Exchange Data 

Feeds is set forth below. 

MEMOIR Depth 

The MEMOIR Depth feed is a MEMXonly market data feed that contains all 

displayed orders for securities trading 

on the Exchange (i.e., top and depth-ofbook order data), order executions (i.e., 

last sale data), order cancellations, order 

modifications, order identification 

numbers, and administrative messages.4

The Exchange proposes to charge each 

of the fees set forth below for MEMOIR 

Depth. 

1. Internal Distribution Fee. For the 

receipt of access to the MEMOIR Depth 

feed, the Exchange proposes to charge 

$1,500 per month. This proposed access 

fee would be charged to any data 

recipient that receives a data feed of the 

MEMOIR Depth feed for purposes of 

internal distribution (i.e., an ‘‘Internal 

Distributor’’). The Exchange proposes to 

define an Internal Distributor as ‘‘a 

Distributor that receives an Exchange 

Data product and then distributes that 

data to one or more data recipients 

within the Distributor’s own 

organization.’’ 5 The proposed access fee 

for internal distribution will be charged 

only once per month per subscribing 

entity (‘‘Firm’’). The Exchange notes 

that it has proposed to use the phrase 

‘‘own organization’’ in the definition of 

Internal Distributor and External 

Distributor because a Firm will be 

permitted to share data received from an 

Exchange Data product to other legal 

entities affiliated with the Firm that 

have been disclosed to the Exchange 

without such distribution being 

considered external to a third party. For 

instance, if a company has multiple 

affiliated broker-dealers under the same 

holding company, that company could 

have one of the broker-dealers or a nonbroker-dealer affiliate subscribe to an 

Exchange Data product and then share 

the data with other affiliates that have 

a need for the data. This sharing with 

affiliates would not be considered 

external distribution to a third party but 

instead would be considered internal 

distribution to data recipients within 

the Distributor’s own organization. 

2. External Distribution Fee. For 

redistribution of the MEMOIR Depth 

feed, the Exchange proposes to establish 

an access fee of $2,500 per month. The 

proposed redistribution fee would be 

charged to any External Distributor of 

the MEMOIR Depth feed, which would 

be defined to mean ‘‘a Distributor that 

receives an Exchange Data product and 

then distributes that data to a third party 

or one or more data recipients outside 

the Distributor’s own organization.’’ 6

The proposed access fee for external 

distribution will be charged only once 

per month per Firm. As noted above, 

while a Firm will be permitted to share 

data received from an Exchange Data 

product to other legal entities affiliated 

with the Firm that have been disclosed 

to the Exchange without such 

distribution being considered external 

to a third party, if a Firm distributes 

data received from an Exchange Data 

product to an unaffiliated third party 

that would be considered distribution to 

data recipients outside the Distributor’s 

own organization and the access fee for 

external distribution would apply. 

3. Non-Display Use Fees. The 

Exchange proposes to establish separate 

non-display fees for usage by Trading 

Platforms and other Users (i.e., not by 

Trading Platforms).7 Non-Display Usage 

would be defined to mean ‘‘any method 

of accessing an Exchange Data product 

that involves access or use by a machine 

or automated device without access or 

use of a display by a natural person or 


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8See Market Data Definitions under the proposed 

MEMX Fee Schedule. 

9Non-Display Usage not by Trading Platforms 

would include trading uses such as high frequency 

or algorithmic trading as well as any trading in any 

asset class, automated order or quote generation 

and/or order pegging, price referencing for smart 

order routing, operations control programs, 

investment analysis, order verification, surveillance 

programs, risk management, compliance, and 

portfolio management. 

10The Exchange proposes to adopt note 1 to the 

proposed Market Data fees table, which would 

make clear to subscribers that use of the data for 

multiple non-display purposes or operate more than 

one Trading Platform would only be charged once 

per category per month. Thus, the footnote makes 

clear that each fee applicable to Non-Display Usage 

is charged per subscriber (e.g., a Firm) and that each 

of the fees represents the maximum charge per 

month per subscriber regardless of the number of 

non-display uses and/or Trading Platforms operated 

by the subscriber, as applicable. 11See MEMX Rule 13.8(b). 

12The Exchange notes that while it is not 

differentiating Professional and Non-Professional 

Users based on fees (in that it is proposing the same 

fee for such Users) for this data feed, and thus will 

not audit Firms based on this distinction, it will 

request reporting of each distinct category for 

informational purposes. 

persons.’’ 8 For Non-Display Usage of 

the MEMOIR Depth feed not by Trading 

Platforms, the Exchange proposes to 

establish a fee of $1,500 per month.9 For 

Non-Display Usage of the MEMOIR 

Depth feed by Trading Platforms, the 

Exchange proposes to establish a fee of 

$4,000 per month. The proposed fees for 

Non-Display Usage will be charged only 

once per category per Firm.10 In other 

words, with respect to Non-Display 

Usage Fees, a Firm that uses MEMOIR 

Depth for non-display purposes but 

does not operate a Trading Platform 

would pay $1,500 per month, a Firm 

that uses MEMOIR Depth in connection 

with the operation of one or more 

Trading Platforms (but not for other 

purposes) would pay $4,000 per month, 

and a Firm that uses MEMOIR Depth for 

non-display purposes other than 

operating a Trading Platform and for the 

operation of one or more Trading 

Platforms would pay $5,500 per month. 

4. User Fees. The Exchange proposes 

to charge a Professional User Fee (per 

User) of $30 per month and a NonProfessional User Fee (per User) of $3 

per month. The proposed User fees 

would apply to each person that has 

access to the MEMOIR Depth feed for 

displayed usage. Thus, each 

Distributor’s count will include every 

individual that accesses the data 

regardless of the purpose for which the 

individual uses the data. Internal 

Distributors and External Distributors of 

the MEMX Depth feed must report all 

Professional and Non-Professional Users 

in accordance with the following: 

• In connection with a Distributor’s 

distribution of the MEMOIR Depth feed, 

the Distributor must count as one User 

each unique User that the Distributor 

has entitled to have access to the 

MEMOIR Depth feed. 

• Distributors must report each 

unique individual person who receives 

access through multiple devices or 

multiple methods (e.g., a single User has 

multiple passwords and user 

identifications) as one User. 

• If a Distributor entitles one or more 

individuals to use the same device, the 

Distributor must include only the 

individuals, and not the device, in the 

count. Thus, Distributors would not be 

required to report User device counts 

associated with a User’s display use of 

the data feed. 

5. Enterprise Fee. Other than the 

Digital Media Enterprise Fee described 

below, the Exchange is not proposing to 

adopt an Enterprise Fee for the 

MEMOIR Depth feed at this time. 

6. Digital Media Enterprise Fee. As an 

alternative to User fees, a recipient Firm 

may purchase a monthly Digital Media 

Enterprise license to receive MEMOIR 

Depth for distribution to an unlimited 

number of Users for viewing via 

television, websites, and mobile devices 

for informational and non-trading 

purposes only. The Exchange proposes 

to establish a fee of $5,000 per month 

for a Digital Media Enterprise license to 

the MEMOIR Depth feed. 

MEMOIR Top 

The MEMOIR Top feed is a MEMXonly market data feed that contains top 

of book quotations based on equity 

orders entered into the System as well 

as administrative messages.11 The 

Exchange proposes to charge each of the 

fees set forth below for MEMOIR Top. 

1. Internal Distribution Fee. For the 

receipt of access to the MEMOIR Top 

feed, the Exchange proposes to charge 

$750 per month. This proposed access 

fee would be charged to any data 

recipient that receives a data feed of the 

MEMOIR Top feed for purposes of 

internal distribution (i.e., an Internal 

Distributor). The proposed access fee for 

internal distribution will be charged 

only once per month per Firm. 

2. External Distribution Fee. For 

redistribution of the MEMOIR Top feed, 

the Exchange proposes to establish an 

access fee of $2,000 per month. The 

proposed redistribution fee would be 

charged to any External Distributor of 

the MEMOIR Top feed. The proposed 

access fee for external distribution will 

be charged only once per month per 

Firm. 

3. Non-Display Use Fees. The 

Exchange does not propose to establish 

non-display fees for usage by Trading 

Platforms or other Users with respect to 

MEMOIR Top. 

4. User Fees. The Exchange proposes 

to charge a Professional User Fee (per 

User) of $0.01 per month and a NonProfessional User Fee (per User) of $0.01 

per month. The proposed User fees 

would apply to each person that has 

access to the MEMOIR Top feed that is 

provided by an External Distributor for 

displayed usage. The Exchange does not 

propose any per User fees for internal 

distribution of the MEMOIR Top feed. 

Each External Distributor’s count will 

include every individual that accesses 

the data regardless of the purpose for 

which the individual uses the data. 

External Distributors of the MEMOIR 

Top feed must report all Professional 

and Non-Professional Users 12 in 

accordance with the following: 

• In connection with an External 

Distributor’s distribution of the 

MEMOIR Top feed, the Distributor must 

count as one User each unique User that 

the Distributor has entitled to have 

access to the MEMOIR Top feed. 

• External Distributors must report 

each unique individual person who 

receives access through multiple 

devices or multiple methods (e.g., a 

single User has multiple passwords and 

user identifications) as one User. 

• If an External Distributor entitles 

one or more individuals to use the same 

device, the Distributor must include 

only the individuals, and not the device, 

in the count. Thus, Distributors would 

not be required to report User device 

counts associated with a User’s display 

use of the data feed. 

5. Enterprise Fee. As an alternative to 

User fees, a recipient Firm may 

purchase a monthly Enterprise license 

to receive MEMOIR Top for distribution 

to an unlimited number of Professional 

and Non-Professional Users. The 

Exchange proposes to establish a fee of 

$10,000 per month for an Enterprise 

license to the MEMOIR Top feed. 

6. Digital Media Enterprise Fee. As an 

alternative to User fees, a recipient Firm 

may purchase a monthly Digital Media 

Enterprise license to receive MEMOIR 

Top for distribution to an unlimited 

number of Users for viewing via 

television, websites, and mobile devices 

for informational and non-trading 

purposes only. The Exchange proposes 

to establish a fee of $2,000 per month 

for a Digital Media Enterprise license to 

the MEMOIR Top feed. 

MEMOIR Last Sale 

The MEMOIR Last Sale feed is a 

MEMX-only market data feed that 

contains only execution information 

based on equity orders entered into the 


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Federal Register / Vol. 87, No. 111 / Thursday, June 9, 2022 / Notices 35255 

13See MEMX Rule 13.8(c). 

14See supra note 12. 

15See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS 

Adopting Release’’). 

16See Securities Exchange Act Release No. 51808, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18) (Transaction Fee Pilot for NMS Stocks Final 

Rule) (‘‘Transaction Fee Pilot’’). 

17See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at: http://

markets.cboe.com/us/equities/market_share/. See 

generally https://www.sec.gov/fast-answers/ 

divisionsmarketregmrexchangesshtml.html. 

18See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/ 

otctransparency/AtsData. A list of alternative 

trading systems registered with the Commission is 

available at: https://www.sec.gov/foia/docs/ 

atslist.htm. 

19Market share percentage calculated as of 

February 1, 2022. The Exchange receives and 

processes data made available through consolidated 

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

20See id. 

21See Cboe Global Markets NBBO Quote Market 

Share Statistics, available at: https://

www.cboe.com/us/equities/market_statistics/. In 

April 2022, NBBO Quote Market Share of the largest 

six equities exchanges was as follows: NYSE Arca 

18.88%, Nasdaq 17.67%, BZX 11.66%, NYSE 

10.43%, MEMX 9.85%, EDGX 8.91%. The 

remaining ten equities exchanges have NBBO Quote 

Market Share below 5%. 

System as well as administrative 

messages.13 The Exchange proposes to 

charge each of the fees set forth below 

for MEMOIR Last Sale. 

1. Internal Distribution Fee. For the 

receipt of access to the MEMOIR Last 

Sale feed, the Exchange proposes to 

charge $500 per month. This proposed 

access fee would be charged to any data 

recipient that receives a data feed of the 

MEMOIR Last Sale feed for purposes of 

internal distribution (i.e., an Internal 

Distributor). The proposed access fee for 

internal distribution will be charged 

only once per month per Firm. 

2. External Distribution Fee. For 

redistribution of the MEMOIR Last Sale 

feed, the Exchange proposes to establish 

an access fee of $2,000 per month. The 

proposed redistribution fee would be 

charged to any External Distributor of 

the MEMOIR Last Sale feed. The 

proposed access fee for external 

distribution will be charged only once 

per month per Firm. 

3. Non-Display Use Fees. The 

Exchange does not propose to establish 

separate non-display fees for usage by 

Trading Platforms or other Users with 

respect to MEMOIR Last Sale. 

4. User Fees. The Exchange proposes 

to charge a Professional User Fee (per 

User) of $0.01 per month and a NonProfessional User Fee (per User) of $0.01 

per month. The proposed User fees 

would apply to each person that has 

access to the MEMOIR Last Sale feed 

that is provided by an External 

Distributor for displayed usage. The 

Exchange does not propose any per User 

fees for internal distribution of the 

MEMOIR Last Sale feed. Each External 

Distributor’s count will include every 

individual that accesses the data 

regardless of the purpose for which the 

individual uses the data. External 

Distributors of the MEMOIR Last Sale 

feed must report all Professional and 

Non-Professional Users 14 in accordance 

with the following: 

• In connection with an External 

Distributor’s distribution of the 

MEMOIR Last Sale feed, the Distributor 

must count as one User each unique 

User that the Distributor has entitled to 

have access to the MEMOIR Last Sale 

feed. 

• External Distributors must report 

each unique individual person who 

receives access through multiple 

devices or multiple methods (e.g., a 

single User has multiple passwords and 

user identifications) as one User. 

• If an External Distributor entitles 

one or more individuals to use the same 

device, the Distributor must include 

only the individuals, and not the device, 

in the count. Thus, Distributors would 

not be required to report User device 

counts associated with a User’s display 

use of the data feed. 

5. Enterprise Fee. As an alternative to 

User fees, a recipient Firm may 

purchase a monthly Enterprise license 

to receive MEMOIR Last Sale for 

distribution to an unlimited number of 

Professional and Non-Professional 

Users. The Exchange proposes to 

establish a fee of $10,000 per month per 

Firm for an Enterprise license to the 

MEMOIR Last Sale feed. 

6. Digital Media Enterprise Fee. As an 

alternative to User fees, a recipient Firm 

may purchase a monthly Digital Media 

Enterprise license to receive MEMOIR 

Last Sale for distribution to an 

unlimited number of Users for viewing 

via television, websites, and mobile 

devices for informational and nontrading purposes only. The Exchange 

proposes to establish a fee of $2,000 per 

month per Firm for a Digital Media 

Enterprise license to the MEMOIR Last 

Sale feed. 

Additional Discussion—Competitive 

Forces 

The Commission has repeatedly 

expressed its 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.’’ 15 As 

the Commission itself recognized, the 

market for trading services in NMS 

stocks has become ‘‘more fragmented 

and competitive.’’ 16 Indeed, equity 

trading is currently dispersed across 16 

exchanges,17 31 alternative trading 

systems,18 and numerous broker-dealer 

internalizers and wholesalers, all 

competing for order flow. While the 

competitive environment described 

above and the Commission’s statements 

related thereto are primarily regarding 

market share and trading volumes, and 

not market data specifically, the 

Exchange believes that competition does 

constrain the Exchange’s ability to set 

market data prices, as described below. 

The recent growth of MEMX’s market 

share demonstrates the competitive 

marketplace in which the Exchange 

operates. The Exchange launched in 

September 2020 and slowly grew over 

the next several months as it completed 

its staged rollout intended to ensure 

market stability. In January 2021, the 

Exchange averaged approximately 0.6% 

of consolidated trading volume.19 The 

Exchange experienced significant 

growth every month from February 2021 

to December 2021 and ended 2021 with 

market share of approximately 4.2% of 

consolidated volume; MEMX has 

maintained a similar market share 

percentage in 2022, with approximately 

4.05% market share to date.20

As the Exchange’s transaction market 

share has increased, so has the value of 

its market data. In addition to achieving 

over 4% of consolidated volume, the 

Exchange’s NBBO Quote Market Share 

(i.e., the notional value displayed at the 

inside national best bid or offer, or 

‘‘NBBO’’, as a percentage of overall 

notional value at the NBBO) is 

comparable to that of Cboe BZX 

Exchange, Inc. (‘‘BZX’’) and the New 

York Stock Exchange (‘‘NYSE’’), and 

higher than that of Cboe EDGX 

Exchange. Inc.21 The Exchange 

determined the level of the fees to 

charge for the Exchange Data Feeds 

based on the value of the Exchange’s 

market data as well as the cost analysis 

described later in this filing. In 

particular, as noted elsewhere in this 

proposal, the proposed fee structure is 

comparable to that of BZX and the 

proposed fees themselves are equal to or 

in many cases lower than BZX. Thus, as 

the Exchange has similar market quality 

to BZX and other larger maker/taker 

exchanges and has priced its data at a 

significant discount to those markets, 


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22The Exchange notes that the remaining 

customers that modified or cancelled their 

subscriptions to the Exchange Data Feeds (seven 

customers total) are not trading participants on the 

Exchange and likely subscribed to the Exchange 

Data Feeds initially because they were free but 

determined to cancel such subscriptions now that 

the Exchange is charging market data fees. 

the Exchange believes it is starting from 

a place of general acceptability to 

industry participants. Indeed, while 

silence cannot necessarily be 

interpreted as support, the Exchange 

notes that no comment letters on the 

Initial Proposal have been filed. 

As noted above, over a 16-month 

period, MEMX has grown from 0% to 

over 4% market share of consolidated 

trading volume. During that same 

period, the Exchange has had a steady 

increase in the number of subscribers to 

Exchange Data Feeds. As a new entrant 

into the exchange industry, the 

Exchange is particularly subject to 

competitive forces as it works to attract 

new Members and trading volume and 

maintain participation from existing 

participants. While the Exchange has 

been able to rapidly grow its market 

share since its launch in September 

2020, MEMX operates only a single U.S. 

equities exchange with market share 

that remains significantly lower than the 

market share of the largest exchange 

groups. As noted above, until April of 

this year, MEMX did not charge fees for 

market data provided by the Exchange. 

The objective of this approach was to 

eliminate any fee-based barriers for 

Members when MEMX launched as a 

national securities exchange in 2020, 

which the Exchange believes has been 

helpful in its ability to attract order flow 

as a new exchange. The Exchange also 

did not initially charge for market data 

because MEMX believes that any 

exchange should first deliver 

meaningful value to Members and other 

market participants before charging fees 

for its products and services. The 

Exchange believes that its proposed 

approach to market data fees is 

reasonable based on the existence of 

competition, a comparison to 

competitors and the cost analysis 

presented below. 

The Exchange is not required to make 

the Exchange Data Feeds available or to 

offer any specific pricing alternatives to 

any customers, nor is any firm required 

to purchase the Exchange Data Feeds. 

Firms that choose to subscribe to the 

Exchange Data Feeds do so for the 

primary goals of using it to increase 

their revenues, reduce their expenses, 

and in some instances to compete 

directly with the Exchange (including 

for order flow). Those firms are able to 

determine for themselves whether or not 

the Exchange Data Feeds or any other 

similar products are attractively priced. 

Because the Exchange Data Feeds 

have not been previously subject to fees, 

the Exchange did not know the impact 

of the proposed fees on data recipients 

at the time of the Initial Proposal but 

expected that subscribers may choose to 

reduce or eliminate their use of MEMX 

data. The Exchange now has additional 

data regarding the impact of fees for 

Exchange Data Feeds. Specifically, 

current subscribers to the Exchange Data 

Feeds have indeed changed their 

behavior in response to the imposition 

of fees as predicted in the Initial 

Proposal. Following the date that fees 

for the Exchange Data Feeds were 

officially announced, fifteen (15) out of 

seventy-nine (79) subscribers, 

representing 19% of the subscribers to 

such data feeds, modified or canceled 

their subscriptions before the fees went 

into effect. In each instance, the 

subscriber told the Exchange that the 

reason for modifying or cancelling its 

subscription was the imminent 

imposition of fees. These modifications 

and cancellations are evidence that 

subscribing to the Exchange Data Feeds 

is discretionary, that each customer 

makes the decision whether to subscribe 

based on its own analysis of the benefits 

and costs to itself, and that customers 

can and do make those decisions 

quickly based on reactions to fee 

changes. Prior to the imposition of fees, 

four (4) customers (or 5% of market data 

subscribers) informed the Exchange that 

if the Exchange imposes the fees as 

proposed, such customers will limit 

their subscription the MEMOIR Top 

feed and/or the MEMOIR Last Sale feed, 

rather than the MEMOIR Depth feed, 

which is more expensive under the 

proposed fees. Notably, three (3) of 

these customers are active trading 

participants on the Exchange and have 

continued to participate on the 

Exchange without use of the Exchange’s 

MEMOIR Depth feed. In addition, 

eleven (11) customers of the Exchange 

that were subscribed to receive 

Exchange Data Feeds have cancelled 

their subscriptions to such data feeds 

entirely (representing approximately 

14% of market data subscribers). Five 

(5) of the eleven (11) customers that 

have cancelled all subscriptions to 

Exchange Data Feeds actively trade on 

the Exchange and have informed the 

Exchange that they will rely instead on 

consolidated data distributed pursuant 

to NMS Plans (i.e., ‘‘SIP data’’) to 

participate on the Exchange. This is 

clear evidence that the availability of 

these substitute products constrains the 

Exchange’s ability to charge supracompetitive prices for the Exchange 

Data Feeds.22

The Exchange intentionally adopted 

fees that it believed were reasonable and 

would not result in the Exchange losing 

market share. In fact, despite the 

modifications and cancellations 

described above, the Exchange has not 

lost market share from such market 

participants. Rather, their participation 

has remained similar to that on the 

Exchange prior to the imposition of fees 

and resulting changes to their market 

data subscriptions. However, the 

Exchange continues to believe that a 

data recipient that chose to discontinue 

subscribing to the Exchange’s Data 

Feeds could also choose to shift order 

flow away from the Exchange and, given 

the current competitive environment, if 

data recipients had both discontinued 

the product and shifted order flow away 

from the Exchange, the Exchange would 

have had to reevaluate the fees and file 

a separate proposed rule change to 

amend its fees. The Exchange believes 

that the majority of data subscribers 

have maintained both their 

subscriptions to Exchange Data Feeds 

and their market share on the Exchange 

due to the overall reasonability of the 

proposed fees. 

Had the proposed fees for the 

Exchange Data Feeds instead been 

unreasonable, the Exchange believes it 

would have seen additional 

modifications or cancellations to 

subscriptions to the Exchange Data 

Feeds and this may have further 

resulted in a loss of market share. As the 

Exchange has intentionally avoided 

imposing unreasonable fees, consistent 

with its obligations as a registered 

national securities exchange, the 

Exchange cannot present statistical 

evidence to support its understanding of 

how market participants would have 

reacted to the imposition of such fees. 

Indeed, adopting fees that are 

unreasonable in order to prove that the 

Exchange’s market data is subject to 

competitive forces, would contradict the 

Exchange’s responsibilities under 

Section 6(b)(4) of the Exchange Act, and 

would have the paradoxical effect of 

weakening competition in the market by 

harming the competitive standing of a 

new exchange entrant that has actively 

sought to increase competition among 

U.S. equities exchanges. 

Additional Discussion—Comparison 

With Other Exchanges 

The proposed fee structure is not 

novel but is instead comparable to the 

fee structure currently in place for the 

equities exchanges operated by Cboe 

Global Markets, Inc., in particular 


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23See BZX Fee Schedule, available at: https://

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

schedule/bzx/. 

24See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

25The Exchange notes that although no fee 

proposed by the Exchange is higher than the fee 

charged for BZX for a comparable data product, 

under certain fact patterns a BZX data recipient 

could pay a lower rate than that charged by the 

Exchange. For instance, while the Exchange has 

proposed to adopt identical fees to those charged 

for internal distribution of MEMOIR Top as 

compared to BZX Top ($750 per month) and for 

internal distribution of MEMOIR Last Sale as 

compared to BZX Last Sale ($500 per month), BZX 

permits a data recipient who takes both feeds to pay 

only one fee and, upon request, to receive the other 

data feed free of charge. See BZX Fee Schedule, 

Market Data Fees, BZX Depth, available at: https:// 

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

schedule/bzx/. Because the Exchange has not 

proposed such a discount, a data recipient taking 

both MEMOIR TOP and MEMOIR Last Sale would 

pay more ($1,250 per month) than they would to 

take comparable data feeds from BZX ($750 per 

month). 

26Fees for the NYSE Arca Integrated Feed, which 

is the comparable product to MEMOIR Depth, are 

$3,000 for access (internal use) and $3,750 for 

redistribution (external distribution), compared to 

the Exchange’s proposed fees of $1,500 and $2,500, 

respectively. In addition, for its Integrated Feed, 

NYSE Arca charges for three different categories of 

non-display usage, each of which is $10,500 and 

each of which can be charged to the same firm more 

than one time (e.g., a customer operating a Trading 

Platform would pay $10,500 compared to the 

Exchange’s proposed fee of $4,000 but would also 

pay for each Trading Platform, up to three, if they 

operate more than one, instead of the single fee 

proposed by the Exchange; if that customer also 

uses the data for the other categories of non-display 

usage they would also pay $10,500 for each other 

category of usage, whereas the Exchange would 

only charge $1,500 for any non-display usage other 

than operating a Trading Platform). Finally, the 

NYSE Arca Integrated Feed user fee for pro devices 

is $60 compared to the proposed Professional User 

fee of $30 for MEMOIR Depth and the NYSE Arca 

Integrated user fee for non-pro devices is $20 

compared to the proposed Non-Professional User 

fee of $3 for MEMOIR Depth. See NYSE Proprietary 

Market Data Pricing list, available at: https://

www.nyse.com/publicdocs/nyse/data/NYSE_

Market_Data_Pricing.pdf. 

27Fees for the Nasdaq TotalView data feed, which 

is the comparable product to MEMOIR Depth, are 

$1,500 for access (internal use) and $3,750 for 

redistribution (external distribution), compared to 

the Exchange’s proposed fees of $1,500 and $2,500, 

respectively. In addition, for TotalView, Nasdaq 

charges Trading Platforms $5,000 compared to the 

Exchange’s proposal of $4,000, and, like NYSE 

Arca, charges customers per Trading Platform, up 

to three, if they operate more than one, instead of 

the single fee proposed by the Exchange. Nasdaq 

also requires users to report and pay usage fees for 

non-display access at levels of from $375 per 

subscriber for smaller firms with 39 or fewer 

subscribers to $75,000 per firm for a larger firm 

with over 250 subscribers. The Exchange does not 

require counting of devices or users for non-display 

purposes and instead has proposed flat fee of 

$1,500 for non-display usage not by Trading 

Platforms. Finally, the Nasdaq TotalView user fee 

for professional subscribers is $76 compared to the 

proposed Professional User fee of $30 for MEMOIR 

Depth and the Nasdaq TotalView user fee for nonprofessional subscribers is $15 compared to the 

proposed Non-Professional User fee of $3 for 

MEMOIR Depth. See Nasdaq Global Data Products 

pricing list, available at: http://

www.nasdaqtrader.com/TraderB.aspx?id=

MDDPricingALLN. 

28See supra notes 26 and 27. 

29See BZX Fee Schedule, Market Data Fees, BZX 

Depth, available at: https://www.cboe.com/us/ 

equities/membership/fee_schedule/bzx/. The 

Exchange notes that there are differences between 

the structure of BZX Depth fees and the proposed 

fees for MEMOIR Depth, including that the 

Exchange has proposed a Digital Media Enterprise 

License for MEMOIR Depth but a comparable 

license is not available from BZX. Additionally, 

BZX maintains a general enterprise license for User 

fees, similar to that proposed by the Exchange for 

MEMOIR Top and MEMOIR Last Sale, but the 

Exchange has not proposed adding a general 

Enterprise license at this time. 

BZX.23 As noted above, in January 2022, 

MEMX had 4.2% market share; for that 

same month, BZX had 5.5% market 

share.24 The Exchange is proposing fees 

for its Exchange Data Feeds that are 

similar in structure to BZX and rates 

that are equal to, or in most cases lower, 

than the rates data recipients pay for 

comparable data feeds from BZX.25 The 

Exchange notes that other competitors 

maintain fees applicable to market data 

that are considerably higher than those 

proposed by the Exchange, including 

NYSE Arca 26 and Nasdaq.27 However, 

the Exchange has focused its 

comparison on BZX because it is the 

closest market in terms of market share 

and offers market data at prices lower 

than several other incumbent 

exchanges.28

The fees for the BZX Depth feed— 

which like the MEMOIR Depth feed, 

includes top of book, depth of book, 

trades, and security status messages— 

consist of an internal distributor access 

fee of $1,500 per month (the same as the 

Exchange’s proposed rate), an external 

distributor access fee of $5,000 per 

month (two times the Exchange’s 

proposed rate), a non-display usage fee 

for non-Trading Platforms of $2,000 per 

month ($500 more than the Exchange’s 

proposed rate), a non-display usage fee 

for Trading Platforms of $5,000 per 

month ($1,000 more than the 

Exchange’s proposed rate), a 

Professional User fee (per User) of $40 

per month ($10 more than the 

Exchange’s proposed rate), and a NonProfessional User fee (per User) of $5 

per month ($2 more than the Exchange’s 

proposed rate).29

The comparisons of the MEMOIR Last 

Sale feed and MEMOIR Top feed to the 

BZX Last Sale feed and BZX Top feed, 

respectively, are similar in that BZX 

generally maintains the same fee 

structure proposed by the Exchange and 

BZX charges fees that are comparable to, 

but in most cases higher than, the 

Exchange’s proposed fees. Notably, the 

User fees proposed by the Exchange for 

External Distributors of MEMOIR Last 

Sale and MEMOIR Top ($0.01 for both 

Professional Users and Non-Professional 

Users) are considerably lower than those 

charged by BZX for BZX Top and BZX 

Last Sale ($4 for Professional Users and 

$0.10 for Non-Professional Users). 

By charging the same low rate for all 

Users of MEMOIR Top and MEMOIR 

Last Sale the Exchange believes it is 

proposing a structure that is not only 

lower cost but that will also simplify 

reporting for subscribers who externally 

distribute these data feeds to Users, as 

the Exchange believes that 

categorization of Users as Professional 

and Non-Professional is not meaningful 

for these products and requiring such 

categorization would expose Firms to 

unnecessary audit risk of paying more 

for mis-categorization. However, the 

Exchange does not believe this is 

equally true for MEMOIR Depth, as most 

individual Users of MEMOIR Depth are 

likely to be Professional Users and the 

Exchange has proposed pricing for such 

Users that the Exchange believes is 

reasonable given the value to 

Professional Users (i.e., since 

Professional Users use data to 

participate in the markets as part of 

their full-time profession and earn 

compensation based on their 

employment). While the Exchange 

would prefer the simplicity of a single 

fee, similar to that imposed for 

Professional Users and Non-Professional 

Users, as that would reduce audit risk 

and simplify reporting, the proposed fee 

for Professional Users if also applied to 

Non-Professional Users would be 

significantly higher than other 

exchanges charge. The Exchange 

reiterates that it does not anticipate 

many Non-Professional Users to 

subscribe to MEMOIR Depth. In fact, 

though data recipient reporting is still 

being completed and validated for the 

first billing cycle, the Exchange is only 

aware of a single Non-Professional User 

(i.e., one User) that is reported to receive 

MEMOIR Depth. 

Additional Discussion—Cost Analysis 

In general, the Exchange believes that 

exchanges, in setting fees of all types, 

should meet very high standards of 

transparency to demonstrate why each 

new fee or fee increase meets the 

Exchange Act requirements that fees be 

reasonable, equitably allocated, not 

unfairly discriminatory, and not create 

an undue burden on competition among 

members and markets. In particular, the 

Exchange believes that each exchange 

should take extra care to be able to 

demonstrate that these fees are based on 

its costs and reasonable business needs. 

Accordingly, in proposing to charge fees 

for market data, the Exchange has 


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30 15 U.S.C. 78s(b)(1). 

31 17 CFR 240.19b–4. 

32 15 U.S.C. 78f(b). 

33 15 U.S.C. 78f(b)(4). 

34 15 U.S.C. 78f(b)(5). 

35 15 U.S.C. 78f(b)(8). 

36 In 2019, Commission staff published guidance 

suggesting the types of information that SROs may 

use to demonstrate that their fee filings comply 

with the standards of the Exchange Act (‘‘Fee 

Guidance’’). While MEMX understands that the Fee 

Guidance does not create new legal obligations on 

SROs, the Fee Guidance is consistent with MEMX’s 

view about the type and level of transparency that 

exchanges should meet to demonstrate compliance 

with their existing obligations when they seek to 

charge new fees. See Staff Guidance on SRO Rule 

Filings Relating to Fees (May 21, 2019) available at 

https://www.sec.gov/tm/staff-guidancesro-rulefilings-fees. 

37See Securities Exchange Act Release Nos. 

93937 (January 10, 2022), 87 FR 2466 (January 14, 

2022) (SR–MEMX–2021–22); 94419 (March 15, 

2022), 87 FR 16046 (March 21, 2022) (SR–MEMX– 

2022–02); 94924 (May 16, 2022) (SR–MEMX–2022– 

13) (as the fees adopted have remained the same 

and the Exchange has filed since January of 2022, 

these filings are referred to generally hereafter as 

the ‘‘Connectivity Filing’’). 

sought to be especially diligent in 

assessing those fees in a transparent way 

against its own aggregate costs of 

providing the related service, and also 

carefully and transparently assessing the 

impact on Members—both generally and 

in relation to other Members, i.e., to 

assure the fee will not create a financial 

burden on any participant and will not 

have an undue impact in particular on 

smaller Members and competition 

among Members in general. The 

Exchange believes that this level of 

diligence and transparency is called for 

by the requirements of Section 19(b)(1) 

under the Act,30 and Rule 19b–4 

thereunder,31 with respect to the types 

of information self-regulatory 

organizations (‘‘SROs’’) should provide 

when filing fee changes, and Section 

6(b) of the Act,32 which requires, among 

other things, that exchange fees be 

reasonable and equitably allocated,33

not designed to permit unfair 

discrimination,34 and that they not 

impose a burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.35 This rule 

change proposal addresses those 

requirements, and the analysis and data 

in this section are designed to clearly 

and comprehensively show how they 

are met.36

In October 2021, MEMX completed a 

study of its aggregate costs to produce 

market data and connectivity (the ‘‘Cost 

Analysis’’). The Cost Analysis required 

a detailed analysis of MEMX’s aggregate 

baseline costs, including a 

determination and allocation of costs for 

core services provided by the 

Exchange—transactions, market data, 

membership services, physical 

connectivity, and application sessions 

(which provide order entry, cancellation 

and modification functionality, risk 

functionality, ability to receive drop 

copies, and other functionality). MEMX 

separately divided its costs between 

those costs necessary to deliver each of 

these core services, including 

infrastructure, software, human 

resources (i.e., personnel), and certain 

general and administrative expenses 

(‘‘cost drivers’’). Next, MEMX adopted 

an allocation methodology with various 

principles to guide how much of a 

particular cost should be allocated to 

each core service. For instance, fixed 

costs that are not driven by client 

activity (e.g., message rates), such as 

data center costs, were allocated more 

heavily to the provision of physical 

connectivity (75%), with smaller 

allocations to logical ports (2.6%), and 

the remainder to the provision of 

transaction execution and market data 

services (22.4%). In contrast, costs that 

are driven largely by client activity (e.g., 

message rates), were not allocated to 

physical connectivity at all but were 

allocated primarily to the provision of 

transaction execution and market data 

services (90%) with a smaller allocation 

to application sessions (10%). The 

allocation methodology was decided 

through conversations with senior 

management familiar with each area of 

the Exchange’s operations. After 

adopting this allocation methodology, 

the Exchange then applied an estimated 

allocation of each cost driver to each 

core service, resulting in the cost 

allocations described below. 

By allocating segmented costs to each 

core service, MEMX was able to 

estimate by core service the potential 

margin it might earn based on different 

fee models. The Exchange notes that as 

a non-listing venue it has four primary 

sources of revenue that it can 

potentially use to fund its operations: 

transaction fees, fees for connectivity 

services, membership and regulatory 

fees, and market data fees. Accordingly, 

the Exchange must cover its expenses 

from these four primary sources of 

revenue. 

The Exchange recently filed to adopt 

fees for connectivity services, to which 

the Exchange allocated a monthly 

aggregate monthly cost of $1,143,715.37

Based on the pricing adopted by the 

Exchange, the Exchange estimated it 

would generate monthly revenue of 

$1,233,750 from connectivity services 

(i.e., physical connections and 

application sessions), providing cost 

recovery to the Exchange for the 

aggregate costs of offering connectivity 

services plus approximately 8% margin. 

Thus far, fees for connectivity services 

have generated revenues consistent with 

the Exchange’s estimates. 

The Exchange notes that it is difficult, 

if not impossible, to purely split the 

costs of generating and producing 

market data and the costs associated 

with operation of the system that 

processes (and displays through market 

data) orders, cancellations, and 

transactions and performs related 

functions (collectively, together with 

market data, ‘‘Transaction Services’’). 

Instead, as described below, the 

Exchange believes its costs for providing 

Transaction Services, including market 

data, are inextricably linked, and thus 

the cost analysis below and corollary 

margin discussion includes all 

Transaction Services. 

Through the Exchange’s extensive 

Cost Analysis, the Exchange analyzed 

every expense item in the Exchange’s 

general expense ledger to determine 

whether each such expense relates to 

the provision of Transaction Services, 

and, if such expense did so relate, what 

portion (or percentage) of such expense 

actually supports the provision of 

Transaction Services, and thus bears a 

relationship that is, ‘‘in nature and 

closeness,’’ directly related to 

Transaction Services. In turn, the 

Exchange allocated certain costs more to 

Transaction Services than other 

services, while certain costs were only 

allocated to such services at a very low 

percentage, using consistent allocation 

methodologies as described above. 

Based on its analysis, MEMX calculated 

its aggregate monthly costs for providing 

Transaction Services, at $2,797,265. The 

Exchange expects to recoup the majority 

of this cost from transaction fees and 

revenues from the public data feeds in 

which the Exchange participates and 

receives revenues (i.e., the SIPs). As 

such, the Exchange has not determined 

it necessary to charge higher fees for the 

Exchange Data Feeds than proposed, but 

instead has proposed what it believes 

are relatively low-cost options to receive 

and use Exchange Data Feeds. However, 

in order to cover operating costs and 

earn a reasonable profit on its market 

data the Exchange has determined it 

necessary to charge some fees for 

proprietary data, and, as such, the 

Exchange is proposing to modify its Fee 

Schedule, pursuant to MEMX Rules 

15.1(a) and (c), as set forth above. 

Costs Related To Offering Transaction 

Services 

The following chart details the 

individual line-item (monthly) costs 

considered by MEMX to be related to 

offering Transaction Services 

(transactions and market data) to its 


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38The Exchange notes that the total monthly cost 

set forth for Transaction Services ($2,797,265) is the 

same as that used for the Initial Proposal; however, 

the Exchange has modified the categorization of 

such fees in the table above as such categorization 

was inconsistent when compared to the 

categorization used in the Connectivity Filing. In 

order to ensure a consistent presentation and 

description of the Cost Analysis and allocation 

methodology, the revised chart above corrects these 

inconsistencies to align with the categorization 

used in the Connectivity Filing. 

39The Exchange notes that in the Initial Proposal 

it included technology Consulting costs as a 

separate line-item but has included such costs along 

with Hardware and Software Licenses in this 

proposal for consistency with the Connectivity 

Filing. 

Members and other customers as well as 

the percentage of the Exchange’s overall 

costs such costs represent for such area 

(e.g., as set forth below, the Exchange 

allocated approximately 77.8% of its 

overall Human Resources cost to 

offering Transaction Services). 

Costs drivers 38 Costs % of all 

Human Resources ................................................................................................................................................... $1,480,822 77.8 

Connectivity (external fees, cabling, switches, etc.) ............................................................................................... 48,480 22.4 

Data Center ............................................................................................................................................................. 65,538 22.4 

External Market Data ............................................................................................................................................... 133,266 92.5 

Hardware and Software Licenses and Consulting .................................................................................................. 331,722 88.7 

Monthly Depreciation ............................................................................................................................................... 393,830 73.2 

Allocated Shared Expenses .................................................................................................................................... 343,607 70.6 

Total .................................................................................................................................................................. 2,797,265 70.7 

Human Resources 

For personnel costs (Human 

Resources), MEMX calculated an 

allocation of employee time for 

employees whose functions include 

directly providing services necessary to 

offer Transaction Services, including 

performance thereof, as well as 

personnel with ancillary functions 

related to establishing and providing 

such services (such as information 

security and finance personnel). The 

Exchange notes that it has fewer than 

seventy (70) employees and each 

department leader has direct knowledge 

of the time spent by those spent by each 

employee with respect to the various 

tasks necessary to operate the Exchange. 

The estimates of Human Resources cost 

were therefore determined by consulting 

with such department leaders, 

determining which employees are 

involved in tasks related to providing 

Transaction Services, and confirming 

that the proposed allocations were 

reasonable based on an understanding 

of the percentage of their time such 

employees devote to tasks related to 

providing Transaction Services. The 

Exchange notes that senior level 

executives were allocated Human 

Resources costs to the extent the 

Exchange believed they are involved in 

overseeing tasks related to providing 

Transaction Services. The Human 

Resources cost was calculated using a 

blended rate of compensation reflecting 

salary, equity and bonus compensation, 

benefits, payroll taxes, and 401(k) 

matching contributions. 

Connectivity 

The Connectivity cost includes 

external fees paid to connect to other 

exchanges, cabling and switches 

required to operate the Exchange. The 

Exchange notes that it previously 

labeled this line item as ‘‘Infrastructure 

and Connectivity’’ but has eliminated 

the reference to Infrastructure because 

several other line-item costs could be 

considered infrastructure given the 

generality of that term. The Connectivity 

line-item is more narrowly focused on 

technology used to complete 

connections to the Exchange and to 

connect to external markets. The 

majority of the Exchange’s Connectivity 

cost was allocated to physical 

connectivity (75%), as set forth in the 

Connectivity Filing. The remainder of 

the Exchange’s Connectivity cost was 

allocated between Transaction Services 

(22.4%) and application sessions 

(2.6%). 

Data Center 

Data Center costs includes an 

allocation of the costs the Exchange 

incurs to provide Transaction Services 

in the third-party data centers where the 

Exchange maintains its equipment as 

well as related costs (the Exchange does 

not own the Primary Data Center or the 

Secondary Data Center, but instead, 

leases space in data centers operated by 

third parties). Similar to the 

Connectivity cost described above, the 

majority of the Exchange’s Data Center 

cost was allocated to physical 

connectivity (75%), as set forth in the 

Connectivity Filing. The remainder of 

the Exchange’s Data Center cost was 

allocated between Transaction Services 

(22.4%) and application sessions 

(2.6%). 

External Market Data 

External Market Data Costs includes 

fees paid to third parties, including 

other exchanges and the SIPs under the 

consolidated plans, to receive and 

consume market data necessary to 

provide Transaction Services. 

Hardware and Software Licenses and 

Consulting 

Hardware and Software Licenses and 

Consulting includes hardware and 

software licenses used to operate and 

monitor physical assets necessary to 

offer Transaction Services. This lineitem also includes the cost of certain 

third-party consultants used by the 

Exchange to help test and review 

systems necessary to offering 

Transaction Services.39

Monthly Depreciation 

All physical assets and software, 

which also includes assets used for 

testing and monitoring of Exchange 

infrastructure, were valued at cost, 

depreciated or leased over periods 

ranging from three to five years. Thus, 

the depreciation cost primarily relates to 

servers necessary to operate the 

Exchange, some of which are owned by 

the Exchange and some of which are 

leased by the Exchange in order to allow 

efficient periodic technology refreshes. 

The depreciation cost also includes 

depreciated software that is necessary to 

run the Exchange. As noted above, the 

Exchange allocated 73.2% of all 

depreciation costs, including both 

hardware and software depreciation, to 

providing Transaction Services. 

Allocated Shared Expenses 

Finally, a limited portion of general 

shared expenses was allocated to overall 


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40The Exchange notes that in the Initial Proposal 

it included Regulatory Costs as a separate line-item 

but has included such costs in Allocated Shared 

Expenses in this proposal for consistency with the 

Connectivity Filing. 

Transaction Services costs as without 

these general shared costs the Exchange 

would not be able to operate in the 

manner that it does and provide 

Transaction Services. The costs 

included in general shared expenses 

include general expenses of the 

Exchange, including office space and 

office expenses (e.g., occupancy and 

overhead expenses), utilities, recruiting 

and training, marketing and advertising 

costs, regulatory costs,40 professional 

fees for legal, tax and accounting 

services (including external and internal 

audit expenses), and 

telecommunications costs. The 

Exchange notes that the cost of paying 

directors to serve on its Board of 

Directors is included in the calculation 

of Allocated Shared Expenses, and thus 

a portion of such overall cost was 

allocated to providing Transaction 

Services. 

Cost Analysis—Additional Discussion 

In conducting its Cost Analysis, the 

Exchange did not allocate any of its 

expenses in full to any core service and 

did not double-count any expenses. 

Instead, as described above, the 

Exchange identified and allocated 

applicable cost drivers across its core 

services and used the same Cost 

Analysis to form the basis of the 

Connectivity Filing and this filing 

proposing fees for Exchange Data Feeds. 

For instance, as described in the 

Connectivity Filing, in calculating the 

Human Resources expenses to be 

allocated to physical connections, the 

Exchange has a team of employees 

dedicated to network infrastructure and 

with respect to such employees the 

Exchange allocated network 

infrastructure personnel with a high 

percentage of the cost of such personnel 

(75%) given their focus on functions 

necessary to provide physical 

connections. The salaries of those same 

personnel were allocated only 2.5% to 

application sessions and the remaining 

22.5% was allocated to transactions and 

market data. 

In total, again as explained in the 

Connectivity Filing, the Exchange 

allocated 13.8% of its personnel costs to 

providing physical connections and 

7.7% of its personnel costs to providing 

application sessions, for a total 

allocation of 21.5% Human Resources 

expense to provide connectivity 

services. In turn, the Exchange allocated 

the remaining 78.5% of its Human 

Resources expense to Membership (less 

than 1%) and the majority to 

Transaction Services (77.8%). Thus, 

again, the Exchange’s allocations of cost 

across core services were based on real 

costs of operating the Exchange and 

were not double-counted across the core 

services or their associated revenue 

streams. 

As another example, the Exchange 

allocated depreciation expense to all 

core services, including Transaction 

Services, but in different amounts. The 

Exchange believes it is reasonable to 

allocate the identified portion of such 

expense because such expense includes 

the actual cost of the computer 

equipment, such as dedicated servers, 

computers, laptops, monitors, 

information security appliances and 

storage, and network switching 

infrastructure equipment, including 

switches and taps that were purchased 

to operate and support the Exchange. 

Without this equipment, the Exchange 

would not be able to operate the 

Exchange and provide Transaction 

Services to its Members and nonMembers and their customers. The 

Exchange did not allocate all of the 

depreciation and amortization expense 

toward the cost of providing 

Transaction Services, but instead 

allocated approximately 73% of the 

Exchange’s overall depreciation and 

amortization expense to Transaction 

Services. 

The Exchange anticipates that the 

proposed fees for Exchange Data Feeds 

will generate approximately $280,000 

based on initial reporting that has taken 

place since the Exchange commenced 

billing for such data feeds. The 

proposed fees for Exchange Data Feeds 

are designed to permit the Exchange to 

cover the costs allocated to providing 

Transaction Services with a markup that 

the Exchange believes is modest 

(approximately 10.1%), which the 

Exchange believes is fair and reasonable 

after taking into account the costs 

related to Transaction Services that the 

Exchange has previously borne 

completely on its own and help fund 

future expenditures (increased costs, 

improvements, etc.). The Exchange also 

reiterates that prior to April of this year 

the Exchange has not previously 

charged any fees for Exchange Data 

Feeds and its allocation of costs to 

Exchange Data Feeds was part of a 

holistic allocation that also allocated 

costs to other core services without 

double-counting any expenses. 

Looking at the Exchange’s operations 

holistically, the total monthly costs to 

the Exchange for offering core services 

is $3,954,537. The Exchange again notes 

that it anticipates that the proposed fees 

for Exchange Data Feeds will generate 

approximately $280,000 based on initial 

reporting that has taken place since the 

Exchange commenced billing for such 

data feeds. Incorporating this amount 

into the Exchange’s overall projected 

revenue, the Exchange anticipates 

monthly revenue of $4,326,950 from all 

sources (i.e., connectivity fees and 

membership fees that were introduced 

in January 2022, transaction fees, and 

revenue from market data, both through 

the fees proposed herein and through 

the revenue received from the SIPs). As 

such, applying the Exchange’s holistic 

Cost Analysis to a holistic view of 

anticipated revenues, the Exchange 

would earn approximately 9.4% margin 

on its operations as a whole. As noted 

above, the Exchange believes its profit 

margin for Transaction Services will be 

approximately 10.1%. The Exchange 

believes that both of these amounts are 

reasonable. 

The Exchange notes that its revenue 

estimates are based on projections 

across all potential revenue streams and 

will only be realized to the extent such 

revenue streams actually produce the 

revenue estimated. As a new entrant to 

the hyper-competitive exchange 

environment, and an exchange focused 

on driving competition, the Exchange 

does not yet know whether such 

expectations will be realized. For 

instance, in order to generate the 

revenue expected from the Exchange 

Data Feeds, the Exchange will have to 

be successful in retaining existing 

subscribers and obtaining new 

subscribers to the Exchange Data Feeds. 

Similarly, the Exchange will have to be 

successful in retaining a positive net 

capture on transaction fees in order to 

realize the anticipated revenue from 

transaction pricing. 

To the extent the Exchange is 

successful in gaining market share, 

improving its net capture on transaction 

fees, encouraging new subscribers to 

subscribe to the Exchange Data Feeds, 

and other developments that would 

help to increase Exchange revenues, the 

Exchange does not believe it should be 

penalized for such success. The 

Exchange like other exchanges is, after 

all, a for-profit business. Accordingly, 

while the Exchange believes in 

transparency around costs and potential 

margins, as well as periodic review of 

revenues and applicable costs (as 

discussed below), the Exchange does 

not believe that these estimates should 

form the sole basis of whether or not a 

proposed fee is reasonable or can be 

adopted. Instead, the Exchange believes 

that the information should be used 

solely to confirm that an Exchange is 

not earning supra-competitive profits, 

and the Exchange believes its Cost 


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41 15 U.S.C. 78f. 

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

43 15 U.S.C. 78f(b)(5). 

44See Regulation NMS Adopting Release, 70 FR 

37495, at 37499. 

45NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. 

Cir. 2010) (‘‘NetCoalition I’’) (quoting H.R. Rep. No. 

94–229 at 92 (1975), as reprinted in 1975 

U.S.C.C.A.N. 323). 

46 Id. at 535. 

47See supra notes 26–27; see supra note 29 and 

accompanying text. 

Analysis and related projections 

demonstrate this fact. 

The Exchange notes that the Cost 

Analysis was based on the Exchange’s 

first year of operations and projections 

for the current year. As a general matter, 

the Exchange believes that its costs will 

remain relatively similar in future years. 

It is possible however that such costs 

will either decrease or increase. To the 

extent the Exchange sees growth in use 

of Exchange Data Feeds it will receive 

additional revenue to offset future cost 

increases. However, if use of Exchange 

Data Feeds is static or decreases, the 

Exchange might not realize the revenue 

that it anticipates or needs in order to 

cover applicable costs. Accordingly, the 

Exchange is committing to conduct a 

one-year review after implementation of 

these fees. The Exchange expects that it 

may propose to adjust fees at that time, 

to increase fees in the event that 

revenues fail to cover costs and a 

reasonable mark-up of such costs. 

Similarly, the Exchange would propose 

to decrease fees in the event that 

revenue materially exceeds current 

projections. In addition, the Exchange 

will periodically conduct a review to 

inform its decision making on whether 

a fee change is appropriate (e.g., to 

monitor for costs increasing/decreasing 

or subscribers increasing/decreasing, 

etc. in ways that suggest the thencurrent fees are becoming dislocated 

from the prior cost-based analysis) and 

would propose to increase fees in the 

event that revenues fail to cover its costs 

and a reasonable mark-up, or decrease 

fees in the event that revenue or the 

mark-up materially exceeds current 

projections. In the event that the 

Exchange determines to propose a fee 

change, the results of a timely review, 

including an updated cost estimate, will 

be included in the rule filing proposing 

the fee change. More generally, the 

Exchange believes that it is appropriate 

for an exchange to refresh and update 

information about its relevant costs and 

revenues in seeking any future changes 

to fees, and the Exchange commits to do 

so. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6(b) 41 of the 

Act in general, and furthers the 

objectives of Section 6(b)(4) 42 of the 

Act, in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees and other charges 

among its Members and other persons 

using its facilities. Additionally, the 

Exchange believes that the proposed 

fees are consistent with the objectives of 

Section 6(b)(5) 43 of the Act in that they 

are designed to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

a free and open market and national 

market system, and, in general, to 

protect investors and the public interest, 

and, particularly, are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Proposed Rule Change Is 

Reasonable 

In adopting Regulation NMS, the 

Commission granted SROs and brokerdealers increased authority and 

flexibility to offer new and unique 

market data to the public. 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.’’ 44

With respect to market data, the 

decision of the United States Court of 

Appeals for the District of Columbia 

Circuit in NetCoalition v. SEC upheld 

the Commission’s reliance on the 

existence of competitive market 

mechanisms to evaluate the 

reasonableness and fairness of fees for 

proprietary market data: 

In fact, the legislative history 

indicates that the Congress intended 

that the market system ‘‘evolve through 

the interplay of competitive forces as 

unnecessary regulatory restrictions are 

removed’’ and that the SEC wield its 

regulatory power ‘‘in those situations 

where competition may not be 

sufficient,’’ such as in the creation of a 

‘‘consolidated transactional reporting 

system.’’ 45

The court agreed with the 

Commission’s conclusion that 

‘‘Congress intended that ‘competitive 

forces should dictate the services and 

practices that constitute the U.S. 

national market system for trading 

equity securities.’ ’’ 46

In this competitive marketplace, the 

Exchange’s executed trading volume has 

grown from 0% market share to over 4% 

market share in less than one and a half 

years and the Exchange believes that it 

is reasonable to begin charging fees for 

the Exchange Data Feeds. One of the 

primary objectives of MEMX is to 

provide competition and to reduce fixed 

costs imposed upon the industry. 

Consistent with this objective, the 

Exchange believes that this proposal 

reflects a simple, competitive, 

reasonable, and equitable pricing 

structure designed to permit the 

Exchange to cover certain fixed costs 

that it incurs for providing market data, 

with fees that are discounted when 

compared to products and services 

offered by competitors.47

The Exchange is not aware of any 

evidence that a market share of 

approximately 4% provides the 

Exchange with supra-competitive 

pricing power because, as shown 

elsewhere, market participants (even 

those that trade on the Exchange) are 

not required to subscribe to the 

Exchange Data Feeds, and if they do so, 

have a choice with respect to the 

Exchange Data Feed(s) to which they 

will subscribe. As noted above, when 

the Exchange announced that it would 

charge for the Exchange Data Feeds, 

19% of its subscribers either modified 

or cancelled their subscriptions to 

Exchange Data Feeds. While some of 

these subscribers do not actively 

participate by trading on the Exchange 

and likely subscribed to the Exchange 

Data Feeds because they were offered 

free of charge, several of the subscribers 

that modified or cancelled their 

subscriptions are in fact Members that 

trade on the Exchange. Specifically, five 

(5) subscribers that actively participate 

on the Exchange have cancelled all 

subscriptions to the Exchange Data 

Feeds and have informed the Exchange 

that they will instead utilize SIP data to 

trade on the Exchange. In addition, 

three (3) subscribers that actively 

participate on the Exchange have 

discontinued their subscription to 

receive the MEMOIR Depth feed and 

have informed the Exchange that they 

will instead use the less expensive 

MEMOIR Top feed to trade on the 

Exchange (the Exchange notes that two 

of these subscribers have also 

maintained their subscriptions to the 

MEMOIR Last Sale feed). 


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48 866 F.3d 442 (D.C. Cir. 2017). 

49Securities Exchange Act Release No. 84432 

(October 16, 2018). 

50See Securities Exchange Act Release No. 51808, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18). 

51Commission Division of Trading and Markets, 

Memorandum to EMSAC, dated October 20, 2015, 

available here: https://www.sec.gov/spotlight/ 

emsac/memo-maker-taker-feeson-equitiesexchanges.pdf. 

With regard to reasonableness, the 

Exchange understands that the 

Commission has traditionally taken a 

market-based approach to examine 

whether the SRO making the proposal 

was subject to significant competitive 

forces in setting the terms of the 

proposal. In looking at this question, 

consistent with the decisions in 

Susquehanna Int’l Grp., LLC v. SEC48

and In the Matter of the Application of 

Securities Industry and Financial 

Markets Ass’n for Review of Action 

taken by NYSE Arca, Inc. and Nasdaq 

Stock Market, LLC,49 the Commission 

considers whether the SRO has 

provided evidence in its filing that: (i) 

there are reasonable substitutes for the 

product or service; (ii) ‘‘platform’’ 

competition constrains the ability to set 

the fee; and/or (iii) revenue and cost 

analysis shows the fee would not result 

in the SRO taking supra-competitive 

profits. If the SRO demonstrates that the 

fee is subject to significant competitive 

forces, the Commission will next 

consider whether there is any 

substantial countervailing basis to 

suggest the fee’s terms fail to meet one 

or more standards under the Exchange 

Act. If the filing fails to demonstrate that 

the fee is constrained by competitive 

forces, the SRO must provide a 

substantial basis, other than 

competition, to show that it is 

consistent with the Exchange Act, 

which may include production of 

relevant revenue and cost data 

pertaining to the product or service. 

The Exchange has not previously 

charged fees for market data but 

commenced charging in April of this 

year. As discussed in the purpose 

section of this proposed rule change, 

while the Exchange intentionally 

adopted fees that it believes are 

reasonable and would not result in a 

loss of market share, consistent with its 

obligations as a national securities 

exchange under Section 6(b)(4) of the 

Act, the Exchange continues to believe 

that competitive forces are in effect and 

that if the proposed fees for the 

Exchange Data Feeds were unreasonable 

that the Exchange would lose current or 

prospective Members and market share. 

Further, the Exchange has conducted a 

comprehensive Cost Analysis to 

determine the reasonability of its 

proposed fees, including that the 

Exchange will not take supracompetitive profits. 

1. The Proposed Fees Are Constrained 

by Significant Competitive Forces 

a. Exchange Market Data Fees Are 

Constrained by Competition 

The Commission itself has recognized 

that the market for trading services in 

NMS stocks has become ‘‘more 

fragmented and competitive.’’ 50 The 

Commission’s Division of Trading and 

Markets has also recognized that with so 

many ‘‘operating equities exchanges and 

dozens of ATSs, there is vigorous price 

competition among the U.S. equity 

markets and, as a result, [transaction] 

fees are tailored and frequently 

modified to attract particular types of 

order flow, some of which is highly 

fluid and price sensitive.’’ 51 Indeed, as 

noted above, equity trading is currently 

dispersed across 16 exchanges, 31 

alternative trading systems, and 

numerous broker-dealer internalizers 

and wholesalers, all competing for order 

flow. While the competitive 

environment described above and the 

Commission’s statements related thereto 

are primarily regarding market share 

and trading volumes, and not market 

data specifically, the Exchange believes 

that competition does constrain the 

Exchange’s ability to set market data 

prices, as described in this proposal. 

Further, low barriers to entry mean 

that new exchanges like the Exchange 

may rapidly enter the market and offer 

competition with the Exchange. Due to 

the ready availability of substitutes and 

the low cost to move order flow to those 

substitute trading venues, an exchange 

setting market data fees that are not at 

competitive levels would expect to 

quickly lose business to competitors 

with more attractive pricing. Indeed, as 

described above, at least eight Members 

trade on the Exchange either by using 

the lower cost MEMOIR Top feed (some 

in combination with MEMOIR Last Sale) 

or without use of any Exchange Data 

Feed (i.e., using SIP data). Although the 

various exchanges may differ in their 

strategies for pricing their market data 

products and their transaction fees for 

trades—with some offering low-cost 

market data with higher trading costs, 

and others charging more for market 

data and comparatively less for 

trading—all exchanges compete for the 

same pool of customers and must work 

to demonstrate to such customers that 

pricing is reasonable. The Exchange 

believes that the best way to do this is 

to provide transparency into the costs of 

producing and maintaining its services. 

Commission staff noted in its Fee 

Guidance that, as an initial step in 

assessing the reasonableness of a fee, 

staff considers whether the fee is 

constrained by significant competitive 

forces. To determine whether a 

proposed fee is constrained by 

significant competitive forces, staff has 

said that it considers whether the 

evidence demonstrates that there are 

reasonable substitutes for the product or 

service that is the subject of a proposed 

fee. As noted elsewhere in this proposal, 

there is no regulatory requirement that 

any market participant subscribe to any 

Exchange Data Feeds or a particular 

Exchange Data Feed. To demonstrate 

substitutability with tangible evidence, 

as noted above, five (5) Members that 

actively trade on the Exchange have 

determined to the SIPs as a substitute 

for the Exchange’s Data Feeds but have 

continued trading on the Exchange 

while three (3) Members that actively 

trade on the Exchange have determined 

to use lower cost Exchange Data Feeds 

(i.e., MEMOIR Top or MEMOIR Top in 

conjunction with MEMOIR Last Sale) 

instead of the MEMOIR Depth feed. 

The Exchange believes the proposed 

fees are reasonable because in setting 

them, the Exchange is constrained by 

the availability of numerous competitors 

offering market data products and 

trading services. Such substitutes need 

not be identical, but only substantially 

similar to the product at hand. More 

specifically, in setting fees for the 

Exchange Data Feeds, the Exchange is 

constrained by the fact that, if its pricing 

is unattractive to customers, customers 

have their pick of a large number of 

alternative execution venues to use 

instead of the Exchange. The Exchange 

believes that it has considered all 

relevant factors and has not considered 

irrelevant factors in order to establish 

reasonable fees. The existence of 

competition ensures that the Exchange 

cannot set unreasonable market data 

fees without suffering the negative 

effects of that decision in the fiercely 

competitive market in which it operates. 

b. Exchange Data Feeds Are Optional 

Market Data Products 

Subscribing to the Exchange Data 

Feeds is entirely optional. The Exchange 

is not required to make the Exchange 

Data Feeds available to any customers, 

nor is any customer required to 

purchase any Exchange Data Feed. 

Unlike some other data products (e.g., 

the consolidated quotation and last-sale 

information feeds) that firms are 

required to purchase in order to fulfill 


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52The Exchange notes that broker-dealers are not 

required to purchase proprietary market data to 

comply with their best execution obligations. See In 

the Matter of the Application of Securities Industry 

and Financial Markets Association for Review of 

Actions Taken by Self-Regulatory Organizations, 

Release Nos. 34–72182; AP–3–15350; AP–3–15351 

(May 16, 2014). Similarly, there is no requirement 

in Regulation NMS or any other rule that 

proprietary data be utilized for order routing 

decisions, and some competing exchanges, brokerdealers and ATSs have chosen not to do so. 

53Broadly speaking, the self-regulatory 

organizations (‘‘SROs’’) administer the SIPs and set 

pricing. Each SIP charges its own fees, which are 

determined by the operating committees of each SIP 

subject to the SEC rule filing process. While MEMX 

is a member of the operating committee of each SIP, 

it has only one vote and does not exercise control 

over SIP pricing. MEMX also notes that the SIPs 

charge pursuant to a different pricing structure than 

the pricing structure proposed by the Exchange in 

this filing. 

54See, e.g., NYSE Arca Rule 7.37–E.(d), Order 

Execution and Routing, and BZX Rule 11.21, each 

of which discloses the data feeds used by each 

respective exchange and state that SIP products are 

used with respect to MEMX. 

55See MEMX Rule 13.4, Usage of Data Feeds, 

which discloses that the Exchange uses proprietary 

data feeds for all exchanges that offer them. 

56See Rule 600(b)(71) of Regulation NMS, 17 CFR 

242.600(b)(17). 

57See NYSE Arca Rule 7.37–E.(b), describing 

routing services offered by NYSE Arca; BZX Rule 

11.13(b), describing routing services offered by 

BZX. 

58See, e.g., Letter from Anders Franzon, General 

Counsel, MEMX LLC, dated May 26, 2020, 

regarding proposed Market Data Infrastructure rule, 

available at: https://www.sec.gov/comments/s7-03- 

20/s70320-7235183-217090.pdf. 

59See, e.g., Letter from Adrian Griffiths, Head of 

Market Structure, MEMX LLC, dated November 8, 

2021, regarding proposed fees for consolidated data 

provided pursuant to CTA/CQ/UTP Plans, available 

at: https://www.sec.gov/comments/sr-ctacq-2021- 

03/srctacq202103-9403088-262830.pdf. 

regulatory obligations,52 a customer’s 

decision whether to purchase any 

Exchange Data Feed is entirely 

discretionary. Most Firms that choose to 

subscribe to an Exchange Data Feed do 

so for the primary goals of using it to 

increase their revenues, reduce their 

expenses, and in some instances to 

compete directly with the Exchange for 

order flow. Such firms are able to 

determine for themselves whether a 

particular Exchange Data Feed is 

necessary for their business needs, and 

if so, whether or not it is attractively 

priced. If an Exchange Data Feed does 

not provide sufficient value to a Firm 

based on the uses such Firm may have 

for it, such Firm may simply choose to 

conduct their business operations in 

ways that do not use the applicable 

Exchange Data Feed. Again, the 

Exchange has demonstrated above that 

several Members have in fact made this 

determination and trade on the 

Exchange without use of Exchange Data 

Feeds or with use of one or more of the 

lower cost Exchange Data Feeds and not 

MEMOIR Depth. 

Specifically related to the Exchange 

Data Feed with the highest rates, the 

MEMOIR Depth Feed, even if a Firm 

determines that the fees for such feed 

are too high, customers can access much 

of the same data at lower rates by 

subscribing to the MEMOIR Top feed 

(which includes best-bid-and-offer 

information for the Exchange on a realtime basis) and MEMOIR Last Sale 

(which includes last-sale information 

for the Exchange on a real-time basis). 

MEMX top-of-book quotation 

information and last-sale information is 

also available on the consolidated SIP 

feeds.53 In this way, MEMOIR Top, 

MEMOIR Last Sale, and SIP data 

products are all substitutes for a 

significant portion of the data available 

on the MEMOIR Depth Feed, and SIP 

data products are also a substitute for a 

significant portion of data available on 

the MEMOIR Top and MEMOIR Last 

Sale feeds. As shown above, several 

Members that trade on the Exchange 

discontinued subscriptions to MEMOIR 

Depth and instead use MEMOIR Top (or 

MEMOIR Top combined with MEMOIR 

Last Sale) as a substitute while others 

discontinued their subscription to 

Exchange Data Feeds altogether, using 

SIP data as a substitute. Furthermore, 

several exchange competitors of the 

Exchange have not subscribed to any 

Exchange Data Feeds for purposes of 

executing orders on their exchanges, 

order routing, and regulatory 

purposes,54 even though the Exchange 

subscribes to and pays for their 

comparable market data products.55 As 

such competitors are required by 

Regulation NMS to honor (i.e., not trade 

through, lock or cross) protected 

quotations 56 displayed by the Exchange 

and by rule they offer routing services 

including routing to the Exchange,57

these competitors must have determined 

it possible to meet these obligations 

through use of SIP data in lieu of 

subscribing to any Exchange Data Feed. 

The only content available on the 

MEMOIR Depth Feed that is not 

available on these other products is the 

order-by-order look at the MEMX order 

book, which provides information about 

depth-of-book on the Exchange. The 

Exchange has been a vocal advocate in 

support of the Commission’s Market 

Data Infrastructure Rule, which 

mandates the creation of a ‘‘SIP 

Premium’’ product that would include 

depth-of-book information on the 

consolidated market data feeds.58 The 

Exchange has also been a vocal advocate 

in support of pricing new content for 

the consolidated market data feeds in a 

reasonable and competitive manner that 

would encourage the use of a SIP 

Premium product and other content to 

be provided via the SIPs.59 Future 

products such as SIP Premium would 

include not only integrated depth-ofbook information from MEMX, but all 

other exchanges as well, and would 

further constrain the Exchange’s ability 

to price any Exchange Data Feed, 

including MEMOIR Depth, at a supracompetitive price. However, even in the 

absence of such products, the Exchange 

believes that use of the Exchange Data 

Feeds is entirely optional, as described 

above. 

Further, in the case of products that 

are also redistributed through market 

data vendors such as Bloomberg and 

Refinitiv, the vendors themselves 

provide additional price discipline for 

proprietary data products because they 

control the primary means of access to 

certain end users. These vendors impose 

price discipline based upon their 

business models. For example, vendors 

that assess a surcharge on data they sell 

are able to refuse to offer proprietary 

products that their end users do not or 

will not purchase in sufficient numbers. 

Even in the absence of fees for the 

Exchange Data Feeds, many major 

market data vendors have not elected to 

make available the Exchange Data Feeds 

and likely will not unless their 

customers request it, and customers will 

not elect to pay the proposed fees unless 

the applicable Exchange Data Feed can 

provide value by sufficiently increasing 

revenues or reducing costs to the 

customer’s business in a manner that 

will offset the fees. All of these factors 

operate as constraints on pricing 

proprietary data products. 

In setting the proposed fees for the 

Exchange Data Feeds, the Exchange 

considered the competitiveness of the 

market for proprietary data and all of 

the implications of that competition. As 

described elsewhere in this proposal, 

the Exchange also considered the Cost 

Analysis conducted by the Exchange 

and believes it has demonstrated that 

the fees will not result in any supracompetitive profit. The Exchange 

believes that it has considered all 

relevant factors and has not considered 

irrelevant factors in order to establish 

reasonable fees. The existence of 

alternatives to the Exchange and the 

continued availability of choice between 

different Exchange Data Feeds, other 

exchanges’ proprietary data products, 

and the SIPs ensure that the Exchange 

cannot set unreasonable fees when 

vendors and subscribers can elect these 

alternatives or choose not to purchase a 

specific proprietary data product if the 

attendant fees are not justified by the 


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60See Fee Guidance, supra note 36. 

61 15 U.S.C. 78f(b)(4). 

62The Exchange notes that while it does impose 

a $200 per month Membership Fee, the Exchange 

does not charge several other types of fees charged 

by competitors to the Exchange, including fees for 

market participant identifiers (‘‘MPIDs’’), fees for 

risk management tools, application fees, or fees to 

access the Exchange User portal. 

63See supra notes 26–27; see supra note 29 and 

accompanying text. 

returns that any particular vendor or 

data recipient would achieve through 

the purchase. 

c. The Proposed Fees for Exchange Data 

Feeds Will Not Result in SupraCompetitive Profits 

Commission staff previously noted 

that the generation of supra-competitive 

profits is one of several potential factors 

in considering whether an exchange’s 

proposed fees are consistent with the 

Act.60 As described in the Fee 

Guidance, the term ‘‘supra-competitive 

profits’’ refers to profits that exceed the 

profits that can be obtained in a 

competitive market. The proposed fee 

structure would not result in excessive 

pricing or supra-competitive profits for 

the Exchange. The proposed fee 

structure is merely designed to permit 

the Exchange to cover the costs 

allocated to providing Transaction 

Services with a modest markup 

(approximately 10.1%), which the 

Exchange believes is fair and reasonable 

after taking into account the costs 

related to Transaction Services that the 

Exchange has previously borne 

completely on its own and to help fund 

future expenditures (increased costs, 

improvements, etc.). The Exchange 

believes that this is fair, reasonable, and 

equitable. Accordingly, the Exchange 

believes that its proposal is consistent 

with Section 6(b)(4) 61 of the Act 

because the proposed fees will permit 

recovery of the Exchange’s costs and 

will not result in excessive pricing or 

supra-competitive profit. 

The proposed fees for Exchange Data 

Feeds will allow the Exchange to cover 

certain costs incurred by the Exchange 

associated with providing and 

maintaining necessary hardware and 

other network infrastructure as well as 

network monitoring and support 

services; without such hardware, 

infrastructure, monitoring and support 

the Exchange would be unable to 

provide Transaction Services, including 

market data. The Exchange routinely 

works to improve the performance of 

the network’s hardware and software. 

The costs associated with maintaining 

and enhancing a state-of-the-art 

exchange network is a significant 

expense for the Exchange, and thus the 

Exchange believes that it is reasonable 

and appropriate to help offset those 

costs by adopting fees for the Exchange 

Data Feeds. As detailed above, the 

Exchange has four primary sources of 

revenue that it can potentially use to 

fund its operations: transaction fees, 

fees for connectivity services, 

membership and regulatory fees, and 

market data fees. Accordingly, the 

Exchange must cover its expenses from 

these four primary sources of revenue. 

The Exchange expects to recoup the 

majority of its estimated aggregate 

monthly costs for providing Transaction 

Services from transaction fees and 

revenues from the public data feeds in 

which the Exchange participates and 

receives revenues (i.e., the SIPs). As 

such, the Exchange has not determined 

it necessary to charge higher fees for the 

Exchange Data Feeds than proposed, but 

instead has proposed what it believes 

are relatively low-cost options to receive 

and use Exchange Data Feeds. However, 

in order to cover operating costs and 

earn a reasonable profit on its market 

data the Exchange has determined it 

necessary to charge some fees for 

proprietary data, and, as such, the 

Exchange is proposing to charge the fees 

described herein for the Exchange Data 

Feeds. In addition, this revenue will 

allow the Exchange to continue to offer, 

to enhance, and to continually refresh 

its infrastructure as necessary to offer a 

state-of-the-art trading platform. The 

Exchange believes that, consistent with 

the Act, it is appropriate to charge fees 

that represent a reasonable markup over 

cost given the other factors discussed 

above, including the relatively low cost 

to participate on the Exchange 62 and the 

need for the Exchange to maintain a 

highly performant and stable platform to 

allow Members to transact with 

determinism. 

The Exchange’s Cost Analysis 

estimates the costs to provide 

Transaction Services at $2,797,265. 

Based on current subscriptions to 

Exchange Data Feeds (but without 

definitive data regarding User counts) 

and projections related to transaction 

activity and volumes, the Exchange 

estimates it will generate monthly 

revenues of approximately $280,000 

from the Exchange Data Feeds and 

$3,080,000 from providing Transaction 

Services overall (on a monthly basis). 

This represents a modest profit when 

compared to the cost of providing 

Transaction Services (approximately 

10.1%). Further, as noted above, 

applying the Exchange’s holistic Cost 

Analysis to a holistic view of 

anticipated revenues from all sources, 

the Exchange would earn approximately 

9.4% margin on its operations as a 

whole. The Exchange believes that this 

amount is reasonable and cannot be 

considered to be supra-competitive 

profit. 

2. The Proposed Fees Are Reasonable 

The specific fees that the Exchange 

proposes for the Exchange Data Feeds 

are reasonable for the following 

additional reasons. 

Overall. The Exchange believes the 

proposed fees for the Exchange Data 

Feeds are reasonable when compared to 

fees for comparable products, such as 

the BZX Depth feed, BZX Top feed, and 

BZX Last Sale feed, compared to which 

the Exchange’s proposed fees are 

generally lower, as well as other 

comparable data feeds priced 

significantly higher than the Exchange’s 

proposed fees for the Exchange Data 

Feeds.63 Specifically with respect to the 

MEMOIR Depth feed, the Exchange 

believes that the proposed fees for such 

feed are reasonable because they 

represent not only the value of the data 

available from the MEMOIR Top and 

MEMOIR Last Sale data feeds, which 

have lower proposed fees, but also the 

value of receiving the depth-of-book 

data on an order-by-order basis. The 

Exchange believes it is reasonable to 

have pricing based, in part, upon the 

amount of information contained in 

each data feed and the value of that 

information to market participants. The 

MEMOIR Top and Last Sale data feeds, 

as described above, can be utilized to 

trade on the Exchange but contain less 

information than that is available on the 

MEMOIR Depth feed (i.e., even for a 

subscriber who takes both feeds, such 

feeds do not contain depth-of-book 

information). Thus, the Exchange 

believes it reasonable for the products to 

be priced as proposed, with MEMOIR 

Last Sale having the lowest price, 

MEMOIR Top the next lowest price, and 

MEMOIR Depth the highest price (and 

more than MEMOIR Last Sale and 

MEMOIR Top combined). Finally, the 

Exchange believes that its Cost Analysis 

and holistic approach thereto 

demonstrates that the proposed fees for 

the Exchange Data Feeds would not 

result in supra-competitive profits. 

Internal Distribution Fees. The 

Exchange believes that it is reasonable 

to charge fees to access the Exchange 

Data Feeds for Internal Distribution 

because of the value of such data to 

subscribers in their profit-generating 

activities. The Exchange also believes 

that the proposed monthly Internal 

Distribution fees for MEMOIR Depth, 

MEMOIR Top, and MEMOIR Last Sale 

are reasonable as they are the same 


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64See BZX Fee Schedule available at https://

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

schedule/bzx/. 

65See NYSE Proprietary Market Data Pricing list, 

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

nyse/data/NYSE_Market_Data_Pricing.pdf; Nasdaq 

Global Data Products pricing list, available at: 

http://www.nasdaqtrader.com/TraderB.aspx?id=

MDDPricingALLN. 

66See BZX Fee Schedule available at https://

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

schedule/bzx/. 

67See id. 

68See NYSE Proprietary Market Data Pricing list, 

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

nyse/data/NYSE_Market_Data_Pricing.pdf; Nasdaq 

Global Data Products pricing list, available at: 

http://www.nasdaqtrader.com/TraderB.aspx?id=

MDDPricingALLN. 

69See BZX Fee Schedule, available at: https://

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

schedule/bzx/. 

70See NYSE Proprietary Market Data Pricing list, 

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

nyse/data/NYSE_Market_Data_Pricing.pdf; Nasdaq 

Global Data Products pricing list, available at: 

http://www.nasdaqtrader.com/TraderB.aspx?id=

MDDPricingALLN. 

71See id. 

72See BZX Fee Schedule, available at: https://

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

schedule/bzx/; EDGX Fee Schedule, available at: 

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

schedule/edgx/. 

73See supra notes 26–27. 

amounts charged by at least one other 

exchange of comparable size for 

comparable data products,64 and are 

lower than the fees charged by several 

other exchanges for comparable data 

products.65

External Distribution Fees. The 

Exchange believes that it is reasonable 

to charge External Distribution fees for 

the Exchange Data Feeds because 

vendors receive value from 

redistributing the data in their business 

products provided to their customers. 

The Exchange believes that charging 

External Distribution fees is reasonable 

because the vendors that would be 

charged such fees profit by retransmitting the Exchange’s market data 

to their customers. These fee would be 

charged only once per month to each 

vendor account that redistributes any 

Exchange Data Feed, regardless of the 

number of customers to which that 

vendor redistributes the data. The 

Exchange also believes the proposed 

monthly External Distribution fee for 

the MEMOIR Depth Feed is reasonable 

because it is half the amount of the fee 

charged by at least one other exchange 

of comparable size for a comparable 

data product,66 and significantly less 

than the amount charged by several 

other exchanges for comparable data 

products.67 Similarly, the Exchange 

believes the proposed monthly External 

Distribution fees for the MEMOIR TOP 

and MEMOIR Last Sale feeds are 

reasonable because they are discounted 

compared to same amounts charged by 

at least one other exchange of 

comparable size for comparable data 

products, and significantly less than the 

amount charged by several other 

exchanges for comparable data 

products.68

User Fees. The Exchange believes that 

having separate Professional and NonProfessional User fees for the MEMOIR 

Depth feed is reasonable because it will 

make the product more affordable and 

result in greater availability to 

Professional and Non-Professional 

Users. Setting a modest NonProfessional User fee is reasonable 

because it provides an additional 

method for Non-Professional Users to 

access the Exchange Data Feeds by 

providing the same data that is available 

to Professional Users. The proposed 

monthly Professional User fee and 

monthly Non-Professional User fee are 

reasonable because they are lower than 

the fees charged by at least one other 

exchange of comparable size for 

comparable data products,69 and 

significantly less than the amounts 

charged by several other exchanges for 

comparable data products.70 The 

Exchange also believes it is reasonable 

to charge the same low per User fee of 

$0.01 for both Professional Users and 

Non-Professional Users receiving the 

MEMOIR Top and MEMOIR Last Sale 

feeds, as this is not only pricing such 

data at a much lower cost than other 

exchanges charge for comparable data 

feeds 71 but doing so will also simplify 

reporting for subscribers who externally 

distribute these data feeds to Users, as 

the Exchange believes that 

categorization of Users as Professional 

and Non-Professional is not meaningful 

for these products and that requiring 

such categorization would expose Firms 

to unnecessary audit risk of paying more 

for mis-categorization. The Exchange 

also believes that the proposal to require 

reporting of individual Users, but not 

devices, is reasonable as this too will 

eliminate unnecessary audit risk that 

can arise when recipients are required 

to apply complex counting rules such as 

whether or not to count devices or 

whether an individual accessing the 

same data through multiple devices 

should be counted once or multiple 

times. 

Non-Display Use Fees. The Exchange 

believes the proposed Non-Display 

Usage fees for the MEMOIR Depth feed 

are reasonable, because they reflect the 

value of the data to the data recipients 

in their profit-generating activities and 

do not impose the burden of counting 

non-display devices. 

The Exchange believes that the 

proposed Non-Display Usage fees reflect 

the significant value of the non-display 

data use to data recipients, which 

purchase such data on an entirely 

voluntary basis. Non-display data can be 

used by data recipients for a wide 

variety of profit-generating purposes, 

including proprietary and agency 

trading and smart order routing, as well 

as by data recipients that operate 

Trading Platforms that compete directly 

with the Exchange for order flow. The 

data also can be used for a variety of 

non-trading purposes that indirectly 

support trading, such as risk 

management and compliance. Although 

some of these non-trading uses do not 

directly generate revenues, they can 

nonetheless substantially reduce a 

recipient’s costs by automating such 

functions so that they can be carried out 

in a more efficient and accurate manner 

and reduce errors and labor costs, 

thereby benefiting recipients. The 

Exchange believes that charging for nontrading uses is reasonable because data 

recipients can derive substantial value 

from such uses, for example, by 

automating tasks so that can be 

performed more quickly and accurately 

and less expensively than if they were 

performed manually. 

Previously, the non-display use data 

pricing policies of many exchanges 

required customers to count, and the 

exchanges to audit the count of, the 

number of non-display devices used by 

a customer. As non-display use grew 

more prevalent and varied, however, 

exchanges received an increasing 

number of complaints about the 

impracticality and administrative 

burden associated with that approach. 

In response, several exchanges 

developed a non-display use pricing 

structure that does not require nondisplay devices to be counted or those 

counts to be audited, and instead 

categorizes different types of use. The 

Exchange proposes to distinguish 

between non-display use for the 

operation of a Trading Platform and 

other non-display use, which is similar 

to exchanges such as BZX and EDGX,72

while other exchanges maintain 

additional categories and in many cases 

charge multiple times for different types 

of non-display use or the operation of 

multiple Trading Platforms.73

The Exchange believes that it is 

reasonable to segment the fee for nondisplay use into these two categories. As 

noted above, the uses to which 

customers can put the MEMOIR Depth 

feed are numerous and varied, and the 

Exchange believes that charging 

separate fees for these separate 

categories of use is reasonable because 


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74See BZX Fee Schedule, available at: https://

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

schedule/bzx/. 

75See NYSE Proprietary Market Data Pricing list, 

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

nyse/data/NYSE_Market_Data_Pricing.pdf; Nasdaq 

Global Data Products pricing list, available at: 

http://www.nasdaqtrader.com/TraderB.aspx?id=

MDDPricingALLN. 

76See BZX Fee Schedule, available at: https://

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

schedule/bzx/. 

77See supra notes 26–27. 

78See also Exchange Act Release No. 69157, 

March 18, 2013, 78 FR 17946, 17949 (March 25, 

2013) (SR–CTA/CQ–2013–01) (‘‘[D]ata feeds have 

become more valuable, as recipients now use them 

to perform a far larger array of non-display 

functions. Some firms even base their business 

models on the incorporation of data feeds into black 

boxes and application programming interfaces that 

apply trading algorithms to the data, but that do not 

require widespread data access by the firm’s 

employees. As a result, these firms pay little for 

data usage beyond access fees, yet their data access 

and usage is critical to their businesses.’’ 

79See, e.g., Securities Exchange Act Release No. 

59544 (March 9, 2009), 74 FR 11162 (March 16, 

2009) (SR–NYSE–2008–131) (establishing the $15 

Non-Professional User Fee (Per User) for NYSE 

OpenBook); Securities Exchange Act Release No. 

20002, File No. S7–433 (July 22, 1983), 48 FR 34552 

(July 29, 1983) (establishing Non-Professional fees 

for CTA data); NASDAQ BX Equity 7 Pricing 

Schedule, Section 123. 

it reflects the actual value the customer 

derives from the data, based upon how 

the customer makes use of the data. 

The Exchange believes that the 

proposed fees for non-display use other 

than operation of a Trading Platform is 

reasonable. These fees are comparable 

to, and lower than, the fees charged by 

at least one other exchange of 

comparable size for a comparable data 

product,74 and significantly less than 

the amounts charged by several other 

exchanges for comparable data 

products.75 The Exchange believes that 

the proposed fees directly and 

appropriately reflect the significant 

value of using data on a non-display 

basis in a wide range of computerautomated functions relating to both 

trading and non-trading activities and 

that the number and range of these 

functions continue to grow through 

innovation and technology 

developments. Further, in contrast to 

non-display use for operation of a 

Trading Platform, discussed below, the 

Exchange benefits from and wants to 

encourage other non-display use by 

market participants (including the fact 

that the Exchange receives orders 

resulting from algorithms and routers as 

well as more broadly beneficial uses 

such as risk management and 

compliance). 

The Exchange also believes, regarding 

non-display use for operation of a 

Trading Platform, it is reasonable to 

charge a higher monthly fee than for 

other non-display use because such use 

of the Exchange’s data is directly in 

competition with the Exchange and the 

Exchange should be permitted to recoup 

some of its lost trading revenue by 

charging for the data that makes such 

competition possible. The Exchange 

also believes that it is reasonable to 

charge the proposed fees for non-display 

use for operation of a Trading Platform 

because the proposed fees are 

comparable to, and lower than, the fees 

charged at least one other exchange of 

comparable size for a comparable data 

product,76 and significantly less than 

the amounts charged by several other 

exchanges for comparable data 

products, which also charge per Trading 

Platform operated by a data subscriber 

subject to a cap in most cases, rather 

than charging per Firm, as proposed by 

the Exchange.77

The proposed Non-Display Usage fees 

for the Exchange Data Feeds are also 

reasonable because they take into 

account the extra value of receiving the 

data for Non-Display Usage that 

includes a rich set of information 

including top of book quotations, depthof-book quotations, executions and 

other information. The Exchange 

believes that the proposed fees directly 

and appropriately reflect the significant 

value of using the MEMOIR Depth feed 

on a non-display basis in a wide range 

of computer-automated functions 

relating to both trading and non-trading 

activities and that the number and range 

of these functions continue to grow 

through innovation and technology 

developments.78

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees for the Exchange Data Feeds are 

reasonable. 

The Proposed Fees Are Equitably 

Allocated 

The Exchange believes the proposed 

fees for the Exchange Data Feeds are 

allocated fairly and equitably among the 

various categories of users of the feeds, 

and any differences among categories of 

users are justified and appropriate. 

Overall. The Exchange believes that 

the proposed fees are equitably 

allocated because they will apply 

uniformly to all data recipients that 

choose to subscribe to the Exchange 

Data Feeds. Any subscriber or vendor 

that chooses to subscribe to one or more 

Exchange Data Feeds is subject to the 

same Fee Schedule, regardless of what 

type of business they operate, and the 

decision to subscribe to one or more 

Exchange Data Feeds is based on 

objective differences in usage of 

Exchange Data Feeds among different 

Firms, which are still ultimately in the 

control of any particular Firm. The 

Exchange believes the proposed pricing 

between Exchange Data Feeds is 

equitably allocated because it is based, 

in part, upon the amount of information 

contained in each data feed and the 

value of that information to market 

participants. The MEMOIR Top and Last 

Sale data feeds, as described above, can 

be utilized to trade on the Exchange but 

contain less information than that is 

available on the MEMOIR Depth feed 

(i.e., even for a subscriber who takes 

both feeds, such feeds do not contain 

depth-of-book information). Thus, the 

Exchange believes it is an equitable 

allocation of fees for the products to be 

priced as proposed, with MEMOIR Last 

Sale having the lowest price, MEMOIR 

Top the next lowest price, and MEMOIR 

Depth the highest price (and more than 

MEMOIR Last Sale and MEMOIR Top 

combined). 

Internal Distribution Fee. The 

Exchange believes the proposed 

monthly fees for Internal Distribution of 

the Exchange Data Feeds are equitably 

allocated because they would be 

charged on an equal basis to all data 

recipients that receive the Exchange 

Data Feeds for internal distribution, 

regardless of what type of business they 

operate. 

External Distribution Fees. The 

Exchange believes the proposed 

monthly fees for External Distribution of 

the Exchange Data Feeds are equitably 

allocated because they would be 

charged on an equal basis to all data 

recipients that receive the Exchange 

Data Feeds that choose to redistribute 

the feeds externally. The Exchange also 

believes that the proposed monthly fees 

for External Distribution are equitably 

allocated when compared to lower 

proposed fees for Internal Distribution 

because data recipients that are 

externally distributing Exchange Data 

Feeds are able to monetize such 

distribution and spread such costs 

amongst multiple third party data 

recipients, whereas the Internal 

Distribution fee is applicable to use by 

a single data recipient (and its affiliates). 

User Fees. The Exchange believes that 

the fee structure differentiating 

Professional User fees from NonProfessional User fees for display use of 

the MEMOIR Depth feed is equitable. 

This structure has long been used by 

other exchanges and the SIPs to reduce 

the price of data to Non-Professional 

Users and make it more broadly 

available.79 Offering the MEMOIR Depth 

feed to Non-Professional Users at a 

lower cost than Professional Users 

results in greater equity among data 


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80See supra, notes 26–27. 81See supra note 79. 

recipients, as Professional Users are 

categorized as such based on their 

employment and participation in 

financial markets, and thus, are 

compensated to participate in the 

markets. While Non-Professional Users 

too can receive significant financial 

benefits through their participation in 

the markets, the Exchange believes it is 

reasonable to charge more to those Users 

who are more directly engaged in the 

markets. The Exchange also believes it 

may be unreasonable to charge a NonProfessional User the same fee that it 

has proposed for Professional Users, as 

this fee would be higher than any other 

U.S. equities exchange charges to NonProfessional Users for receipt of a 

comparable data product. These User 

fees would be charged uniformly to all 

individuals that have access to the 

MEMOIR Depth feed based on the 

category of User. The Exchange also 

believes the proposed User fees for 

MEMOIR Top and MEMOIR Last Sale 

are equitable because the Exchange has 

proposed to charge Professional Users 

and Non-Professional Users the same 

low rate of $0.01 per month. 

Non-Display Use Fees. The Exchange 

believes the proposed Non-Display 

Usage fees are equitably allocated 

because they would require subscribers 

to pay fees only for the uses they 

actually make of the data. As noted 

above, non-display data can be used by 

data recipients for a wide variety of 

profit-generating purposes (including 

trading and order routing) as well as 

purposes that do not directly generate 

revenues (such as risk management and 

compliance) but nonetheless 

substantially reduce the recipient’s costs 

by automating certain functions. The 

Exchange believes that it is equitable to 

charge non-display data subscribers that 

use data for purposes other than 

operation of a Trading Platform as 

proposed because all such subscribers 

would have the ability to use such data 

for as many non-display uses as they 

wish for one low fee. As noted above, 

this structure is comparable to that in 

place for the BZX Depth feed but several 

other exchanges charge multiple nondisplay fees to the same client to the 

extent they use a data feed in several 

different trading platforms or for several 

types of non-display use.80

The Exchange also believes, regarding 

non-display use for operation of a 

Trading Platform, it is equitable to 

charge a higher rate for each Firm 

operating a Trading Platform (as 

compared to other Non-Display Usage 

not by Trading Platforms) because such 

use of the data is directly in competition 

with the Exchange and the Exchange 

should be permitted to recoup some of 

its lost trading revenue by charging for 

the data that makes such competition 

possible. Further, in contrast to nondisplay use for operation of a Trading 

Platform, the Exchange benefits from 

and wants to encourage other nondisplay use by market participants 

(including the fact that the Exchange 

receives orders resulting from 

algorithms and routers as well as more 

broadly beneficial uses such as risk 

management and compliance). The 

Exchange believes that it is equitable to 

charge a single fee per Firm rather than 

multiple fees for a Firm that operates 

more than one Trading Platform because 

operators of Trading Platforms are many 

times viewed as a single competing 

venue or group, even if there a multiple 

liquidity pools operated by the same 

competitor. 

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees for the Exchange Data Feeds are 

equitably allocated. 

The Proposed Fees Are Not Unfairly 

Discriminatory 

The Exchange believes the proposed 

fees for the Exchange Data Feeds are not 

unfairly discriminatory because any 

differences in the application of the fees 

are based on meaningful distinctions 

between customers, and those 

meaningful distinctions are not unfairly 

discriminatory between customers. 

Overall. The Exchange believes that 

the proposed fees are not unfairly 

discriminatory because they would 

apply to all data recipients that choose 

to subscribe to the same Exchange Data 

Feed(s). Any vendor or subscriber that 

chooses to subscribe to the Exchange 

Data Feeds is subject to the same Fee 

Schedule, regardless of what type of 

business they operate. Because the 

proposed fees for MEMOIR Depth are 

higher, vendors and subscribers seeking 

lower cost options may instead choose 

to receive data from the SIPs or through 

the MEMOIR Top and/or MEMOIR Last 

Sale feed for a lower cost. Alternatively, 

vendors and subscribers can choose to 

pay for the MEMOIR Depth feed in 

order to receive data in a single feed 

with depth-of-book information if such 

information is valuable to such vendors 

or subscribers. The Exchange notes that 

vendors or subscribers can also choose 

to subscribe to a combination of data 

feeds for redundancy purposes or to use 

different feeds for different purposes. In 

sum, each vendor or subscriber has the 

ability to choose the best business 

solution for itself. The Exchange does 

not believe it is unfairly discriminatory 

to base pricing upon the amount of 

information contained in each data feed 

and the value of that information to 

market participants. As described above, 

the MEMOIR Top and Last Sale data 

feeds, can be utilized to trade on the 

Exchange but contain less information 

than that is available on the MEMOIR 

Depth feed (i.e., even for a subscriber 

who takes both feeds, such feeds do not 

contain depth-of-book information). 

Thus, the Exchange believes it is not 

unfairly discriminatory for the products 

to be priced as proposed, with MEMOIR 

Last Sale having the lowest price, 

MEMOIR Top the next lowest price, and 

MEMOIR Depth the highest price (and 

more than MEMOIR Last Sale and 

MEMOIR Top combined). 

Internal Distribution Fees. The 

Exchange believes the proposed 

monthly fees for Internal Distribution of 

the Exchange Data Feeds are not 

unfairly discriminatory because they 

would be charged on an equal basis to 

all data recipients that receive the same 

Exchange Data Feed(s) for internal 

distribution, regardless of what type of 

business they operate. 

External Distribution Fees. The 

Exchange believes the proposed 

monthly fees for redistributing the 

Exchange Data Feeds are not unfairly 

discriminatory because they would be 

charged on an equal basis to all data 

recipients that receive the same 

Exchange Data Feed(s) that choose to 

redistribute the feed(s) externally. The 

Exchange also believes that having 

higher monthly fees for External 

Distribution than Internal Distribution is 

not unfairly discriminatory because data 

recipients that are externally 

distributing Exchange Data Feeds are 

able to monetize such distribution and 

spread such costs amongst multiple 

third party data recipients, whereas the 

Internal Distribution fee is applicable to 

use by a single data recipient (and its 

affiliates). 

User Fees. The Exchange believes that 

the fee structure differentiating 

Professional User fees from NonProfessional User fees for display use of 

the MEMOIR Depth feed is not unfairly 

discriminatory. This structure has long 

been used by other exchanges and the 

SIPs to reduce the price of data to NonProfessional Users and make it more 

broadly available.81 Offering the 

Exchange Data Feeds to NonProfessional Users with the same data as 

is available to Professional Users results 

in greater equity among data recipients. 

These User fees would be charged 

uniformly to all individuals that have 

access to the Exchange Data Feeds based 

on the category of User. The Exchange 


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82See supra notes 26–27. 83 15 U.S.C. 78f(b)(8). 

also believes the proposed User fees for 

MEMOIR Top and MEMOIR Last Sale 

are not unfairly discriminatory because 

the Exchange has proposed to charge 

Professional Users and Non-Professional 

Users the same low rate of $0.01 per 

month. 

Non-Display Use Fees. The Exchange 

believes the proposed Non-Display 

Usage fees for the MEMOIR Depth feed 

are not unfairly discriminatory because 

they would require subscribers for nondisplay use to pay fees depending on 

their use of the data, either for operation 

of a Trading Platform or not, but would 

not impose multiple fees to the extent 

a Firm operates multiple Trading 

Platforms or has multiple different types 

of non-display use. As noted above, 

non-display data can be used by data 

recipients for a wide variety of profitgenerating purposes as well as purposes 

that do not directly generate revenues 

but nonetheless substantially reduce the 

recipient’s costs by automating certain 

functions. This segmented fee structure 

is not unfairly discriminatory because 

no subscriber of non-display data would 

be charged a fee for a category of use in 

which it did not actually engage. 

The Exchange also believes that, 

regarding non-display use for operation 

of a Trading Platform, it is not 

unreasonably discriminatory to charge a 

higher fee for each Firm operating a 

Trading Platform (as compared to other 

Non-Display Usage not by Trading 

Platforms) because such use of the data 

is directly in competition with the 

Exchange and the Exchange should be 

permitted to recoup some of its lost 

trading revenue by charging for the data 

that makes such competition possible. 

The Exchange believes that it is not 

unreasonably discriminatory to charge a 

single fee for an operator of Trading 

Platforms that operates more than one 

Trading Platform because operators of 

Trading Platforms are many times 

viewed as a single competing venue or 

group, even if there a multiple liquidity 

pools operated by the same competitor. 

The Exchange again notes that certain 

competitors to the Exchange charge for 

non-display usage per Trading 

Platform,82 in contrast to the Exchange’s 

proposal. In turn, to the extent they 

subscribe to Exchange Data Feeds, these 

same competitors will benefit from the 

Exchange’s pricing model to the extent 

they operate multiple Trading Platforms 

(as most do) by paying a single fee 

rather than paying for each Trading 

Platform that they operate that 

consumes Exchange Data Feeds. 

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees for the Exchange Data Feeds are not 

unfairly discriminatory. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,83 the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Intra-Market Competition 

The Exchange does not believe that 

the proposed rule change would place 

certain market participants at the 

Exchange at a relative disadvantage 

compared to other market participants 

or affect the ability of such market 

participants to compete. Since the 

pricing for the Exchange Data Feeds was 

announced by the Exchange, the 

Exchange has received no official 

complaints from Members, nonMembers, or third-parties that 

redistribute the Exchange Data Feeds, 

that the Exchange’s fees or the proposed 

fees for Exchange Data Feeds would 

negatively impact their abilities to 

compete with other market participants 

or that they are placed at a disadvantage 

relative to others. The Exchange does 

not believe that the proposed fees for 

Exchange Data Feeds place certain 

market participants at a relative 

disadvantage to other market 

participants because, as noted above, 

the proposed fees are associated with 

usage of Exchange Data Feeds by each 

market participant based on the type of 

business they operate, and the decision 

to subscribe to one or more Exchange 

Data Feeds is based on objective 

differences in usage of Exchange Data 

Feeds among different Firms, which are 

still ultimately in the control of any 

particular Firm, and such fees do not 

impose a barrier to entry to smaller 

participants. Accordingly, the proposed 

fees for Exchange Data Feeds do not 

favor certain categories of market 

participants in a manner that would 

impose a burden on competition; rather, 

the allocation of the proposed fees 

reflects the types of Exchange Data 

Feeds consumed by various market 

participants and their usage thereof. 

As noted above, the current 

subscribers to the Exchange Data Feeds 

began changing their behavior in 

response to the imposition of fees as 

predicted in the Initial Proposal and as 

described herein. Following the date 

that fees for the Exchange Data Feeds 

were officially announced, fifteen (15) 

out of seventy-nine (79) subscribers, 

representing 19% of the subscribers to 

such data feeds, modified or canceled 

their subscriptions before the fees went 

into effect. In each instance, the 

subscriber told the Exchange that the 

reason for modifying or cancelling its 

subscription was the imminent 

imposition of fees. These modifications 

and cancellations are evidence that 

subscribing to the Exchange Data Feeds 

is discretionary, that each customer 

makes the decision whether to subscribe 

based on its own analysis of the benefits 

and costs to itself, and that customers 

can and do make those decisions 

quickly based on reactions to fee 

changes. Prior to the imposition of fees, 

four (4) customers (or 5% of market data 

subscribers) informed the Exchange that 

if the Exchange imposes the fees as 

proposed, such customers will limit 

their subscription the MEMOIR Top 

feed and/or the MEMOIR Last Sale feed, 

rather than the MEMOIR Depth feed, 

which is more expensive under the 

proposed fees. Notably, three (3) of 

these customers are active trading 

participants on the Exchange and have 

continued to participate on the 

Exchange without use of the Exchange’s 

MEMOIR Depth feed. In addition, 

eleven (11) customers of the Exchange 

that were subscribed to receive 

Exchange Data Feeds have cancelled 

their subscriptions to such data feeds 

entirely (representing approximately 

14% of market data subscribers). Five 

(5) of the eleven (11) customers that 

have cancelled all subscriptions to 

Exchange Data Feeds actively trade on 

the Exchange and have informed the 

Exchange that they will rely instead on 

SIP data to participate on the Exchange. 

This is clear evidence that the 

availability of these substitute products 

constrains the Exchange’s ability to 

charge supra-competitive prices for the 

Exchange Data Feeds. The Exchange 

notes that the remaining customers that 

modified or cancelled their 

subscriptions to the Exchange Data 

Feeds (seven customers total) are not 

trading participants on the Exchange 

and likely subscribed to the Exchange 

Data Feeds initially because they were 

free but determined to cancel such 

subscriptions now that the Exchange is 

charging market data fees. 

Inter-Market Competition 

The Exchange does not believe the 

proposed fees place an undue burden on 

competition on other SROs that is not 

necessary or appropriate. In particular, 

market participants are not forced to 

subscribe to any of the Exchange Data 

Feeds, as described above. Additionally, 

other exchanges have similar market 

data fees in place for their participants, 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 87, No. 111 / Thursday, June 9, 2022 / Notices 35269 

84See supra notes 26–27; see supra note 29 and 

accompanying text. 

85 15 U.S.C. 78s(b)(3)(A)(ii). 

86 17 CFR 240.19b–4(f)(2). 87 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93689 

(December 1, 2021), 86 FR 69335 (‘‘Notice’’). The 

comment letters received on the proposed rule 

change are available on the Commission’s website 

at: https://www.sec.gov/comments/sr-cboebyx-2021- 

028/srcboebyx2021028.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 94009, 

87 FR 4098 (January 26, 2022). The Commission 

designated March 7, 2022, as the date by which it 

should approve, disapprove, or institute 

proceedings to determine whether to disapprove the 

proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 94373, 

87 FR 14060 (March 11, 2022). 

8See Securities Exchange Act Release No. 94787 

(April 22, 2022), 87 FR 25309. 

9 15 U.S.C. 78s(b)(2). 

10See Notice, supra note 3. 

but with higher rates to connect.84 The 

Exchange is also unaware of any 

assertion that the proposed fees for 

Exchange Data Feeds would somehow 

unduly impair its competition with 

other exchanges. 

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 85 and Rule 

19b–4(f)(2) 86 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–2022–14 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–2022–14. 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–2022–14 and 

should be submitted on or before June 

30, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.87

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12401 Filed 6–8–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95035; File No. SR– 

CboeBYX–2021–028] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of 

Designation of a Longer Period for 

Commission Action on Proceedings To 

Determine Whether To Approve or 

Disapprove a Proposed Rule Change, 

as Modified by Amendment No. 1, To 

Introduce a New Data Product To Be 

Known as the Short Volume Report 

June 3, 2022. 

On November 22, 2021, Cboe BYX 

Exchange, Inc. (‘‘BYX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend Exchange Rule 11.22(f) 

to introduce a new data product to be 

known as the Short Volume Report. The 

proposed rule change was published for 

comment in the Federal Register on 

December 7, 2021.3 On January 20, 

2022, pursuant to Section 19(b)(2) of the 

Act,4 the Commission designated a 

longer period within which to approve 

the proposed rule change, disapprove 

the proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.5

On March 7, 2022, the Commission 

instituted proceedings under Section 

19(b)(2)(B) of the Act 6 to determine 

whether to approve or disapprove the 

proposed rule change.7 On March 30, 

2022, the Exchange filed Amendment 

No. 1 to the proposed rule change, 

which superseded the proposed rule 

change as originally filed. The proposed 

rule change, as modified by Amendment 

No. 1, was published for comment in 

the Federal Register on April 28, 2022.8

Section 19(b)(2) of the Act 9 provides 

that, after initiating proceedings, the 

Commission shall issue an order 

approving or disapproving the proposed 

rule change not later than 180 days after 

the date of publication of notice of the 

filing of the proposed rule change. The 

Commission may extend the period for 

issuing an order approving or 

disapproving the proposed rule change, 

however, by not more than 60 days if 

the Commission determines that a 

longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for comment in 

the Federal Register on December 7, 

2021.10 The 180th day after publication 

of the proposed rule change is June 5, 

2022. The Commission is extending the 

time period for approving or 


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