Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 42775 

74 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed 

pricing changes on May 2, 2022 (SR–MRX–2022– 

04) instituting fees for membership, ports and 

market data. See Securities Exchange Act Release 

No. 94901 (May 12, 2022), 87 FR 30305 (May 18, 

2022) (SR–MRX–2022–04). On June 29, 2022, the 

Exchange withdrew that filing, and submitted 

separate filings for membership, ports and market 

data. The instant filing replaces the market data fees 

set forth in SR–MRX–2022–04. 

4See, e.g., Securities Exchange Act Release No. 

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

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

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

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

for the NYSE National exchange after initially 

setting such fees at zero). 

5Nasdaq recently announced that, beginning in 

2022, Nasdaq plans to migrate its North American 

markets to Amazon Web Services in a phased 

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

market. The proposed fee changes are entirely 

unrelated to this effort. 

6Nasdaq MRX Depth of Market Data Feed 

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

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

provides subscribers with a consolidated view of 

tradable prices beyond the BBO, showing additional 

liquidity and enhancing transparency for MRX 

traded options. The data provided for each option 

series includes the symbols (series and underlying 

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

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. In addition, subscribers are provided with 

total aggregate quantity, Public Customer aggregate 

quantity, Priority Customer aggregate quantity, 

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

provided for each of the top five price levels on the 

Depth Feed. The feed also provides order 

imbalances on opening/reopening. See Options 3, 

Section 23(a)(1). 

7Nasdaq MRX Order Feed (‘‘Order Feed’’) 

provides information on new orders resting on the 

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

capacity). In addition, the feed also announces all 

auctions. The data provided for each option series 

includes the symbols (series and underlying 

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

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. The feed also provides order imbalances on 

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

8Nasdaq MRX Top Quote Feed (‘‘Top Quote 

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

and offer position, with aggregated size (including 

total size in aggregate, for Professional Order size 

in the aggregate and Priority Customer Order size 

in the aggregate), based on displayable order and 

Continued 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MRX–2022–07 and should 

be submitted on or before August 8, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.74

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15222 Filed 7–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95265; File No. SR–MRX– 

2022–08] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend MRX Options 

7, Section 7 To Add Fees for Market 

Data 

July 12, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on June 29, 

2022, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes amend MRX’s 

Pricing Schedule at Options 7, Section 

7. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

MRX proposes to amend its Pricing 

Schedule at Options 7, Section 7, to 

assess market data fees, which are not 

assessed today, and which have not 

been assessed since MRX’s inception in 

2016.3 The proposed changes are 

designed to update data fees to reflect 

their current value—rather than their 

value when it was a new exchange six 

years ago—based on increased market 

share. Newly-opened exchanges often 

charge no fees for market data to attract 

order flow to an exchange, and later 

amend their fees to reflect the true value 

of those services.4 Allowing newlyopened exchanges time to build and 

sustain market share before charging for 

their market data encourages market 

entry and promotes competition. 

This Proposal reflects MRX’s 

assessment that it has gained sufficient 

market share to compete effectively 

against other 15 options exchanges 

without waiving market data fees. Such 

fees are assessed by options exchanges 

that compete with MRX—indeed, MRX 

is the only options exchange (out of the 

16 current options exchanges) not to 

assess them today. New exchanges 

commonly waive data fees to attract 

market participants, facilitating their 

entry into the market and, once there is 

sufficient depth and breadth of 

liquidity, ‘‘graduate’’ to compete against 

established exchanges and charge fees 

that reflect the value of their services. If 

MRX is incorrect in its assessment, that 

error will be reflected in MRX’s ability 

to compete with other options 

exchanges.5

The Exchange proposes to amend fees 

for the following market data feeds 

within Options 7, Section 7: (1) Nasdaq 

MRX Depth of Market Data; 6 (2) Nasdaq 

MRX Order Feed; 7 (3) Nasdaq MRX Top 

Quote Feed; 8 (4) Nasdaq MRX Trades 


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42776 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 

quote interest in the System. The feed also provides 

last trade information along with opening price, 

daily trading volume, high and low prices for the 

day. The data provided for each option series 

includes the symbols (series and underlying 

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

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

only. The feed also provides order imbalances on 

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

9Nasdaq MRX Trades Feed (‘‘Trades Feed’’) 

displays last trade information along with opening 

price, daily trading volume, high and low prices for 

the day. The data provided for each option series 

includes the symbols (series and underlying 

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

strike price of the series, and whether the option 

series is available for trading on MRX and identifies 

if the series is available for closing transactions 

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

10Nasdaq MRX Spread Feed (‘‘Spread Feed’’) is 

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

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

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

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

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

Spread Feed provides updates, including prices, 

side, size and capacity, for every Complex Order 

placed on the MRX Complex Order Book. The 

Spread Feed shows: (1) aggregate bid/ask quote size; 

(2) aggregate bid/ask quote size for Professional 

Customer Orders; and (3) aggregate bid/ask quote 

size for Priority Customer Orders for MRX traded 

options. The feed also provides Complex Order 

auction notifications. See Options 3, Section 

23(a)(5). 

11A ‘‘distributor’’ of Nasdaq MRX data is any 

entity that receives a feed or data file of data 

directly from Nasdaq MRX or indirectly through 

another entity and then distributes it either 

internally (within that entity) or externally (outside 

that entity). All distributors shall execute a Nasdaq 

Global Data Agreement. 

12A Professional Subscriber is any Subscriber 

that is not a Non-Professional Subscriber. 

13A Non-Professional Subscriber is a natural 

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

any capacity with the Commission, the 

Commodities Futures Trading Commission, any 

state securities agency, any securities exchange or 

association, or any commodities or futures contract 

market or association; (ii) engaged as an 

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

Section 201(11) of the Investment Advisors Act of 

1940 (whether or not registered or qualified under 

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

organization exempt from registration under federal 

or state securities laws to perform functions that 

would require registration or qualification if such 

functions were performed for an organization not so 

exempt. 

14For example, if a firm has one Professional 

(Non-Professional) Subscriber accessing Top of 

Market, Order, and Depth of Market Feed the firm 

would only report the Subscriber once and pay $25 

($1 for Non-Professional). 

15The Non-Display Enterprise License of $7,500 

per month is optional. A firm that does not have 

a sufficient number of subscribers to benefit from 

purchase of the license need not do so. 

16See 15 U.S.C. 78f(b). 

17See 15 U.S.C. 78f(b)(4) and (5). 

18See NetCoalition, 615 F.3d at 539 (D.C. Cir. 

2010) (quoting Securities Exchange Act Release No. 

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

(December 9, 2008) (SR–NYSEArca–2006–21)). 19See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 20See NetCoalition, 615 F.3d at 534–35; see also 

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

of the conferees that the national market system 

evolve through the interplay of competitive forces 

as unnecessary regulatory restrictions are 

removed.’’). 

21See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74,770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

22 Id. 

Feed; 9 and (5) Nasdaq MRX Spread 

Feed.10 Currently, no fees are being 

assessed for these feeds. 

In addition to the proposed fees for 

each data feed, the Exchange is 

introducing an Internal Distributor 

Fee 11 of $1,500 per month for the 

Nasdaq MRX Depth of Market Feed, 

Order Feed, and Top Quote Feed, an 

Internal Distributor Fee of $750 per 

month for the Trades Feed, and an 

Internal Distributor Fee of $1,000 per 

month for the Spread Feed. If a Member 

subscribes to both the Trades Feed and 

the Spread Feed, both Internal 

Distributor Fees would be assessed. 

The Exchange also proposes to assess 

an External Distributor Fee of $2,000 per 

month for the Nasdaq MRX Depth of 

Market Feed, Order Feed, and Top 

Quote Feed, an External Distributor Fee 

of $1,000 per month for the Trades 

Feed, and an External Distributor Fee of 

$1,500 per month for the Spread Feed. 

MRX will also assess Professional 12

and Non-Professional 13 subscriber fees. 

The Professional Subscriber will be $25 

per month, and the Non-Professional 

Subscriber will be $1 per month. These 

subscriber fees (both Professional and 

Non-Professional) cover the usage of all 

five MRX data products identified above 

and would not be assessed separately 

for each product.14

MRX also proposes a Non-Display 

Enterprise License for $7,500 per 

month. This license would lower costs 

for internal professional subscribers and 

lower administrative costs overall by 

permitting the distribution of all MRX 

proprietary direct data feed products to 

an unlimited number of internal nondisplay Subscribers without incurring 

additional fees for each internal 

Subscriber, or requiring the customer to 

count internal subscribers.15 The NonDisplay Enterprise License is in 

addition to any other associated 

distributor fees for MRX proprietary 

direct data feed products. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,16 in general, and furthers the 

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

of the Act,17 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The proposed changes to the pricing 

schedule are reasonable in several 

respects. As a threshold matter, the 

Exchange is subject to significant 

competitive forces in the market for 

order flow, which constrains its pricing 

determinations. The fact that the market 

for order flow is competitive has long 

been recognized by the courts. In 

NetCoalition v. Securities and Exchange 

Commission, the D.C. Circuit stated, 

‘‘[n]o one disputes that competition for 

order flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

. . . .’’ 18

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention to determine prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues, and also recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 19

Congress directed the Commission to 

‘‘rely on ‘competition, whenever 

possible, in meeting its regulatory 

responsibilities for overseeing the SROs 

and the national market system.’ ’’ 20 As 

a result, the Commission has 

historically relied on competitive forces 

to determine whether a fee proposal is 

equitable, fair, reasonable, and not 

unreasonably or unfairly discriminatory. 

‘‘If competitive forces are operative, the 

self-interest of the exchanges themselves 

will work powerfully to constrain 

unreasonable or unfair behavior.’’ 21

Accordingly, ‘‘the existence of 

significant competition provides a 

substantial basis for finding that the 

terms of an exchange’s fee proposal are 

equitable, fair, reasonable, and not 

unreasonably or unfairly 

discriminatory.’’ 22 In its 2019 guidance 

on fee proposals, Commission staff 

indicated that they would look at factors 

beyond the competitive environment, 

such as cost, only if a ‘‘proposal lacks 


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23See U.S. Securities and Exchange Commission, 

‘‘Staff Guidance on SRO Rule filings Relating to 

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

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

24See e.g., Securities Exchange Act Release Nos. 

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

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

and Immediate Effectiveness of Proposed Rule 

Change To Establish the Schedule of Fees); 77409 

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

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

Immediate Effectiveness of Proposed Rule Change 

To Amend the Schedule of Fees); 81 FR 16238 

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

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

Immediate Effectiveness of Proposed Rule Change 

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

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

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the Schedule of 

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

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

Filing and Immediate Effectiveness of Proposed 

Rule Change To Amend the Schedule of Fees To 

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

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

2018–10) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

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

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

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

Immediate Effectiveness of Proposed Rule Change 

To Increase Certain Route-Out Fees Set Forth in 

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

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

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

Immediate Effectiveness of Proposed Rule Change 

To Relocate the Exchange’s Schedule of Fees); 

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

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

Immediate Effectiveness of a Proposed Rule Change 

To Amend the Pricing Schedule at Options 7, 

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

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

Filing and Immediate Effectiveness of a Proposed 

Rule Change Relating to PIM Fees and Rebates); 

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

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

Immediate Effectiveness of a Proposed Rule Change 

To Adopt Complex Order Pricing); 88022 (January 

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

2020–02) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

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

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

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its Pricing 

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

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

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its Pricing 

Schedule at Options 7, Section 5, Other Options 

Fees and Rebates, in Connection With the Pricing 

for Orders Entered Into the Exchanges Price 

Improvement Mechanism); 90503 (November 24, 

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

2020–18) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Its Pricing Schedule at Options 7 for Orders Entered 

Into the Exchange’s Price Improvement 

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

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

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To the Exchange’s Pricing 

Schedule at Options 7 To Amend Taker Fees for 

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

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

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the Pricing 

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

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

and Immediate Effectiveness of Proposed Rule 

Change To Amend the Exchange’s Pricing Schedule 

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

name for MRX. 

25See Securities Exchange Act Release No. 86326 

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

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

Effectiveness of a Proposed Rule Change to Adopt 

Complex Order Pricing). 26One distinction is that ISE offered its Members 

access to Nasdaq Precise in 2019 and since that 

time. MRX has never offered Precise. ‘‘Nasdaq 

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

allows EAMs and their Sponsored Customers to 

send orders to the Exchange and perform other 

related functions. Features include the following: 

(1) order and execution management: enter, modify, 

and cancel orders on the Exchange, and manage 

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

orders, and post-trade allocations); (2) market data: 

access to real-time market data (e.g., NBBO and 

Exchange BBO); (3) risk management: set 

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

(4) book keeping and reporting: comprehensive 

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

and done away trade reports). See ISE 

Supplementary Material .03(d) of Options 3, 

Section 7. Precise is also available on GEMX. 

27NYSE National stated that the proposed 

integrated feed included depth-of-book order data, 

last sale data, security status updates, and stock 

summary messages. See Securities Exchange Act 

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

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

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

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

Proposal’’). 

28See id. 

29See NetCoalition v. SEC, 615 F.3d 525, 535 

(D.C. 2010) (‘‘NetCoalition I’’). 

30See NYSE National Approval Order (citing 

NetCoalition I). 

31See id. 

32See Securities Exchange Act Release No. 94901 

(May 12, 2022), 87 FR 30305 (May 18, 2022) (SR– 

MRX–2022–04). 

persuasive evidence that the proposed 

fee is constrained by significant 

competitive forces.’’ 23

History of MRX Operations 

Over the years, MRX has amended its 

transactional pricing to attract order 

flow to the Exchange.24 In June 2019, 

MRX commenced offering complex 

orders.25 With the addition of complex 

order functionality, MRX offered 

Members certain order types, an 

opening process, auction capabilities 

and other trading functionality that was 

nearly identical to functionality 

available on ISE.26 The added 

functionality attracted order flow, 

which has enhanced the value of its 

market data and is the basis for these 

proposed fee changes. 

Market Data Products are Subject to 

Significant Substitution-Based 

Competitive Forces 

An Exchange can show that a product 

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

introducing evidence that customers can 

substitute that product with products 

offered by other exchanges. 

NYSE National was able to prove 

exactly this when it sought approval for 

the ‘‘NYSE National Integrated Feed’’ 27

in 2020. NYSE National at the time of 

its filing was in a similar position to 

MRX today—the exchange had an 

approximately 1.9% market share of 

executed volume of equity trades.28 The 

Commission approved the proposal to 

establish fees for NYSE National based 

on a finding that the exchange ‘‘was 

subject to significant substitution-based 

competitive forces.’’ Citing NetCoalition 

I,29 the Commission stated that 

‘‘whether a market is competitive 

notwithstanding potential alternatives 

depends on factors such as the number 

of buyers who consider other products 

interchangeable and at what prices.’’ 30

Noting that ‘‘many market participants 

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

National Integrated Feed, even when the 

feed is offered without charge,’’ the 

Commission concluded that ‘‘NYSE 

National’s consistently low percentage 

of market share, the relatively small 

number of subscribers to the NYSE 

National Integrated Feed, and the 

sizeable portion of subscribers that 

terminated their subscriptions following 

the proposal of the fees,’’ demonstrated 

that the exchange ‘‘was subject to 

significant substitution-based 

competitive forces’’ in setting fees such 

that the proposed rule change was 

consistent with the Act.31

MRX today is in essentially the same 

position as NYSE National in 2020, and 

all three of the factors cited in the 

Commission’s approval order for NYSE 

National are present in MRX today. 

First, MRX has a consistently low 

percentage of market share, starting at 

approximately 0.2 percent when it 

opened as an Exchange and ending in 

approximately 1.8 percent today. 

Second, only a small number of firms 

purchase market data from MRX relative 

to its affiliated options exchanges. 

Third, a sizeable portion of 

subscribers—approximately 15 

percent—have terminated their 

subscriptions following the 

implementation of the proposed fees, 

demonstrating that customers can and 

do exercise choice in deciding whether 

to purchase the Exchange’s market data 

feeds. 

As of May 2, 2022, the date that MRX 

initially proposed these market data 

fees, MRX reported that two customers 

had terminated their market data 

subscriptions.32 As of June 29, 2022, 

approximately two months later, an 

additional three have done so, for a total 

of five cancellations, amounting to 

approximately 15 percent of the 34 

customers that had been taking MRX 

feeds in the first quarter of 2022. All five 

customers terminated all feeds available 


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33These terminations were limited to market 

data; none of these customers were members of 

MRX and therefore purchased neither memberships 

nor ports from the Exchange. 

to them. Some customers had taken all 

feeds, while others had taken only a 

subset. Although not all customers took 

all of the MRX feeds, each one of these 

feeds—Nasdaq MRX Depth of Market 

Data, Nasdaq MRX Order Feed, Nasdaq 

MRX Top Quote Feed, Nasdaq MRX 

Trades Feed, and Nasdaq MRX Spread 

Feed—was cancelled by at least one 

customer, demonstrating that customers 

can and do exercise choice with respect 

to each feed. Nasdaq does not have 

detailed information from each 

customer about how these feeds were 

used prior to cancellation or why they 

were cancelled, but each customer, after 

being specifically informed about the 

new MRX fees, terminated all access to 

MRX market data.33

Detailed information supporting the 

first step in this analysis—low market 

share—is set forth in Chart 1, which 

shows the January 2022 market share for 

multiply-listed options by exchange. Of 

the 16 operating options exchanges, 

none currently has more than a 13.1% 

market share, and MRX has the smallest 

market share at 1.8%. Customers widely 

distribute their transactions across 

exchanges according to their business 

needs and the ability of each exchange 

to meet those needs through technology, 

liquidity and functionality. Average 

market share for the 16 options 

exchanges is 6.26 percent, with the 

median at 5.8, and a range between 1.8 

and 13.1 percent. 

Market share is the percentage of 

volume on a particular exchange 

relative to the total volume across all 

exchanges, and indicates the amount of 

order flow directed to that exchange. 

High levels of market share enhance the 

value of market data. 

The second step in this analysis— 

demonstrating that only a small number 

of firms purchase market data relative to 

affiliated options exchanges—is shown 

in Chart 2, which compares the number 

of firms with access to market data from 

MRX to the number of firms purchasing 

market data from the four MRXaffiliated options exchanges, GEMX, 

ISE, The Nasdaq Stock Market LLC 

(‘‘NOM’’) and Nasdaq PHLX, LLC 

(‘‘Phlx’’). 


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Chart 1: Market Share by Exchange for January 2022 

ARCA 111111 1111 11111 

PHI.X ¢£ 11&1 

CBOE ) 1111 [ 

BATS .. , , I 11111 

NOM L AMEll 

ISE -

_Ill 

SOX 

MIAX 

a 

Market Share - Exchange 

I I llf 

11111 

11111 u n111111 nr 

II I I 1111 Ill Dlllllil 

a 

I It&& dlll-■ 

111111111 II I - 11111111 II 11 !1111 11 111111111 

:auu .11 • .a,., 

IIIUIR llliflllRI II 11110.1,i; 

Ill 11111 I na -.7% 

8.3% 

111 ia.1,-. 

EOGX - ]llllllllill!IIIIHU Option Exchanges • Parent Company 

Ml'RI. JI! 1111 Ill Ill I I 11111111111 Ill 4.4% !soXI 

l.~%J 

EMLD 1111111 II 

GEMX 111111 I 1111 I 1111 U% 

SXOP 2.2% 

MRX ~ .. • .• 8% 
Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 42779 

34See Cboe DataShop, available at https://

datashop.cboe.com/. 

35See MIAX Options Market Data & Offerings, 

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

36See NYSE Options Markets, available at https:// 

www.nyse.com/options. 

37Today, MRX is the only options exchange that 

does not assess market data fees. 

Chart 2 shows that 34 firms 

subscribed to at least one market data 

product from MRX in the first quarter of 

2022. This is the second lowest number 

of firms purchasing market data from 

the Nasdaq-affiliated options exchanges. 

The third step in this analysis— 

showing that a sizable number of 

customers terminated subscriptions 

following the proposal of the fees—is 

confirmed by the five customer 

cancellations. As explained above, all 

five customers terminated all feeds 

available to them. Although not all 

customers took all of the MRX feeds, 

each one of these feeds was cancelled by 

at least one customer, demonstrating 

that customers can and do exercise 

choice with respect to each feed. These 

cancellations reduced the number of 

firms with access to at least one MRX 

market data feed from 34 to 29, an 

approximately 15 percent reduction in 

usage, demonstrating that firms can and 

do exercise choice in determining 

whether to purchase market data from 

the Exchange. 

MRX lists no proprietary options 

products that are entirely unique to 

MRX. Firms can substitute MRX market 

data with feeds from exchanges that 

provide a high degree of functionality, 

including complex orders. Full market 

data options are available, for example, 

from Cboe,34 MIAX,35 and NYSE Arca 

Options.36 Because MRX does not list 

options on products that are exclusively 

available on MRX, consumers can 

substitute MRX data with data from any 

exchange that lists such multiply-listed 

options, or through OPRA. Moreover, all 

broker-dealers involved in order routing 

must take consolidated data from OPRA, 

and proprietary data feeds cannot be 

used to meet that particular 

requirement. As such, all proprietary 

data feeds are optional. 

This analysis must be viewed in the 

context of a field with relatively low 

barriers to entry. MRX, like many new 

entrants to the field, offered market data 

for free to establish itself and gain 

market share. As new entrants enter the 

field, MRX can also expect competition 

from these new entrants. Those new 

entrants, like MRX, are likely to set 

market data fees to zero, increasing 

marketplace competition. 

The Proposal is not unfairly 

discriminatory. The five market data 

feeds at issue here—the Depth of Market 

Feed, Order Feed, Top Quote Feed, 

Trades Feed, and Spreads Feed—are 

used by a variety of market participants 

for a variety of purposes. Users include 

regulators, market makers, competing 

exchanges, media, retail, academics, 

portfolio managers. Market data feeds 

will be available to members of all of 

these groups on a non-discriminatory 

basis. 

With respect to the proposed NonDisplay Enterprise License, enterprise 

licenses in general have been widely 

recognized as an effective and not 

unfairly discriminatory method of 

distributing market data. Enterprise 

licenses are widely employed by 

options exchanges, and the proposal 

here is typical of such licenses. 

After 6 years, MRX proposes to 

commence assessing market data fees, 

just as all other options exchanges do 

now.37 The introduction of these fees 

will not impede access to MRX, but 

rather will allow MRX to continue to 

compete and grow its marketplace so 

that it may continue to offer a robust 

trading architecture, a quality opening 

process, an array of simple and complex 

order types and auctions, and 

competitive transaction pricing. If MRX 

is incorrect in its assessment of the 

value of its services, that assessment 

will be reflected in MRX’s ability to 

compete with other options exchanges. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. For all of the 

reasons set forth above, the Exchange is 

subject to ‘‘significant substitutionbased competitive forces’’: (i) it has a 

consistently low percentage of market 

share, starting at approximately 0.2 

percent when it opened as an Exchange 

and ending in approximately 1.8 

percent today; (ii) only a small number 

of firms purchase market data from 


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80 

Chart 2: Number of Firms with Access to Market Data and Purchasing Trading 

Services from Options Venues (March 2022) 

Nasdaq Option Venues - March 2022 

Data Trading 

MRX 

BXOP 

~GEMX 

ISE 

NOM 

PHU 
42780 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 

38The Exchange notified market participants of 

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

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

www.nasdaqtrader.com/ 

TraderNews.aspx?id=dn2021-11. As such, market 

participants have had ample notice of the proposed 

fee changes and will be able to adjust their 

purchases of exchange services accordingly. 39 15 U.S.C. 78s(b)(3)(A)(ii). 

40 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

MRX relative to its affiliated options 

exchanges; and (iii) a sizeable portion of 

subscribers—approximately 15 

percent—have terminated their 

subscriptions following the 

implementation of the proposed fees, 

demonstrating that customers can and 

do exercise choice in deciding whether 

to purchase market data. 

Nothing in the Proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

Proposal does not impose any burden 

on the ability of other options exchanges 

to compete. Each of the remaining 15 

options exchanges currently sells its 

market data, and is capable of modifying 

its fees in response to the proposed 

changes by MRX. Moreover, allowing 

MRX, or any new market entrant, to 

waive fees for a period of time to allow 

it to become established encourages 

market entry and thereby ultimately 

promotes competition. 

Nothing in the Proposal burdens 

intra-market competition (the 

competition among consumers of 

exchange data) because each customer 

will be able to decide whether or not to 

purchase the Exchange’s market data, as 

demonstrated by the fact that a 

significant number of the Exchange’s 

customers have already elected to 

terminate their access to such feeds. 

The Exchange operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues if they deem fee levels at a 

particular venue to be excessive. 

Because competitors are free to modify 

their own fees in response, and because 

market participants may readily adjust 

their order routing practices, the 

Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

extremely limited. If the changes 

proposed herein are unattractive to 

market participants, it is likely that the 

Exchange will lose market share.38

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.39 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is: (i) 

necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MRX–2022–08 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MRX–2022–08. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MRX–2022–08 and should 

be submitted on or before August 8, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15220 Filed 7–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95262; File No. SR–MRX– 

2022–09] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend MRX’s Pricing 

Schedule at Options 7, Section 6 To 

Add Port Fees 

July 12, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on July 1, 

2022, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

MRX’s Pricing Schedule at Options 7, 

Section 6. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 


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