Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 42767 

29 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. On June 29, 2022, the Exchange 

withdrew that filing, and submitted separate filings 

for membership, ports and market data. The instant 

filing replaces the membership fees set forth in SR– 

MRX–2022–04. 

4See also Securities Exchange Act Release No. 

93927 (January 7, 2022), 87 FR 2191 (January 13, 

2022) (SR–MEMX–2021–19) (introduction of 

membership fees by MEMX). 

5For example, MIAX Emerald commenced 

operations as a national securities exchange 

registered on March 1, 2019. See Securities 

Exchange Act Release No. 84891 (December 20, 

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

10–233) (order approving application of MIAX 

Emerald, LLC for registration as a national 

securities exchange). MIAX Emerald filed to adopt 

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

15. See Securities Exchange Act Release No. 85393 

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

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

Immediate Effectiveness of a Proposed Rule Change 

To Establish the MIAX Emerald Fee Schedule). 

MIAX Emerald waived its one-time application fee 

and monthly Trading Permit Fees assessable to 

EEMs and Market Makers among other fees within 

SR–EMERALD–2019–15. 

6Nasdaq 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. 

7The term ‘‘Electronic Access Member’’ or 

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

exercise trading privileges associated with EAM 

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

8The term ‘‘Market Makers’’ refers to 

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

Makers’’ collectively. See Options 1, Section 

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

means a Member that is approved to exercise 

trading privileges associated with CMM Rights. See 

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

Market Maker’’ means a Member that is approved 

to exercise trading privileges associated with PMM 

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

9 In the case where a single Member has multiple 

MRX memberships, the monthly access fee is 

charged for each membership. For example, if a 

single member firm is both an EAM and a CMM, 

or owns multiple CMM memberships, the firm is 

subject to the access fee for each of those 

memberships. 

10See GEMX Options 7, Section 6.A. (Access 

Fees). 

11See GEMX Options 7, Section 6.B. (CMM 

Trading Rights Fees). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15219 Filed 7–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95264; File No. SR–MRX– 

2022–07] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 7, 

Section 5 To Add Membership 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 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 to amend 

MRX’s Pricing Schedule at Options 7, 

Section 5, Other Options Fees and 

Rebates, to assess membership fees. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

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 5, Other 

Options Fees and Rebates, to assess 

membership 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 fees for MRX’s 

services to reflect their current value— 

rather than their value when it was a 

new exchange six years ago—based on 

MRX’s ability to deliver value to its 

customers through technology, liquidity 

and functionality. Newly-opened 

exchanges often charge no fees for 

certain services such as membership, in 

order to attract order flow to an 

exchange, and later amend their fees to 

reflect the true value of those services.4

Allowing newly-opened exchanges time 

to build and sustain market share before 

charging non-transactional fees 

encourages market entry and promotes 

competition. The proposed changes to 

membership fees within Options 7, 

Section 5; Other Options Fees and 

Rebates, are described below. 

This proposal reflects MRX’s 

assessment that it has gained sufficient 

market share to compete effectively 

against the other 15 options exchanges 

without waiving fees for membership. 

These types of fees are assessed by 

options exchanges that compete with 

MRX in the sale of exchange services— 

indeed, MRX is the only options 

exchange (out of the 16 current options 

exchanges) not assessing membership 

fees today. New exchanges commonly 

waive membership fees to attract market 

participants, facilitating their entry into 

the market and, once there is sufficient 

depth and breadth of liquidity, 

‘‘graduate’’ to compete against 

established exchanges and charge fees 

that reflect the value of their services.5

If MRX is incorrect in this assessment, 

that error will be reflected in MRX’s 

ability to compete with other options 

exchanges.6

As noted above, MRX Members are 

not assessed fees for membership today. 

Under the proposed fee change, MRX 

Members will be required to pay a 

monthly Access Fee, which entitles 

MRX Members to trade on the Exchange 

based on their membership type. 

Specifically, MRX proposes to assess 

Electronic Access Members 7 an Access 

Fee of $200 per month, per membership. 

The Exchange proposes to assess Market 

Makers 8 Access Fees depending on 

whether they are a Primary Market 

Maker (‘‘PMM’’) or a Competitive 

Market Maker (‘‘CMM’’). A PMM would 

be assessed an Access Fee of $200 per 

month, per membership. A CMM would 

be assessed an Access Fee of $100 per 

month, per membership.9 The proposed 

fees are identical to access fees on 

Nasdaq GEMX, LLC (‘‘GEMX’’).10

In order to receive market making 

appointments to quote in any options 

class, CMMs will also be assessed a 

CMM Trading Right Fee identical to 

GEMX.11 CMM trading rights entitle a 


khammond on DSKJM1Z7X2PROD with NOTICES
42768 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 

12A CMM may request changes to its 

appointments at any time upon advance 

notification to the Exchange in a form and manner 

prescribed by the Exchange. See MRX Options 2, 

Section 3(c)(3). 

13These trading rights are referred to as CMM 

Rights. See MRX Options 2, Section 3. 

14See GEMX Options 7, Section 6.B. 

15PMMs are required to provide two-sided 

quotations in 90% of cumulative number of 

seconds, or such higher percentage as the Exchange 

may announce in advance. In contrast, a CMM is 

not required to enter quotations in the options 

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

initiates quoting in an options class, the CMM is 

required to provide two-sided quotations in 60% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce in 

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

Additionally, PMMs are required to submit a Valid 

Width Quote to open their assigned options series. 

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

16The Exchange notes that all MRX Members may 

submit orders; however, only Market Makers may 

submit quotes. The Exchange surveils Market 

Makers quotes in addition to any orders transacted 

on MRX and conducts surveillance on Market 

Maker quotes to ensure these participants have met 

their quoting and other market making obligations. 

The regulatory oversight for Market Makers is in 

addition to the regulatory oversight which is 

administered for all EAMs. 

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

18See 15 U.S.C. 78f(b)(4) and (5). 

19See 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)). 

20See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

21See 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.’’). 

22See Securities Exchange Act Release No. 59039 

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

2008) (SR–NYSEArca–2006–21). 

23 Id. 

24See 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. 

25See 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 

CMM to enter quotes in options symbols 

that comprise a certain percentage of 

industry volume. On a quarterly basis, 

the Exchange assigns points to each 

options class equal to its percentage of 

overall industry volume (not including 

exclusively traded index options), 

rounded down to the nearest one 

hundredth of a percentage with a 

maximum of 15 points. A new listing is 

assigned a point value of zero for the 

remainder of the quarter in which it was 

listed. CMMs may seek appointments to 

options classes that total 20 points for 

the first CMM Right it holds, and 10 

points for the second and each 

subsequent CMM Right it holds.12 In 

order to encourage CMMs to quote on 

the Exchange, MRX launched CMM 

trading rights without any fees, allowing 

CMMs to freely quote in all options 

classes. 

The Exchange is now proposing to 

adopt a monthly CMM Trading Rights 

Fee. Under the proposed fee structure, 

CMMs will be assessed a Trading Rights 

Fee of $850 per month for the first 

trading right, which will entitle the 

CMM to quote in 20 percent of industry 

volume.13 Each additional CMM Right 

will cost $500 per month, and will 

entitle the CMM to quote an additional 

10 percent of volume. Similar to 

GEMX’s trading rights fee,14 a new 

CMM would pay $850 for the first 

trading right and all CMMs would 

thereafter pay $500 for each additional 

trading right. The Exchange is proposing 

this pricing model because each 

subsequent CMM Right costs less than 

the first trading right. All CMMs have 

the opportunity to purchase additional 

CMM Rights beyond the initial trading 

right in order to quote in additional 

options series. The Exchange notes that 

it is not proposing trading right fees for 

PMMs, as the Exchange wishes to 

encourage Members to act as PMMs, 

which will benefit the market through, 

for example, more robust quoting 

requirements. PMMs have additional 

obligations on MRX as compared to 

CMMs.15 The Exchange is proposing 

only to charge the $200 access fee to 

EAMs, and no trading rights fee, as the 

technical, regulatory, and administrative 

services associated with an EAM’s use 

of the Exchange are not as 

comprehensive as those associated with 

Market Makers’ use.16

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,17 in general, and furthers the 

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

of the Act,18 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’ 

. . . .’’ 19

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.’’ 20

Congress directed the Commission to 

‘‘rely on ‘competition, whenever 

possible, in meeting its regulatory 

responsibilities for overseeing the SROs 

and the national market system.’’ 21 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.’’ 22

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.’’ 23 In its 2019 guidance 

on fee proposals, Commission staff 

indicated that they would look at factors 

beyond the competitive environment, 

such as cost, only if a ‘‘proposal lacks 

persuasive evidence that the proposed 

fee is constrained by significant 

competitive forces.’’ 24

History of MRX Operations 

Over the years, MRX has amended its 

transactional pricing to remain 

competitive and attract order flow to the 

Exchange.25


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Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 42769 

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. 

26See 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). 

27One 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. 

28 In 2019, ISE assessed the following Access 

Fees: $500 per month, per membership to an 

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

membership to a Primary Market Maker and $2,500 

per month, per membership to a Competitive 

Market Maker. ISE does not assess Trading Rights 

Fees to Competitive Market Makers. See Securities 

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

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

(Notice of Filing and Immediate Effectiveness of 

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

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

2019 as well. 

29Unlike ISE, MRX does not offer Precise. See 

note 27, supra. 

In June 2019, MRX commenced 

offering complex orders.26 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.27 By 

way of comparison, ISE, unlike MRX, 

assessed membership fees in 2019 28

while offering the same suite of 

functionality as MRX, with a limited 

exception.29

Membership Is 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 the product for products 

offered by other exchanges. 

Chart 1 below shows the January 2022 

market share for multiply-listed options 

by exchange. Of the 16 operating 

options exchanges, none currently has 

more than a 13.1% market share, and 

MRX has the smallest market share at 

1.8%. Customers widely distribute their 

transactions across exchanges according 

to their business needs and the ability 

of each exchange to meet those needs 

through technology, liquidity and 

functionality. Average market share for 

the 16 options exchanges is 6.26 

percent, with the median at 5.8, and a 

range between 1.8 and 13.1 percent. 


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42770 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 

30Of course, that third party must itself become 

a Member of MRX, so at least some market 

participants must become Members of MRX for any 

trading to take place at all. Nevertheless, because 

some firms would be able to exercise the option of 

not becoming Members, excessive membership fees 

would cause the Exchange to lose members. 

31See Securities and Exchange Release No. 94894 

(May 11, 2022), 87 FR 29987 (May 17, 2022) (SR– 

BOX–2022–17) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change To Amend 

the Fee Schedule on the BOX Options Market LLC 

Facility To Adopt Electronic Market Maker Trading 

Permit Fees). 

32 Id at 29990. 

Market share is the percentage of 

volume on a particular exchange 

relative to the total volume across all 

exchanges, and indicates the amount of 

order flow directed to that exchange. 

High levels of market share enhance the 

value of trading and membership. 

Chart 2 below compares the number 

of firms purchasing memberships from 

MRX to the number of firms purchasing 

such services from the four MRXaffiliated options exchanges, GEMX, 

ISE, The Nasdaq Stock Market LLC 

(‘‘NOM’’) and Nasdaq PHLX, LLC 

(‘‘Phlx’’). 

Chart 2 also shows that MRX has the 

smallest number of Members relative to 

its GEMX, ISE, NOM and Phlx affiliates, 

with approximately 40 members. This 

demonstrates that customers can and 

will choose where to become members, 

need not become members of all 

exchanges, and do not need to become 

Members of MRX and instead may 

utilize a third party.30

Further, BOX Exchange LLC (‘‘BOX’’) 

recently filed to establish a new 

monthly Participant Fee.31 In that rule 

change BOX noted that it responded to 

Market Maker feedback to the proposed 

fees in January 2022 and due to this 

valuable feedback, BOX lowered the 

proposed fees.32 BOX stated that, ‘‘. . . 

this reduction demonstrates that 

competitive constraints do not depend 

on showing that a Market Maker walked 

away, or threatened to walk away, from 


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Chart 1: Market Share by Exchange for January 2022 

AflO!il 

PHI.X 

CBOE 

NCM 

AMEl< 

IS£ 

BOX 

MtAX 

&OGX 

MPRL 

&MU:> 

GEM'i< 

BX01" 

MRX 

Market Share - Exchange 

8.7% 

6\.Z'Ki 

Option Exchanges - Parent Company 

Chart 2: Number of Firms Purchasing Membership and Purchasing Trading 

Services from Options Venues (March 2022) 

120 

100 

80 . .,. 

§ 

cr: 60 

'5 

"" 40 

20 

0 

Nasdaq Option Venues-· March 2022 

Members Trading 

IIIMRX 

IIIIBXOP 

GEMX 

1111 ISE 

11\!INOM 

IIIPHLX 
Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 42771 

33 Id at 29990. 

34BOX noted that this Market Maker was 

approved as an electronic Market Maker in 2017 but 

never underwent the process of provisioning itself 

to access the BOX systems. Id at 29991. 

35 Id at 29991. 

36See Securities Exchange Act Release No. 95142 

(June 23, 2022), 87 FR 38786 (June 29, 2022) (SR– 

NYSEArca–2022–36) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Amend the NYSE Arca Options Fee Schedule). 

37 Id. 

38 Id at 38790. 

39 Id at note 24. 

BOX due to a pricing change. Rather, 

the absence of negative feedback (in and 

of itself, and particularly when coupled 

with valuable feedback suggesting 

modifications or alternatives) is 

indicative that the proposed fees are, in 

fact, reasonable and consistent with 

BOX being subject to competitive forces 

in setting fees.’’ 33

MRX filed its membership fees on 

May 2, 2022 and has not received a 

comment with respect to the proposed 

membership fee changes. MRX Members 

may elect to cancel their membership on 

MRX. No MRX Member is required by 

rule, regulation, or competitive forces to 

be a Member on the Exchange. 

Further, BOX noted in its rule change 

that one Market Maker modified their 

access to BOX since the implementation 

of the proposed fee change.34 After the 

Market Maker reviewed the notice the 

Exchange issued describing the 

proposed fees, the Market Maker 

informed the Exchange that it would 

terminate its Market Maker status on 

BOX as it had no intention to provision 

itself for access.35 BOX argued in its rule 

change that, 

The Exchange believes this further 

demonstrates competition within the market 

for exchange access, which as a result 

constrains fees the Exchange may charge for 

that access. The Exchange believes the fact 

that this Participant chose to terminate its 

Market Maker status on BOX but retained its 

status as an Order Flow Provider on BOX 

demonstrates that market participants can 

and do alter their membership statuses at 

exchanges if the market participant deems 

any fees as too high for its relevant 

marketplace. In BOX’s case, the Participant 

determined that the Exchange’s proposed 

fees for electronic Market Makers did not 

make business sense for itself, however it 

retained its membership as a BOX Participant 

in a different capacity. 

Yet another example of an exchange 

being subject to significant competitive 

forces with respect to membership fees 

was noted in a recent NYSE Arca, Inc. 

(‘‘NYSE Arca’’) rule change.36 Recently, 

NYSE Arca filed a rule change to modify 

the number of option issues a Market 

Maker may quote per OTP and modify 

the fees applicable to Market Maker 

OTPs.37 In that rule change, NYSE Arca 

stated that, 

The Exchange has also observed that 

another options exchange group experienced 

decreases in market share following its 

proposed modifications of its access fees 

(including Market Maker trading permit fees), 

suggesting that market participants 

(including Market Makers) are sensitive to 

changes in exchanges’ access fees and may 

respond by shifting their order flow 

elsewhere if they deem the fees to be 

unreasonable or excessive.38

Moreover, NYSE Arca noted that it 

observed that, 

. . .exchanges in the MIAX Group 

introduced multiple access fee increases in 

July and August 2021. In June 2021, prior to 

these fee increases, the aggregate MIAX 

Group share of multi-list options volume was 

15.45%. In the months after the introduction 

of higher access fees, MIAX Group’s market 

share declined: by September 2021, the 

aggregate MIAX Group market share was 

14.50%, and as of March 2022, market share 

was 13.75%.39

Similar to MIAX, Chart 3 below 

demonstrates that since the inception of 

its membership, port and market data 

fees, MRX volumes declined. 


khammond on DSKJM1Z7X2PROD with NOTICESEN18JY22.009</GPH>

Chart 3: MRX Options Volume as Compared to Options Volume on 15 Other 

Options Exchanges in 202240 

0.5 

0.4 

0.3 

(I) 0.2 

E 

::J 0.1 

0 

::> 0.0 

8' -0.1 ..... 

aJ -0.2 N 

·; -0.3 

E-o.4 

~ -0.5 

-0.6 

-0.7 

-0.8 

-0.9 

Jan 1 

Date Announced 

Feb1 Marl Apr1 May1 Jun 1 Jul 1 
42772 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Notices 

40The chart displays the log volume for MRX and 

all other options exchanges combined. It is 

‘‘normalized’’ by subtracting each day’s value from 

the first trading day of the year (January 3, 2022). 

The straight lines represent the average normalized 

log volumes from January 3, 2022 through April 29, 

2022 and from May 2, 2022 through June 23, 2022, 

respectively. 41MRX General 3, Membership and Access, 

incorporates by reference Nasdaq General 3. 42The Exchange’s Membership Department must 

ensure, among other things, that an applicant is not 

statutorily disqualified. 43See GEMX Options 7, Section 6A (Access Fees). 44See Cboe’s Fees Schedule. Cboe assesses permit 

fees as follows: Market-Maker Electronic Access 

Permit of $5,000 per month; Electronic Access 

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

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

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

Fee Schedule. MIAX assesses an Electronic 

Exchange Member Fee of $1,500 per month. 

45See Phlx, ISE, GEMX, MRX, Nasdaq BX, Inc. 

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

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

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

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

46See ISE, GEMX and MRX, Phlx, BX and NOM 

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

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

O. 

47Options markets refer to the primary market 

maker on an exchange in several ways. 

48See BX Options 2, Section 4; ISE, GEMX and 

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

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

O. 

49See BX Options 2, Section 4; ISE, GEMX and 

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

Cboe Rule 5.52; BOX Rule 8040. 

50See ISE, GEMX, MRX, Phlx and BX Options 3, 

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

BOX Rules 7150 and 7245. 

51See Phlx and ISE Options 3, Section 14; MIAX 

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

NYSE Arca Rule 6.91–O. 

52See ISE, GEMX, MRX, Phlx, BX and NOM 

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

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

53See Cboe Rule 5.85; BOX Rule 7130; and NYSE 

Arca Rule 6.76–O. 

54See Phlx, ISE, GEMX and MRX Options 3, 

Section 10; and BOX Rule 7135. 

55See BX Options 3, Section 10. While BX’s rule 

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

all symbols on BX are currently designated as Price/ 

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

rule permits both Price-Time and Pro-Rata 

allocation. See also MIAX Rule 514. 

56See ISE, GEMX and MRX Options 3, Section 

11; NYSE American Rules 971.1NY and 971.2NY; 

and Cboe Rule 5.39. 

57See ISE, GEMX, MRX, Phlx, BX and NOM 

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

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

58Today, Phlx, Cboe, BOX, NYSE Arca, and 

NYSE American LLC have a trading floor. Trading 

floors require an on-floor presence to execute 

options transactions. 

59There are certain features of open outcry 

trading that are difficult to replicate in an electronic 

trading environment. The Exchange has observed, 

and understands from various market participants, 

that they have had difficulty executing certain 

orders, such as larger orders and high-risk and 

complicated strategies, in an all-electronic trading 

configuration without the element of human 

interaction to negotiate pricing for these orders. 

Specifically, since May 2, 2022, MRX 

saw a larger drop in its average daily 

volume (¥11%) than all other options 

exchanges (¥5%) since MRX’s fees 

were added on May 2, 2022 when 

compared to their respective year-todate volumes through April 29, 2022. 

This pattern indicates that the adoption 

of MRX membership, port, and market 

data fees impacted MRX’s volume 

negatively. 

In summary, MRX membership fees 

are subject to significant substitutionbased competitive forces due to its 

consistently low percentage of market 

share, the relatively small number of 

purchasers for each product, and the 

purchasers that are reviewing their 

subscriptions. Implementation of the 

proposed fees is therefore consistent 

with the Act. 

Fees for Membership 

The proposed membership fees 

described below are in line with those 

of other markets. Setting a fee above 

competitors is likely to drive away 

customers, so the most efficient pricesetting strategy is to set prices at the 

same level as other firms. 

The Exchange’s proposal to adopt 

membership fees is reasonable, 

equitable and not unfairly 

discriminatory. As a self-regulatory 

organization, MRX’s membership 

department reviews applicants to ensure 

that each application complies with the 

rules specified within MRX General 3 41

as well as other requirements for 

membership.42 Applicants must meet 

the Exchange’s qualification criteria 

prior to approval. The membership 

review includes, but is not limited to, 

the registration and qualification of 

associated persons, financial health, the 

validity of the required clearing 

relationship, and the history of 

disciplinary matters. Approved 

Members would be required to comply 

with MRX’s By-Laws and Rules and 

would be subject to regulation by MRX. 

The proposed membership fees are 

identical to membership fees on 

GEMX,43 and are lower than similar fees 

assessed on other options markets.44

The Exchange believes that there are 

many factors that may cause a market 

participant to decide to become a 

member of a particular exchange. 

Among various factors, the Exchange 

believes market participants consider: 

(i) an exchange’s available liquidity in 

options series; (ii) trading functionality 

offered on a particular market; (iii) 

product offerings; (iv) customer service 

on an exchange; and (v) transactional 

pricing. The Exchange believes that the 

decision to become a member of an 

exchange, particularly as a registered 

market maker, is a complex one that is 

not solely based on non-transactional 

costs assessed by an exchange. Market 

participants weigh the tradeoff between 

where they choose to deploy liquidity 

versus where trading opportunities 

exist. Of course, the cost of membership 

may factor into a decision to become a 

member of a certain exchange, but the 

Exchange believes it is by no means the 

only factor when comparing exchanges. 

Market Makers 

Market makers play an important role 

on options exchanges as they provide 

liquidity. In options markets, registered 

market makers are assigned options 

series 45 and are required to quote in 

those options series for a specified time 

period during the day.46 Typically, a 

lead or primary market maker 47 will be 

required to quote for a longer period of 

time during the day as compared to 

other market makers registered on an 

exchange.48 Additionally, market 

makers are typically required to quote 

within a certain width on options 

markets.49 Greater liquidity on options 

markets benefits all market participants 

by providing more trading opportunities 

and attracting greater participation by 

market makers. An increase in the 

activity of market makers in turn 

facilitates tighter spreads. Market 

participants are attracted to options 

markets that have ample liquidity and 

tighter spreads in options series. 

Trading Functionality 

An exchange’s trading functionality 

attracts market participants who may 

elect, for example, to submit an order 

into a price improving auction,50 enter 

a complex order,51 or utilize a particular 

order type.52 Different options 

exchanges offer different trading 

functionality to their members. For 

example, with respect to priority and 

allocation of an order book, some 

options exchanges have price/time 

allocation,53 some have a size pro-rata 

allocation,54 while other exchanges offer 

both allocation models.55 The allocation 

methodology on a particular options 

exchange’s order book may attract 

certain market participants. Also, the 

manner in which some options markets 

structure their solicitation auction,56 or 

opening process,57 may be attractive to 

certain market participants. Finally, 

some exchanges have trading floors 58

which may accommodate trading for 

certain market participants or trading 

firms.59

Product Offerings 

Introducing new and innovative 

products to the marketplace designed to 

meet customer demands may attract 

market participants to a particular 


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60See e.g., options on the Nasdaq-100 Index®

available on ISE, GEMX and Phlx and Cboe’s 

Market Volatility Index®. Currently, MRX does not 

list any proprietary products. 

61See Miami International Securities Exchange, 

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

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

schedule-files/MIAX_Options_Fee_Schedule_

03012022.pdf. 

62See GEMX Options 7, Section 6.B. (CMM 

Trading Rights Fees). 

63See Securities Exchange Act Release No. 93927 

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

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

Fee is assessed to each active Member at the close 

of business on the first day of each month. 

64See Options Order Protection and Locked/ 

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

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

4b99-9f11-c0e4db1a2266/options_order_protection_

plan.pdf. 

65MRX Members may elect to not route their 

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

Continued 

options venue. New products in the 

options industry may allow market 

participants greater trading and hedging 

opportunities, as well as new avenues to 

manage risks. The listing of new options 

products enhances competition among 

market participants by providing 

investors with additional investment 

vehicles, as well as competitive 

alternatives, to existing investment 

products. An exchange’s proprietary 

product offering may attract order flow 

to a particular exchange to trade a 

particular options product.60

Transaction Pricing 

The pricing available on a particular 

exchange may impact a market 

participant’s decision to submit order 

flow to a particular options venue. The 

options industry is competitive. Clear 

substitutes to the Exchange exist in the 

market for options security transaction 

services; the Exchange is only one of 

sixteen options exchanges to which 

market participants may direct their 

order flow. Within this environment, 

market participants can freely, and often 

do, shift their order flow among the 

Exchange and competing venues in 

response to changes in their respective 

pricing schedules. 

With respect to the CMM Trading 

Rights Fee, the proposed fees compare 

favorably with those of other options 

exchanges. For example, a market maker 

on MIAX is assessed a $3,000 one-time 

fee and then a tiered monthly fee from 

$7,000 for up to 10 classes to $22,000 

for over 100 classes.61 By comparison, 

under the proposed fee structure, a 

CMM can be granted access on the 

Exchange for as little as $950 per month 

(i.e., a $100 access fee and an $850 

trading right), and could quote in all 

options classes on the Exchange by 

paying the access fee and obtaining nine 

CMM trading rights for a total of $4,950 

per month. The Exchange notes that its 

tiered model for CMM trading rights is 

consistent with the pricing practices of 

other exchanges, such as NYSE Arca, 

which charges $6,000 per month for the 

first market maker trading permit, down 

to $1,000 per month for the fifth and 

additional trading permits, with various 

tiers in-between. Like other options 

exchanges, the Exchange is proposing a 

tiered pricing model because it may 

encourage CMM firms to purchase 

additional trading rights and quote more 

issues because subsequent trading rights 

are priced lower than the initial trading 

right. 

The Exchange does not believe that it 

is unfairly discriminatory to assess 

different fees for PMMs, CMMs, and 

EAMs. For PMMs on MRX, the fees 

required to access the Exchange are 

substantially lower than those of 

competing exchanges. For example, a 

PMM could quote on the Exchange for 

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

compared with the minimum $6,000 per 

month trading permit fee charged by 

NYSE Arca. The Exchange notes that it 

is not proposing trading right fees for 

PMMs, as the Exchange wishes to 

encourage Members to act as PMMs, 

which will benefit the market through, 

for example, more robust quoting 

requirements. Similarly, the Exchange is 

proposing only to charge the $200 

access fee to EAMs as the technical, 

regulatory, and administrative services 

associated with an EAM’s use of the 

Exchange are not as comprehensive as 

those associated with Market Makers. 

The CMM Trading Right Fee is identical 

to GEMX.62

Membership fees are charged by 

nearly all exchanges, and all established 

exchanges with sufficient order flow. In 

2022, MEMX LLC (‘‘MEMX’’) 

established a monthly membership fee 

of $200.63 MEMX reasoned in that rule 

change that there is value in becoming 

a member of the exchange. MEMX 

stated that it believed that its proposed 

membership fee ‘‘is not unfairly 

discriminatory because no broker-dealer 

is required to become a member of the 

Exchange.’’ Moreover, ‘‘neither the 

trade-through requirements under 

Regulation NMS nor broker-dealers’ best 

execution obligations require a brokerdealer to become a member of every 

exchange.’’ In this respect, MEMX is 

correct; a monthly membership fee is 

reasonable, equitably allocated and not 

unfairly discriminatory. Market 

participants may choose to become a 

member of one or more options 

exchanges based on the market 

participant’s business model. A very 

small number of market participants 

choose to become a member of all 

sixteen options exchanges. It is not a 

requirement for market participants to 

become members of all options 

exchanges, in fact, certain market 

participants conduct an options 

business as a member of only one 

options market. 

Most firms that actively trade on 

options markets are not currently 

Members of MRX. Using options 

markets that Nasdaq operates as points 

of comparison, less than a third of the 

firms that are members of at least one 

of the options markets that Nasdaq 

operates are also Members of MRX 

(approximately 29%). The Exchange 

notes that no firm is a Member of MRX 

only. Few, if any, firms have become 

Members at MRX, notwithstanding the 

fact that MRX membership is currently 

free, because MRX currently has less 

liquidity than other options markets. As 

explained above, MRX has the smallest 

market share of the 16 options 

exchanges, representing only 

approximately 1.8% of the market, and, 

for certain market participants, the 

current levels of liquidity may be 

insufficient to justify the costs 

associated with becoming a Member and 

connecting to the Exchange, 

notwithstanding the fact that 

membership is free. 

The decision to become a member of 

an exchange, particularly for registered 

market makers, is complex, and not 

solely based on the non-transactional 

costs assessed by an exchange. As noted 

herein, specific factors include, but are 

not limited to: (i) an exchange’s 

available liquidity in options series; (ii) 

trading functionality offered on a 

particular market; (iii) product offerings; 

(iv) customer service on an exchange; 

and (v) transactional pricing. Becoming 

a member of an exchange does not 

‘‘lock’’ a potential member into a market 

or diminish the overall competition for 

exchange services. The decision to 

become a member of an exchange is 

made at the beginning of the 

relationship, and is no less subject to 

competition than trading fees. 

In lieu of becoming a member at each 

options exchange, a market participant 

may join one exchange and elect to have 

their orders routed in the event that a 

better price is available on an away 

market. Nothing in the Order Protection 

Rule requires a firm to become a 

Member at MRX.64 If MRX is not at the 

NBBO, MRX will route an order to any 

away market that is at the NBBO to 

prevent a trade-through and also ensure 

that the order was executed at a superior 

price.65


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this case, the order would not be routed. See 

Options 3, Section 7(m). 

66Service bureaus provide access to market 

participants to submit and execute orders on an 

exchange. On MRX, a Service Bureau may be a 

Member. Some MRX Members utilize a Service 

Bureau for connectivity and that Service Bureau 

may not be a Member. Some market participants 

utilize a Service Bureau who is a Member to submit 

orders. As noted herein only MRX Members may 

submit orders or quotes through ports. 

67Sponsored Access is an arrangement whereby 

a member permits its customers to enter orders into 

an exchange’s system that bypass the member’s 

trading system and are routed directly to the 

Exchange, including routing through a service 

bureau or other third-party technology provider. 

68This may include utilizing a Floor Broker and 

submitting the trade to one of the five options 

trading floors. 

69Today, MRX is the only options exchange that 

does not assess membership fees. 

70See GEMX Options 7, Section 6.A. (Access 

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

71See NYSE Arca Fees and Charges, General 

Options and Trading Permit (OTP) Fees (comparing 

CMM Trading Rights Fees to the Arca Market Maker 

fees). 

72See MRX Options 2, Section 5. PMMs, 

associated with the same Member, are collectively 

required to provide two-sided quotations in 90% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce. CMMs 

are not required to enter quotations in the options 

classes to which it is appointed, however if a CMM 

initiates quoting in an options class, the CMM, 

associated with the same Member, is collectively 

required to provide two-sided quotations in 60% of 

the cumulative number of seconds, or such higher 

percentage as the Exchange may announce. 

73 15 U.S.C. 78s(b)(3)(A)(ii). 

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

order on an exchange. For example, a 

third-party broker-dealer Member of 

MRX may be utilized by a retail investor 

to submit orders into an Exchange. An 

institutional investor may utilize a 

broker-dealer, a service bureau,66 or 

request sponsored access 67 through a 

member of an exchange in order to 

submit a trade directly to an options 

exchange.68 A market participant may 

either pay the costs associated with 

becoming a member of an exchange or, 

in the alternative, a market participant 

may elect to pay commissions to a 

broker-dealer, pay fees to a service 

bureau to submit trades, or pay a 

member to sponsor the market 

participant in order to submit trades 

directly to an exchange. Market 

participants may elect any of the above 

models and weigh the varying costs 

when determining how to submit trades 

to an exchange. Depending on the 

number of orders to be submitted, 

technology, ability to control 

submission of orders, and projected 

revenues, a market participant may 

determine one model is more cost 

efficient as compared to the alternatives. 

After 6 years, MRX proposes to 

commence assessing membership fees, 

just as all other options exchanges.69

The introduction of these fees will not 

impede a Member’s access to MRX, but 

rather will allow MRX to continue to 

compete and grow its marketplace so 

that it may continue to offer a robust 

trading architecture, a quality opening 

process, an array of simple and complex 

order types and auctions, and 

competitive transaction pricing. If MRX 

is incorrect in its assessment of the 

value of its services, that assessment 

will be reflected in MRX’s ability to 

compete with other options exchanges. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange believes its proposal 

remains competitive with other options 

markets, and will offer market 

participants with another choice of 

venue to transact options. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues if they deem fee levels at a 

particular venue to be excessive, or 

rebate opportunities available at other 

venues to be more favorable. Because 

competitors are free to modify their own 

fees in response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

The proposed membership fees are 

identical to membership fees assessed 

by GEMX.70 The proposed fees are 

designed to reflect the benefits of the 

technical, regulatory, and administrative 

services provided to a Member by the 

Exchange, and the fees remain 

competitive with similar fees offered on 

other options exchanges. The Exchange 

does not believe that assessing different 

fees for PMMs, CMMs, and EAMs 

creates an undue burden on 

competition. 

With respect to the CMM Trading 

Rights Fee, the proposed fees compare 

favorably with those of other options 

exchanges.71 Like other options 

exchanges, the Exchange is proposing a 

tiered pricing model because it may 

encourage CMM firms to purchase 

additional trading rights and quote more 

issues because subsequent trading rights 

are priced lower than the initial trading 

right. The Exchange notes that it is not 

proposing trading right fees for PMMs as 

the Exchange wishes to encourage 

Members to act as PMMs, which will 

benefit the market through, for example, 

more robust quoting. Additionally, as 

noted herein, PMMs have higher 

quoting obligations as compared to 

CMMs.72

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.73 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–2022–07 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–2022–07. 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 


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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 


khammond on DSKJM1Z7X2PROD with NOTICES