Document ID: SEC-2021-0609-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq MRX, LLC
Posted Date: 2021-05-03T04:00Z

[Federal Register Volume 86, Number 83 (Monday, May 3, 2021)]
[Notices]
[Pages 23478-23483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09130]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91687; File No. SR-MRX-2021-04]

Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Exchange's Pricing Schedule at Options 7

April 27, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 23479]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 13, 2021, 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 and II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's Pricing Schedule at 
Options 7, as described further below.
    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
    The purpose of the proposed rule change is to amend the Exchange's 
Pricing Schedule at Options 7, as further described below.
Market Maker Fees
    Today, as set forth in Table 1 of Options 7, Section 3, the 
Exchange assesses the following maker/taker fees for regular orders in 
Non-Penny Symbols:
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    \3\ This fee also applies to Market Maker orders sent to the 
Exchange by Electronic Access Members.

                                                Non-Penny Symbols
----------------------------------------------------------------------------------------------------------------
                                                     Maker fee       Maker fee       Taker fee       Taker fee
               Market participant                     Tier 1          Tier 2          Tier 1          Tier 2
----------------------------------------------------------------------------------------------------------------
Market Maker \3\................................           $0.20           $0.10           $1.10           $1.10
Non-Nasdaq MRX Market Maker (FarMM).............            0.90            0.90            1.10            1.10
Firm Proprietary/Broker-Dealer..................            0.90            0.90            1.10            1.10
Professional Customer...........................            0.90            0.90            1.10            1.10
Priority Customer...............................            0.00            0.00            0.00            0.00
----------------------------------------------------------------------------------------------------------------

    The Exchange now proposes to increase the maker fees for Market 
Makers \4\ from $0.20 to $0.35 per contract (Tier 1) and from $0.10 to 
$0.20 per contract (Tier 2).
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    \4\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See Options 1, 
Section 1(a)(21).
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Qualifying Tier Thresholds
    Currently, the Exchange operates a maker/taker fee model for Penny 
and Non-Penny Symbols in Table 1 of Options 7, Section 3 where all 
market participants are charged a fee (or are eligible for free 
executions) with potentially discounted fees based on the following 
qualifying tier thresholds in Table 3 of Options 7, Section 3:
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    \5\ ``Total Affiliated Member or Affiliated Entity ADV'' means 
all average daily volume (``ADV'') executed on the Exchange in all 
symbols and order types, including volume executed by Affiliated 
Members or Affiliated Entities. All eligible volume from Affiliated 
Members or an Affiliated Entity are aggregated in determining 
applicable tiers.
    \6\ ``Customer Total Consolidated Volume'' means the total 
volume cleared at The Options Clearing Corporation in the Customer 
range in equity and ETF options in that month.

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                     Tiers                                                Total affiliated member or affiliated entity ADV \5\
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Tier 1........................................  executes 0.00%--0.7499% of Customer Total Consolidated Volume. \6\
Tier 2........................................  executes 0.75% or more of Customer Total Consolidated Volume.
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    The highest tier threshold attained applies retroactively in a 
given month to all eligible traded contracts and applies to all 
eligible market participants.
    The Exchange now proposes to amend the Tier 1 qualification to 
require that Members execute 0.00% to less than 0.75% of Customer Total 
Consolidated Volume. The proposed rule change will not impact current 
Tier 1 rates. Rather, the purpose of the proposed change is to ensure 
that all eligible volume gets included in the calculation of the tiers. 
Specifically, the proposed rule change recognizes the potential for a 
Member to execute a percentage of Customer Total Consolidated Volume 
that falls between 0.7499% and 0.75%. As such, the proposed changes 
will make clear that Members that execute anywhere from 0.00% to less 
than 0.75% of Customer Total Consolidated Volume will qualify for Tier 
1 pricing in the Exchange's maker/taker fee schedule. The Exchange 
believes that its proposal will have minimal impact as no Member falls 
into this category.
    The Exchange further proposes to permit Market Makers to 
alternatively qualify for the Tier 1 and Tier 2 maker/taker fees in 
Penny and Non-Penny Symbols based on Total Market Maker ADV. 
Specifically, Market Makers may alternatively qualify for the Tier 1 
and Tier 2 maker/taker fees if they: execute up to 0.10% of Customer 
Total Consolidated Volume which adds liquidity in regular orders (Tier 
1), and execute more than 0.10% of Customer Total Consolidated Volume 
which adds

[[Page 23480]]

liquidity in regular orders (Tier 2).\7\ The Exchange also proposes to 
add a definition of Total Market Maker ADV to include all Market Maker 
ADV executed on the Exchange in all symbols and order types, including 
volume executed by Affiliated Members \8\ or Affiliated Entities.\9\ 
All eligible volume from Affiliated Members or an Affiliated Entity 
will be aggregated in determining applicable tiers.\10\ The Exchange 
also proposes to add a new note 5 in Table 1 of Options 7, Section 3, 
which will provide that Market Makers may alternatively qualify for the 
fees in Table 1 if they meet the applicable tier thresholds based on 
Total Market Maker ADV set forth in Table 3. Lastly, the Exchange 
proposes to amend the current definition of Total Affiliated Member or 
Affiliated Entity ADV in Table 3 as follows: ``Total Affiliated Member 
or Affiliated Entity ADV means all ADV executed on the Exchange in all 
symbols and order types, including volume executed by Affiliated 
Members or Affiliated Entities. All eligible volume from Affiliated 
Members or an Affiliated Entity will be aggregated in determining 
applicable tiers.'' With the foregoing change, the Exchange also 
proposes to delete redundant language regarding aggregation of 
Affiliated Member or Affiliated Entity volume currently in the last 
bullet point of Table 3.
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    \7\ 0.10% of Customer Total Consolidated Volume is approximately 
28,000 contracts per day.
    \8\ An ``Affiliated Member'' is a Member that shares at least 
75% common ownership with a particular Member as reflected on the 
Member's Form BD, Schedule A.
    \9\ An ``Affiliated Entity'' is a relationship between an 
Appointed Market Maker and an Appointed OFP for purposes of 
qualifying for certain pricing specified in the Pricing Schedule. 
Market Makers and OFPs are required to send an email to the Exchange 
to appoint their counterpart, at least 3 business days prior to the 
last day of the month to qualify for the next month. The Exchange 
will acknowledge receipt of the emails and specify the date the 
Affiliated Entity is eligible for applicable pricing, as specified 
in the Pricing Schedule. Each Affiliated Entity relationship will 
commence on the 1st of a month and may not be terminated prior to 
the end of any month. An Affiliated Entity relationship will 
terminate after a one (1) year period, unless either party 
terminates earlier in writing by sending an email to the Exchange at 
least 3 business days prior to the last day of the month to 
terminate for the next month. Affiliated Entity relationships must 
be renewed annually by each party sending an email to the Exchange. 
Affiliated Members may not qualify as a counterparty comprising an 
Affiliated Entity. Each Member may qualify for only one (1) 
Affiliated Entity relationship at any given time.
    \10\ The proposed definition will be set forth in the Table 3 
notes of Options 7, Section 3.
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    While the fees in Table 1 of Options 7, Section 3 for nearly all 
market participants (i.e., Non-Nasdaq MRX Market Makers,\11\ Firm 
Proprietary \12\/Broker-Dealers,\13\ Professional Customers,\14\ and 
Priority Customers) \15\ will not be impacted by this proposal,\16\ the 
proposed volume requirements will impact Market Makers that will be 
eligible to alternatively qualify for the lower maker fees.\17\ The 
Exchange believes that the proposed fee structure will encourage Market 
Makers and their Affiliated Members or Affiliated Entities to increase 
their liquidity providing activity on the Exchange, which would support 
the quality of price discovery on the Exchange and provide additional 
liquidity for incoming orders.
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    \11\ A ``Non-Nasdaq MRX Market Maker'' is a market maker as 
defined in Section 3(a)(38) of the Securities Exchange Act of 1934, 
as amended, registered in the same options class on another options 
exchange.
    \12\ A ``Firm Proprietary order is an order submitted by a 
Member for its own proprietary account.
    \13\ A ``Broker-Dealer'' order is an order submitted by a Member 
for a broker-dealer account that is not its own proprietary account.
    \14\ A ``Professional Customer'' is a person or entity that is 
not a broker/dealer and is not a Priority Customer.
    \15\ A ``Priority Customer'' is a person or entity that is not a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s), as defined in Nasdaq MRX Options 1, 
Section 1(a)(36).
    \16\ In particular, other non-Priority Customers will continue 
to be uniformly charged the same maker fees of $0.47 per contract 
(Penny Symbols) and $0.90 per contract (Non-Penny Symbols), 
regardless of tier achieved. Priority Customers will continue to 
receive free executions for their orders.
    \17\ Currently, Market Makers are charged maker fees of $0.20 
per contract (Tier 1) and $0.10 per contract (Tier 2) in both Penny 
and Non-Penny Symbols. As proposed above, the maker fees for Market 
Makers will be increased to $0.35 per contract (Tier 1) and $0.20 
per contract (Tier 2) in Non-Penny Symbols only.
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PIM Break-Up Rebates
    Today, as set forth in Options 7, Section 3.A, the Exchange pays a 
PIM break-up rebate to an originating Priority Customer PIM order that 
executes with a response (order or quote), other than the PIM contra-
side order, of $0.25 per contract in Penny Symbols and $0.60 per 
contract in Non-Penny Symbols.\18\ The Exchange also offers additional 
break-up rebates in note 3 of Options 7, Section 3.A for Members that 
meet certain volume requirements or alternatively, that enter into 
Affiliated Member or Affiliated Entity relationships. In particular, 
note 3 currently provides: ``Members that are not in an Affiliated 
Member or Affiliated Entity relationship and that execute 0.05% or 
greater of Customer Total Consolidated Volume in non-PIM Priority 
Customer contracts within a month will receive an additional rebate of: 
(i) $0.20 per contract in Penny Symbols for Complex PIM Orders only, 
(ii) $0.15 per contract in Penny Symbols for Regular PIM Orders only, 
and (iii) $0.45 per contract in Non-Penny Symbols for both Regular and 
Complex PIM Orders. Alternatively, Affiliated Members or Affiliated 
Entities will be eligible to receive the rebates in this note 3 without 
any additional volume requirements.''
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    \18\ Break-up rebates apply only to regular PIM orders of 500 or 
fewer contracts and to complex PIM orders where the largest leg is 
500 or fewer contracts.
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    The Exchange now proposes to modify the note 3 rebate 
qualifications only for those Members that are not in Affiliated Member 
or Affiliated Entity relationships. Under this proposal, Affiliated 
Members or Affiliated Entities will continue to be eligible to receive 
the note 3 rebates without any additional volume requirements. 
Specifically, the Exchange proposes to require Members not in 
Affiliated Member or Affiliated Entity relationships to execute 0.05% 
or greater of Customer Total Consolidated Volume which adds liquidity 
in non-PIM Priority Customer contracts within a month in order to 
receive the additional rebates in note 3.
Marketing Fee
    Today, as set forth in Options 7, Section 5.B, the Exchange 
assesses Market Makers a marketing fee of $0.25 per contract in Penny 
Symbols and $0.70 per contract in Non-Penny Symbols for each regular 
Priority Customer contract executed.\19\ This fee is currently waived 
for (i) Flash Order \20\ responses; (ii) Market Maker orders that take 
liquidity from the order book; (iii) Crossing Orders \21\ and Responses 
to

[[Page 23481]]

Crossing Orders; \22\ and (iv) complex orders.
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    \19\ The marketing fee is rebated proportionately to the Members 
that paid the fee such that on a monthly basis the marketing fee 
fund balance administered by a Primary Market Maker for a Group of 
options established under Options 2, Section 3(b) does not exceed 
$100,000 and the marketing fee fund balance administered by a 
preferenced Competitive Market Maker for such a Group does not 
exceed $100,000. A preferenced Competitive Market Maker that elects 
not to administer a fund is not charged the marketing fee. The 
Exchange assesses an administrative fee of .45% on the total amount 
of the funds collected each month.
    \20\ A ``Flash Order'' is an order that is exposed at the 
National Best Bid or Offer by the Exchange to all Members for 
execution, as provided under Supplementary Material .02 to Nasdaq 
MRX Options 5, Section 2. For all Flash Orders, the Exchange will 
charge the applicable taker fee and for responses that trade against 
a Flash Order, the Exchange will charge the applicable maker fee.
    \21\ A ``Crossing Order'' is an order executed in the Exchange's 
Facilitation Mechanism, Solicited Order Mechanism, PIM or submitted 
as a Qualified Contingent Cross order. For purposes of this Pricing 
Schedule, orders executed in the Block Order Mechanism are also 
considered Crossing Orders.
    \22\ ``Responses to Crossing Order'' is any contra-side interest 
(i.e., orders & quotes) submitted after the commencement of an 
auction in the Exchange's Facilitation Mechanism, Solicited Order 
Mechanism, Block Order Mechanism or Price Improvement Mechanism.
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    The Exchange now proposes to set this marketing fee to $0.00 per 
contract. The Exchange also proposes in Options 7, Section 5.B to add 
language that makes clear no marketing fees will be charged with the 
proposed changes. Specifically, the Exchange will add that no marketing 
fees are charged for Penny and Non-Penny Symbols. If the Exchange 
determines to charge a marketing fee in the future, it will do so 
pursuant to a rule filing.
Technical Amendments
    The Exchange proposes non-substantive, technical amendments in 
Options 7, Section 1(c) to rearrange the definitions in alphabetical 
order without changing the substance of the Rule. The Exchange also 
proposes in Options 7, Section 3 to relocate the definition of Total 
Affiliated Member or Affiliated Entity Priority Customer ADV from Table 
3 into Table 1 as this definition is currently only used within Table 1 
pricing. The relocated definition will provide that Total Affiliated 
Member or Affiliated Entity Priority Customer ADV means all Priority 
Customer ADV executed on the Exchange in all symbols and order types, 
including volume executed by Affiliated Members or Affiliated Entities. 
All eligible volume from Affiliated Members or an Affiliated Entity 
will be aggregated in determining applicable tiers.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\23\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\24\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposed changes to its Pricing Schedule are 
reasonable in several respects. As a threshold matter, the Exchange is 
subject to significant competitive forces in the market for options 
securities transaction services that constrain its pricing 
determinations in that market. The fact that this market is competitive 
has long been recognized by the courts. In NetCoalition v. Securities 
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one 
disputes that competition for order flow is `fierce.' . . . As the SEC 
explained, `[i]n the U.S. national market system, buyers and sellers of 
securities, and the 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'. . ..'' \25\
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    \25\ NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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    The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. In Regulation 
NMS, 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.'' \26\
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    \26\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Numerous indicia demonstrate the competitive nature of this market. 
For example, 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. As such, 
the proposal represents a reasonable attempt by the Exchange to 
increase its liquidity and market share relative to its competitors.
Market Maker Fees
    The Exchange believes that the proposed increase in the Tier 1 and 
Tier 2 maker fees for Market Makers in Non-Penny Symbols is reasonable. 
As proposed, the maker fees will increase from $0.20 to $0.35 per 
contract (Tier 1) and from $0.10 to $0.20 per contract (Tier 2). The 
Exchange believes that the proposed maker fees will remain attractive 
to Market Makers and will continue to incentivize them to add liquidity 
in Non-Penny Symbols as the proposed fees will remain the lowest maker 
fees assessed to any other market participant on the Exchange, except 
for Priority Customers who will continue to receive free 
executions.\27\ Incentivizing Market Makers to provide liquidity 
through the lower maker fees will create additional displayed liquidity 
and opportunities for market participants to trade.
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    \27\ Specifically, Non-Nasdaq MRX Market Makers, Firm 
Proprietary/Broker-Dealers, and Professional Customers will continue 
to be assessed the $0.90 per contract maker fee in Non-Penny 
Symbols, regardless of tier achieved.
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    The Exchange's proposal to increase the Tier 1 and Tier 2 maker 
fees in Non-Penny Symbols for Market Makers is equitable and not 
unfairly discriminatory as the proposed increase will apply uniformly 
to all similarly situated market participants. Market Makers will 
continue to pay lower maker fees in Non-Penny Symbols compared to other 
non-Priority Customers. The Exchange believes that it is equitable and 
not unfairly discriminatory to continue charging lower maker fees for 
Market Makers as they, unlike other market participants, add value to 
the Exchange through quoting obligations and their commitment of 
capital.
Qualifying Tier Thresholds
    The Exchange believes that the proposal to amend the current Tier 1 
threshold is reasonable, equitable, and not unfairly discriminatory. As 
discussed above, the proposed rule change will not impact current Tier 
1 rates; rather, the proposed change will ensure that all eligible 
volume gets included in the calculation of the tiers and will make 
clear that Members that execute 0.00% to less than 0.75% of Customer 
Total Consolidated Volume will qualify for Tier 1 pricing in the 
Exchange's maker/taker fee schedule. As noted above, the Exchange 
believes that its proposal will have minimal impact as no market 
participant falls into this category. Furthermore, the proposed changes 
to the existing Tier 1 threshold will apply uniformly to all market 
participants.
    Furthermore, the Exchange believes that it is reasonable to 
introduce an alternative way for Market Makers to qualify for the Tier 
1 and Tier 2 fees based on Total Market Maker ADV.\28\ As

[[Page 23482]]

discussed above, Market Makers may alternatively qualify for the Tier 1 
and Tier 2 maker/taker fees if they: execute up to 0.10% of Customer 
Total Consolidated Volume which adds liquidity in regular orders (Tier 
1), and execute more than 0.10% of Customer Total Consolidated Volume 
which adds liquidity in regular orders (Tier 2). The Exchange believes 
that the proposal would encourage additional order flow, especially 
liquidity adding regular order flow, from Market Makers and their 
Affiliated Members or Affiliated Entities by providing an alternative 
method for Market Makers to qualify for the Tier 1 and Tier 2 fees. 
This, in turn, will benefit all market participants that will have an 
opportunity to trade with the order flow that these firms bring to the 
market.
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    \28\ As discussed above, Total Market Maker ADV will be defined 
in the Pricing Schedule as all Market Maker ADV executed on the 
Exchange in all symbols and order types, including volume executed 
by Affiliated Members or Affiliated Entities. Furthermore, all 
eligible volume from Affiliated Members or an Affiliated Entity will 
be aggregated in determining applicable tiers.
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    The Exchange's proposal to introduce an alternative way for Market 
Makers to qualify for Tier 1 and Tier 2 pricing based on Total Market 
Maker ADV is equitable and not unfairly discriminatory because it will 
apply uniformly to all similarly situated market participants. The 
Exchange believes it is equitable and not unfairly discriminatory to 
introduce the proposed alternative qualifications for only Market 
Makers because Market Makers have different requirements and 
obligations to the Exchange that other market participants do not (such 
as quoting requirements). As such, the Exchange's proposal is designed 
to increase Market Maker participation and reward Market Makers for the 
unique role that they play in ensuring a robust market.
PIM Break-up Rebates
    The Exchange believes that the proposed changes to the 
qualifications for receiving the additional PIM break-up rebates are 
reasonable, equitable, and not unfairly discriminatory. As discussed 
above, the Exchange is proposing to amend the rebate qualifications to 
require that Members not in Affiliated Member or Affiliated Entity 
relationships execute 0.05% or greater of Customer Total Consolidated 
Volume which adds liquidity in non-PIM Priority Customer contracts 
within a month in order to receive the additional rebates in note 3 of 
Options 7, Section 3.A. The Exchange believes that the proposed changes 
will incentivize Members to bring greater liquidity adding order flow 
for execution on the Exchange, which the Exchange believes may result 
in tighter spreads, thereby making the Exchange a more attractive 
trading venue to the benefit of all market participants.
    The Exchange believes that the proposed changes to the additional 
PIM break-up rebate qualifications in note 3 are equitable and not 
unfairly discriminatory because the changes will apply uniformly to all 
Priority Customer PIM originating orders that execute with any PIM 
response. While Priority Customer PIM originating orders will continue 
to be eligible to receive the additional break-up rebates in note 3, as 
opposed to other market participants, the Exchange believes that the 
application of this rebate program is equitable and not unfairly 
discriminatory because Priority Customer PIM originating order flow 
enhances liquidity on the Exchange. This, in turn, provides more 
trading opportunities and attracts other market participants, thus 
facilitating tighter spreads, increased order flow and trading 
opportunities to the benefit of all market participants. Moreover, the 
Exchange has historically provided lower pricing or other incentives to 
Priority Customer PIM originating orders in order to attract such order 
flow.
Marketing Fee
    The Exchange believes that it is reasonable to set the marketing 
fee to $0.00 per contract for Penny and Non-Penny Symbols because the 
Exchange seeks to limit the cost of transacting in regular orders for 
Market Makers who are the only market participants that are assessed 
this fee today. The Exchange believes that the proposed fee change is 
equitable and not unfairly discriminatory as no Market Makers would be 
charged a marketing fee under this proposal. Furthermore, the Exchange 
believes that it is reasonable, equitable, and not unfairly 
discriminatory to add language in Options 7, Section 5.B as it will 
make clear that no marketing fees will be assessed for Penny and Non-
Penny Symbols with the proposed changes, and that if the Exchange 
determines to charge a marketing fee in the future, it will do so 
pursuant to a rule filing.
Technical Amendments
    The Exchange believes that the proposed changes to alphabetize the 
definitions in Options 7, Section 1(c) and to relocate the definition 
of Total Affiliated Member or Affiliated Entity Priority Customer ADV 
in Options 7, Section 3 in the manner described above are reasonable, 
equitable, and not unfairly discriminatory. All of the changes are non-
substantive, technical amendments that will facilitate the use of the 
Exchange's Pricing Schedule by market participants.

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. In terms of intra-market 
competition, the Exchange does not believe that the proposed changes 
will place any category of market participant at a competitive 
disadvantage. Overall, the Exchange's proposal is designed to 
incentivize Members to bring additional order flow to the Exchange, and 
create a more active and quality market in MRX-listed options. Market 
Makers and Priority Customers would continue to receive favorable 
pricing by way of lower fees or rebates, as compared to other market 
participants. As discussed above, Market Makers add value through 
continuous quoting and are subject to additional requirements and 
obligations unlike other market participants. Incentivizing Market 
Makers to increase their participation on the Exchange benefits all 
market participants through the quality of order interaction. 
Similarly, Priority Customer liquidity benefits all market participants 
by providing more trading opportunities, which attracts other market 
participants, thus facilitating tighter spreads, increased order flow 
and trading opportunities to the benefit of all market participants.
    In terms of inter-market competition, 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. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
options exchanges. 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.
    Moreover, as noted above, price competition between exchanges is 
fierce, with liquidity and market share moving freely between exchanges 
in reaction to fee and rebate changes. In sum, if the changes proposed 
herein are unattractive to market participants, it is likely that the 
Exchange will lose

[[Page 23483]]

market share as a result. Accordingly, the Exchange does not believe 
that the proposed changes will impair the ability of Members or 
competing order execution venues to maintain their competitive standing 
in the financial markets.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\29\ and Rule 19b-4(f)(2) \30\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is: (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.
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    \29\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \30\ 17 CFR 240.19b-4(f)(2).
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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-2021-04 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-MRX-2021-04. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MRX-2021-04 and should be submitted on 
or before May 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09130 Filed 4-30-21; 8:45 am]
BILLING CODE 8011-01-P