8011-01p
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100435; File No. SR-MEMX-2024-25]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Amend the Exchange’s Fee Schedule
Regarding Options Market Data Products
June 26, 2024.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and
Rule 19b-4 thereunder,2 notice is hereby given that on June 14, 2024, MEMX LLC (“MEMX” or
the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the
proposed rule change as described in Items I, II, and III below, which Items have been prepared
by the Exchange. The Commission is publishing this notice to solicit comments on the proposed
rule change from interested persons.
I.

Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed
Rule Change
The Exchange is filing with the Commission a proposed rule change to amend the Market

Data section of its fee schedule applicable to its equity options platform (“MEMX Options”) to
adopt fees for certain of its market data products, which are currently offered free of charge,
pursuant to MEMX Rules 15.1(a) and (c). The Exchange proposes to implement the changes to
the Fee Schedule pursuant to this proposal immediately. The text of the proposed rule change is
provided in Exhibit 5.
II.

Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the Exchange included statements concerning the

purpose of and basis for the proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below,

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

17 CFR 240.19b-4.

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 Market Data section of the
Exchange’s fee schedule applicable to MEMX Options (“MEMX Options Fee Schedule”) to
adopt fees for certain of its options market data products which are currently offered free of
charge, namely MEMOIR Options Depth and MEMOIR Options Top (collectively, the “Options
Data Feeds”). As set forth below, the Exchange believes that the proposed fees are fair and
reasonable and has based its proposal on a detailed cost analysis, as well as other factors
including a comparison to competitor pricing. The Exchange is proposing to implement the
proposed fees immediately. The Exchange previously filed this proposal on March 28, 2024 (SRMEMX-2024-11) (the “Initial Proposal”). On April 15, 2024, the Exchange withdrew the Initial
Proposal and replaced it with SR-MEMX-2024-14 (the “Second Proposal”). Now, the Exchange
is withdrawing the Second Proposal and is replacing it with the current filing.
Before setting forth the additional details regarding the proposal as well as the cost
analysis conducted by the Exchange, immediately below is a description of the proposed fees.
Proposed Market Data Pricing
MEMX Options offers two separate data feeds to subscribers – MEMOIR Options Depth
and MEMOIR Options Top. The Exchange notes that there is no requirement that any
subscribing entity (“Firm”) subscribe to a particular Options Data Feed or any Options Data Feed
whatsoever, but instead, a Firm may choose to maintain subscriptions to those Options Data
Feeds they deem appropriate based on their business model. The proposed fee will not apply
differently based upon the size or type of Firm, but rather based upon the subscriptions a Firm
has to Options Data Feeds. The proposed pricing for each of the Options Data Feeds is set forth
below.
MEMOIR Options Depth

The MEMOIR Options Depth feed is a MEMX-only market data feed that contains depth
of book quotations and execution information based on options orders entered in the System.3
For the receipt of access to the MEMOIR Options Depth feed, the Exchange proposes to charge
$1,500 per month. This proposed access fee would be charged to any data recipient that receives
a data feed of the MEMOIR Options Depth feed for purposes of internal distribution (i.e., an
“Internal Distributor”), for external redistribution (i.e. an “External Distributor”), or both. The
Exchange proposes to define an Internal Distributor as “a Distributor that receives an Exchange
Data product and then distributes that data to one or more data recipients within the Distributor’s
own organization,”4 and an External Distributor as “a Distributor that receives an Exchange
Data product and then distributes that data to a third party or one or more data recipients outside
the Distributor’s own organization.”5 The proposed access fee will be charged only once per
month per Firm regardless of whether the Firm uses the MEMOIR Options Depth feed for
internal distribution, external distribution, or both.6
MEMOIR Options Top
The MEMOIR Options Top feed is a MEMX-only market data feed that contains top of
book quotations and executions based on options orders entered into the System.7 For the receipt
of access to the MEMOIR Options Top feed, the Exchange proposes to charge $750 per month.
This proposed access fee would be charged to any data recipient that receives a data feed of the
MEMOIR Options Top feed for purposes of internal distribution (i.e., an Internal Distributor),
external redistribution (i.e. an External Distributor), or both. The proposed access fee for

See MEMX Rule 21.15(b)(1).

See Market Data Definitions under the proposed MEMX Options Fee Schedule. The Exchange also
proposes to adopt a definition for “Distributor”, which would mean any entity that receives an Exchange
Data product directly from the Exchange or indirectly through another entity and then distributes internally
or externally to a third party.

See Market Data Definitions under the proposed MEMX Options Fee Schedule.

The proposed definitions of Internal Distributor and External Distributor are the same definitions used in
the Exchange’s Equities Fee Schedule.

See MEMX Rule 21.15(b)(2).

internal and external distribution will be charged only once per month per Firm regardless of
whether the Firm uses the MEMOIR Options Top feed for internal distribution, external
distribution, or both.
Billing Process
The Exchange proposes to bill for the Options Data Feeds in the same manner as it does
for the market data products it provides for its equities Exchange, (the “Equities Data Feeds”),
and to make this clear on the Fee Schedule. Specifically, the Fee Schedule would state that
“[f]ees for Market Data products are assessed based on each active product at the close of
business on the first day of each month,” and that “[i]f a product is cancelled by a subscriber’s
submission of a written request or via the MEMX User Portal prior to such fee being assessed,
then the subscriber will not be obligated to pay the applicable product fee. MEMX does not
return pro rated fees if a product is not used for an entire month.” The Exchange believes that
this billing methodology has been efficient with respect to the Equities Data Feeds and is well
understood by market participants.
Additional Discussion – Background
The Exchange launched MEMX Options on September 27, 2023. As a new entrant in the
equity options trading space, MEMX did not begin charging fees for options market data until
April 1, 2024. The objective of this approach was to eliminate any fee-based barriers for
Members to join the Exchange, which the Exchange believes was helpful in its ability to attract
order flow as a new options exchange. Further, the Exchange did not initially charge for options
market data because MEMX believes that any exchange should first deliver meaningful value to
Members and other market participants before charging fees for its products and services.
The Exchange also did not begin charging for the Equities Data Feeds until 2022, nearly
two years after it launched as a national securities exchange in 2020. In connection with the
adoption of fees for the Equities Data Feeds, the Exchange conducted an extensive cost analysis

(the “2022 Cost Analysis”),8 and the Exchange’s Initial and Second Proposal to adopt fees for
Options Data Feeds stemmed from the same cost analysis, which it reviewed and updated for
2024 (the “2024 Cost Analysis”). The 2024 Cost Analysis combined costs for providing market
data for both its equities and options trading platforms (the “Exchange Data Feeds”) due to the
fact that in general, the Exchange did not add a significant amount of marginal costs for the
provision of options market data, and as such, costs associated with the provision of Equities
Data Feeds became shared costs for the provision of Options Data Feeds. For example, the
Exchange did not hire additional staff specifically to sell or otherwise manage options market
data, rather, the existing team absorbed the additional workload. Nevertheless, as discussed more
fully below, the Exchange has revised its cost analysis in this proposal by focusing solely on the
marginal costs associated with the addition of providing the Options Data Feeds, and allocating
those costs according to the same principles utilized in the 2024 Cost Analysis (the “Options
Market Data Cost Analysis”). Pursuant to the Options Market Data Analysis, the Exchange
calculated the total marginal costs for providing the Options Data Feeds in 2024 at
approximately $307,001. In order to establish fees that are designed to recover the marginal costs
of providing the Options Data Feeds with a reasonable profit margin, the Exchange is proposing
to modify its Fee Schedule, as described above. In addition to the Options Market Data Cost
Analysis, described below, the Exchange believes that its proposed approach to market data fees
is in line with that of its competitors.
Additional Discussion – Comparison with Other Exchanges
The proposed fee structure for the Options Data Feeds is not novel but is instead
comparable to the fee structure currently in place for the options exchanges operated by MIAX,
in particular, MIAX Pearl Options (“MIAX Pearl”),9 and the options exchanges operated by

See Securities Exchange Act Release No. 97130 (March 13, 2023), 88 FR 16491 (March 17, 2023) (SRMEMX-2023-04).

See MIAX Pearl Options Fee Schedule, available at: https://www.miaxglobal.com/markets/usoptions/pearl-options/fees (the “MIAX Pearl Fee Schedule”).

Nasdaq, in particular, Nasdaq BX Options (“BX Options”).10 The Exchange is proposing fees for
its Options Data Feeds that are similar in structure to MIAX Pearl and BX Options and rates that
are equal to, or lower than, than the rates data recipients pay for comparable data feeds from
those exchanges, in a more simplified fashion.11 The Exchange notes that other competitors
maintain fees applicable to options market data that are considerably higher than those proposed
by the Exchange, including Cboe BZX Options (“BZX Options”), NYSE Arca Options and
NYSE American Options.12 However, the Exchange has focused its comparison on MIAX Pearl
and BX Options because their similar market data products are offered at prices lower than
several other incumbent exchanges, which is a similar approach to that proposed by the
Exchange.13

See the Nasdaq BX Options Fee Schedule, available at:
https://listingcenter.nasdaq.com/rulebook/bx/rules/bx-options-7.

As noted below, based on its review of MIAX Pearl’s Fee Schedule, the Exchange believes that MIAX
Pearl charges separate fees for Internal and External Distribution of its options data feeds, and while its
External Distribution fees are identical to the Exchange’s proposed flat fee for all uses for both comparable
products, its Internal Distribution Fees are slightly lower than what the Exchange is proposing for access to
the Exchange’s Options Data Feeds. Nevertheless, given that the Exchange allows both Internal and
External Distribution for a single fee for a single data feed, the Exchange believes its proposed fees remain
comparable and competitive with MIAX Pearl.

Fees for BZX Options Depth, which is the comparable product to MEMOIR Options Depth, are $3,000 for
internal distribution and $2,000 for external distribution compared to the Exchange’s proposed fee of
$1,500 for all uses. In addition, BZX Options charges professional user fees of $30 per month and nonprofessional user fees of $1.00 per month for each entity to which it distributes the feed (alternatively, it
offers distributors an option to purchase a monthly Enterprise Fee of $3,500 to distribute to an unlimited
number of users), which the Exchange is not proposing to charge. Fees for BZX Options Top, which is the
comparable product to MEMOIR Options Top, are $3,000 for internal distribution, $2,000 for external
distribution, with Professional User Fees of $5 per month, Non-Professional Fees of $0.10 per month per
user, or an Enterprise Fee ranging anywhere from $20,000 to $60,000 per month depending on the number
of users to which the distributer plans to distribute the feed. Again, the Exchange is not proposing any
additional User Fees for MEMOIR Options Top, but rather, a flat fee of $750 for all uses. See the BZX
Options Fee Schedule, available at: https://www.cboe.com/us/options/membership/fee_schedule/bzx/. Fees
for NYSE Arca Options Deep and NYSE American Options Deep, which are the comparable products to
MEMOIR Options Depth, are $3,000 for access (internal use) and $2,000 for redistribution (external
distribution), and $5,000 for non-display use, compared to the Exchange’s proposed fee of $1,500 for all
uses. NYSE Arca Options and NYSE American Options also charge professional user fees of $50 per User,
and Non-Professional User Fees of $1.00 per user, capped at $5,000 per month. Again, the Exchange does
not require any counting of users and has instead proposed a flat fee of $1,500 for all uses. Fees for the
NYSE Arca Options Top and NYSE American Options Top, which are the comparable products to
MEMOIR Options Top are the same as above ($3,000 for internal, $2,000 for external and $5,000 for nondisplay, with the additional Professional and Non-Professional User Fees), compared to the Exchange’s
proposed fee of $750 for all uses. See NYSE Proprietary Market Data Pricing Guide, available at:
https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Pricing.pdf.

See supra notes 9-10.

The fees for the MIAX Pearl Liquidity Feed—which like the MEMOIR Options Depth
feed, includes top of book, depth of book, trades, and administrative messages—consist of an
internal distributor access fee of $1,250 per month and an external distributor access fee of
$1,500 per month. As such, the Exchange’s proposed rate for all uses of $1,500 per month is
equal to what MIAX Pearl charges for external distribution, and $250 higher than what it charges
for internal distribution only.14
The fees for the MIAX Pearl Top of Market Feed – which is the comparable product to
MEMOIR Options Top, consist of an internal distributor access fee of $500 per month and an
external distributor access fee of $750. Again, the Exchange’s proposed rate for all uses of $750
per month is identical to what MIAX Pearl charges for external distribution, and $250 higher
than what it charges for internal distribution.
While the Exchange’s proposed fee is slightly higher than what MIAX Pearl charges for
internal distribution of its similar products, the Exchange believes that the simplicity of a single
fee is preferable, specifically by reducing audit risk and simplifying reporting, both for the
Exchange and its customers. Further, to the extent MIAX Pearl assesses both fees for both uses,
it would cost more overall to receive and provide both internal and external distribution of
MIAX Pearl’s comparable options data feeds than it does to receive and provide both internal
and external distribution of the Exchange’s Options Data Feeds.
As an additional cost comparison, the fees for both Nasdaq BX Options Depth of Market
Feed (“BX Depth”) and Top of Market Feed (“BX Top”) are $1,500 per month for internal
distribution and $2,000 for external distribution, with an added $2,500 fee for a non-Display
Enterprise License.15 While one distributor fee allows access to both BX Top and BX Depth, (for
example, $1,500 per month would allow a BX Options customer internal distribution of both BX
Top and BX Depth) if a BX Options Customer wanted the same access provided under the

See MIAX Pearl Options Fee Schedule, supra note 9.

See Nasdaq BX Options Fee Schedule, supra note 10.

Exchange’s proposed fees, (i.e. for all uses) it would need to pay an additional $2,000 for
external distribution and $2,500 per month for a non-display enterprise license fee. In addition,
BX Options charges monthly per subscriber fees for professional or non-professional use16 which
the Exchange will not charge for its similar market data products.
Additional Discussion –Options Market Data Cost Analysis
In general, the Exchange believes that exchanges, in setting fees of all types, should meet
very high standards of transparency to demonstrate why each new fee or fee increase meets the
Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly
discriminatory, and not create an undue burden on competition among members and markets. In
particular, the Exchange believes that each exchange should take extra care to be able to
demonstrate that these fees are based on its costs and reasonable business needs. Accordingly, in
proposing to charge fees for Options Data Feeds, the Exchange has sought to be especially
diligent in assessing those fees in a transparent way against its own aggregate costs of providing
the related service, and also carefully and transparently assessing the impact on Members – both
generally and in relation to other Members, i.e., to assure the fee will not create a financial
burden on any participant and will not have an undue impact in particular on smaller Members
and competition among Members in general. The Exchange does not believe it needs to
otherwise address questions about market competition in the context of this filing because the
proposed fees are so clearly consistent with the Act based on its Options Market Data Cost
Analysis. The Exchange also believes that this level of diligence and transparency is called for
by the requirements of section 19(b)(1) under the Act,17 and Rule 19b-4 thereunder,18 with
respect to the types of information self-regulatory organizations (“SROs”) should provide when
filing fee changes, and section 6(b) of the Act,19 which requires, among other things, that
Id.

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

17 CFR 240.19b-4.

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

exchange fees be reasonable and equitably allocated,20 not designed to permit unfair
discrimination,21 and that they not impose a burden on competition not necessary or appropriate
in furtherance of the purposes of the Act.22 This rule change proposal addresses those
requirements, and the analysis and data in this section are designed to clearly and
comprehensively show how they are met.23
As noted above, MEMX recently conducted a study of its aggregate costs to produce the
Exchange Data Feeds – the 2024 Cost Analysis, and it used the 2024 Cost Analysis as the
foundation of the Options Market Data Cost Analysis, which ultimately went a step further in
subtracting the marginal costs associated with the provision of the Options Data Feeds from the
total aggregate costs originally allocated towards the provision of the Exchange Data Feeds (i.e.
both the Equities and Options Data Feeds) and allocating those marginal costs towards the
provision of the Options Data Feeds.
Prior to discussing how the Exchange allocated applicable costs under the Options
Market Data Cost Analysis, the Exchange believes it is first necessary to set forth its process in
conducting the 2024 Cost Analysis. The 2024 Cost Analysis required a detailed analysis of
MEMX’s aggregate baseline costs, including a determination and allocation of costs for core
services provided by the Exchange – transaction execution, market data, membership services
and trading permits, regulatory services, physical connectivity, and application sessions (which
provide order entry, cancellation and modification functionality, risk functionality, ability to
receive drop copies, and other functionality). MEMX separately divided its costs between those

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

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

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

In 2019, Commission staff published guidance suggesting the types of information that SROs may use to
demonstrate that their fee filings comply with the standards of the Exchange Act (“Fee Guidance”). While
MEMX understands that the Fee Guidance does not create new legal obligations on SROs, the Fee
Guidance is consistent with MEMX’s view about the type and level of transparency that exchanges should
meet to demonstrate compliance with their existing obligations when they seek to charge new fees. See
Staff Guidance on SRO Rule Filings Relating to Fees (May 21, 2019) available at
https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees.

costs necessary to deliver each of these core services, including infrastructure, software, human
resources (i.e., personnel), and certain general and administrative expenses (“cost drivers”).
Next, MEMX adopted an allocation methodology with various principles to guide how much of
a particular cost should be allocated to each core service. For instance, fixed costs that are not
driven by client activity (e.g., message rates), such as data center costs, were allocated more
heavily to the provision of physical connectivity (80%), with smaller allocations to logical ports
(11%), and the remainder to the provision of transaction execution, regulatory services, and
market data services (9%). The allocation methodology was decided through conversations with
senior management familiar with each area of the Exchange’s operations. After adopting this
allocation methodology, the Exchange then applied an estimated allocation of each cost driver to
each core service, resulting in the cost allocations described below.
By allocating segmented costs to each core service, MEMX was able to estimate by core
service the potential margin it might earn based on different fee models. The Exchange notes
that as a non-listing venue it has four primary sources of revenue that it can potentially use to
fund its operations: transaction fees, fees for connectivity services, membership and regulatory
fees, and market data fees. Accordingly, the Exchange generally must cover its expenses from
these four primary sources of revenue.
Through the Exchange’s extensive 2024 Cost Analysis, the Exchange analyzed every
expense item in the Exchange’s general expense ledger to determine whether each such expense
relates to the provision of the Exchange Data Feeds, and, if such expense did so relate, what
portion (or percentage) of such expense actually supports the provision of the Exchange Data
Feeds, and thus bears a relationship that is, “in nature and closeness,” directly related to the
Exchange Data Feeds. Based on its analysis, MEMX calculated its aggregate annual costs for
providing the Exchange Data Feeds at $3,683,375.
The following chart details the individual line-item (annual) costs considered by MEMX
to be related to offering the Exchange Data Feeds to its Members and other customers as well as

a percentage of the Exchange’s overall costs that such costs represent for such area (e.g., as set
forth below, the Exchange allocated approximately 8% of its overall Human Resources cost to
offering Exchange Data Feeds).
COST DRIVER
Human Resources
Data Center
Technology (Hardware, Software Licenses, etc.)
Depreciation
Allocated Shared Expenses
TOTAL

COSTS
$2,606,282
$69,340
$287,141
$397,471
$323,141
$3,683,375

% of
ALL
8%
2%
7%
5%
4%
5.8%

Options Market Data Cost Analysis
As noted above, the 2024 Cost Analysis estimated aggregate annual costs for providing
the Exchange Data Feeds at $3,683,375. Based on the limited number of additional resources
specifically devoted to providing and administering the Options Data Feeds, the Exchange
determined it was appropriate to conduct an allocation of only marginal costs related to the
provision of the Options Data Feeds. In conducting this analysis, the Exchange adopted an
allocation model for four of the five categories (all but Human Resources, as described more
fully below) that was proportionally based upon the number of products sold in equities and
options, and given the fact that the Exchange offers more data feeds and charges for Professional
and Non-Professional User Fees in equities, the resulting allocation was 95.1% towards equities,
and 4.9% towards options. The following chart details the individual line-item costs considered
by MEMX to be related to offering the Options Data Feeds to its Members and other customers
as a well as the percentage of the Exchange’s overall Exchange Data Feed costs that such costs
represent for such area (e.g., as set for the below, the Exchange allocated approximately 9.8% of
the Human Resources costs allocated to the provision of the Exchange Data Feeds to the Options
Data Feeds, or $254,331 annually).24

It follows that the remaining percentage of costs allocated to the Exchange Data Feeds in the 2024 Cost
Analysis were allocated to the provision of the Equities Data feeds in the Options Market Data Cost
Analysis. For example, the 2024 Cost Analysis allocated $2,606,282 of Human Resources costs to the

COST DRIVER

COSTS

Human Resources
Data Center
Technology (Hardware, Software Licenses, etc.)
Depreciation
Allocated Shared Expenses
TOTAL

$254,331
$3,391
$14,041
$19,436
$15,802
$307,001

% of Market
Data Total
9.8%
4.9%
4.9%
4.9%
4.9%

Human Resources
In allocating personnel (Human Resources) costs, the Exchange considered the amount of
employee time for employees whose functions include directly providing services necessary to
offer the Options Data Feeds, including performance thereof, as well as personnel with ancillary
functions related to establishing and providing such services (such as information security and
finance personnel). The Exchange notes that it has fewer than 100 employees and each
department leader has direct knowledge of the time spent by each employee with respect to the
various tasks necessary to operate the Exchange. The estimates of Human Resources cost were
therefore determined by consulting with such department leaders, determining which employees
are involved in tasks related to providing the Options Data Feeds, and confirming that the
proposed allocation was reasonable based on an understanding of the percentage of their time
such employees devote to tasks related to providing the Options Data Feeds. The Human
Resources cost was calculated using a blended rate of compensation reflecting salary, equity and
bonus compensation, benefits, payroll taxes, and 401(k) matching contributions. The results of
that review found that of the original Human Resources cost originally allocated towards the
provision of the Exchange Data Feeds, 9.8%, or $254,331, should be allocated towards the
provision of Options Market Data. The Exchange believes that this allocation is reasonable
given the limited amount of additional employee time that it takes to provide and administer the
Options Data Feeds as compared to the Equities Data Feeds.

provision of the Exchange Data feeds. In the Options Market Data Cost Analysis, the Exchange then
allocated $254,331, or 9.8% of that total to the provision of Options Data Feeds, and thus the remaining
$2,351,951 (or 90.2%) to the provision of the Equities Data Feeds.

Data Center
Data Center costs includes an allocation of the costs the Exchange incurs to provide the
Exchange Data Feeds in the third-party data centers where the Exchange maintains its equipment
as well as related costs (the Exchange does not own the Primary Data Center or the Secondary
Data Center, but instead, leases space in data centers operated by third parties). Based on the
allocation model utilized in the Options Market Data Cost Analysis described above, the
Exchange allocated $3,391 of its Data Center costs (i.e. 4.9% of the costs allocated towards the
Exchange Data Feeds in the 2024 Cost Analysis) towards the provision of the Options Data
Feeds.
Technology
The Technology category includes the Exchange’s network infrastructure, other
hardware, software, and software licenses used to operate and monitor physical assets necessary
to provide the Exchange Data Feeds. Of note, certain of these costs were included in separate
Network Infrastructure and Hardware and Software Licenses categories in the 2022 Cost
Analysis; however, in order to align more closely with the Exchange’s audited financial
statements, these costs were combined into the broader Technology category. Based on the
allocation model utilized in the Options Market Data Cost Analysis described above, the
Exchange allocated approximately $14,041 of its Technology costs to the Options Data Feeds in
2024.
Depreciation
The vast majority of the software the Exchange uses with respect to its operations,
including the software used to generate and disseminate the Options Data Feeds has been
developed in-house and the cost of such development is depreciated over time. Accordingly, the
Exchange included Depreciation costs related to depreciated software used to generate and
disseminate the Options Data Feeds. The Exchange also included in the Depreciation costs
certain budgeted improvements that the Exchange intends to capitalize and depreciate with

respect to the Options Data Feeds in the near-term, as well as the servers used at the Exchange’s
primary and back-up data centers specifically used for the Options Data Feeds. Based on the
allocation model utilized in the Options Market Data Cost Analysis described above, the
Exchange allocated approximately $19,346 of its Depreciation costs towards the provision of the
Options Data Feeds.
Allocated Shared Expenses
Finally, a limited portion of general shared expenses were allocated to the Options Data
Feeds. The costs included in general shared expenses allocated to the Options Data Feeds
include office space and office expenses (e.g., occupancy and overhead expenses), utilities,
recruiting and training, marketing and advertising costs, professional fees for legal, tax and
accounting services (including external and internal audit expenses), and telecommunications
costs. The cost of paying individuals to serve on the Exchange’s Board of Directors or any
committee was not allocated to providing Options Data Feeds. Based on the allocation model
utilized in the Options Market Data Cost Analysis described above, the Exchange allocated
$15,802 of its Allocated Shared Expenses to the Options Data Feeds in 2024.
Cost Analysis – Additional Discussion
Based on the current number of subscribers to the Options Data Feeds,25 the Exchange
anticipates annual 2024 revenue for Options Data Feeds of $342,000. The proposed fees for the
Options Data Feeds are designed to permit the Exchange to cover the marginal costs allocated to
providing the Options Data Feeds with a profit margin that the Exchange believes is modest
(approximately 10%),26 which the Exchange believes is fair and reasonable after taking into
account the costs related to creating, generating, and disseminating the Options Data Feeds and

In the Initial and Second Filings, the Exchange’s revenue projections anticipated a drop in subscriptions
once the Exchange began charging for the Options Data Feeds, which did indeed occur. Specifically, of the
nineteen (19) customers receiving the Options Data Feeds free of charge, four (4) requested removal once
the Exchange began charging in April 2024.

The Exchange calculated this profit margin by dividing the annual projected profit of $34,999 by the annual
projected revenue of $342,000 and multiplying by 100.

the fact that the Exchange will need to fund future expenditures (increased costs, improvements,
etc.).
The Exchange like other exchanges is, after all, a for-profit business. Accordingly, while
the Exchange believes in transparency around costs and potential margins, as well as periodic
review of revenues and applicable costs (as discussed below), the Exchange does not believe that
these estimates should form the sole basis of whether or not a proposed fee is reasonable or can
be adopted. Instead, the Exchange believes that the information should be used solely to confirm
that an Exchange is not earning supra-competitive profits, and the Exchange believes its Cost
Analysis and related projections demonstrate this fact.
As a general matter, the Exchange believes that its costs will remain relatively similar in
future years. It is possible however that such costs will either decrease or increase. To the extent
the Exchange sees growth in use of Options Data Feeds it will receive additional revenue to
offset future cost increases. However, if use of Options Data Feeds is static or decreases, the
Exchange might not realize the revenue that it anticipates or needs in order to cover applicable
costs. Accordingly, the Exchange is committing to conduct a one-year review after
implementation of these fees. The Exchange expects that it may propose to adjust fees at that
time, to increase fees in the event that revenues fail to cover costs with a reasonable profit
margin.27 Similarly, the Exchange expects that it would propose to decrease fees in the event
that revenue materially exceeds current projections. In addition, the Exchange will periodically
conduct a review to inform its decision making on whether a fee change is appropriate (e.g., to
monitor for costs increasing/decreasing or subscribers increasing/decreasing, etc. in ways that
suggest the then-current fees are becoming dislocated from the prior cost-based analysis) and
expects that it would propose to increase fees in the event that revenues fail to cover its costs and
a reasonable margin, or decrease fees in the event that revenue or the profit margin materially

The Exchange notes that it does not believe that a 10% profit margin is necessarily competitive, and instead
that this is likely significantly below the mark-up many businesses place on their products and services.

exceeds current projections. In the event that the Exchange determines to propose a fee change,
the results of a timely review, including an updated cost estimate, will be included in the rule
filing proposing the fee change. More generally, the Exchange believes that it is appropriate for
an exchange to refresh and update information about its relevant costs and revenues in seeking
any future changes to fees, and the Exchange commits to do so.
2.

Statutory Basis

The Exchange believes that the proposed rule change is consistent with the provisions of
section 6(b)28 of the Act in general, and furthers the objectives of section 6(b)(4)29 of the Act, in
particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees
and other charges among its Members and other persons using its facilities. Additionally, the
Exchange believes that the proposed fees are consistent with the objectives of section 6(b)(5)30 of
the Act in that they are designed to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in securities, to remove impediments to
a free and open market and national market system, and, in general, to protect investors and the
public interest, and, particularly, are not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange notes prior to addressing the specific reasons the Exchange believes the
proposed fees and fee structure are reasonable, equitably allocated and not unreasonably
discriminatory, that the proposed definitions and fee structure described above are consistent
with the definitions and fee structure used by most U.S. options exchanges, MIAX Pearl and BX
Options in particular. As such, the Exchange believes it is adopting a model that is easily
understood by Members and non-Members, most of which also subscribe to market data

15 U.S.C. 78f.

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

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

products from other exchanges. For this reason, the Exchange believes that the proposed
definitions and fee structure described above are consistent with the Act generally, and section
6(b)(5)31 of the Act in particular.
One of the primary objectives of MEMX is to provide competition and to reduce fixed
costs imposed upon the industry. Consistent with this objective, the Exchange believes that this
proposal reflects a simple, competitive, reasonable, and equitable pricing structure, with fees that
are discounted when compared to comparable data products and services offered by
competitors.32
Reasonableness
Overall. With regard to reasonableness, the Exchange understands that the Commission
has traditionally taken a market-based approach to examine whether the SRO making the fee
proposal was subject to significant competitive forces in setting the terms of the proposal. The
Exchange understands that in general the analysis considers whether the SRO has demonstrated
in its filing that (i) there are reasonable substitutes for the product or service; (ii) “platform”
competition constrains the ability to set the fee; and/or (iii) revenue and cost analysis shows the
fee would not result in the SRO taking supra-competitive profits. If the SRO demonstrates that
the fee is subject to significant competitive forces, the Exchange understands that in general the
analysis will next consider whether there is any substantial countervailing basis to suggest the
fee’s terms fail to meet one or more standards under the Exchange Act. The Exchange further
understands that if the filing fails to demonstrate that the fee is constrained by competitive
forces, the SRO must provide a substantial basis, other than competition, to show that it is
consistent with the Exchange Act, which may include production of relevant revenue and cost
data pertaining to the product or service.

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

See supra note 12.

The Exchange has not determined its proposed overall market data fees based on
assumptions about market competition, instead relying upon a cost-plus model to determine a
reasonable fee structure that is informed by the Exchange’s understanding of different uses of the
products by different types of participants. In this context, the Exchange believes the proposed
fees overall are fair and reasonable as a form of cost recovery plus the possibility of a reasonable
return for the Exchange’s marginal costs of offering the Options Data Feeds. The Exchange
believes the proposed fees are reasonable because they are designed to generate annual revenue
to recoup some or all of Exchange’s annual marginal costs of providing market data in options
with a reasonable profit margin. The Exchange also believes that performing the Options Market
Data Cost Analysis utilizing the marginal costs related to the Options Data Feeds is reasonable
because as a new entrant in the equity options space, the Exchange simply cannot charge more at
this time based on what its competitors charge and what other options are available to market
participants for the receipt of options market data. If the Exchange chose to allocate the average
cost of providing market data to options and equities via a 50/50 split, then based on its proposed
pricing and the revenues projected, the analysis would result in a negative profit margin of
265%. Alternatively, the Exchange would need to significantly increase the fees charged for the
Options Data Feeds, which in turn, the Exchange believes would result in customers canceling
their access to such Options Data Feeds and potentially participating less on the Exchange.
Accordingly, the Exchange believes it is reasonable to seek to recover only the marginal costs
associated with the Options Data Feeds in this proposal. As discussed in the Purpose section, the
Exchange estimates that the Options Data Feed fees proposed herein will result in annual
revenue of approximately $342,000, representing a profit margin of approximately 10% for the
provision of Options Market Data. As such, the Exchange believes that this fee methodology is
reasonable because it allows the Exchange to recoup some or all of its marginal expenses for
providing options market data (with any additional revenue representing no more than what the
Exchange believes to be a reasonable rate of return). The Exchange also believes that the

proposed fees are reasonable because they are generally less than the fees charged by competing
options exchanges for comparable market data products, notwithstanding that the competing
exchanges may have different system architectures that may result in different cost structures for
the provision of market data.
The Exchange believes the proposed fees for the Options Data Feeds are reasonable when
compared to fees for comparable products, such as the MIAX Pearl Top of Market Feed, the
MIAX Pearl Liquidity Feed, and the BX Options Top and Depth Feeds, compared to which the
Exchange’s proposed fees are equivalent or lower, as well as other comparable data feeds priced
significantly higher than the Exchange’s proposed fees for the Options Data Feeds.33
Additionally, the Exchange’s single flat fee for each of its Options Data Feeds, regardless of use
type, offers a more simplistic approach to market data pricing. Specifically with respect to the
MEMOIR Options Depth feed, the Exchange believes that the proposed fee for such feed is
reasonable because it represents not only the value of the data available from the MEMOIR
Options Top feed, which has a lower proposed fee, but also the value of receiving the depth-ofbook data on an order-by-order basis. The Exchange believes it is reasonable to have pricing
based, in part, upon the amount of information contained in each data feed, which may have
additional value to market participants. The MEMOIR Options Top feed, as described above,
can be utilized to trade on the Exchange but contains less information than that is available on
the MEMOIR Options Depth feed. Thus, the Exchange believes it reasonable for the products to
be priced as proposed, with MEMOIR Options Depth having a higher price than MEMOIR
Options Top.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the
Options Data Feeds are reasonable.
Equitable Allocation

Id.

Overall. The Exchange believes that its proposed fees are reasonable, fair, and equitable,
and not unfairly discriminatory because they are designed to align fees with services provided.
The Exchange believes that the proposed fees are equitably allocated because they will apply
uniformly to all data recipients that choose to subscribe to the Options Data Feeds. Any Firm that
chooses to subscribe to one or both of the Options Data Feeds is subject to the same Fee
Schedule, regardless of what type of business they operate, and the decision to subscribe to one
or both of the Options Data Feeds is based on objective differences in usage of Options Data
Feeds among different Firms, which are still ultimately in the control of any particular Firm.
The Exchange believes the proposed pricing between Options Data Feeds is equitably allocated
because it is based, in part, upon the amount of information contained in each data feed, which
may have additional value to market participants. The MEMOIR Options Top feed, as described
above, can be utilized to trade on the Exchange but contains less information than that is
available on the MEMOIR Options Depth feed. Thus, the Exchange believes it is an equitable
allocation of fees for the products to be priced as proposed, with MEMOIR Options Top having
the lower price of the two Options Data Feeds.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the
Exchange Data Feeds are equitably allocated.
The Proposed Fees Are Not Unfairly Discriminatory
The Exchange believes the proposed fees for the Options Data Feeds are not unfairly
discriminatory because any differences in the application of the fees are based on meaningful
distinctions between the feeds themselves.
Overall. The Exchange believes that the proposed fees are not unfairly discriminatory
because they would apply to all data recipients that choose to subscribe to the same Options Data
Feed(s). Any Firm that chooses to subscribe to the Options Data Feeds is subject to the same Fee
Schedule, regardless of what type of business they operate. Because the proposed fee for
MEMOIR Options Depth is higher, Firms seeking lower cost options may instead choose to

receive data through the MEMOIR Options Top feed for a lower cost. Alternatively, Firms can
choose to receive data solely from the Options Price Reporting Authority (“OPRA”) for a lower
cost. The Exchange notes that Firms can also choose to subscribe to a combination of data feeds
for redundancy purposes or to use different feeds for different purposes. In sum, each Firm has
the ability to choose the best business solution for itself. The Exchange does not believe it is
unfairly discriminatory to base pricing upon the amount of information contained in each data
feed, which may have additional value to a market participant. As described above, the
MEMOIR Options Top feed can be utilized to trade on the Exchange but contains less
information than that is available on the MEMOIR Options Depth feed. Thus, the Exchange
believes it is not unfairly discriminatory for the products to be priced as proposed, with
MEMOIR Options Top having a lower price than MEMOIR Options Depth.
For all of the foregoing reasons, the Exchange believes that the proposed fees for the
Exchange Data Feeds are not unfairly discriminatory.
B.

Self-Regulatory Organization’s Statement on Burden on Competition

In accordance with section 6(b)(8) of the Act,34 the Exchange does not believe that the
proposed rule change would impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
Intra-Market Competition
The Exchange does not believe that the proposed fees for Options Data Feeds place
certain market participants at a relative disadvantage to other market participants because, as
noted above, the proposed fees are associated with usage of Options Data Feeds by each market
participant based on the type of business they operate, and the decision to subscribe to one or
both Options Data Feeds is based on objective differences in usage of Options Data Feeds among
different Firms, which are still ultimately in the control of any particular Firm, and such fees do
not impose a barrier to entry to smaller participants. Accordingly, the proposed fees for Options
15 U.S.C. 78f(b)(8).

Data Feeds do not favor certain categories of market participants in a manner that would impose
a burden on competition; rather, the allocation of the proposed fees reflects the types of Options
Data Feeds consumed by various market participants.
Inter-Market Competition
The Exchange does not believe the proposed fees place an undue burden on competition
on other SROs that is not necessary or appropriate. In particular, market participants are not
regulatorily required to subscribe to any of the Options Data Feeds, as described above.
Additionally, other exchanges have similar market data fees in place for their participants, but
with comparable and in many cases higher rates for options market data feeds.35 The proposed
fees are based on actual costs and are designed to enable the Exchange to recoup its applicable
costs with the possibility of a reasonable profit on its investment as described in the Purpose and
Statutory Basis sections. Competing options exchanges are free to adopt comparable fee
structures subject to the SEC rule filing process.
C.

Self-Regulatory Organization’s Statement on Comments on the Proposed Rule
Change Received from Members, Participants, or Others

The Exchange neither solicited nor received comments on the proposed rule change.
III.

Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the

Act36 and Rule 19b-4(f)(2)37 thereunder.
At any time within 60 days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the proposed rule change should be

See supra note 12.

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

17 CFR 240.19b-4(f)(2).

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
(https://www.sec.gov/rules/sro.shtml); or

•

Send an email to rule-comments@sec.gov. Please include file number
SR-MEMX-2024-25 on the subject line.

Paper Comments:
•

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

All submissions should refer to file number SR-MEMX-2024-25. 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 (https://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 a.m. and 3
p.m. Copies of the filing also will be available for inspection and copying at the principal office
of the Exchange. Do not include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We may redact in part or

withhold entirely from publication submitted material that is obscene or subject to copyright

protection. All submissions should refer to file number SR-MEMX-2024-25 and should be
submitted on or before [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
For the Commission, by the Division of Trading and Markets, pursuant to delegated
authority.38

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-14517 Filed: 7/1/2024 8:45 am; Publication Date: 7/2/2024]

17 CFR 200.30-3(a)(12).