Found this in the latest NYSE rule filing. Appears to be an appeal against the ban of some well known dark pools

No, this is absolutely incorrect. These filings are about cutting off data streams that these platforms were either [freeloading] or [previously had at a different rate]. The filings talk about amending the fee structure for such data streams to accommodate hardware and bandwidth at the exchange - hence colocation. The 14-day period is to allow them to either find an alternative or start paying the exchanges for the data streams.

Correct but hear me out on why it’s relevant. The fees are what makes MEMX and the others that got suspended dark markets. These are the data feeds that HFT like Citadel and Virtu use to take advantage of payment for order flow. The fees are also astronomical and provide a huge barrier to entry for anybody but the largest hedge funds:

“Cifu claimed that exchanges charge a total of $1,188,000 every year for six cross connects, which are cables that plug into the exchanges for connectivity. He added that his firm contacted a cable vendor in Hicksville and bought one for just $189 – it can even be found on Amazon for $89. Six cables in total, one primary and one backup, to connect to NYSE, Nasdaq and Cboe, means the cost to the exchanges on this basis, in terms of providing access and connectivity, could be as low as $1,300.” Source

OP got it absolutely wrong. With the potential exception of Morgan Stanley, these are not dark pool exchanges. Just Google each one of those entities with the phrase "dark pool" and you won't get any returns other than Morgan Stanley. Morgan Stanley was once affiliated with a dark pool in some way, and that's where I stopped reading.

Which leads me to your second point which is that they’re not dark pools. This is not exactly true as the data in those data feeds is not accessible to all market participants. The high cost is a huge barrier to entry and creates unfair market conditions.

Here’s a quote from this article I found about MEMX that I thought was relevant:

“Paul Rowady, of Alphacution Research Conservatory, among others, points to MEMX’s vow to reduce exchange fees, writing for Tabb Forum. MEMX wants to be the last stop on the "Payments for Order Flow" train. To ride the MEMX train, a retail order (read price-insensitive and slow order):

  1. goes to a retail broker (Charles Schwab Corporation (SCHW), Fidelity Investments, E*TRADE Financial Corp. (ETFC), Robinhood, and TD Ameritrade (AMTD)].
  2. The broker is paid by high-frequency traders (HFTs) for order flow.is routed to an HFT [Virtu Financial (VIRT), Citadel, and Jane Street] which pays the exchange for limit orders
  3. and thence to an exchange.

But the basic incentive for Wall Street to back MEMX is clear. The broker-dealer community believes it is being soaked by the Big Three exchange management firms. MEMX charges lower fees for data feeds.”

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