[Federal Register Volume 88, Number 221 (Friday, November 17, 2023)]
[Notices]
[Pages 80366-80369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25380]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98908; File No. SR-PEARL-2023-62]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Provide an
Additional Means To Access the Exchange's Equity Trading Platform
Member Firm Portal
November 13, 2023
Pursuant to the provisions of 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 November 2, 2023, MIAX PEARL, LLC (``MIAX
Pearl'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a 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.
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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 provide an additional means to access the
Exchange's equity trading platform (referred to herein as ``MIAX Pearl
Equities'') Member Firm Portal.\3\
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\3\ See MIAX Exchanges Member Firm Portal User Manual, available
at https://www.miaxglobal.com/sites/default/files/page-files/MIAX_Exchanges_Member_Firm_Portal_User_Manual_07142023.pdf.
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The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings, at MIAX Pearl's principal office, 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.
[[Page 80367]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange provides Equity Members \4\ access to an internet-
facing portal which provides self-service functions to Equity Members,
known as the Member Firm Portal (``MFP''). Specifically, the MFP allows
Equity Members to view current connectivity and services, manage
various order entry settings,\5\ view all orders and cancel individual
open orders, and view current and request changes for current session
notifications, session configurations, and Market Participant
Identifier (``MPID'') configurations. The MFP also provides Equity
Members the ability to adjust risk settings and allows Equity Market
Makers \6\ to view and manage their securities assignments. The MFP
allows Equity Members to more efficiently manage their back office
operations at the Equity Member level. Currently, access to the MFP is
provided on a per user basis, whereby Equity Members seek to have
individuals within their organization permissioned to access the MFP
via a web portal on their behalf (known as the ``MFP User Interface''
or ``MFP UI''). The Exchange provides the MFP UI to Equity Members free
of charge.\7\
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\4\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
\5\ This includes whether an order should be attributed by its
MPID or as Retail on the Exchange's proprietary data feeds or when
routed pursuant to the PAC routing option, adjusting port level
settings, adjusting risk controls, and retrieving assignment history
for a given symbol assignments. See, e.g., Exchange Rules
2614(c)(5), 2617(a)(5)(ii)(A)(3), 2618(a), and 2622(f).
\6\ The term ``Equities Market Maker'' shall mean an Equity
Member that acts as a Market Maker in equity securities, pursuant to
Chapter XXVI. See Exchange Rule 1901.
\7\ The Exchange does not currently intend to charge fees for
API access to the MFP and will submit a separate filing with the
Commission pursuant to Section 19(b)(1) should it decide to do so in
the future.
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Equity Members have requested that the Exchange also provide access
to the MFP via an Application Programming Interface (``API'' and
together ``MFP API''), in addition to the current MFP UI accessed via
the web portal. The Exchange currently provides MFP API to Members \8\
on it options platform,\9\ as do its affiliates, Miami International
Holdings, LLC (``MIAX'') and MIAX Emerald, LLC (``MIAX Emerald'').\10\
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\8\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of these
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Act. See Exchange Rule 100.
\9\ See Securities Exchange Act Release No. 98016 (July 28,
2023), 88 FR 51364 (August 3, 2023) (SR-PEARL-2023-32) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Provide an Additional Means of Access to the Member Firm Portal
Through an Application Programming Interface).
\10\ See Securities Exchange Act Release Nos. 98017 (July 28,
2023), 88 FR 51366 (August 3, 2023) (SR-MIAX-2023-29); and 98018
(July 28, 2023), 88 FR 51374 (August 3, 2023) (SR-EMERALD-2023-18)
(Notices of Filing and Immediate Effectiveness of a Proposed Rule
Change To Provide an Additional Means of Access to the Member Firm
Portal Through an Application Programming Interface).
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In sum, an API is a way for two or more computer programs to talk
to each other. It is a software to software interface that defines the
data and the transactions that can be communicated between systems. In
providing the MPF API, functions that would otherwise be done manually
via the MFP UI, can be automated. The MFP API, in essence, facilitates
and expedites the transaction processing for the supported
functionality such that Equity Members can automate their interactions
with the MFP. This allows for more efficient processing, the potential
reduction of operational risk due to issues caused by human error, the
timeliness of the completion of MFP-related functions, etc.\11\
Providing API access to the MFP would allow Equity Members to enable
their systems and applications to communicate directly with the MFP,
thereby eliminating or reducing the need for individuals to access the
MFP UI via the web portal.
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\11\ See, e.g., What is an API?, available at https://www.ibm.com/topics/api (last visited October 9, 2023).
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The Exchange does not propose to alter the current MFP or MFP UI.
The Exchange simply proposes to provide an additional and optional
means to access the MFP, in the form of an API. API access to the MFP
would allow an Equity Member's applications to communicate directly
with the MFP. Therefore, by its nature, the MFP API does not lend
itself to access on a per user basis, as is the case today with the MFP
UI via the web portal. API access would allow Equity Members to
automate functions they perform today on the MFP, such as adjusting
risk settings or managing various order entry settings. Equity Members
who do not prefer to access the MFP API would be able to perform the
same functions when accessing the MFP UI via the current web portal.
However, due to associated technological changes needed to provide API
access, the Exchange does not plan to offer all MFP functionality that
is currently available via the MFP UI on day one and intends to rollout
the functionality over a period of time.
The Exchange notes that the use of accessing the MFP API would be
completely voluntary and would simply be a second optional means to
access the MFP. Equity Members who wish to continue to access the MFP
UI via the web portal may continue to do so for no fee.
Implementation Date and Rollout
Due to the technological changes associated with this proposed
change, the Exchange will issue a trading alert publicly announcing the
implementation date of the proposed rule change and will announce in
that trading alert which MFP functions will be available via the API.
The Exchange anticipates that it will begin to offer API access to the
MFP in first quarter of 2024. The Exchange will issue a trading alert
each time it makes additional MFP functions available via the API.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\12\ in general, and
Section 6(b)(5),\13\ in particular, because it is designed to prevent
fraudulent and manipulative acts and practices, 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, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The Exchange notes that providing the MFP API to Equity Members is
consistent with the Act in that the use of MFP API is completely
voluntary and simply provides Equity Members with an additional means
to access the Exchange's MFP. The MFP is a useful tool for Equity
Members to manage their trading on the Exchange, including back office
operations, risk controls settings, and Equity Market Maker
assignments. The Exchange also notes that it currently provides MFP API
to Members on it options platform,\14\ as do its affiliates, MIAX and
MIAX Emerald.\15\ The Exchange simply seeks to do the same for MIAX
Pearl Equities in this filing.
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\14\ See supra note 9.
\15\ See supra note 10.
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As noted above, accessing the MFP via an API would be an optional
alternative to web access. Those not
[[Page 80368]]
electing to access the MFP via an API may continue to use the MFP UI
via the web portal free of charge. The MFP, whether accessed via an API
or web portal, allow Equity Members to more efficiently manage their
back office operations, view all orders and cancel individual open
orders, and view current and request changes for current session
notifications, session configurations, MPID configurations, and in
managing Equity Market Maker assignments. The Exchange notes that trade
information in the MFP is specific to each Equity Member and their
trades, allowing them to conveniently manage their back office
operations as needed.
Providing API access to the MFP would be provided purely for
convenience, in response to Equity Member demand, and would be entirely
optional. As stated above, API access to the MFP would enable Equity
Members to connect their applications to the MFP allowing their
application to communicate directly with the MFP. This enables Equity
Members to automate functions that would normally be performed by
individual users access the MFP via the current web portal, such as
adjusting risk settings and managing various order entry settings.
Equity Members who do not prefer to access the MFP API would be able to
perform the same functions by accessing the MFP UI via the existing web
portal.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. API access to
the MFP would simply be an optional additional means to access the MFP.
The Exchange does not believe that the proposal would impose any
inappropriate burden on intramarket competition because Equity Members
who access the MFP via an API would not receive any competitive
advantage over those who access it via the current web portal because
any functionality available to Equity Members who access the MFP via an
API would be available to those who access MFP UI via the current web
portal. API access would simply be a convenience and would enable
Equity Members to automate their back office operations performed via
the MFP as they choose. The Exchange does not believe an Equity
Member's ability to automate this functionality provides any
competitive advantage when trading on the Exchange because the MFP is
only used by Equity Members for back office operations and not order
entry or execution.
The Exchange believes that the proposed rule change would not
impose any inappropriate burden on intermarket competition as other
exchanges currently offer similar API access to their comparable member
portals.\16\ The proposal would enhance the Exchange's competitive
position vis-a-vis other exchanges by allowing it to upgrade the means
of access to its MFP, which would provide added convenience to Equity
Members that wish to utilize the MFP via an API. Further, the proposed
rule change would enable the Exchange to improve its customer service
and enhance Equity Members' experience when managing their back office
and other operations performed via the MFP.
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\16\ See, e.g., Cboe US Secure Web API manual, available at
https://cdn.cboe.com/resources/membership/US_Secure_Web_API.pdf.
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As such, the Exchange does not believe that the proposed rule
change will impose any burden on intermarket or intramarket competition
not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6) \18\
thereunder.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-PEARL-2023-62 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-PEARL-2023-62. 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-PEARL-2023-62 and should be
submitted on or before December 8, 2023.
[[Page 80369]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25380 Filed 11-16-23; 8:45 am]
BILLING CODE 8011-01-P