[Federal Register Volume 89, Number 243 (Wednesday, December 18, 2024)]
[Notices]
[Pages 102982-102985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29928]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101902; File No. SR-PEARL-2024-57]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Equities Fee Schedule To Make a Non-Substantive Change
December 12, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 102983]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 4, 2024, MIAX PEARL, LLC (``MIAX Pearl'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange has designated the
proposed rule change as constituting a ``non-controversial'' rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
receipt of this filing by the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 fee schedule (the ``Fee
Schedule'') applicable to MIAX Pearl Equities, an equities trading
facility of the Exchange.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-equities/pearl-equities/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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the table in Section (1)(a) of the
Fee Schedule, which provides the Exchange's standard rates for adding
or removing liquidity in all securities, to make a non-substantive,
clarifying change.
Background
Currently, the Standard Rates table in Section (1)(a) of the Fee
Schedule provides the standard rates for executions of orders in all
securities that add or remove liquidity from the Exchange as well as
the corresponding liquidity indicator code applicable to such
transaction. In particular, the Exchange provides a standard rebate of
($0.0021) \5\ per share for executions of orders in securities priced
at or above $1.00 per share that add displayed liquidity to the
Exchange across all tapes.\6\ The Exchange provides a standard rebate
of 0.15% of the total dollar value of the transaction for executions of
orders in securities priced below $1.00 per share that add displayed
liquidity to the Exchange across all tapes.\7\ The Exchange provides in
the Standard Rates table in Section (1)(a) of the Fee Schedule that the
liquidity indicator codes that apply to the above-described
transactions are ``AA'' (Adds Liquidity, Displayed Order (Tape A));
``AB'' (Adds Liquidity, Displayed Order (Tape B)); ``AC'' (Adds
Liquidity, Displayed Order (Tape C)); and ``AR'' (Retail Order, Adds
Liquidity, Displayed Order (All Tapes)).\8\ Effective beginning July 1,
2021, the Exchange established liquidity indicator code ``AR,'' which
provides a higher standard rebate for executions of Retail Orders in
securities priced at or above $1.00 per share that add displayed
liquidity to the Exchange across all tapes. This is the ``standard
rate'' of ($0.0037) per share for such Retail Order transactions.\9\
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\5\ Rebates are indicated by parentheses. See the General Notes
section of the Fee Schedule.
\6\ See Fee Schedule, Section (1)(a).
\7\ Id.
\8\ A ``Retail Order'' is an agency or riskless principal order
that meets the criteria of FINRA Rule 5320.03 that originates from a
natural person and is submitted to the Exchange by a Retail Member
Organization, provided that no change is made to the terms of the
order with respect to price or side of market and the order does not
originate from a trading algorithm or any other computerized
methodology. See Exchange Rule 2626(a)(2).
\9\ See Securities Exchange Act Release No. 92452 (July 20,
2021), 86 FR 40092 (July 26, 2021) (SR-PEARL-2021-34).
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Proposal
The Exchange proposes to amend the Standard Rates table in Section
(1)(a) of the Fee Schedule to add a new column that will describe the
rebate applicable to executions of Retail Orders in all securities that
add displayed liquidity to the Exchange across all tapes. The Exchange
proposes to delete liquidity indicator code ``AR'' from the first
column of rebates titled ``Adding Liquidity Displayed Order'' and
create a new column titled ``Adding Liquidity Displayed Retail Order,''
which will apply only to liquidity indicator code ``AR''. Since
liquidity indicator code ``AR'' is currently in the first column of the
Standard Rates table, this suggests incorrectly that the rebate for
executions of Retail Orders in securities at or above $1.00 per share
that add displayed liquidity to the Exchange across all tapes is
($0.0021) per share; however, since July 2021, the Exchange has
provided market participants the correct rebate of ($0.0037) per share
for such transactions in Retail Orders. This proposal will eliminate
the erroneous text regarding the rebate applicable to executions of
Retail Orders in securities at or above $1.00 per share that add
displayed liquidity to the Exchange across all tapes.
The proposed new column will describe the current standard rates
applicable to executions of Retail Orders in all securities that add
displayed liquidity to the Exchange across all tapes. In particular,
the first row of the new column will show the standard rebate of
($0.0037) per share for executions Retail Orders in securities priced
at or above $1.00 per share that add displayed liquidity to the
Exchange across all tapes. The second row will show the standard rebate
of 0.15% of the total dollar value of the transaction for executions
Retail Orders in securities priced below $1.00 per share that add
displayed liquidity to the Exchange across all tapes. Finally, the
third row will show the applicable liquidity indicator code of ``AR.''
The Exchange does not propose to amend any rebates or fees. The purpose
of the proposed change is to provide greater clarity within the Fee
Schedule.
2. Statutory Basis
The Exchange believes that the proposed change is consistent with
Section 6(b) of the Act \10\ in general, and further the objectives of
Section 6(b)(5) of the Act,\11\ in particular, in that it is designed
to promote just and equitable principles of trade, foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, protect investors and the public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed changes promote just and
equitable principles of trade and remove impediments to and perfects
the
[[Page 102984]]
mechanism of a free and open market and a national market system
because the proposed changes will provide greater clarity to Equity
Members \12\ and the public regarding the Exchange's Fee Schedule. This
is because the Fee Schedule, as currently stated, may be unclear as to
which rebate market participants will receive for executions of Retail
Orders in securities priced at or above $1.00 per share that add
displayed liquidity to the Exchange, which is ($0.0037) per share and
not ($0.0021) per share.\13\ The proposed changes will provide greater
clarity within the Fee Schedule by eliminating what could be read as an
inapplicable rebate of ($0.0021) per share for executions of Retail
Orders in securities priced at or above $1.00 per share that add
displayed liquidity to the Exchange since the Exchange established the
rebate of ($0.0037) per share for such transactions in Retail Orders in
July 2021 and has provided the correct rebate since that time.
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\12\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
\13\ See Fee Schedule, Section (1)(a).
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With the addition of the new column, the Exchange will provide
greater clarity regarding the standard rates in the Fee Schedule. The
Exchange believes this proposed change will make it easier for Equity
Members to interpret the Exchange's Fee Schedule, render the Fee
Schedule more accurate and reduce potential investor confusion, which
removes impediments to and perfects the mechanism of a free and open
market and a national market system. The Exchange does not propose to
amend any rebates or fees. It is in the public interest for the
Exchange's Fee Schedule to be clear and consistent so as to eliminate
the potential for confusion.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. Specifically, the Exchange believes the
proposed change will not impose any burden on intra-market competition
as there is no change to the Exchange's rebates or fees and because the
Exchange's Fee Schedule will continue to apply equally to all market
participants. The proposal will have no impact on competition as it is
not designed to address any competitive issue but rather is designed to
provide clarity regarding the Exchange's rebates for certain types of
transactions. The proposal will not impose any burden on competition;
rather it will make it easier for Equity Members to interpret the
Exchange's Fee Schedule, which may reduce potential investor confusion.
The Exchange does not believe the proposal will impose any burden
on inter-market competition as the proposal does not address any
competitive issues and is intended to protect investors by providing
greater clarity regarding the Exchange's standard rate for executions
of Retail Orders in securities priced at or above $1.00 per share that
add displayed liquidity to the Exchange across all tapes. The Exchange
does not believe that the proposal will harm another exchange's ability
to compete. Accordingly, the Exchange does not believe the proposal
imposes any burden on competition that is 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 if consistent with the
protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) \15\ thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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, along
with a brief description and text of 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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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange states that
the proposed rule change does not significantly affect the protection
of investors or the public interest because the proposed addition of a
new column to show the standard rates for executions of Retail Orders
in all securities that add displayed liquidity to the Exchange across
all tapes is a non-substantive, clarifying edit that does not propose
to amend any current fees or rebates. Further, the Exchange states that
is in the public interest for the Fee Schedule to be clear and
consistent. The proposed rule change does not raise any new or novel
issues, and is intended to reduce the potential for confusion within
the Exchange's Fee Schedule. For these reasons, the Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposal operative upon filing.\18\
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-2024-57 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.
[[Page 102985]]
All submissions should refer to file number SR-PEARL-2024-57. 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-2024-57 and should be
submitted on or before January 8, 2025.
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. 2024-29928 Filed 12-17-24; 8:45 am]
BILLING CODE 8011-01-P