Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 2611, Odd and Mixed Lots, 80200-80202 [2020-27201]
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80200
Federal Register / Vol. 85, No. 239 / Friday, December 11, 2020 / Notices
30, 2020, Applicant derived
approximately 82% of its gross income
from securities (other than Qualifying
Real Estate Assets) and approximately
18% of its gross income from Qualifying
Real Estate Assets. Applicant expects its
income from securities (other than
Qualifying Real Estate Assets and other
assets that are not Qualifying Real Estate
Assets but which are real estate-related
assets (‘‘Real Estate-Related Assets’’) to
continue to decrease, and its income
from Qualifying Real Estate Assets and
Real Estate-Related Assets to continue to
increase, as it continues to divest its
legacy portfolio assets and reinvest in
Qualifying Real Estate Assets and RealEstate Related Assets. Applicant
represents that currently it derives no
material portion of its gross income
from securities that are not Qualifying
Real Estate Assets or Real Estate-Related
Assets.
8. Upon deregistering as an
investment company, which will be the
final step in implementing the Business
Change Proposal, Applicant represents
that it will issue a press release to
shareholders indicating that it is no
longer a registered investment company
and will cease indicating in its financial
statements that it is a registered
investment company.
9. Applicant states that it is not
currently a party to any litigation or
administrative proceeding and has
timely complied with its obligations to
file annual and other reports with the
Commission.
10. Applicant represents that, if the
requested order is granted, its common
shares will continue to be traded on The
Nasdaq Stock Market LLC.
Applicant’s Legal Analysis:
1. Section 8(f) of the Act provides that
whenever the Commission, upon
application or its own motion, finds that
a registered investment company has
ceased to be an investment company,
the Commission shall so declare by
order and upon the taking effect of such
order, the registration of such company
shall cease to be in effect.
2. Section 3(a)(1)(A) of the Act defines
an ‘‘investment company’’ as any issuer
which ‘‘is or holds itself out as being
engaged primarily, or proposes to
engage primarily, in the business of
investing, reinvesting, or trading in
securities.’’ Section 3(a)(1)(B) of the Act
defines an ‘‘investment company’’ as
any issuer which ‘‘is engaged or
proposes to engage in the business of
issuing face-amount certificates of the
installment type, or has been engaged in
such business and has any such
certificate outstanding.’’
3. Section 3(a)(1)(C) of the Act defines
an ‘‘investment company’’ as any issuer
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which ‘‘is engaged or proposes to engage
in the business of investing, reinvesting,
owning, holding, or trading in
securities, and owns or proposes to
acquire investment securities having a
value exceeding 40 per centum of the
value of such issuer’s total assets
(exclusive of Government securities and
cash items) on an unconsolidated
basis.’’ Section 3(a)(2) of the Act defines
‘‘investment securities’’ as ‘‘all
securities except (A) Government
securities, (B) securities issued by
employees’ securities companies, and
(C) securities issued by majority-owned
subsidiaries of the owner which (i) are
not investment companies, and (ii) are
not relying on the exception from the
definition of investment company in
paragraph (1) or (7) of subsection (c).’’
4. Applicant states that it is no longer
an investment company as defined in
section 3(a)(1)(A), 3(a)(1)(B) or section
3(a)(1)(C). With regard to section
3(a)(1)(A), Applicant represents that it
now operates as a commercial mortgage
REIT, and argues that its historical
development, its public representations,
the activities of its directors and
officers, the nature of its present assets
and the sources of its present income
support this assertion.
5. With regard to section 3(a)(1)(B),
Applicant represents that it is not
engaged, and does not propose to
engage, in the business of issuing faceamount certificates of the installment
type, has not been engaged in such
business and does not have any such
certificate outstanding.
6. With regard to section 3(a)(1)(C),
Applicant represents that, as discussed
in greater detail below, the Real Estate
Subsidiary is excluded from the
definition of investment company by
virtue of section 3(c)(5)(C) of the Act
and that, as a result, securities issued by
the Real Estate Subsidiary are not
‘‘investment securities’’ within the
meaning of section 3(a)(2) of the Act.
Because the value of Applicant’s
interest in the Real Estate Subsidiary
exceeds 60% of the value of Applicant’s
Adjusted Total Assets, the value of any
‘‘investment securities’’ owned by
Applicant is less than 40% of the value
of Applicant’s Adjusted Total Assets.
Applicant, therefore, states that it is not
an investment company within the
meaning of section 3(a)(1)(C) of the Act.
7. Section 3(c)(5)(C) of the Act
excludes from the definition of an
investment company ‘‘any person who
is not engaged in the business of issuing
redeemable securities, face-amount
certificates of the installment type or
periodic payment plan certificates, and
who is primarily engaged in one or more
of the following businesses: . . . (C)
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Frm 00211
Fmt 4703
Sfmt 4703
purchasing or otherwise acquiring
mortgages and other liens on and
interests in real estate.’’
8. Applicant represents that, as of
November 30, 2020, the only assets of
the Real Estate Subsidiary were
mortgage loans fully secured by real
estate and, as a result, the Real Estate
Subsidiary meets the exclusion from the
definition of investment company in
section 3(c)(5)(C).
9. Applicant states that it is thus
qualified for an order of the Commission
pursuant to section 8(f) of the Act.
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–27206 Filed 12–10–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90579; File No. SR–
PEARL–2020–28]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 2611, Odd and Mixed Lots
December 7, 2020.
Pursuant to 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
23, 2020, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘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 a proposal to
amend Exchange Rule 2611 regarding
the handling of odd lot sized orders.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
1 15
2 17
E:\FR\FM\11DEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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
jbell on DSKJLSW7X2PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to amend Exchange Rule 2611
to provide that odd lot orders 3 would
no longer be processed differently than
orders that are a round lot or greater in
size.4 Exchange Rule 2611 sets forth the
requirements relating to odd and mixed
lot trading of equity securities on the
Exchange’s equity trading platform
(referred to herein as ‘‘MIAX PEARL
Equities’’). Exchange Rule 2611(b)
further provides that round lot, mixed
lot, and odd lot orders are treated in the
same manner on the Exchange, provided
that, the working and display price of a
displayable odd lot order will be
adjusted both on arrival and when
resting on the MIAX PEARL Equities
Book.5
Currently, Exchange Rule 2611(b)(1)
and subparagraphs (A)–(C) describe how
the working and displayed price of odd
lot orders are adjusted in relation to the
contra-side Protected Best Bid (‘‘PBB’’)
or Protected Best Offer (‘‘PBO’’,
collectively with PBB, the ‘‘PBBO’’). In
short, working and displayed prices of
odd lot orders are bound by either the
PBBO of an away trading center or of
the Exchange, which means resting odd
3 Exchange Rule 2610 provides that the unit of
trading in stocks is one (1) share. 100 shares
constitutes a ‘‘round lot,’’ unless specified by the
primary listing market to be fewer than 100 shares.
Any amount less than a round lot shall constitute
an ‘‘odd lot,’’ and any amount greater than a round
lot that is not a multiple of a round lot shall
constitute a ‘‘mixed lot.’’
4 The proposed rule change is substantially
similar to a recent rule amendment by the New
York Stock Exchange LLC (‘‘NYSE’’). See Securities
Exchange Act Nos. 88362 (March 12, 2020), 85 FR
15538 (March 18, 2020) (SR–NYSE–2020–13); and
88793 (May 1, 2020), 85 FR 27259 (May 7, 2020)
(SR–NYSE–2020–13) (‘‘NYSE Approval Order’’).
See also NYSE Rule 7.38.
5 See Exchange Rule 1901 defining the term
‘‘MIAX PEARL Equities Book’’.
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lot orders can be re-priced if the PBBO
changes or becomes locked or crossed.
Specifically, current Exchange Rule
2611(b)(1)(A) reflects standard behavior
and provides that if the limit price of an
odd lot order to buy (sell) is below
(above) the PBO (PBB) of an away
Trading Center, it will have a working
and display price equal to the limit
price. Current Exchange Rule
2611(b)(1)(B) provides that if the limit
price of an odd lot order to buy (sell) is
at or above (below) the PBO (PBB) of an
away Trading Center, it will have a
working price equal to the PBO (PBB).
The display price will also be adjusted
to one minimum price variation lower
(higher) than the PBO (PBB). Current
Exchange Rule 2611(b)(1)(C) provides
that if the PBBO is locked or crossed
and the limit price of an odd lot order
to buy (sell) resting on the MIAX PEARL
Equities Book is above (below) the PBO
(PBB) of an away Trading Center, it will
have a working and display price equal
to the PBB (PBO) of the Exchange.
Current Exchange Rule 2611(b)(1)(C)
further provides that the working and
display price of such odd lot order will
be adjusted again pursuant to
paragraphs (A) and (B) of Exchange Rule
2611(b)(1) should the PBBO unlock or
uncross.
As proposed, odd lot sized orders
would be handled in the same manner
as orders of a round lot size or higher,
and if they are designated displayed,
they would stand their ground if locked
or crossed by the PBBO of an away
trading center.6 The proposal would,
therefore, result in fewer orders being
re-priced, thereby allowing those orders
to retain their priority on the MIAX
PEARL Equites Book. To effect this
change, the Exchange proposes to delete
Exchange Rule 2611(b)(1) and subparagraphs (A)–(C) in their entirety. As
a result of these changes, Exchange Rule
2611(b) would provide, without any
qualifiers, that ‘‘[r]ound lot, mixed lot
and odd lot orders are treated in the
same manner on the Exchange.’’ The
Exchange proposes an additional nonsubstantive change to renumber current
Exchange Rule 2611(b)(2) as Exchange
Rule 2611(c).
Implementation
6 Like round and mixed lot sized orders, odd lot
sized orders would be subject to the Exchange price
sliding processes under Exchange Rule 2614(g).
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Frm 00212
Fmt 4703
that the implementation date will be in
the first half of 2021.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,7
in general, and furthers the objectives of
Section 6(b)(5),8 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, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Exchange believes
that processing odd lot sized orders in
the same manner as round and mixed
lot sized orders would remove
impediments to and perfect the
mechanism of a free and open market
because the same principle applies: an
order of any size that has been
displayed has priority at that price if an
away Trading Center subsequently locks
or crosses that price. In addition, the
Exchange believes that processing odd
lot orders the same as round-lot sized
orders is not novel as it is consistent
with the rules of other exchanges.9
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. In fact, the
Exchange believes that the proposal may
have a positive effect on competition
because it is designed to conform how
the Exchange processes odd lot orders to
the functionality available on other
exchanges. The Exchange believes that
the proposed change would promote
competition because fewer orders would
need to be repriced on the Exchange and
therefore liquidity providers seeking for
their orders to retain priority may route
additional orders to the Exchange.
Likewise, liquidity takers may be more
likely to route orders to the Exchange if
7 15
Due to the technological changes
associated with this proposed change,
the Exchange will issue a trading alert
publicly announcing the
implementation date of this proposed
rule change. The Exchange anticipates
Sfmt 4703
80201
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 See the NYSE Approval Order, supra note 5. See
NYSE Rule 7.38. See also Nasdaq Rules 4703(b)(3)
(defining the term ‘‘odd lot’’ as an order attribute)
and 4702 (describing which order attributes are
available for orders on Nasdaq, without any
discussion of odd lot sized orders being priced
differently than round-lot sized orders). See also
BZX Rules 11.10 (defining the term ‘‘odd lot’’) and
11.9 (describing BZX Orders and Modifiers, without
any discussion of odd lot sized orders being priced
differently than round-lot sized orders).
8 15
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80202
Federal Register / Vol. 85, No. 239 / Friday, December 11, 2020 / Notices
they have greater determinism regarding
the price at which their orders would be
executed.
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 10 and Rule 19b-4(f)(6) 11
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
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 rule-comments@
sec.gov. Please include File Number SR–
PEARL–2020–28 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.
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10 15
U.S.C. 78s(b)(3)(A).
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.
11 17
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23:25 Dec 10, 2020
Jkt 253001
All submissions should refer to File
Number SR–PEARL–2020–28. 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
10:00 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–PEARL–2020–28, and
should be submitted on or before
January 4, 2021.
(‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on November
23, 2020, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ 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 Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2020–27201 Filed 12–10–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90577; File No. SR–
NASDAQ–2020–079]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Relocate Its
Equity and General Rules From Its
Current Rulebook Into Its New
Rulebook Shell
December 7, 2020.
PO 00000
CFR 200.30–3(a)(12).
Frm 00213
Fmt 4703
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.
1. Purpose
The purpose of this rule change is to
relocate Nasdaq equity and general rules
from the current Rulebook into the new
Rulebook shell.3 The Exchange also
proposes a number of minor, nonsubstantive changes to the Rulebook
shell as described below. The relocation
and harmonization of these rules is part
of the Exchange’s continued effort to
promote efficiency and conformity of its
processes with those of its affiliated
exchanges. The Exchange believes that
the placement of these rules into their
new location in the Rulebook shell will
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Previously, the Exchange filed to relocate other
rules within its Rulebook. See Securities Exchange
Act Release No. 87778 (December 17, 2019), 84 FR
70590 (December 23, 2019) (SR–NASDAQ–2019–
098).
2 17
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
12 17
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to relocate its
equity and general rules from its current
Rulebook into its new Rulebook shell.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
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]]>Agencies
[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80200-80202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27201]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90579; File No. SR-PEARL-2020-28]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 2611, Odd and Mixed Lots
December 7, 2020.
Pursuant to 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 23, 2020, MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'')
filed with the Securities and Exchange Commission (``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 2611
regarding the handling of odd lot sized orders.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.
[[Page 80201]]
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 Exchange Rule
2611 to provide that odd lot orders \3\ would no longer be processed
differently than orders that are a round lot or greater in size.\4\
Exchange Rule 2611 sets forth the requirements relating to odd and
mixed lot trading of equity securities on the Exchange's equity trading
platform (referred to herein as ``MIAX PEARL Equities''). Exchange Rule
2611(b) further provides that round lot, mixed lot, and odd lot orders
are treated in the same manner on the Exchange, provided that, the
working and display price of a displayable odd lot order will be
adjusted both on arrival and when resting on the MIAX PEARL Equities
Book.\5\
---------------------------------------------------------------------------
\3\ Exchange Rule 2610 provides that the unit of trading in
stocks is one (1) share. 100 shares constitutes a ``round lot,''
unless specified by the primary listing market to be fewer than 100
shares. Any amount less than a round lot shall constitute an ``odd
lot,'' and any amount greater than a round lot that is not a
multiple of a round lot shall constitute a ``mixed lot.''
\4\ The proposed rule change is substantially similar to a
recent rule amendment by the New York Stock Exchange LLC (``NYSE'').
See Securities Exchange Act Nos. 88362 (March 12, 2020), 85 FR 15538
(March 18, 2020) (SR-NYSE-2020-13); and 88793 (May 1, 2020), 85 FR
27259 (May 7, 2020) (SR-NYSE-2020-13) (``NYSE Approval Order''). See
also NYSE Rule 7.38.
\5\ See Exchange Rule 1901 defining the term ``MIAX PEARL
Equities Book''.
---------------------------------------------------------------------------
Currently, Exchange Rule 2611(b)(1) and subparagraphs (A)-(C)
describe how the working and displayed price of odd lot orders are
adjusted in relation to the contra-side Protected Best Bid (``PBB'') or
Protected Best Offer (``PBO'', collectively with PBB, the ``PBBO''). In
short, working and displayed prices of odd lot orders are bound by
either the PBBO of an away trading center or of the Exchange, which
means resting odd lot orders can be re-priced if the PBBO changes or
becomes locked or crossed.
Specifically, current Exchange Rule 2611(b)(1)(A) reflects standard
behavior and provides that if the limit price of an odd lot order to
buy (sell) is below (above) the PBO (PBB) of an away Trading Center, it
will have a working and display price equal to the limit price. Current
Exchange Rule 2611(b)(1)(B) provides that if the limit price of an odd
lot order to buy (sell) is at or above (below) the PBO (PBB) of an away
Trading Center, it will have a working price equal to the PBO (PBB).
The display price will also be adjusted to one minimum price variation
lower (higher) than the PBO (PBB). Current Exchange Rule 2611(b)(1)(C)
provides that if the PBBO is locked or crossed and the limit price of
an odd lot order to buy (sell) resting on the MIAX PEARL Equities Book
is above (below) the PBO (PBB) of an away Trading Center, it will have
a working and display price equal to the PBB (PBO) of the Exchange.
Current Exchange Rule 2611(b)(1)(C) further provides that the working
and display price of such odd lot order will be adjusted again pursuant
to paragraphs (A) and (B) of Exchange Rule 2611(b)(1) should the PBBO
unlock or uncross.
As proposed, odd lot sized orders would be handled in the same
manner as orders of a round lot size or higher, and if they are
designated displayed, they would stand their ground if locked or
crossed by the PBBO of an away trading center.\6\ The proposal would,
therefore, result in fewer orders being re-priced, thereby allowing
those orders to retain their priority on the MIAX PEARL Equites Book.
To effect this change, the Exchange proposes to delete Exchange Rule
2611(b)(1) and sub-paragraphs (A)-(C) in their entirety. As a result of
these changes, Exchange Rule 2611(b) would provide, without any
qualifiers, that ``[r]ound lot, mixed lot and odd lot orders are
treated in the same manner on the Exchange.'' The Exchange proposes an
additional non-substantive change to renumber current Exchange Rule
2611(b)(2) as Exchange Rule 2611(c).
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\6\ Like round and mixed lot sized orders, odd lot sized orders
would be subject to the Exchange price sliding processes under
Exchange Rule 2614(g).
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Implementation
Due to the technological changes associated with this proposed
change, the Exchange will issue a trading alert publicly announcing the
implementation date of this proposed rule change. The Exchange
anticipates that the implementation date will be in the first half of
2021.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\7\ in general, and furthers the objectives of Section 6(b)(5),\8\
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, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. The Exchange believes that
processing odd lot sized orders in the same manner as round and mixed
lot sized orders would remove impediments to and perfect the mechanism
of a free and open market because the same principle applies: an order
of any size that has been displayed has priority at that price if an
away Trading Center subsequently locks or crosses that price. In
addition, the Exchange believes that processing odd lot orders the same
as round-lot sized orders is not novel as it is consistent with the
rules of other exchanges.\9\
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ See the NYSE Approval Order, supra note 5. See NYSE Rule
7.38. See also Nasdaq Rules 4703(b)(3) (defining the term ``odd
lot'' as an order attribute) and 4702 (describing which order
attributes are available for orders on Nasdaq, without any
discussion of odd lot sized orders being priced differently than
round-lot sized orders). See also BZX Rules 11.10 (defining the term
``odd lot'') and 11.9 (describing BZX Orders and Modifiers, without
any discussion of odd lot sized orders being priced differently than
round-lot sized orders).
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act. In fact, the Exchange
believes that the proposal may have a positive effect on competition
because it is designed to conform how the Exchange processes odd lot
orders to the functionality available on other exchanges. The Exchange
believes that the proposed change would promote competition because
fewer orders would need to be repriced on the Exchange and therefore
liquidity providers seeking for their orders to retain priority may
route additional orders to the Exchange. Likewise, liquidity takers may
be more likely to route orders to the Exchange if
[[Page 80202]]
they have greater determinism regarding the price at which their orders
would be executed.
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 \10\ and Rule 19b-4(f)(6) \11\
thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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-2020-28 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-2020-28. 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 10:00 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-PEARL-2020-28, and should be submitted
on or before January 4, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27201 Filed 12-10-20; 8:45 am]
BILLING CODE 8011-01-P
