Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 531, Reports and Market Data Products, To Adopt the Liquidity Taker Event Report for Options Trading, 30337-30341 [2021-11798]
Download as PDF
<![CDATA[
Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
The General Counsel of the
Corporation has certified that in his
opinion, one or more of the exemptions
set forth in 5 U.S.C. 552 (b)(2) and (4)
permit closure of the following
portion(s) of this meeting:
• Executive Session
Agenda
I. Call to Order
II. Executive Session Discussion with
General Counsel and Chief Audit
Executive
III. Executive Session Executive
Compensation Review
IV. Executive Session: Report from CEO
V. Executive Session: Report from CFO
VI. NeighborWorks CompassTM Update
VII. Action Item Approval of Minutes
VIII. Action Item Board Elections and
Appointments
IX. Action Item Revision of Bylaws for
Creation of the Chief Information
Officer Position
X. Action Item Management Elections
XI. Action Item Grants to the Capital
Corporations
XII. Action Item HPN Launchpad
Contract Extension
XIII. Action Item LIFT 8.0
XIV. Discussion Item Annual Ethics
Review
XV. Discussion Item Annual Review of
Governance Operations Guide
XVI. Discussion Item Investment Policy
Review
XVII. Management Program Background
and Updates
XVIII. Adjournment
Portions Open to the Public:
Everything except the Executive
Session.
Portions Closed to the Public:
Executive Session.
CONTACT PERSON FOR MORE INFORMATION:
Lakeyia Thompson, Special Assistant,
(202) 524–9940; Lthompson@nw.org.
Lakeyia Thompson,
Special Assistant.
Week of June 7, 2021
Tuesday, June 8, 2021
10 a.m. Briefing on Human Capital and
Equal Employment Opportunity
(Public Meeting); (Contact: Anne
DeFrancisco: 610–337–5078)
Additional Information: Due to
COVID–19, there will be no physical
public attendance. The public is invited
to attend the Commission’s meeting live
by webcast at the Web address—https://
video.nrc.gov/.
Thursday, June 10, 2021
10 a.m. Briefing on Results of the
Agency Action Review Meeting
(Public Meeting); (Contact: Nicole
Fields: 630–829–9570)
Additional Information: Due to
COVID–19, there will be no physical
public attendance. The public is invited
to attend the Commission’s meeting live
by webcast at the Web address—https://
video.nrc.gov/.
Week of June 14, 2021—Tentative
There are no meetings scheduled for
the week of June 14, 2021.
Week of June 21, 2021—Tentative
Week of June 28, 2021—Tentative
There are no meetings scheduled for
the week of June 28, 2021.
Week of July 5, 2021—Tentative
There are no meetings scheduled for
the week of July 12, 2021.
CONTACT PERSON FOR MORE INFORMATION:
NUCLEAR REGULATORY
COMMISSION
[NRC–2021–0001]
khammond on DSKJM1Z7X2PROD with NOTICES
Sunshine Act Meetings
Weeks of June 7, 14, 21,
28, July 5, 12, 2021.
PLACE: Commissioners’ Conference
Room, 11555 Rockville Pike, Rockville,
Maryland.
STATUS: Public.
MATTERS TO BE CONSIDERED:
TIME AND DATE:
VerDate Sep<11>2014
20:21 Jun 04, 2021
Jkt 253001
For more information or to verify the
status of meetings, contact Wesley Held
at 301–287–3591 or via email at
Wesley.Held@nrc.gov. The schedule for
Commission meetings is subject to
change on short notice.
The NRC Commission Meeting
Schedule can be found on the internet
at: https://www.nrc.gov/public-involve/
public-meetings/schedule.html.
The NRC provides reasonable
accommodation to individuals with
disabilities where appropriate. If you
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
Dated: June 3, 2021.
For the Nuclear Regulatory Commission.
Wesley W. Held,
Policy Coordinator, Office of the Secretary.
BILLING CODE 7590–01–P
9 a.m. Briefing on Transformation at
the NRC—Midyear Review (Public
Meeting); (Contact: Maria ArribasColon: 301–415–6026)
Additional Information: Due to
COVID–19, there will be no physical
public attendance. The public is invited
to attend the Commission’s meeting live
by webcast at the Web address—https://
video.nrc.gov/.
Week of July 12, 2021—Tentative
BILLING CODE 7570–02–P
need a reasonable accommodation to
participate in these public meetings or
need this meeting notice or the
transcript or other information from the
public meetings in another format (e.g.,
braille, large print), please notify Anne
Silk, NRC Disability Program Specialist,
at 301–287–0745, by videophone at
240–428–3217, or by email at
Anne.Silk@nrc.gov. Determinations on
requests for reasonable accommodation
will be made on a case-by-case basis.
Members of the public may request to
receive this information electronically.
If you would like to be added to the
distribution, please contact the Nuclear
Regulatory Commission, Office of the
Secretary, Washington, DC 20555, at
301–415–1969, or by email at
Wendy.Moore@nrc.gov or Tyesha.Bush@
nrc.gov.
The NRC is holding the meetings
under the authority of the Government
in the Sunshine Act, 5 U.S.C. 552b.
[FR Doc. 2021–12016 Filed 6–3–21; 4:15 pm]
Tuesday, June 22, 2021
There are no meetings scheduled for
the week of July 5, 2021.
[FR Doc. 2021–12020 Filed 6–3–21; 4:15 pm]
30337
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92082; File No. SR–
PEARL–2021–25]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 531,
Reports and Market Data Products, To
Adopt the Liquidity Taker Event Report
for Options Trading
June 1, 2021.
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 May 19,
2021, 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 Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
1 15
2 17
E:\FR\FM\07JNN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
07JNN1
30338
Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
provide for the new ‘‘Liquidity Taker
Event Report’’.
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.
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
khammond on DSKJM1Z7X2PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Exchange Rule 531(a) to provide for the
new ‘‘Liquidity Taker Event Report’’
(the ‘‘Report’’). The proposed Report is
identical to that previously adopted by
the Exchange’s affiliate, MIAX Emerald,
LLC (‘‘MIAX Emerald’’), and approved
by the Securities and Exchange
Commission (‘‘Commission’’).3 The
proposed Report would only be
available for options trading on the
Exchange.
The Report is an optional product 4
available to Members.5 Currently, the
Exchange provides real-time prices and
analytics in the marketplace. The
Exchange believes the additional data
points from the matching engine
outlined below may help Members gain
a better understanding about their
3 See Securities Exchange Act Release No. 91787
(May 6, 2021), 85 FR 26111 (May 12, 2021) (SR–
EMERALD–2021–09) (Order Approving Proposed
Rule Change to Adopt Exchange Rule 531(a),
Reports, to Provide for a New ‘‘Liquidity Taker
Event Report’’).
4 The Exchange intends to submit a separate filing
with the Commission pursuant to Section 19(b)(1)
to propose fees for the Liquidity Taker Event
Report.
5 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
VerDate Sep<11>2014
17:36 Jun 04, 2021
Jkt 253001
interactions with the Exchange. The
Exchange believes the Report will
provide Members with an opportunity
to learn more about better opportunities
to access liquidity and receive better
execution rates. The proposed Report
will increase transparency and
democratize information so that all
firms that subscribe to the Report have
access to the same information on an
equal basis, even for firms that do not
have the appropriate resources to
generate a similar report regarding
interactions with the Exchange. None of
the components of the proposed Report
include real-time market data.
Members generally would use a
liquidity accessing order if there is a
high probability that it will execute
against an order resting on the
Exchange’s Book.6 The proposed Report
would identify by how much time an
order that may have been marketable
missed an execution. The proposed
Report will provide greater visibility
into the missed trading execution,
which will allow Members to optimize
their models and trading patterns to
yield better execution results.
The proposed Report will be a
Member-specific report and will help
Members to better understand by how
much time a particular order missed
executing against a specific resting
order, thus allowing that Member to
determine whether it wants to invest in
the necessary resources and technology
to mitigate missed executions against
certain resting orders on the Exchange’s
Book. For example, Member A submits
an order that is posted to the Book and
then Member B enters a marketable
order to execute against Member A’s
resting order. Immediately thereafter,
Member C sends a marketable order to
execute against Member A’s resting
Order. Because Member B’s order is
received by the Exchange before
Member C’s order, Member B’s order
executes against Member A’s resting
order. The proposed Report would
provide Member C the data points
necessary for that firm to calculate by
how much time they missed executing
against Member A’s resting order. The
Exchange proposes to provide the
Report on a T+1 basis. As further
described below, the Report will be
specific and tailored to the Member that
is subscribed to the Report and any data
included in the Report that relates to a
Member other than the Member
receiving the Report will be
anonymized.
6 The term ‘‘Book’’ means the electronic book of
buy and sell orders and quotes maintained by the
System. See Exchange Rule 100. The term ‘‘System’’
means the automated trading system used by the
Exchange for the trading of securities. See id.
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
The Exchange proposes to provide the
Report in response to Member demand
for data concerning the timeliness of
their incoming orders and executions
against resting orders. Members have
periodically requested from the
Exchange’s trading operations personnel
information concerning the timeliness
of their incoming orders and efficacy of
their attempts to execute against resting
liquidity on the Exchange’s Book. The
purpose of the Report is to provide
Members the necessary data in a
standardized format on a T+1 basis to
those that subscribe to the Report on an
equal basis.
Proposed Exchange Rule 531(a) would
provide that the Report is a daily report
that provides a Member (‘‘Recipient
Member’’) with its liquidity response
time details for executions of an order
resting on the Book, where that
Recipient Member attempted to execute
against such resting order within a
certain timeframe.
Report Content
Paragraph (a)(1) of Rule 531 would
describe the content of the Report and
delineate which information would be
provided regarding the resting order,7
the response that successfully executed
against the resting order, and the
response submitted by the Recipient
Member that missed executing against
the resting order. It is important to note
that the content of the Report will be
specific to the Recipient Member and
the Report will not include any
information related to any Member
other than the Recipient Member. The
Exchange will restrict all other market
participants, including the Recipient
Member, from receiving another market
participant’s data.
Resting Order Information. Rule
531(a)(1)(i) would provide that the
following information would be
included in the Report regarding the
resting order: (A) The time the resting
order was received by the Exchange; 8
(B) symbol; (C) order reference number,
which is a unique reference number
assigned to a new order at the time of
receipt; (D) whether the Recipient
Member is an Affiliate 9 of the Member
7 Only displayed orders will be included in the
Report. The Exchange notes that it does not
currently offer any non-displayed orders types on
its options trading platform.
8 The time the Exchange received the resting
order would be in nanoseconds and is the time the
resting order was received by the Exchange’s
System.
9 The term ‘‘affiliate’’ of or person ‘‘affiliated
with’’ another person means a person who, directly,
or indirectly, controls, is controlled by, or is under
common control with, such other person. See
Exchange Rule 100.
E:\FR\FM\07JNN1.SGM
07JNN1
Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
that entered the resting order; 10 (E)
origin type (e.g., Priority Customer,11
Market Maker 12); (F) side (buy or sell);
and (G) displayed price and size of the
resting order.13
Execution Information. Rule
531(a)(1)(ii) would provide that the
following information would be
included in the Report regarding the
execution of the resting order: (A) The
PBBO 14 at the time of execution; 15 (B)
the ABBO 16 at the time of execution; 17
(C) the time first response that executes
against the resting order was received by
the Exchange and the size of the
execution and type of the response; 18
(D) the time difference between the time
the resting order was received by the
Exchange and the time the first response
that executes against the resting order
was received by the Exchange; 19 and (E)
whether the response was entered by
the Recipient Member. If the resting
order executes against multiple contraside responses, only the PBBO and
ABBO at the time of the execution
10 The Report will simply indicate whether the
Recipient Member is an Affiliate of the Member that
entered the resting order and not include any other
information that may indicate the identity of the
Member that entered the resting order.
11 The term ‘‘Priority Customer’’ means a person
or entity that (i) is not a broker or dealer in
securities, and (ii) does not place more than 390
orders in listed options per day on average during
a calendar month for its own beneficial account(s).
The number of orders shall be counted in
accordance with Interpretation and Policy .01 to
Exchange Rule 100. See Exchange Rule 100.
12 The term ‘‘Market Maker’’ refers to ‘‘Lead
Market Makers’’, ‘‘Primary Lead Market Makers’’
and ‘‘Registered Market Makers’’ collectively. See
Exchange Rule 100.
13 The Exchange notes that the displayed price
and size are also disseminated via the Exchange’s
proprietary data feeds and the Options Price
Reporting Authority (‘‘OPRA’’). The Exchange also
notes that the displayed price of the resting order
may be different than the ultimate execution price.
This may occur when a resting order is displayed
and ranked at different prices upon entry to avoid
a locked or crossed market.
14 The term ‘‘PBBO’’ means the best bid or offer
on the Exchange. See Exchange Rule 100.
15 Exchange Rule 531(a)(1)(ii)(A) would further
provide that if the resting order executes against
multiple contra-side responses, only the PBBO at
the time of the execution against the first response
will be included.
16 The term ‘‘ABBO’’ or ‘‘Away Best Bid or Offer’’
means the best bid(s) or offer(s) disseminated by
other Eligible Exchanges (defined in Exchange Rule
1400(g)) and calculated by the Exchange based on
market information received by the Exchange from
OPRA. See Exchange Rule 100.
17 Exchange Rule 531(a)(1)(ii)(B) would further
provide that if the resting order executes against
multiple contra-side responses, only the ABBO at
the time of the execution against the first response
will be included.
18 The time the Exchange received the response
order would be in nanoseconds and would be the
time the response was received by the Exchange’s
network, which is before the time the response
would be received by the System.
19 The time difference would be provided in
nanoseconds.
VerDate Sep<11>2014
17:36 Jun 04, 2021
Jkt 253001
against the first response will be
included.
Recipient Member’s Response
Information. Rule 531(a)(1)(iii) would
provide that the following information
would be included in the Report
regarding response(s) sent by the
Recipient Member: (A) Recipient
Member identifier; (B) the time
difference between the time the first
response that executes against the
resting order was received by the
Exchange and the time of each response
sent by the Recipient Member,
regardless of whether it executed or
not; 20 (C) size and type of each response
submitted by Recipient Member; and (D)
response reference number, which is a
unique reference number attached to the
response by the Recipient Member.
Timeframe for Data Included in Report
Paragraph (a)(2) of Rule 531 would
provide that the Report would include
the data set forth under Rule 531(a)(1)
described above for executions and
contra-side responses that occurred
within 200 microseconds of the time the
resting order was received by the
Exchange.
Scope of Data Included in the Report
Paragraph (a)(3) of Rule 531 would
provide that the Report will only
include trading data related to the
Recipient Member and, subject to the
proposed paragraph (4) of Rule 531(a)
described below, will not include any
other Member’s trading data other than
that listed in paragraphs (1)(i) and (ii) of
Exchange Rule 531(a) described above.
Historical Data
Paragraph (a)(4) of Rule 531 would
specify that the Report will contain
historical data from the prior trading
day and will be available after the end
of the trading day, generally on a T+1
basis.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.21 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 22 requirements that the rules of
an exchange be designed to prevent
20 For purposes of calculating this duration of
time, the Exchange will use the time the resting
order and the Recipient Member’s response(s) is
received by the Exchange’s network, both of which
would be before the order and response(s) would
be received by the System. This time difference
would be provided in nanoseconds.
21 15 U.S.C. 78f(b).
22 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
30339
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. This
proposal is in keeping with those
principles in that it promotes increased
transparency through the dissemination
of the optional Report to those
interested in subscribing to receive the
data. Additionally, the Exchange
believes the proposed rule change is
consistent with the Section 6(b)(5) 23
requirement that the rules of an
exchange not be designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The proposed Report is also identical to
a report previously adopted by the
Exchange’s affiliate, MIAX Emerald, and
approved by the Commission.24
Therefore, the proposed rule change
does not present any new or novel
issues not previously considered by the
Commission.
The Exchange believes the proposed
Report will serve to promote just and
equitable principles of trade, remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general protect investors and the public
interest because it will benefit investors
by facilitating their prompt access to the
value added information that is
included in the proposed Report. The
Report will allow Members to access
information regarding their trading
activity that they may utilize to evaluate
their own trading behavior and order
interactions.
The proposed Report is designed for
Members that are interested in gaining
insight into latency in connection with
orders that failed to execute against an
order resting on the Exchange’s Book by
providing those Members data to
analyze by how much time their order
may have missed an execution against a
contra-side order resting on the Book.
The Exchange believes that providing
this optional latency data to interested
Members is consistent with facilitating
transactions in securities, removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protecting investors and the
public interest because it provides
23 Id.
24 See
E:\FR\FM\07JNN1.SGM
supra note 3.
07JNN1
khammond on DSKJM1Z7X2PROD with NOTICES
30340
Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
greater visibility into the latency of
Members’ incoming orders. Members
may use this data to optimize their
models and trading patterns in an effort
to yield better execution results by
calculating by how much time their
order may have missed an execution.
As discussed above, the Exchange
currently fields ad hoc requests from
Members for information regarding the
timeliness of their attempts to execute
against resting options liquidity on the
Exchange’s Book. The proposal is
designed to offer this type of latency
information in a systematized way and
standardized format to any Member that
chooses to subscribe to the Report. As
a result, the proposal will make latency
information for liquidity-seeking orders
available in a more equalized manner
and will increase transparency,
particularly for Recipient Members that
may not have the expertise to generate
the same information on their own. The
proposed Report may better enable
Recipient Members to increase the fill
rates for their liquidity-seeking orders.
At the same time, as is also discussed
above, the Report is designed to prevent
a Recipient Member from learning other
Members’ sensitive trading information.
The Report would not be a real-time
market data product, as it would
provide only historical trading data for
the previous trading day, generally on a
T+1 basis. In addition, the data in the
Report regarding incoming orders that
failed to execute would be specific to
the Recipient Member’s orders, and
other information in the proposed
Report regarding resting orders and
executions would be anonymized if it
relates to a Member other than the
Recipient Member.
The Report generally contains three
buckets of information. The first two
buckets include information about the
resting order and the execution of the
resting order. This information is
generally available from other public
sources, such as OPRA and the
Exchange’s proprietary data feeds, or is
similar to information included in a
report offered by another exchange. For
example, OPRA provides bids, offers,
and consolidated last sale and quotation
information for options trading on all
national securities exchanges, including
the Exchange. In addition, the Exchange
offers the Top of Market (‘‘ToM’’) feed
which provides real-time quote and last
sale information for all displayed orders
on the Book.25
Specifically, the first bucket of
information contained in the Report for
the resting order includes the time the
resting order was received by the
25 See
Section 6)a) of the Exchange’s fee schedule.
VerDate Sep<11>2014
17:36 Jun 04, 2021
Jkt 253001
Exchange, the symbol, unique reference
number assigned at the time of receipt,
side (buy or sell), and the displayed
price and size of the resting order.
Further, the symbol, origin type, side
(buy or sell), and displayed price and
size are also available either via OPRA
or the Exchange’s proprietary data feeds.
The first bucket of information also
indicates whether the Recipient Member
is an Affiliate of the Member that
entered the resting order. This data field
will not indicate the identity of the
Member that entered the resting order
and would simply allow the Recipient
Member to better understand the
scenarios in which it may execute
against the orders of its Affiliates.26
The second bucket of information
contained in the Report regards the
execution of the resting order and
includes the PBBO and ABBO at the
time of execution. These data points are
also available either via OPRA or the
Exchange’s proprietary data feeds. The
second bucket of information will also
indicate whether the response was
entered by the Recipient Member. This
data point is simply provided as a
convenience. If not entered by the
Recipient Member, this data point will
be left blank so as not to include any
identifying information about other
Member activity. The second bucket of
information also includes the size, time
and type of first response that executes
against the resting order; as well as the
time difference between the time the
resting order and first response that
executes against the resting order are
received by the Exchange. These data
points would assist the Recipient
Member in analyzing by how much time
their order may have missed an
execution against a contra-side order
resting on the Book.
The third bucket of information is
about the Recipient Member’s
response(s) and the time their
response(s) is received by the Exchange.
This includes the time difference
between the time the first response that
executes against the resting order was
received by the Exchange and the time
of each response sent by the Recipient
Member, regardless of whether it
executed or not. As above, this data
point would assist the Recipient
Member in analyzing by how much time
their order may have missed an
execution against a contra-side order
resting on the Book. This bucket would
also include the size and type of each
response submitted by the Recipient
Member, the Recipient Member
26 The Exchange’s surveils to monitor for
abhorrent behavior related to internalized trades
and identify potential wash sales.
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
identifier, and a response reference
number which is selected by the
Recipient Member. Each of these data
points are unique to the Recipient
Member and should already be known
by Recipient Member even if not
included in the Report.
The Exchange proposes to provide the
Report on a voluntary basis and no
Member will be required to subscribe to
the Report. The Exchange notes that
there is no rule or regulation that
requires the Exchange to produce, or
that a Member elect to receive, the
Report. It is entirely a business decision
of each Member to subscribe to the
Report. The Exchange proposes to offer
the Report as a convenience to Members
to provide them with additional
information regarding trading activity
on the Exchange on a delayed basis after
the close of regular trading hours. A
Member that chooses to subscribe to the
Report may discontinue receiving the
Report at any time if that Member
determines that the information
contained in the Report is no longer
useful.
In summary, the proposed Report will
help to protect a free and open market
by providing additional data (offered on
an optional basis) to the marketplace
and by providing investors with greater
choices.27 Additionally, the proposal
would not permit unfair discrimination
because the proposed Report will be
available to all Exchange Members.
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, as amended.
The Exchange believes that the
proposed Report will enhance
competition 28 by providing a new
option for receiving market data to
Members. The proposed Report will also
further enhance competition between
exchanges by allowing the Exchange to
expand its product offerings to include
a report similar to that currently offered
by the NASDAQ Stock Market LLC
(‘‘NASDAQ’’).29
In this instance, the proposed rule
change to offer the optional Report is in
response to Member interest and
requests for such information. The
Exchange does not believe the proposed
Report will have an inappropriate
27 See Sec. Indus. Fin. Mkts. Ass’n (SIFMA),
Initial Decision Release No. 1015, 2016 SEC LEXIS
2278 (ALJ June 1, 2016) (finding the existence of
vigorous competition with respect to non-core
market data).
28 Id.
29 See NASDAQ Equity Section 7, Rule 146(a)(2).
E:\FR\FM\07JNN1.SGM
07JNN1
Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
burden on intra-market competition
between Recipient Members and other
Members who do not receive the Report.
As discussed above, the first two
buckets of information included in the
Report contain information about the
resting order and the execution of the
resting order, both of which are
generally available to Members that
choose not to receive the Report from
other public sources, such as OPRA and
the Exchange’s proprietary data feeds.
The third bucket of information is about
the Recipient Member’s response and
the time their response is received by
the Exchange, information which the
Recipient Member would be able to
obtain without receiving the Report.
Additionally, some Members may
already be able to derive a substantial
amount of the same data that is
provided by some of the components
based on their own executions and
algorithms.
In sum, if the proposed Report is
unattractive to Members, Members will
opt not to receive it. Accordingly, the
Exchange does not believe that the
proposed change will impair the ability
of Members or competing order
execution venues to maintain their
competitive standing in the financial
markets.
khammond on DSKJM1Z7X2PROD with NOTICES
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 30 and Rule
19b–4(f)(6) thereunder.31 Because the
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 from the date on which it
was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 32 and Rule 19b–4(f)(6)
thereunder.33
30 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
32 15 U.S.C. 78s(b)(3)(A).
33 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
31 17
VerDate Sep<11>2014
17:36 Jun 04, 2021
Jkt 253001
A proposed rule change filed under
Rule 19b–4(f)(6) 34 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),35 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 immediately. The Exchange
states that it is prepared to begin
offering the Report upon the
effectiveness of this proposed rule
change. The Exchange also argues that
waiver of the operative delay would
allow the Exchange to provide a product
offering identical to that of its affiliate,
MIAX Emerald, as soon as practicable,
which in turn would reduce potential
confusion in the near term about
whether the Exchange is offering the
same report as its affiliate offers
currently. For these reasons, the
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.36
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 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:
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.
34 17 CFR 240.19b–4(f)(6).
35 17 CFR 240.19b–4(f)(6)(iii).
36 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).
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
30341
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–2021–25 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–PEARL–2021–25. 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
10:00 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–2021–25, and
should be submitted on or before June
28, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–11798 Filed 6–4–21; 8:45 am]
BILLING CODE 8011–01–P
37 17
E:\FR\FM\07JNN1.SGM
CFR 200.30–3(a)(12), (59).
07JNN1
]]>Agencies
[Federal Register Volume 86, Number 107 (Monday, June 7, 2021)]
[Notices]
[Pages 30337-30341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11798]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92082; File No. SR-PEARL-2021-25]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Rule
531, Reports and Market Data Products, To Adopt the Liquidity Taker
Event Report for Options Trading
June 1, 2021.
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 May 19, 2021, 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 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.
---------------------------------------------------------------------------
[[Page 30338]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to provide for the new
``Liquidity Taker Event Report''.
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.
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 Exchange Rule 531(a) to provide for
the new ``Liquidity Taker Event Report'' (the ``Report''). The proposed
Report is identical to that previously adopted by the Exchange's
affiliate, MIAX Emerald, LLC (``MIAX Emerald''), and approved by the
Securities and Exchange Commission (``Commission'').\3\ The proposed
Report would only be available for options trading on the Exchange.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 91787 (May 6, 2021),
85 FR 26111 (May 12, 2021) (SR-EMERALD-2021-09) (Order Approving
Proposed Rule Change to Adopt Exchange Rule 531(a), Reports, to
Provide for a New ``Liquidity Taker Event Report'').
---------------------------------------------------------------------------
The Report is an optional product \4\ available to Members.\5\
Currently, the Exchange provides real-time prices and analytics in the
marketplace. The Exchange believes the additional data points from the
matching engine outlined below may help Members gain a better
understanding about their interactions with the Exchange. The Exchange
believes the Report will provide Members with an opportunity to learn
more about better opportunities to access liquidity and receive better
execution rates. The proposed Report will increase transparency and
democratize information so that all firms that subscribe to the Report
have access to the same information on an equal basis, even for firms
that do not have the appropriate resources to generate a similar report
regarding interactions with the Exchange. None of the components of the
proposed Report include real-time market data.
---------------------------------------------------------------------------
\4\ The Exchange intends to submit a separate filing with the
Commission pursuant to Section 19(b)(1) to propose fees for the
Liquidity Taker Event Report.
\5\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
---------------------------------------------------------------------------
Members generally would use a liquidity accessing order if there is
a high probability that it will execute against an order resting on the
Exchange's Book.\6\ The proposed Report would identify by how much time
an order that may have been marketable missed an execution. The
proposed Report will provide greater visibility into the missed trading
execution, which will allow Members to optimize their models and
trading patterns to yield better execution results.
---------------------------------------------------------------------------
\6\ The term ``Book'' means the electronic book of buy and sell
orders and quotes maintained by the System. See Exchange Rule 100.
The term ``System'' means the automated trading system used by the
Exchange for the trading of securities. See id.
---------------------------------------------------------------------------
The proposed Report will be a Member-specific report and will help
Members to better understand by how much time a particular order missed
executing against a specific resting order, thus allowing that Member
to determine whether it wants to invest in the necessary resources and
technology to mitigate missed executions against certain resting orders
on the Exchange's Book. For example, Member A submits an order that is
posted to the Book and then Member B enters a marketable order to
execute against Member A's resting order. Immediately thereafter,
Member C sends a marketable order to execute against Member A's resting
Order. Because Member B's order is received by the Exchange before
Member C's order, Member B's order executes against Member A's resting
order. The proposed Report would provide Member C the data points
necessary for that firm to calculate by how much time they missed
executing against Member A's resting order. The Exchange proposes to
provide the Report on a T+1 basis. As further described below, the
Report will be specific and tailored to the Member that is subscribed
to the Report and any data included in the Report that relates to a
Member other than the Member receiving the Report will be anonymized.
The Exchange proposes to provide the Report in response to Member
demand for data concerning the timeliness of their incoming orders and
executions against resting orders. Members have periodically requested
from the Exchange's trading operations personnel information concerning
the timeliness of their incoming orders and efficacy of their attempts
to execute against resting liquidity on the Exchange's Book. The
purpose of the Report is to provide Members the necessary data in a
standardized format on a T+1 basis to those that subscribe to the
Report on an equal basis.
Proposed Exchange Rule 531(a) would provide that the Report is a
daily report that provides a Member (``Recipient Member'') with its
liquidity response time details for executions of an order resting on
the Book, where that Recipient Member attempted to execute against such
resting order within a certain timeframe.
Report Content
Paragraph (a)(1) of Rule 531 would describe the content of the
Report and delineate which information would be provided regarding the
resting order,\7\ the response that successfully executed against the
resting order, and the response submitted by the Recipient Member that
missed executing against the resting order. It is important to note
that the content of the Report will be specific to the Recipient Member
and the Report will not include any information related to any Member
other than the Recipient Member. The Exchange will restrict all other
market participants, including the Recipient Member, from receiving
another market participant's data.
---------------------------------------------------------------------------
\7\ Only displayed orders will be included in the Report. The
Exchange notes that it does not currently offer any non-displayed
orders types on its options trading platform.
---------------------------------------------------------------------------
Resting Order Information. Rule 531(a)(1)(i) would provide that the
following information would be included in the Report regarding the
resting order: (A) The time the resting order was received by the
Exchange; \8\ (B) symbol; (C) order reference number, which is a unique
reference number assigned to a new order at the time of receipt; (D)
whether the Recipient Member is an Affiliate \9\ of the Member
[[Page 30339]]
that entered the resting order; \10\ (E) origin type (e.g., Priority
Customer,\11\ Market Maker \12\); (F) side (buy or sell); and (G)
displayed price and size of the resting order.\13\
---------------------------------------------------------------------------
\8\ The time the Exchange received the resting order would be in
nanoseconds and is the time the resting order was received by the
Exchange's System.
\9\ The term ``affiliate'' of or person ``affiliated with''
another person means a person who, directly, or indirectly,
controls, is controlled by, or is under common control with, such
other person. See Exchange Rule 100.
\10\ The Report will simply indicate whether the Recipient
Member is an Affiliate of the Member that entered the resting order
and not include any other information that may indicate the identity
of the Member that entered the resting order.
\11\ The term ``Priority Customer'' means a person or entity
that (i) is not a broker or dealer in securities, and (ii) does not
place more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s). The
number of orders shall be counted in accordance with Interpretation
and Policy .01 to Exchange Rule 100. See Exchange Rule 100.
\12\ The term ``Market Maker'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100.
\13\ The Exchange notes that the displayed price and size are
also disseminated via the Exchange's proprietary data feeds and the
Options Price Reporting Authority (``OPRA''). The Exchange also
notes that the displayed price of the resting order may be different
than the ultimate execution price. This may occur when a resting
order is displayed and ranked at different prices upon entry to
avoid a locked or crossed market.
---------------------------------------------------------------------------
Execution Information. Rule 531(a)(1)(ii) would provide that the
following information would be included in the Report regarding the
execution of the resting order: (A) The PBBO \14\ at the time of
execution; \15\ (B) the ABBO \16\ at the time of execution; \17\ (C)
the time first response that executes against the resting order was
received by the Exchange and the size of the execution and type of the
response; \18\ (D) the time difference between the time the resting
order was received by the Exchange and the time the first response that
executes against the resting order was received by the Exchange; \19\
and (E) whether the response was entered by the Recipient Member. If
the resting order executes against multiple contra-side responses, only
the PBBO and ABBO at the time of the execution against the first
response will be included.
---------------------------------------------------------------------------
\14\ The term ``PBBO'' means the best bid or offer on the
Exchange. See Exchange Rule 100.
\15\ Exchange Rule 531(a)(1)(ii)(A) would further provide that
if the resting order executes against multiple contra-side
responses, only the PBBO at the time of the execution against the
first response will be included.
\16\ The term ``ABBO'' or ``Away Best Bid or Offer'' means the
best bid(s) or offer(s) disseminated by other Eligible Exchanges
(defined in Exchange Rule 1400(g)) and calculated by the Exchange
based on market information received by the Exchange from OPRA. See
Exchange Rule 100.
\17\ Exchange Rule 531(a)(1)(ii)(B) would further provide that
if the resting order executes against multiple contra-side
responses, only the ABBO at the time of the execution against the
first response will be included.
\18\ The time the Exchange received the response order would be
in nanoseconds and would be the time the response was received by
the Exchange's network, which is before the time the response would
be received by the System.
\19\ The time difference would be provided in nanoseconds.
---------------------------------------------------------------------------
Recipient Member's Response Information. Rule 531(a)(1)(iii) would
provide that the following information would be included in the Report
regarding response(s) sent by the Recipient Member: (A) Recipient
Member identifier; (B) the time difference between the time the first
response that executes against the resting order was received by the
Exchange and the time of each response sent by the Recipient Member,
regardless of whether it executed or not; \20\ (C) size and type of
each response submitted by Recipient Member; and (D) response reference
number, which is a unique reference number attached to the response by
the Recipient Member.
---------------------------------------------------------------------------
\20\ For purposes of calculating this duration of time, the
Exchange will use the time the resting order and the Recipient
Member's response(s) is received by the Exchange's network, both of
which would be before the order and response(s) would be received by
the System. This time difference would be provided in nanoseconds.
---------------------------------------------------------------------------
Timeframe for Data Included in Report
Paragraph (a)(2) of Rule 531 would provide that the Report would
include the data set forth under Rule 531(a)(1) described above for
executions and contra-side responses that occurred within 200
microseconds of the time the resting order was received by the
Exchange.
Scope of Data Included in the Report
Paragraph (a)(3) of Rule 531 would provide that the Report will
only include trading data related to the Recipient Member and, subject
to the proposed paragraph (4) of Rule 531(a) described below, will not
include any other Member's trading data other than that listed in
paragraphs (1)(i) and (ii) of Exchange Rule 531(a) described above.
Historical Data
Paragraph (a)(4) of Rule 531 would specify that the Report will
contain historical data from the prior trading day and will be
available after the end of the trading day, generally on a T+1 basis.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\21\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \22\ requirements that the rules
of an exchange be 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.
This proposal is in keeping with those principles in that it promotes
increased transparency through the dissemination of the optional Report
to those interested in subscribing to receive the data. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \23\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The proposed Report is also identical to a report
previously adopted by the Exchange's affiliate, MIAX Emerald, and
approved by the Commission.\24\ Therefore, the proposed rule change
does not present any new or novel issues not previously considered by
the Commission.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78f(b).
\22\ 15 U.S.C. 78f(b)(5).
\23\ Id.
\24\ See supra note 3.
---------------------------------------------------------------------------
The Exchange believes the proposed Report will serve to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general protect investors and the public interest
because it will benefit investors by facilitating their prompt access
to the value added information that is included in the proposed Report.
The Report will allow Members to access information regarding their
trading activity that they may utilize to evaluate their own trading
behavior and order interactions.
The proposed Report is designed for Members that are interested in
gaining insight into latency in connection with orders that failed to
execute against an order resting on the Exchange's Book by providing
those Members data to analyze by how much time their order may have
missed an execution against a contra-side order resting on the Book.
The Exchange believes that providing this optional latency data to
interested Members is consistent with facilitating transactions in
securities, removing impediments to and perfecting the mechanism of a
free and open market and a national market system, and, in general,
protecting investors and the public interest because it provides
[[Page 30340]]
greater visibility into the latency of Members' incoming orders.
Members may use this data to optimize their models and trading patterns
in an effort to yield better execution results by calculating by how
much time their order may have missed an execution.
As discussed above, the Exchange currently fields ad hoc requests
from Members for information regarding the timeliness of their attempts
to execute against resting options liquidity on the Exchange's Book.
The proposal is designed to offer this type of latency information in a
systematized way and standardized format to any Member that chooses to
subscribe to the Report. As a result, the proposal will make latency
information for liquidity-seeking orders available in a more equalized
manner and will increase transparency, particularly for Recipient
Members that may not have the expertise to generate the same
information on their own. The proposed Report may better enable
Recipient Members to increase the fill rates for their liquidity-
seeking orders. At the same time, as is also discussed above, the
Report is designed to prevent a Recipient Member from learning other
Members' sensitive trading information. The Report would not be a real-
time market data product, as it would provide only historical trading
data for the previous trading day, generally on a T+1 basis. In
addition, the data in the Report regarding incoming orders that failed
to execute would be specific to the Recipient Member's orders, and
other information in the proposed Report regarding resting orders and
executions would be anonymized if it relates to a Member other than the
Recipient Member.
The Report generally contains three buckets of information. The
first two buckets include information about the resting order and the
execution of the resting order. This information is generally available
from other public sources, such as OPRA and the Exchange's proprietary
data feeds, or is similar to information included in a report offered
by another exchange. For example, OPRA provides bids, offers, and
consolidated last sale and quotation information for options trading on
all national securities exchanges, including the Exchange. In addition,
the Exchange offers the Top of Market (``ToM'') feed which provides
real-time quote and last sale information for all displayed orders on
the Book.\25\
---------------------------------------------------------------------------
\25\ See Section 6)a) of the Exchange's fee schedule.
---------------------------------------------------------------------------
Specifically, the first bucket of information contained in the
Report for the resting order includes the time the resting order was
received by the Exchange, the symbol, unique reference number assigned
at the time of receipt, side (buy or sell), and the displayed price and
size of the resting order. Further, the symbol, origin type, side (buy
or sell), and displayed price and size are also available either via
OPRA or the Exchange's proprietary data feeds. The first bucket of
information also indicates whether the Recipient Member is an Affiliate
of the Member that entered the resting order. This data field will not
indicate the identity of the Member that entered the resting order and
would simply allow the Recipient Member to better understand the
scenarios in which it may execute against the orders of its
Affiliates.\26\
---------------------------------------------------------------------------
\26\ The Exchange's surveils to monitor for abhorrent behavior
related to internalized trades and identify potential wash sales.
---------------------------------------------------------------------------
The second bucket of information contained in the Report regards
the execution of the resting order and includes the PBBO and ABBO at
the time of execution. These data points are also available either via
OPRA or the Exchange's proprietary data feeds. The second bucket of
information will also indicate whether the response was entered by the
Recipient Member. This data point is simply provided as a convenience.
If not entered by the Recipient Member, this data point will be left
blank so as not to include any identifying information about other
Member activity. The second bucket of information also includes the
size, time and type of first response that executes against the resting
order; as well as the time difference between the time the resting
order and first response that executes against the resting order are
received by the Exchange. These data points would assist the Recipient
Member in analyzing by how much time their order may have missed an
execution against a contra-side order resting on the Book.
The third bucket of information is about the Recipient Member's
response(s) and the time their response(s) is received by the Exchange.
This includes the time difference between the time the first response
that executes against the resting order was received by the Exchange
and the time of each response sent by the Recipient Member, regardless
of whether it executed or not. As above, this data point would assist
the Recipient Member in analyzing by how much time their order may have
missed an execution against a contra-side order resting on the Book.
This bucket would also include the size and type of each response
submitted by the Recipient Member, the Recipient Member identifier, and
a response reference number which is selected by the Recipient Member.
Each of these data points are unique to the Recipient Member and should
already be known by Recipient Member even if not included in the
Report.
The Exchange proposes to provide the Report on a voluntary basis
and no Member will be required to subscribe to the Report. The Exchange
notes that there is no rule or regulation that requires the Exchange to
produce, or that a Member elect to receive, the Report. It is entirely
a business decision of each Member to subscribe to the Report. The
Exchange proposes to offer the Report as a convenience to Members to
provide them with additional information regarding trading activity on
the Exchange on a delayed basis after the close of regular trading
hours. A Member that chooses to subscribe to the Report may discontinue
receiving the Report at any time if that Member determines that the
information contained in the Report is no longer useful.
In summary, the proposed Report will help to protect a free and
open market by providing additional data (offered on an optional basis)
to the marketplace and by providing investors with greater choices.\27\
Additionally, the proposal would not permit unfair discrimination
because the proposed Report will be available to all Exchange Members.
---------------------------------------------------------------------------
\27\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision
Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding
the existence of vigorous competition with respect to non-core
market data).
---------------------------------------------------------------------------
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, as amended. The
Exchange believes that the proposed Report will enhance competition
\28\ by providing a new option for receiving market data to Members.
The proposed Report will also further enhance competition between
exchanges by allowing the Exchange to expand its product offerings to
include a report similar to that currently offered by the NASDAQ Stock
Market LLC (``NASDAQ'').\29\
---------------------------------------------------------------------------
\28\ Id.
\29\ See NASDAQ Equity Section 7, Rule 146(a)(2).
---------------------------------------------------------------------------
In this instance, the proposed rule change to offer the optional
Report is in response to Member interest and requests for such
information. The Exchange does not believe the proposed Report will
have an inappropriate
[[Page 30341]]
burden on intra-market competition between Recipient Members and other
Members who do not receive the Report. As discussed above, the first
two buckets of information included in the Report contain information
about the resting order and the execution of the resting order, both of
which are generally available to Members that choose not to receive the
Report from other public sources, such as OPRA and the Exchange's
proprietary data feeds. The third bucket of information is about the
Recipient Member's response and the time their response is received by
the Exchange, information which the Recipient Member would be able to
obtain without receiving the Report. Additionally, some Members may
already be able to derive a substantial amount of the same data that is
provided by some of the components based on their own executions and
algorithms.
In sum, if the proposed Report is unattractive to Members, Members
will opt not to receive it. Accordingly, the Exchange does not believe
that the proposed change will impair the ability of Members or
competing order execution venues to maintain their competitive standing
in the financial markets.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \30\ and Rule 19b-4(f)(6) thereunder.\31\
Because the 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 from the date on which it was filed, or such shorter time as the
Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \32\ and Rule 19b-
4(f)(6) thereunder.\33\
---------------------------------------------------------------------------
\30\ 15 U.S.C. 78s(b)(3)(A)(iii).
\31\ 17 CFR 240.19b-4(f)(6).
\32\ 15 U.S.C. 78s(b)(3)(A).
\33\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \34\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\35\ 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 immediately. The Exchange states that
it is prepared to begin offering the Report upon the effectiveness of
this proposed rule change. The Exchange also argues that waiver of the
operative delay would allow the Exchange to provide a product offering
identical to that of its affiliate, MIAX Emerald, as soon as
practicable, which in turn would reduce potential confusion in the near
term about whether the Exchange is offering the same report as its
affiliate offers currently. For these reasons, the Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\36\
---------------------------------------------------------------------------
\34\ 17 CFR 240.19b-4(f)(6).
\35\ 17 CFR 240.19b-4(f)(6)(iii).
\36\ 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).
---------------------------------------------------------------------------
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 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-2021-25 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-PEARL-2021-25. 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 10:00 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-2021-25, and should be submitted
on or before June 28, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------
\37\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11798 Filed 6-4-21; 8:45 am]
BILLING CODE 8011-01-P
