Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 67559-67562 [2021-25757]
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
change is to help to avoid unnecessary
disruption in the Covered Agency
Transaction market pending any
Commission action on the amendments
that FINRA has proposed to the Covered
Agency Transaction margin
requirements. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest
because the proposal to extend the
implementation date of the
requirements of Rule 4210 does not
raise any new or novel issues and will
reduce any potential uncertainty in the
Covered Agency Transaction market.
Therefore, the Commission hereby
waives the 30-day operative delay
requirement and designates the
proposed rule change as operative upon
filing.17
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–
FINRA–2021–028 on the subject line.
jspears on DSK121TN23PROD with NOTICES1
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–FINRA–2021–028. 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
17 For purposes of waiving the 30-day operative
delay, the Commission has also considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of
FINRA. 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–FINRA–
2021–028 and should be submitted on
or before December 17, 2021.
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.18
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. 2021–25756 Filed 11–24–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93631; File No. SR–
PEARL–2021–56]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule
November 19, 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 November
8, 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
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Pearl Options Fee
Schedule (the ‘‘Fee Schedule’’).
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.
1. Purpose
The Exchange proposes to amend the
Fee Schedule to amend the exchange
groupings of options exchanges within
the routing fee table in Section 1)b) of
the Fee Schedule, Fees for Customer
Orders Routed to Another Options
Exchange. The Exchange initially filed
this proposal on October 27, 2021 (SR–
PEARL–2021–51) and withdrew such
filing on November 8, 2021. The
Exchange proposes to implement the fee
change effective November 8, 2021.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order, (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 3 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
3 See Securities Exchange Act Release No. 88992
(June 2, 2020), 85 FR 35142 (June 8, 2020) (SR–
PEARL–2020–06) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 404, Series of Option Contracts
Open for Trading, and Rule 510, Minimum Price
Variations and Minimum Trading Increments, To
Conform the Rules to Section 3.1 of the Plan for the
Purpose of Developing and Implementing
Procedures Designed To Facilitate the Listing and
Trading of Standardized Options).
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(or other explicitly identified classes),
and (iii) to which away market it is
being routed. This assessment practice
is identical to the routing fees
assessment practice currently utilized
by the Exchange’s affiliates, Miami
International Securities Exchange, LLC
(‘‘MIAX’’) and MIAX Emerald, LLC
(‘‘MIAX Emerald’’). This is also similar
to the methodology utilized by the Cboe
BZX Exchange, Inc. (‘‘Cboe BZX
Options’’), a competing options
exchange, in assessing routing fees.
Cboe BZX Options has exchange
groupings in its fee schedule, similar to
those of the Exchange, whereby several
exchanges are grouped into the same
category, dependent upon the order’s
origin type and whether it is a Penny or
Non-Penny class.4
As a result of conducting a periodic
review of the current transaction fees
and rebates charged by away markets,
the Exchange has determined to amend
the exchange groupings of options
exchanges within the routing fee table to
better reflect the associated costs of
routing customer orders to those options
exchanges for execution.5 In particular,
the Exchange proposes to amend the
exchange groupings in the first row of
the table identified as, ‘‘Routed, Priority
Customer, Penny Program,’’ to relocate
Nasdaq BX Options from the first row of
the table to the second, also identified
as ‘‘Routed, Priority Customer, Penny
Program.’’ The impact of this proposed
change will be that the routing fee for
Priority Customer orders in the Penny
Program that are routed to Nasdaq BX
Options will increase from $0.15 to
$0.65. The purpose of the proposed rule
change is to adjust the routing fee for
certain orders routed to Nasdaq BX
Options to reflect the associated costs
for that routed execution.
Next, the Exchange proposes to
amend the exchange groupings in the
third row of the table, identified as
‘‘Routed, Priority Customer, Non-Penny
Program,’’ to relocate Nasdaq BX
Options from the third row of the table
to the fourth, also identified as ‘‘Routed,
Priority Customer, Non-Penny
Program.’’ The impact of this proposed
change will be that the routing fee for
Priority Customer orders in the NonPenny Program that are routed to
Nasdaq BX Options will increase from
$0.15 to $1.00. The purpose of the
proposed rule change is to adjust the
routing fee for certain orders routed to
Nasdaq BX Options to reflect the
associated costs for that routed
execution.
Next, the Exchange proposes to
amend the exchange groupings in the
sixth row of the table, identified as
‘‘Routed, Public Customer that is not a
Priority Customer, Non-Penny
Program,’’ to relocate Nasdaq ISE from
the exchange groupings in the sixth row
of the table to the exchange groupings
in the seventh row of the table, also
identified as ‘‘Routed, Public Customer
that is not a Priority Customer, NonPenny Program.’’ The impact of this
proposed change will be that the
Exchange routing fee for Public
Customer orders that are not Priority
Customer orders in the Non-Penny
Program that are routed to Nasdaq ISE
will increase from $1.00 to $1.15. The
purpose of the proposed rule change is
to adjust the routing fee for certain
orders routed to Nasdaq ISE to reflect
the associated costs for that routed
execution.
Finally, the Exchange proposes to
amend the exchange groupings in the
seventh row of the table, identified as
‘‘Routed, Public Customer that is not a
Priority Customer, Non-Penny
Program,’’ to relocate Nasdaq BX
Options and MIAX Emerald, to the
eighth row of the table, also identified
as, ‘‘Routed, Public Customer that is not
a Priority Customer, Non-Penny
Program.’’ The impact of this proposed
change will be that the routing fee for
Public Customer orders that are not
Priority Customer orders in the NonPenny Program that are routed to
Nasdaq BX Options or MIAX Emerald
will increase from $1.15 to $1.25. The
purpose of the proposed rule change is
to adjust the routing fee for certain
orders routed to Nasdaq BX Options or
MIAX Emerald to reflect the associated
costs for that routed execution. The
Exchange notes that no options
exchanges were removed from the
routing fee table entirely, with the only
change being the change in
categorization.
Accordingly, with the proposed
change, the routing fee table will be as
follows:
Description
Fees
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Routed, Priority Customer, Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq MRX, MIAX,
Nasdaq PHLX (except SPY) ............................................................................................................................................................
Routed, Priority Customer, Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq ISE,
NOM, Nasdaq PHLX (SPY only), MIAX Emerald, Nasdaq BX Options .........................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, Nasdaq
MRX, MIAX, Nasdaq PHLX .............................................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, NOM,
MIAX Emerald, Nasdaq BX Options ................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Penny Program, to: NYSE American, NYSE Arca Options, Cboe BZX
Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX Emerald, MIAX,
NOM, Nasdaq PHLX, Nasdaq BX Options ......................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: NYSE American, MIAX, Cboe, Nasdaq PHLX,
Cboe EDGX Options ........................................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe C2, NOM, BOX, Nasdaq ISE ................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe BZX Options, NYSE Arca Options,
Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options, MIAX Emerald ..............................................................................................
$0.15
0.65
0.15
1.00
0.65
1.00
1.15
1.25
In determining to amend its routing
fees the Exchange took into account
transaction fees and rebates assessed by
the away markets to which the
Exchange routes orders, as well as the
Exchange’s clearing costs,
administrative, regulatory, and technical
costs associated with routing orders to
an away market. The Exchange uses
unaffiliated routing brokers to route
orders to the away markets; the costs
associated with the use of these services
4 See Cboe U.S. Options Fee Schedules, BZX
Options, effective August 2, 2021, ‘‘Fee Codes and
Associated Fees,’’ at https://www.cboe.com/us/
options/membership/fee_schedule/bzx/.
5 Nasdaq BX established a Customer Taker fee of
$0.46 in Penny Classes and $0.65 in Non-Penny
Classes. See Securities Exchange Act Release No.
91473 (April 5, 2021), 86 FR 18562 (April 9, 2021)
(SR–BX–2021–009). Nasdaq BX recently increased
the Customer Taker fee in Non-Penny Classes from
$0.65 to $0.79. See Securities Exchange Act Release
No. 93121 (September 24, 2021), 86 FR 54259
(September 30, 2021) (SR–BX–2021–040).
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
are included in the routing fees
specified in the Fee Schedule. This
routing fees structure is not only similar
to the Exchange’s affiliates, MIAX and
MIAX Emerald, but is also comparable
to the structure in place on at least one
other competing options exchange, such
as Cboe BZX Options.6 The Exchange’s
routing fee structure approximates the
Exchange’s costs associated with routing
orders to away markets. The percontract transaction fee amount
associated with each grouping closely
approximates the Exchange’s all-in cost
(plus an additional, non-material
amount) 7 to execute that corresponding
contract at that corresponding exchange.
The Exchange notes that in determining
whether to adjust certain groupings of
options exchanges in the routing fee
table, the Exchange considered the
transaction fees and rebates assessed by
away markets, and determined to amend
the grouping of exchanges that assess
transaction fees for routed orders within
a similar range. This same logic and
structure applies to all of the groupings
in the routing fee table. By utilizing the
same structure that is utilized by the
Exchange’s affiliates, MIAX and MIAX
Emerald, the Exchange’s Members 8 will
be assessed routing fees in a similar
manner. The Exchange believes that this
structure will minimize any confusion
as to the method of assessing routing
fees between the three exchanges. The
Exchange notes that its affiliates, MIAX
and MIAX Emerald, will file to make the
same proposed routing fee changes
contained herein.
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2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 9
in general, and furthers the objectives of
6 See supra note 4. The Cboe BZX Options fee
schedule has exchange groupings, whereby several
exchanges are grouped into the same category,
dependent on the order’s Origin type and whether
it is a Penny or Non-Penny class. For example, Cboe
BZX Options fee code RR covers routed customer
orders in Non-Penny classes to NYSE Arca, Cboe
C2, Nasdaq ISE, Nasdaq Gemini, MIAX Emerald,
MIAX Pearl, or NOM, with a single fee of $1.25 per
contract.
7 This amount is to cover de minimis differences/
changes to away market fees (i.e., minor increases
or decreases) that would not necessitate a fee filing
by the Exchange to re-categorize the away exchange
into a different grouping. Routing fees are not
intended to be a profit center for the Exchange and
the Exchange’s target regarding routing fees and
expenses is to be as close as possible to net neutral.
8 The term ‘‘Member’’ means an individual or
organization that is registered with the Exchange
pursuant to Chapter II of Exchange Rules for
purposes of trading on the Exchange as an
‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’
Members are deemed ‘‘members’’ under the
Exchange Act. See the Definitions section of the Fee
Schedule and Exchange Rule 100.
9 15 U.S.C. 78f(b).
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Section 6(b)(4) of the Act 10 in
particular, in that it is an equitable
allocation of reasonable dues, fees, and
other charges among its members and
issuers and other persons using its
facilities. The Exchange also believes
the proposal furthers the objectives of
Section 6(b)(5) of the Act 11 in that it is
designed to promote just and equitable
principles of trade, 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 and is not designed to
permit unfair discrimination between
customers, issuers, brokers and dealers.
The Exchange believes the proposed
change to the exchange groupings of
options exchanges within the routing
fee table furthers the objectives of
Section 6(b)(4) of the Act and is
reasonable, equitable and not unfairly
discriminatory because the proposed
change will continue to apply in the
same manner to all Members that are
subject to routing fees. The Exchange
believes the proposed change to the
routing fee table exchange groupings
furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote
just and equitable principles of trade
and is not unfairly discriminatory
because the proposed change seeks to
recoup costs that are incurred by the
Exchange when routing customer orders
to away markets on behalf of Members
and does so in the same manner to all
Members that are subject to routing fees.
The costs to the Exchange to route
orders to away markets for execution
primarily includes transaction fees and
rebates assessed by the away markets to
which the Exchange routes orders, in
addition to the Exchange’s clearing
costs, administrative, regulatory and
technical costs. The Exchange believes
that the proposed re-categorization of
certain exchange groupings would
enable the Exchange to recover the costs
it incurs to route orders to Nasdaq BX
Options, Nasdaq ISE, and MIAX
Emerald. The per-contract transaction
fee amount associated with each
grouping approximates the Exchange’s
all-in cost (plus an additional, nonmaterial amount) to execute the
corresponding contract at the
corresponding exchange.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes its proposed recategorization of certain exchange
groupings is intended to enable the
Exchange to recover the costs it incurs
to route orders to away markets,
particularly Nasdaq BX Options and
Nasdaq ISE. The Exchange does not
believe that this proposal imposes any
unnecessary burden on competition
because it seeks to recoup costs incurred
by the Exchange when routing orders to
away markets on behalf of Members and
at least one other options exchange has
a similar routing fees structure.12
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 foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 13 of the Act and
subparagraph (f)(2) of Rule 19b–4 14
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 15 of the Act 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 rule-comments@
sec.gov. Please include File Number SR–
PEARL–2021–56 on the subject line.
12 See
supra note 6.
U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(2).
15 15 U.S.C. 78s(b)(2)(B).
13 15
10 15
11 15
PO 00000
U.S.C. 78f(b)(4).
U.S.C. 78f(b)(5).
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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–2021–56. 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–2021–56 and
should be submitted on or before
December 17, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25757 Filed 11–24–21; 8:45 am]
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BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93618; File No. S7–24–89]
Joint Industry Plan; Notice of Filing of
the Fifty-Second Amendment to the
Joint Self-Regulatory Organization
Plan Governing the Collection,
Consolidation and Dissemination of
Quotation and Transaction Information
for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading
Privileges Basis
November 19, 2021.
Pursuant to Section 11A of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 608 thereunder,2
notice is hereby given that on November
5, 2021,3 certain participants in the Joint
Self-Regulatory Organization Plan
Governing the Collection, Consolidation
and Dissemination of Quotation and
Transaction Information for NasdaqListed Securities Traded on Exchanges
on an Unlisted Trading Privileges Basis
(‘‘UTP Plan’’ or ‘‘Plan’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposal to amend
the UTP Plan.4 The amendment
represents the Fifty-Second Amendment
to the Plan (‘‘Amendment’’). Under the
Amendment, the Participants propose to
amend the Plan to adopt fees for the
receipt of the expanded content of
consolidated market data pursuant to
the Commission’s Market Data
Infrastructure Rules (‘‘MDI Rules’’).5
The Participants have submitted a
separate amendment to implement the
non-fee-related aspects of the MDI
Rules.
The proposed Amendment has been
filed by the Participants pursuant to
Rule 608(b)(2) under Regulation NMS.6
The Commission is publishing this
1 15
U.S.C. 78k–1.
CFR 242.608.
3 See Letter from Robert Books, Chair, UTP
Operating Committee, to Vanessa Countryman,
Secretary, Commission (Nov. 5, 2021).
4 The amendment was approved and executed by
more than the required two-thirds of the selfregulatory organizations (‘‘SROs’’) that are
participants of the UTP Plan. The participants that
approved and executed the amendment (the
‘‘Participants’’) are: Cboe BYX Exchange, Inc., Cboe
BZX Exchange, Inc., Cboe EDGA Exchange, Inc.,
Cboe EDGX Exchange, Inc., Cboe Exchange, Inc.,
Nasdaq ISE, LLC, Nasdaq PHLX, Inc., The Nasdaq
Stock Market LLC, New York Stock Exchange LLC,
NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.. The other
SROs that are participants in the UTP Plan are:
Financial Industry Regulatory Authority, Inc., The
Investors’ Exchange LLC, Long-Term Stock
Exchange, Inc., MEMX LLC, MIAX PEARL, LLC,
and Nasdaq BX, Inc.. See infra Section I. G.
5 Securities Exchange Act Release No. 90610, 86
FR 18596 (April 9, 2021) (File No. S7–03–20) (‘‘MDI
Rules Release’’).
6 17 CFR 242.608(b)(2).
2 17
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notice to solicit comments from
interested persons on the proposed
Amendment. Set forth in Sections I and
II, which were prepared and submitted
to the Commission by the Participants,
is the statement of the purpose and
summary of the Amendment, along with
information pursuant to Rules 608(a)
and 601(a) under the Act. A copy of the
Plan marked to show the proposed
Amendment is Attachment A to this
notice.
I. Rule 608(a)
A. Purpose of the Amendments
On December 9, 2020, the
Commission adopted amendments to
Regulation NMS. The effective date of
these final rules was June 8, 2021. As
specified in the MDI Rules Release, the
Participants must submit updated fees
regarding the receipt and use of the
expanded content of consolidated
market data by November 5, 2021.7
Consistent with that requirement, the
Participants are submitting the abovecaptioned amendments to the UTP Plan
to propose such fees.8
The Participants are proposing a fee
structure for the following three
categories of data, which collectively
comprise the amended definition of core
data, as that term is defined in amended
Rule 600(b)(21) of Regulation NMS: 9
(1) Level 1 Service, which the
Participants propose would include Top
of Book Quotations, Last Sale Price
Information, and odd-lot information (as
defined in amended Rule 600(b)(59)).
Plan fees to subscribers currently are for
Top of Book Quotations and Last Sale
Price Information, as well as what is
now defined as administrative data (as
defined in amended Rule 600(b)(2)),
regulatory data (as defined in amended
Rule 600(b)(78)), and self-regulatory
7 MDI
Rules Release at 18699.
the Commission is aware, some of the SROs
(the ‘‘Petitioners’’) have challenged the MDI Rules
Release in the D.C. Circuit. Certain of the
Petitioners have joined in this submission,
including the statement that the Plan amendments
comply with the MDI Rules Release, solely to
satisfy the requirements of the MDI Rules Release
and Rule 608. Nothing in this submission should
be construed as abandoning any arguments asserted
in the D.C. Circuit, as an agreement by Petitioners
with any analysis or conclusions set forth in the
MDI Rules Release, or as a concession by Petitioners
regarding the legality of the MDI Rules Release.
Petitioners reserve all rights in connection with
their pending challenge of the MDI Rules Release,
including inter alia, the right to withdraw the
proposed amendment or assert that any action
relating to the proposed amendment has been
rendered null and void, depending on the outcome
of the pending challenge. Petitioners further reserve
all rights with respect to this submission, including
inter alia, the right to assert legal challenges
regarding the Commission’s disposition of this
submission.
9 17 CFR 242.600(b)(26) (‘‘Rule 600’’).
8 As
E:\FR\FM\26NON1.SGM
26NON1
]]>Agencies
[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67559-67562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25757]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93631; File No. SR-PEARL-2021-56]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee
Schedule
November 19, 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 November 8, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Pearl Options
Fee Schedule (the ``Fee Schedule'').
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 the Fee Schedule to amend the
exchange groupings of options exchanges within the routing fee table in
Section 1)b) of the Fee Schedule, Fees for Customer Orders Routed to
Another Options Exchange. The Exchange initially filed this proposal on
October 27, 2021 (SR-PEARL-2021-51) and withdrew such filing on
November 8, 2021. The Exchange proposes to implement the fee change
effective November 8, 2021.
Currently, the Exchange assesses routing fees based upon (i) the
origin type of the order, (ii) whether or not it is an order for
standard option classes in the Penny Interval Program \3\ (``Penny
classes'') or an order for standard option classes which are not in the
Penny Interval Program (``Non-Penny classes'')
[[Page 67560]]
(or other explicitly identified classes), and (iii) to which away
market it is being routed. This assessment practice is identical to the
routing fees assessment practice currently utilized by the Exchange's
affiliates, Miami International Securities Exchange, LLC (``MIAX'') and
MIAX Emerald, LLC (``MIAX Emerald''). This is also similar to the
methodology utilized by the Cboe BZX Exchange, Inc. (``Cboe BZX
Options''), a competing options exchange, in assessing routing fees.
Cboe BZX Options has exchange groupings in its fee schedule, similar to
those of the Exchange, whereby several exchanges are grouped into the
same category, dependent upon the order's origin type and whether it is
a Penny or Non-Penny class.\4\
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\3\ See Securities Exchange Act Release No. 88992 (June 2,
2020), 85 FR 35142 (June 8, 2020) (SR-PEARL-2020-06) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 404, Series of Option Contracts Open for
Trading, and Rule 510, Minimum Price Variations and Minimum Trading
Increments, To Conform the Rules to Section 3.1 of the Plan for the
Purpose of Developing and Implementing Procedures Designed To
Facilitate the Listing and Trading of Standardized Options).
\4\ See Cboe U.S. Options Fee Schedules, BZX Options, effective
August 2, 2021, ``Fee Codes and Associated Fees,'' at https://www.cboe.com/us/options/membership/fee_schedule/bzx/.
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As a result of conducting a periodic review of the current
transaction fees and rebates charged by away markets, the Exchange has
determined to amend the exchange groupings of options exchanges within
the routing fee table to better reflect the associated costs of routing
customer orders to those options exchanges for execution.\5\ In
particular, the Exchange proposes to amend the exchange groupings in
the first row of the table identified as, ``Routed, Priority Customer,
Penny Program,'' to relocate Nasdaq BX Options from the first row of
the table to the second, also identified as ``Routed, Priority
Customer, Penny Program.'' The impact of this proposed change will be
that the routing fee for Priority Customer orders in the Penny Program
that are routed to Nasdaq BX Options will increase from $0.15 to $0.65.
The purpose of the proposed rule change is to adjust the routing fee
for certain orders routed to Nasdaq BX Options to reflect the
associated costs for that routed execution.
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\5\ Nasdaq BX established a Customer Taker fee of $0.46 in Penny
Classes and $0.65 in Non-Penny Classes. See Securities Exchange Act
Release No. 91473 (April 5, 2021), 86 FR 18562 (April 9, 2021) (SR-
BX-2021-009). Nasdaq BX recently increased the Customer Taker fee in
Non-Penny Classes from $0.65 to $0.79. See Securities Exchange Act
Release No. 93121 (September 24, 2021), 86 FR 54259 (September 30,
2021) (SR-BX-2021-040).
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Next, the Exchange proposes to amend the exchange groupings in the
third row of the table, identified as ``Routed, Priority Customer, Non-
Penny Program,'' to relocate Nasdaq BX Options from the third row of
the table to the fourth, also identified as ``Routed, Priority
Customer, Non-Penny Program.'' The impact of this proposed change will
be that the routing fee for Priority Customer orders in the Non-Penny
Program that are routed to Nasdaq BX Options will increase from $0.15
to $1.00. The purpose of the proposed rule change is to adjust the
routing fee for certain orders routed to Nasdaq BX Options to reflect
the associated costs for that routed execution.
Next, the Exchange proposes to amend the exchange groupings in the
sixth row of the table, identified as ``Routed, Public Customer that is
not a Priority Customer, Non-Penny Program,'' to relocate Nasdaq ISE
from the exchange groupings in the sixth row of the table to the
exchange groupings in the seventh row of the table, also identified as
``Routed, Public Customer that is not a Priority Customer, Non-Penny
Program.'' The impact of this proposed change will be that the Exchange
routing fee for Public Customer orders that are not Priority Customer
orders in the Non-Penny Program that are routed to Nasdaq ISE will
increase from $1.00 to $1.15. The purpose of the proposed rule change
is to adjust the routing fee for certain orders routed to Nasdaq ISE to
reflect the associated costs for that routed execution.
Finally, the Exchange proposes to amend the exchange groupings in
the seventh row of the table, identified as ``Routed, Public Customer
that is not a Priority Customer, Non-Penny Program,'' to relocate
Nasdaq BX Options and MIAX Emerald, to the eighth row of the table,
also identified as, ``Routed, Public Customer that is not a Priority
Customer, Non-Penny Program.'' The impact of this proposed change will
be that the routing fee for Public Customer orders that are not
Priority Customer orders in the Non-Penny Program that are routed to
Nasdaq BX Options or MIAX Emerald will increase from $1.15 to $1.25.
The purpose of the proposed rule change is to adjust the routing fee
for certain orders routed to Nasdaq BX Options or MIAX Emerald to
reflect the associated costs for that routed execution. The Exchange
notes that no options exchanges were removed from the routing fee table
entirely, with the only change being the change in categorization.
Accordingly, with the proposed change, the routing fee table will
be as follows:
------------------------------------------------------------------------
Description Fees
------------------------------------------------------------------------
Routed, Priority Customer, Penny Program, to: NYSE $0.15
American, BOX, Cboe, Cboe EDGX Options, Nasdaq MRX,
MIAX, Nasdaq PHLX (except SPY).........................
Routed, Priority Customer, Penny Program, to: NYSE Arca 0.65
Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq
ISE, NOM, Nasdaq PHLX (SPY only), MIAX Emerald, Nasdaq
BX Options.............................................
Routed, Priority Customer, Non-Penny Program, to: NYSE 0.15
American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE,
Nasdaq MRX, MIAX, Nasdaq PHLX..........................
Routed, Priority Customer, Non-Penny Program, to: NYSE 1.00
Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX,
NOM, MIAX Emerald, Nasdaq BX Options...................
Routed, Public Customer that is not a Priority Customer, 0.65
Penny Program, to: NYSE American, NYSE Arca Options,
Cboe BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX
Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX
Emerald, MIAX, NOM, Nasdaq PHLX, Nasdaq BX Options.....
Routed, Public Customer that is not a Priority Customer, 1.00
Non-Penny Program, to: NYSE American, MIAX, Cboe,
Nasdaq PHLX, Cboe EDGX Options.........................
Routed, Public Customer that is not a Priority Customer, 1.15
Non-Penny Program, to: Cboe C2, NOM, BOX, Nasdaq ISE...
Routed, Public Customer that is not a Priority Customer, 1.25
Non-Penny Program, to: Cboe BZX Options, NYSE Arca
Options, Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options,
MIAX Emerald...........................................
------------------------------------------------------------------------
In determining to amend its routing fees the Exchange took into
account transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, as well as the Exchange's clearing
costs, administrative, regulatory, and technical costs associated with
routing orders to an away market. The Exchange uses unaffiliated
routing brokers to route orders to the away markets; the costs
associated with the use of these services
[[Page 67561]]
are included in the routing fees specified in the Fee Schedule. This
routing fees structure is not only similar to the Exchange's
affiliates, MIAX and MIAX Emerald, but is also comparable to the
structure in place on at least one other competing options exchange,
such as Cboe BZX Options.\6\ The Exchange's routing fee structure
approximates the Exchange's costs associated with routing orders to
away markets. The per-contract transaction fee amount associated with
each grouping closely approximates the Exchange's all-in cost (plus an
additional, non-material amount) \7\ to execute that corresponding
contract at that corresponding exchange. The Exchange notes that in
determining whether to adjust certain groupings of options exchanges in
the routing fee table, the Exchange considered the transaction fees and
rebates assessed by away markets, and determined to amend the grouping
of exchanges that assess transaction fees for routed orders within a
similar range. This same logic and structure applies to all of the
groupings in the routing fee table. By utilizing the same structure
that is utilized by the Exchange's affiliates, MIAX and MIAX Emerald,
the Exchange's Members \8\ will be assessed routing fees in a similar
manner. The Exchange believes that this structure will minimize any
confusion as to the method of assessing routing fees between the three
exchanges. The Exchange notes that its affiliates, MIAX and MIAX
Emerald, will file to make the same proposed routing fee changes
contained herein.
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\6\ See supra note 4. The Cboe BZX Options fee schedule has
exchange groupings, whereby several exchanges are grouped into the
same category, dependent on the order's Origin type and whether it
is a Penny or Non-Penny class. For example, Cboe BZX Options fee
code RR covers routed customer orders in Non-Penny classes to NYSE
Arca, Cboe C2, Nasdaq ISE, Nasdaq Gemini, MIAX Emerald, MIAX Pearl,
or NOM, with a single fee of $1.25 per contract.
\7\ This amount is to cover de minimis differences/changes to
away market fees (i.e., minor increases or decreases) that would not
necessitate a fee filing by the Exchange to re-categorize the away
exchange into a different grouping. Routing fees are not intended to
be a profit center for the Exchange and the Exchange's target
regarding routing fees and expenses is to be as close as possible to
net neutral.
\8\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions section of
the Fee Schedule and Exchange Rule 100.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities. The Exchange also believes the proposal furthers the
objectives of Section 6(b)(5) of the Act \11\ in that it is designed to
promote just and equitable principles of trade, 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 and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed change to the exchange groupings
of options exchanges within the routing fee table furthers the
objectives of Section 6(b)(4) of the Act and is reasonable, equitable
and not unfairly discriminatory because the proposed change will
continue to apply in the same manner to all Members that are subject to
routing fees. The Exchange believes the proposed change to the routing
fee table exchange groupings furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote just and equitable principles of
trade and is not unfairly discriminatory because the proposed change
seeks to recoup costs that are incurred by the Exchange when routing
customer orders to away markets on behalf of Members and does so in the
same manner to all Members that are subject to routing fees. The costs
to the Exchange to route orders to away markets for execution primarily
includes transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, in addition to the Exchange's
clearing costs, administrative, regulatory and technical costs. The
Exchange believes that the proposed re-categorization of certain
exchange groupings would enable the Exchange to recover the costs it
incurs to route orders to Nasdaq BX Options, Nasdaq ISE, and MIAX
Emerald. The per-contract transaction fee amount associated with each
grouping approximates the Exchange's all-in cost (plus an additional,
non-material amount) to execute the corresponding contract at the
corresponding exchange.
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 not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes its
proposed re-categorization of certain exchange groupings is intended to
enable the Exchange to recover the costs it incurs to route orders to
away markets, particularly Nasdaq BX Options and Nasdaq ISE. The
Exchange does not believe that this proposal imposes any unnecessary
burden on competition because it seeks to recoup costs incurred by the
Exchange when routing orders to away markets on behalf of Members and
at least one other options exchange has a similar routing fees
structure.\12\
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\12\ See supra note 6.
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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 foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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-2021-56 on the subject line.
[[Page 67562]]
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-2021-56. 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-2021-56 and should be submitted on
or before December 17, 2021.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25757 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P
