Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Pearl Equities Fee Schedule, 3151-3160 [2022-01065]
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Federal Register / Vol. 87, No. 13 / Thursday, January 20, 2022 / Notices
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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) 10 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
should refer to File Number SR–C2–
2022–001 and should be submitted on
or before February 10, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
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:
[FR Doc. 2022–00981 Filed 1–19–22; 8:45 am]
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–
C2–2022–001 on the subject line.
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX Pearl
Equities Fee Schedule
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–C2–2022–001. 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;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
10 15
U.S.C. 78s(b)(2)(B).
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BILLING CODE 8011–01–P
3151
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
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93979; File No. SR–
PEARL–2022–01]
January 14, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on January
4, 2022, MIAX PEARL, LLC (‘‘MIAX
Pearl’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the fee schedule (the ‘‘Fee
Schedule’’) applicable to MIAX Pearl
Equities, an equities trading facility of
the Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.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
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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The purpose of the proposed rule
change is to amend the Exchange’s Fee
Schedule to (i) adopt new Add and
Remove Volume Tiers for executions of
orders in securities priced at or above
$1.00 that add or remove liquidity from
the Exchange; (ii) reduce the Adding
Liquidity Displayed Order rebate; (iii)
reduce the Adding Liquidity NonDisplayed Order rebate; (iv) increase the
Removing Liquidity fee; (v) update
Liquidity Indicator Codes and
Associated Fees table; (vi) adopt new
definitions in the Definitions section;
and (vii) adopt new provisions in the
General Notes section.
The Exchange first notes that it
operates in a highly competitive market
in which market participants can
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
incentives to be insufficient. More
specifically, the Exchange is only one of
16 registered equities exchanges, as well
as a number of alternative trading
systems and other off-exchange venues,
to which market participants may direct
their order flow. Based on publicly
available information, no single
registered equities exchange currently
has more than approximately 18% of
the total market share of executed
volume of equities trading.4
Add Volume Tiers
The Exchange is proposing to
introduce a tiered pricing structure
applicable to the rebates applied for
volume added to the Exchange.
Specifically, the Exchange proposes to
adopt a new volume-based tier
structure, referred to as the Add Volume
Tiers, in which the Exchange will
provide an enhanced rebate for
executions of Added Displayed Volume
for Equity Members 5 (‘‘Members’’) that
meet the specified volume thresholds on
the Exchange, as described below.
4 Market share percentage calculated as of
December 22, 2021. The Exchange receives and
processes data made available through consolidated
data feeds.
5 The term ‘‘Equity Member’’ is a Member
authorized by the Exchange to transact business on
MIAX Pearl Equities. See Exchange Rule 1901.
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The Exchange proposes to adopt three
Add Volume Tiers (Tier 1, Tier 2, and
Tier 3) in which it will provide an
enhanced rebate per tier. A Member
would qualify for an enhanced rebate
under Tier 1 by achieving an ADAV 6 of
at least 0.07% of the TCV.7 Members
that qualify for Tier 1 would receive an
enhanced rebate of $0.0032 per share for
executions of Added Displayed Volume
for executions of orders in securities
priced at or above $1.00 per share across
all Tapes. A Member would qualify for
an enhanced rebate under Tier 2 by
achieving an ADAV of at least 0.10% of
the TCV. Members that qualify for Tier
2 would receive an enhanced rebate of
$0.0035 per share for executions of
Added Displayed Volume for executions
of orders in securities priced at or above
$1.00 per share across all Tapes. A
Member would qualify for an enhanced
rebate under Tier 3 by achieving an
ADAV of at least 0.20% of the TCV.
Members that qualify for Tier 3 would
receive an enhanced rebate of $0.0036
per share for executions of Added
Displayed Volume for executions of
orders in securities priced at or above
$1.00 per share across all Tapes.
The Exchange believes that basing the
qualifications for the Add Volume Tiers
on an ADAV threshold that is a
percentage of the TCV is appropriate so
that the threshold is variable based on
overall volumes in the equities industry,
which fluctuate month to month.
The proposed Add Volume Tier 1 is
designed to encourage Members to
maintain or increase their orders that
add liquidity on the Exchange in order
to qualify for an enhanced rebate for
executions of Added Displayed Volume,
thereby contributing to a deeper and
more liquid market to the benefit of all
market participants and enhancing the
6 As proposed, the term ‘‘ADAV’’ means daily
added volume [sic] calculated as the number of
shares added per day and ‘‘ADV’’ means average
daily volume calculated as the number of shares
added or removed, combined, per day. ADAV and
ADV are calculated on a monthly basis. The
Exchange excludes from its calculation of ADAV
and ADV shares added or removed on any day that
the Exchange’s system experiences a disruptions
that lasts for more than 60 minutes during regular
trading hours (‘‘Exchange System Disruption’’), on
any day with a scheduled early market close, and
on the ‘‘Russell Reconstitution Day’’ (typically the
last Friday in June). Routed shares are not included
in the ADAV or ADV calculation.
7 As proposed, the term ‘‘TCV’’ means total
consolidated volume calculated as the volume in
shares reported by all exchanges and reporting
facilities to a consolidated transaction reporting
plan for the month for which the fees apply. The
Exchange excludes from its calculation of TCV
volume on any given day that the Exchange’s
system experiences a disruption that lasts for more
than 60 minutes during Regular Trading Hours. On
[sic] any day with a scheduled early market close,
and on the ‘‘Russell Reconstitution Day’’ (typically
the last Friday in June).
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attractiveness of the Exchange as a
trading venue. Further, the proposed
new Add Volume Tier 1 would provide
Members with a higher enhanced rebate
($0.0032) over the new proposed
standard rebate of ($0.0029), as further
described below, for satisfying more
stringent criteria.
The proposed Add Volume Tier 2 is
designed to encourage Members to
maintain or increase their orders that
add liquidity on the Exchange in order
to qualify for an enhanced rebate for
executions of Added Displayed Volume,
thereby contributing to a deeper and
more liquid market to the benefit of all
market participants and enhancing the
attractiveness of the Exchange as a
trading venue. Further, the proposed
new Add Volume Tier 2 would provide
Members with a higher enhanced rebate
($0.0035) over Add Volume Tier 1
($0.0032), for satisfying increasingly
more stringent criteria.
The proposed Add Volume Tier 3 is
designed to encourage Members to
maintain or increase their orders that
add liquidity on the Exchange in order
to qualify for an enhanced rebate for
executions of Added Displayed Volume,
thereby contributing to a deeper and
more liquid market to the benefit of all
market participants and enhancing the
attractiveness of the Exchange as a
trading venue. Further, the proposed
new Add Volume Tier 3 would provide
Members with a higher enhanced rebate
($0.0036) over Add Volume Tier 2
($0.0035), for satisfying increasingly
more stringent criteria.
For the purposes of calculating ADAV
the Exchange proposes to exclude from
the calculation: (1) Any Exchange
System Disruption Days; (2) any day
with a scheduled early market close;
and (3) the Russell Reconstitution day,
which typically occurs on the last
Friday in June. The Exchange believes
that the Exchange system disruptions
could preclude Members from
participating on the Exchange to the
extent that they might have otherwise
participated on such days, and thus, the
Exchange believes it is appropriate to
exclude such days when determining
whether a Member qualifies for an Add
Volume Tier to avoid penalizing
Members that might otherwise have met
the applicable volume threshold.
Additionally, the Exchange believes that
scheduled early market closes, which
typically are the day before, or the day
after, a holiday, may preclude some
Members from submitting orders to the
Exchange at the same level that they
might otherwise. For similar reasons,
the Exchange believes it is appropriate
to exclude the Russell Reconstitution
Day, as the Exchange believes the
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change to normal trading activity as a
result of the Russell Reconstitution may
skew the calculation of ADAV and TCV.
The Exchange also proposes to specify
that routed shares are not included in
the calculation of ADAV.8
The Exchange will continue to
provide a rebate of 0.05% of the total
dollar value of the transaction for
executions of orders that add liquidity
to the Exchange in securities priced
below $1.00 per share. Thus, as under
the Exchange’s current pricing, the same
rebate would be applied to all Members
for executions of orders that add
liquidity on the Exchange in securities
priced below $1.00 per share.
The Exchange notes that the rebates
provided for executions of Added
Displayed Volume under the Add
Volume Tiers ($0.0032 in Tier 1;
$0.0035 in Tier 2; and $0.0036 in Tier
3), are comparable to, and competitive
with, the rebates for executions of
liquidity adding displayed orders
provided by at least one other exchange
under similar volume-based tiers.9
The Exchange believes that the
proposed tiered pricing structure
provides an incentive for Members to
strive for higher ADAV on the Exchange
to receive the proposed enhanced rebate
for executions of Added Displayed
Volume. As such, the proposed Add
Volume Tiers are designed to encourage
Members that provide liquidity on the
Exchange to maintain or increase their
order flow, thereby contributing to a
deeper and more liquid market to the
benefit of all market participants and
enhancing the attractiveness of the
Exchange as a trading venue.
Reduced Standard Rebate for Added
Displayed Volume
The Exchange proposes to reduce the
standard rebate for executions of Added
Displayed Volume. Currently, the
Exchange provides a standard rebate of
$0.0032 per share for executions of
Added Displayed Volume in Tapes A
and C, and $0.0035 per share for
executions of Added Displayed Volume
in Tape B. The Exchange now proposes
to reduce the standard rebate for
8 The Exchange notes that excluding routed
shares from the calculations of ADAV and ADV is
also consistent with the practice of other exchanges
when calculating ADAV and ADV. See, e.g., the
Cboe BZX equities trading fee schedule on its
public website (available at https://
markets.cboe.com/us/equities/membership/fee_
schedule/bzx/).
9 See MEMX, LLC (‘‘MEMX’’) equities trading fee
schedule on its public website (available at https://
info.memxtrading.com/fee-schedule/) which
reflects rebates provided under ‘‘Liquidity
Provision Tiers’’ = tiers based on a member
achieving certain ADAV thresholds ranging from
$0.0031 to $0.00335 [sic] per share for adding
displayed liquidity to the MEMX exchange.
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executions of Added Displayed Volume
to $0.0029 per share for all Tapes.10 The
Exchange notes that executions of
orders in securities priced below $1.00
per share that add displayed liquidity to
the Exchange will continue to receive
the standard rebate applicable to such
executions (i.e., 0.05% of the total dollar
value of the transaction).
The purpose of reducing the standard
rebate for executions of Added
Displayed Volume is for business and
competitive reasons, as the Exchange
believes the reduction of such rebate
would decrease the Exchange’s
expenditures with respect to transaction
pricing and would also offset some of
the costs associated with the proposed
enhanced rebates for executions for
Members that qualify for an Add
Volume Tier, in a manner that is still
consistent with the Exchange’s overall
pricing philosophy of encouraging
added displayed liquidity. The
Exchange notes that despite the modest
reduction proposed herein, the
proposed standard rebate for execution
of Added Displayed Volume (i.e.,
$0.0029 per share) remains higher than,
and competitive with, the standard
rebates provided by other exchanges for
executions of orders in securities priced
at or above $1.00 per share that add
displayed liquidity.11
The Exchange proposes to reduce the
standard rebate to $0.0021 per share for
executions of Added Non-Displayed
Volume. Currently, the Exchange
provides a standard rebate of $0.0025
per share for executions of nondisplayed orders in securities priced at
or above $1.00 per share that add
liquidity to the Exchange. The Exchange
notes that executions of orders in
securities priced below $1.00 per share
that add non-displayed liquidity to the
Exchange will continue to receive the
standard rebate applicable to such
executions (i.e., 0.05% of the total dollar
value of the transaction).
The purpose of reducing the standard
rebate for executions of Added NonDisplayed Volume is for business and
competitive reasons, as the Exchange
believes the reduction of such rebate
10 The standard pricing for executions of Added
Displayed Volume is referred to by the Exchange on
its Fee Schedule in section (1)(a) Standard Rates.
11 See e.g., the Nasdaq PSX equities trading fee
schedule on its public website (available at https://
www.nasdaqtrader.com/Trader.aspx?id=PSX_
Pricing), which reflects a standard rebate of $0.0020
per share to add displayed liquidity in securities
priced at or above $1.00 per share; see also the
NYSE ARCA equities trading fee schedule on its
public website (available at https://www.nyse.com/
publicdocs/nyse/markets/nyse-arca/NYSE_Arca_
Marketplace_Fees.pdf), which reflects a standard
rebate of $0.0020 per share to add displayed
liquidity in securities priced at or above $1.00 per
share.
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would decrease the Exchange’s
expenditures with respect to transaction
pricing and would also offset some of
the costs associated with the proposed
enhanced rebates for executions for
Members that qualify for an Add
Volume Tier, in a manner that is still
consistent with the Exchange’s overall
pricing philosophy of encouraging
added displayed liquidity. The
Exchange notes that despite the modest
reduction proposed herein, the
proposed standard rebate for execution
of Added Non-Displayed Volume (i.e.,
$0.0021 per share) remains higher than,
and competitive with, the standard
rebates provided by other exchanges for
executions of orders in securities priced
at or above $1.00 per share that add
displayed liquidity.12
Remove Volume Tiers
The Exchange is proposing to
introduce a tiered pricing structure
applicable to the fees charged for
executions of Removed Volume on the
Exchange. Specifically, the Exchange
proposes to adopt a new volume-based
tier structure, referred to as the Remove
Volume Tiers, in which the Exchange
will charge a fee that is lower than the
standard fee for executions of Removed
Volume for Members that meet the
specified volume thresholds on the
Exchange, as described below.
Currently, the Exchange charges a
standard fee of $0.0025 per share for all
executions of Removed Volume, which
the Exchange is proposing to increase to
$0.0029, as further described below. The
Exchange now proposes to adopt two
new Remove Volume Tiers in which it
will charge a lower fee of $0.0027 per
share for executions of Removed
Volume for Members that qualify for
Tier 1 by achieving an ADV 13 that is
equal to or greater than 0.10% of TCV;
and a lower fee of $0.00265 per share for
Members that qualify for Tier 2 by
achieving an ADV that is equal to or
greater than 0.15% of TCV. As
proposed, the ADV will be calculated on
a monthly basis, and Members that
qualify for the Remove Volume Tier
discount by achieving one of the
thresholds specified above in a
particular month will be charged the
12 See e.g., the Nasdaq PSX equities trading fee
schedule on its public website (available at https://
www.nasdaqtrader.com/Trader.aspx?id=PSX_
Pricing), which reflects a standard rebate of $0.0015
per share to add non-displayed liquidity in
securities priced at or above $1.00 per share; see
also the Cboe BZX equities trading fee schedule on
its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/bzx/), which reflects a standard rebate of
$0.0010 per share to add non-displayed liquidity in
securities priced at or above $1.00 per share.
13 See supra note 6.
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3153
proposed lower fee according to the
threshold tier achieved instead of the
standard fee of $0.0029 per share, for all
executions of Removed Volume in that
month.
The Exchange will continue to charge
Members a fee of 0.05% of the total
dollar value of the transaction for
executions of orders that remove
liquidity from the Exchange in
securities priced below $1.00 per share.
Thus, as under the Exchange’s current
pricing, the same fee would be applied
to all Members for executions of orders
that remove liquidity from the Exchange
in securities priced below $1.00 per
share.
For the purposes of calculating ADV
the Exchange proposes to exclude from
the calculation: (1) Any Exchange
System Disruption Days; (2) any day
with a scheduled early market close;
and (3) the Russell Reconstitution day,
which typically occurs on the last
Friday in June. The Exchange believes
that Exchange system disruptions could
preclude Members from participating on
the Exchange to the extent that they
might have otherwise participated on
such days, and thus, the Exchange
believes it is appropriate to exclude
such days when determining whether a
Members qualifies for a Remove Volume
Tier to avoid penalizing Members that
might otherwise have met the applicable
volume threshold. For similar reasons,
the Exchange believes it is appropriate
to exclude days with a scheduled early
market close, which are typically the
day before, or the day after, a holiday,
as the early market close may preclude
some Members from submitting orders
to the Exchange at the same level that
they might otherwise. Additionally, the
Exchange believes excluding the Russell
Reconstitution day is appropriate as the
change to normal trading activity as a
result of the Russell Reconstitution may
skew the calculation of ADV and TCV.
The Exchange also proposes to specify
that routed shares are not included in
the calculation of ADV.14
The Exchange believes that the
proposed Remove Volume Tier provides
an incentive for Members to strive for
higher ADV on the Exchange in order to
qualify for the proposed lower fee for
executions of Removed Volume. As
such, the proposed Remove Volume
Tier is designed to encourage Members
to maintain or increase their order flow
directed to the Exchange, thereby
contributing to a deeper and more liquid
market to the benefit of all market
participants and enhancing the
attractiveness of the Exchange as a
trading venue. The Exchange notes that
14 See
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the proposed lower fees for executions
of Remove Volume applicable to
Members that qualify for one of the
Remove Volume Tiers (i.e., $0.0027 or
$0.00265) is comparable to, and
competitive with, the fees charged for
executions of liquidity-removing orders
charged by at least one other exchange
under similar volume-based tiers.15
Increase Standard Fee for Removed
Volume
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In connection with the proposed
adoption of the Remove Volume Tiers,
the Exchange also proposes to increase
the standard fee charged for executions
of Removed Volume. Currently, the
Exchange charges a standard fee of
$0.0025 per share for executions of
Removed Volume. The Exchange now
proposes to increase the standard fee
charged for executions of Removed
Volume to $0.0029 per share.16
The purpose of increasing the
standard fee for executions of Removed
Volume is for business and competitive
reasons, as the Exchange believes that
increasing such fee as proposed would
generate additional revenue to offset
some of the costs associated with the
Exchange’s proposed pricing structure,
which provides various rebates for
liquidity-adding orders and discounted
fees for liquidity-removing orders, and
the Exchange’s operations generally, in
a manner that is consistent with the
Exchange’s overall pricing philosophy
of encouraging added liquidity. The
Exchange notes that despite the modest
increase proposed herein, the
Exchange’s proposed standard fee for
executions of Removed Volume
($0.0029) remains competitive with the
standard fee to remove liquidity in
securities priced at or above $1.00 per
share charged by other equity
exchanges.17
15 See the Cboe EDGX equities trading fee
schedule on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/) which reflects fees charged under
‘‘Remove Volume Tiers’’—tiers based on a member
achieving certain step-up ADAV and ADV volume
thresholds of $0.00275 per share for removing
volume from the Cboe EDGX exchange.
16 The proposed pricing is referred to by the
Exchange on the Fee Schedule under the existing
description ‘‘Removing Liquidity’’ in Section (1)(a)
Standard Rates.
17 See e.g., the Cboe BZX equities trading fee
schedule on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/bzx/) which reflects a standard fee of
$0.0030 per share to remove liquidity in securities
priced at or above $1.00 per share; and the Cboe
EDGX equities trading fee schedule on its public
website (available at https://www.cboe.com/us/
equities/membership/fee_schedule/edgx/) which
reflects a standard fee of $0.0030 per share to
remove liquidity in securities priced at or above
$1.00.
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Liquidity Indicator Codes and
Associated Fees Table Conforming
Changes
In conjunction with the Exchange’s
proposal to (i) reduce the rebate for
Displayed Orders that Add Liquidity
from $0.0032 for Tapes A and C, and
$0.0035 for Tape B, to $0.0029 for all
tapes; (ii) reduce the rebate for NonDisplayed Orders that Add Liquidity
from $0.0025 to $0.0021; and (iii)
increase the fee for Removing Liquidity
from $0.0025 to $0.0029, the Exchange
now proposes to update the Liquidity
Indicator Codes and Associated Fees
table to reflect the aforementioned
changes. The Exchange proposes to
update the liquidity indicator codes as
follows:
• Liquidity indicator code AA, Adds
Liquidity, Displayed Order (Tape A).
The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code AA would receive a rebate of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code AB, Adds
Liquidity, Displayed Order (Tape B).
The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code AB would receive a rebate of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code AC, Adds
Liquidity, Displayed Order (Tape C).
The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code AC would receive a rebate of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code Aa, Adds
Liquidity, Non-Displayed Order (Tape
A). The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code Aa would receive a rebate of
$0.0021 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code Ab, Adds
Liquidity, Non-Displayed Order (Tape
B). The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code Ab would receive a rebate of
$0.0021 per share in securities priced at
or above $1.00 and 0.05% of the
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Sfmt 4703
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code Ac, Adds
Liquidity, Non-Displayed Order (Tape
C). The Liquidity Indicator Code and
Associated Fees table would specify that
orders that yield liquidity indicator
code Ac would receive a rebate of
$0.0021 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code Ar, Retail
Order, Adds Liquidity, Non-Displayed
Order (All Tapes). The Liquidity
Indicator Code and Associated Fees
table would specify that orders that
yield liquidity indicator code Ar would
receive a rebate of $0.0021 per share in
securities priced at or above $1.00 and
0.05% of the transaction’s dollar value
in securities priced below $1.00.
• Liquidity indicator code RA,
Removes Liquidity, Displayed Order
(Tape A). The Liquidity Indicator Code
and Associated Fees table would specify
that orders that yield liquidity indicator
code RA would be subject to a fee of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code RB,
Removes Liquidity, Displayed Order
(Tape B). The Liquidity Indicator Code
and Associated Fees table would specify
that orders that yield liquidity indicator
code RB would be subject to a fee of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code RC,
Removes Liquidity, Displayed Order
(Tape C). The Liquidity Indicator Code
and Associated Fees table would specify
that orders that yield liquidity indicator
code RC would be subject to a fee of
$0.0029 per share in securities priced at
or above $1.00 and 0.05% of the
transaction’s dollar value in securities
priced below $1.00.
• Liquidity indicator code RR, Retail
Order, Removes Liquidity, Displayed
Order (All Tapes). The Liquidity
Indicator Code and Associated Fees
table would specify that orders that
yield liquidity indicator code RR would
be subject to a fee of $0.0029 per share
in securities priced at or above $1.00
and 0.05% of the transaction’s dollar
value in securities priced below $1.00.
• Liquidity indicator code Ra,
Removes Liquidity, Non-Displayed
Order (Tape A). The Liquidity Indicator
Code and Associated Fees table would
specify that orders that yield liquidity
indicator code Ra would be subject to a
fee of $0.0029 per share in securities
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priced at or above $1.00 and 0.05% of
the transaction’s dollar value in
securities priced below $1.00.
• Liquidity indicator code Rb,
Removes Liquidity, Non-Displayed
Order (Tape B). The Liquidity Indicator
Code and Associated Fees table would
specify that orders that yield liquidity
indicator code Rb would be subject to a
fee of $0.0029 per share in securities
priced at or above $1.00 and 0.05% of
the transaction’s dollar value in
securities priced below $1.00.
• Liquidity indicator code Rc,
Removes Liquidity, Non-Displayed
Order (Tape C). The Liquidity Indicator
Code and Associated Fees table would
specify that orders that yield liquidity
indicator code Rc would be subject to a
fee of $0.0029 per share in securities
priced at or above $1.00 and 0.05% of
the transaction’s dollar value in
securities priced below $1.00.
• Liquidity indicator code Rr, Retail
Order, Removes Liquidity, NonDisplayed Order (All Tapes). The
Liquidity Indicator Code and Associated
Fees table would specify that orders that
yield liquidity indicator code Rr would
be subject to a fee of $0.0029 per share
in securities priced at or above $1.00
and 0.05% of the transaction’s dollar
value in securities priced below $1.00.
lotter on DSK11XQN23PROD with NOTICES1
Definitions
The Exchange proposes to add
definitions of the terms ADAV, ADV,
and TCV which are consistent with the
definitions of those terms above to the
‘‘Definitions’’ section of the Fee
Schedule in connection with the
proposed Add and Remove Volume
Tiers. The Exchange notes that the
proposed definitions of ADAV, ADV,
and TCV are substantially similar to the
definitions of those terms used by at
least one other exchange on its fee
schedule in connection with similar
volume-based pricing tiers.18
Allow Members To Aggregate Volume
for Pricing Tiers
The Exchange proposes to include a
provision in its definition of ADAV and
ADV to allow affiliated Members to
aggregate their volume for purposes of
the Exchange’s determination of ADAV
and ADV with respect to pricing tiers if
such Members provide prior notice to
the Exchange. Specifically, to the extent
that two or more affiliated companies
maintain separate memberships with
the Exchange and can demonstrate their
affiliation by showing they control, are
controlled by, or are under common
18 See e.g., the Cboe EDGX Exchange, Inc. (‘‘Cboe
EDGX’’) equities trading fee schedule on its public
website (available at https://www.cboe.com/us/
equities/membership/fee_schedule/edgx/).
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17:16 Jan 19, 2022
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control with each other, the Exchange
would permit such Members to count
aggregate volume of such affiliates in
calculating ADAV and ADV. As
proposed, the Exchange will verify such
affiliation using a Member’s Form BD,
which lists control affiliates. The
purposes of this proposed change is to
avoid disparate treatment of firms that
have divided business activities
between separate corporate entities as
compared to firms that operate those
business activities within a single
corporate entity, as allowing affiliated
Member firms to count their aggregate
volume in calculating ADAV and ADV
would produce the same result for
purposes of the Exchange’s volumebased tier pricing as if such affiliated
Member firms were instead organized as
a single corporate entity. The Exchange
notes that this proposed change is
consistent with the practice of at least
one other exchange with respect to the
aggregation of affiliated member firms’
volume for purposes of ADAV and ADV
calculations with respect to pricing
tiers.19
General Notes
The Exchange proposes to adopt two
new provisions to the ‘‘General Notes’’
section of its fee schedule. The
Exchange proposes to add a provision
that states that, to the extent a Pearl
Equity Member does not qualify for any
tiers contained herein, the rates listed in
the ‘‘Liquidity Indicator Codes and
Associated Fees’’ table shall apply.
Additionally, the Exchange proposes to
add a provision that states that, to the
extent a Pearl Equity Member qualifies
for higher rebates and/or lower fees than
those provided by a tier for which such
Member qualifies, the higher rebates
and/or lower fees shall apply. These
provisions are intended to provide
additional clarity regarding the
operation of the Fee Schedule.
Implementation
The Exchange proposes to implement
the changes to the Fee Schedule
pursuant to this proposal on January 3,
2022.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 20
in general, and furthers the objectives of
Section 6(b)(4) of the Act 21 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among its Equity Members and
issuers and other persons using its
facilities. The Exchange also believes
that the proposed rule change is
consistent with the objectives of Section
6(b)(5) 22 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, and 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, and,
particularly, is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange operates in a highly
fragmented and competitive market in
which market participants can readily
direct their order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
incentives to be insufficient. More
specifically, the Exchange is only one of
sixteen registered equities exchanges,
and there are a number of alternative
trading systems and other off-exchange
venues, to which market participants
may direct their order flow. Based on
publicly available information, no single
registered equities exchange currently
has more than approximately 18% of
the total market share of executed
volume of equities trading.23 Thus, in
such a low-concentrated and highly
competitive market, no single equities
exchange possesses significant pricing
power in the execution of order flow,
and the Exchange currently represents
less than 1% of the overall market share.
The Commission and the courts have
repeatedly expressed their preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, the
Commission highlighted the importance
of market forces in determining prices
and SRO revenues and also recognized
that current regulation of the market
system ‘‘has been remarkably successful
in promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 24
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can shift order flow or discontinue to
22 15
U.S.C 78f(b)(5).
supra note 4.
24 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37499 (June 29, 2005).
19 Id.
20 15
21 15
PO 00000
23 See
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
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reduce use of certain categories of
products, in response to new or
different pricing structures being
introduced into the market.
Accordingly, competitive forces
constrain the Exchange’s transaction
fees and rebates, and market
participants can readily trade on
competing venues if they deem pricing
levels at those other venues to be more
favorable. The Exchange believes the
proposal reflects a reasonable and
competitive pricing structure designed
to incentivize market participants to
direct their order flow to the Exchange,
which the Exchange believes would
enhance liquidity and market quality to
the benefit of all Members and market
participants.
Add Volume Tier
lotter on DSK11XQN23PROD with NOTICES1
The Exchange believes that the
proposed Add Volume Tier is
reasonable because it would provide
Members with an additional incentive
to achieve certain volume thresholds on
the Exchange. The Exchange notes that
volume-based incentives and discounts
have been widely adopted by
exchanges,25 and are reasonable,
equitable, and not unfairly
discriminatory because they are open to
all Members on an equal basis and
provide additional benefits or discounts
that are reasonably related to the value
to an exchange’s market quality
associated with higher levels of market
activity, such as higher levels of
liquidity provision and the introduction
of higher volumes of orders into the
price and volume discovery processes.
The Exchange believes the proposed
Add Volume Tiers are equitable and not
unfairly discriminatory for these same
reasons, as they are available to all
Members and are designed to encourage
Members to maintain or increase their
orders that add liquidity on the
Exchange, thereby contributing to a
deeper and more liquid market to the
benefit of all market participants and
enhancing the attractiveness of the
Exchange as a trading venue. Moreover,
the Exchange believes the proposed Add
Volume Tiers are a reasonable means to
incentivize such increased activity, as it
provides Members with additional
opportunities to qualify for an enhanced
rebate for executions of Added
Displayed Volume.
25 See Cboe EDGX equities trading fee schedule
on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/); Cboe BZX equities trading fee
schedule on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/bzx/); and MEMX equities trading fee
schedule on its public website (available at https://
info.memxtrading.com/fee-schedule/).
VerDate Sep<11>2014
17:16 Jan 19, 2022
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Additionally, the Exchange believes
that the proposed enhanced rebate for
executions of Added Displayed Volume
under Add Volume Tier 1 (i.e., $0.0032
per share) is reasonable, in that it
represents only a modest increase from
the proposed standard rebate for such
executions (i.e., of $0.0029 per share).
Thus, the Exchange believes that it is
reasonable, consistent with an equitable
allocation of fees, and not unfairly
discriminatory to provide an enhanced
rebate for executions of Added
Displayed Volume to Members that
qualify for Tier 1 in comparison with
the standard rebate for such executions
in recognition of the benefits that such
Members provide to the Exchange and
market participants, as described above,
particularly as the magnitude of the
enhanced rebate is not unreasonably
high and is, instead, reasonably related
to the enhanced market quality it is
designed to achieve.
The Exchange believes the proposed
change for the required criteria for Add
Volume Tier 1 as an ADAV of at least
0.07% of TCV is reasonable because, as
noted above, the Exchange believes that
basing qualification for the Add Volume
Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an
ADAV threshold that is a specified
number of shares, is appropriate so that
the threshold is variable based on
overall volumes in the equities industry,
which fluctuate from month to month.
The Exchange believes the proposed
change for the required criteria for Add
Volume Tier 2 as an ADAV of at least
0.10% of TCV is reasonable because, as
noted above, the Exchange believes that
basing qualification for the Add Volume
Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an
ADAV threshold that is a specified
number of shares, is appropriate so that
the threshold is variable based on
overall volumes in the equities industry,
which fluctuate from month to month.
The Exchange believes the proposed
change for the required criteria for Add
Volume Tier 3 as an ADAV of at least
0.20% of TCV is reasonable because, as
noted above, the Exchange believes that
basing qualification for the Add Volume
Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an
ADAV threshold that is a specified
number of shares, is appropriate so that
the threshold is variable based on
overall volumes in the equities industry,
which fluctuate from month to month.
The Exchange further believes the
proposed new criteria is equitable and
non-discriminatory because all
Members will continue to be eligible to
qualify for Add Volume Tier 3 and have
the opportunity to receive the
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
corresponding enhanced rebate if such
criteria is achieved. The Exchange notes
that should a Member not meet the
proposed new criteria for Add Volume
Tier 3, such member would merely not
receive that corresponding enhanced
rebate, and such Member would still
have an opportunity to qualify for an
enhanced rebate, although slightly
lower than Tier 3, for executions of
Added Volume under the proposed Add
Volume Tier 2, which has slightly less
stringent criteria than Add Volume Tier
3, as described above. Members that do
not meet the proposed new criteria for
Add Volume 2 would still have an
opportunity to qualify for an enhanced
rebate, although slightly lower than Add
Volume Tier 2, for executions of Added
Volume under the proposed Add
Volume Tier 1, which has slightly less
stringent criteria than Add Volume Tier
2, as described above.
The Exchange further believes that the
proposed new criteria for Add Volume
Tier 1, Add Volume Tier 2, and Add
Volume Tier 3, are reasonable, in that
the proposed new criteria for Add
Volume Tier 2 is incrementally more
difficult to achieve than that of Add
Volume Tier 1, and the proposed new
criteria for Add Volume Tier 3 is
incrementally more difficult to achieve
than Add Volume Tier 2 thus, Add
Volume Tier 3 appropriately offers the
highest rebate commensurate with the
corresponding highest volume
threshold. Similarly, the Exchange
believes that the proposed new criteria
for Add Volume Tier 2 is incrementally
more difficult to achieve than that for
Add Volume Tier 1, and thus Add
Volume Tier 2 appropriately offers a
higher rebate commensurate with the
higher volume threshold. Therefore, the
Exchange believes the Add Volume
Tiers, as proposed, are consistent with
an equitable allocation of fees and
rebates, as the more stringent criteria
correlates with the corresponding tier’s
higher rebate. The Exchange further
believes that the rebates provided under
the Add Volume Tiers, as proposed,
(i.e., $0.0032 for Tier 1; $0.0035 for Tier
2; and $0.0036 for Tier 3) are
reasonable, consistent with an equitable
allocation of fees, and not unfairly
discriminatory to pay such higher
rebates for executions of Added
Displayed Volume to Members that
qualify for an Add Volume Tier in
comparison with the standard rebate in
recognition of the benefits to the
Exchange and market participants
described above, particularly as the
magnitude of the enhanced rebate is not
unreasonably high and is, instead,
reasonably related to the enhanced
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market quality it is designed to achieve.
Additionally, the Exchange believes the
proposed rebates are reasonable as such
rebates are comparable to, and
competitive with, the rebates for
executions of liquidity-adding displayed
orders provided by at least one other
exchange under similar volume-based
tiers.26
Additionally, the Exchange believes
that excluding Exchange System
Disruption Days, any day with a
scheduled early market close, and the
Russell Reconstitution Day when
determining whether a Member
qualifies for the proposed Add Volume
Tier during a month is reasonable,
equitable, and non-discriminatory
because, as explained above, the
Exchange believes doing so would help
to avoid penalizing Members that might
otherwise have met the requirements to
qualify for the proposed Add Volume
Tier due to Exchange system
disruptions, reduced trading hours, and/
or abnormal market conditions. The
Exchange notes that the exclusion of the
Exchange System Disruption Days, any
day with a scheduled early market
close, and the Russell Reconstitution
Day is consistent with the methodology
used by at least one other exchange
when calculating certain member
trading and other volume metrics for
purposes of determining whether
members qualify for certain pricing
incentives, including calculations of
ADAV for Volume Tiers specifically.27
lotter on DSK11XQN23PROD with NOTICES1
Reduce Standard Rebate for Added
Displayed and Non-Displayed Volume
The Exchange believes that the
proposed reduced standard rebate for
executions of Added Displayed Volume
($0.0029 per share) and Added NonDisplayed Volume ($0.0021 per share) is
reasonable and appropriate because it
represents a modest decrease from the
current standard rebate for executions of
Added Displayed Volume and Added
Non-Displayed Volume, and remains
competitive with the standard rebates
provided by at least one other exchange
for orders in securities priced at or
above $1.00 per share that add
liquidity.28 The Exchange further
26 See the Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’)
equities trading fee schedule on its public website
(available at https://www.cboe.com/us/equities/
membership/fee_schedule/bzx/) which reflects
rebates provided under ‘‘Add Volume Tiers’’—tiers
based on a member achieving certain ADAV
thresholds—ranging from $0.0020 to $0.0031 per
share for adding displayed liquidity to the Cboe
BZX exchange.
27 See e.g., Cboe BZX equities trading fee
schedule on its public website available at https://
www.cboe.com/us/equities/membership/fee_
schedule/bzx/).
28 See MEMX Exchange equities trading fee
schedule on its public website (available at https://
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17:16 Jan 19, 2022
Jkt 256001
believes that the proposed reduced
standard rebate for executions of Added
Displayed Volume and Added NonDisplayed Volume are equitably
allocated and not unfairly
discriminatory because each will apply
equally to all Members.
Remove Volume Tier
The Exchange believes that the
proposed Remove Volume Tier is
reasonable because it would provide
Members with an additional incentive
to achieve certain volume thresholds on
the Exchange. Volume-based incentives
and discounts have been widely
adopted by exchanges,29 and are
reasonable, equitable, and not unfairly
discriminatory because they are open to
all Members on an equal basis and
provide additional benefits or discounts
that are reasonably related to the value
to an exchange’s market quality
associated with higher levels of market
activity, such as higher levels of
liquidity provision and the introduction
of higher volumes of orders into the
price and volume discovery processes.
The Exchange believes the proposed
Remove Volume Tier is equitable and
not unfairly discriminatory for these
same reasons, as it is open to all
Members and is designed to encourage
Members to maintain or increase their
order flow directed to the Exchange,
thereby contributing to a deeper and
more liquid market to the benefit of all
market participants and enhancing the
attractiveness of the Exchange as a
trading venue. Moreover, the Exchange
believes the proposed Remove Volume
Tier is a reasonable means to incentivize
such increased activity, as it provides
two different thresholds that a Member
may achieve by increasing their ADV to
an amount equal to or greater than the
specified TCV threshold.
Additionally, the Exchange believes
the proposed lower fee for executions of
Removed Volume for a qualifying
Member (i.e., $0.0027 and $0.00265
dependent upon the Tier) is reasonable,
in that it represents only a modest
decrease from the proposed standard fee
for such executions (i.e., $0.0029 per
share). The Exchange believes that it is
reasonable, consistent with an equitable
allocation of fees, and not unfairly
discriminatory to charge such lower fees
for executions of Removed Volume to
Members that qualify for the Remove
Volume Tier in comparison with the
standard fee in recognition of the
benefits that such Members provide to
info.memxtrading.com/fee-schedule/) which
reflects a rebate of $0.0028 for Added Displayed
Volume and a rebate of $0.0020 for Added Non
Displayed Volume.
29 See supra note 25.
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
3157
the Exchange and market participants,
as described above, particularly as the
magnitude of the lower fee is not
unreasonably high and is, instead,
reasonably related to the enhanced
market quality it is designed to achieve.
Further, as noted above, competing
exchanges offer tiered pricing structures
similar to the proposed Remove Volume
Tier, including schedules of rebates and
fees that apply based upon Members
achieving certain volume thresholds,
and the Exchange believes the proposed
Remove Volume Tier’s criteria are
reasonable when compared to such tiers
provided for by other exchanges. For
example, Cboe EDGX charges lower fees
for removing volume from the Cboe
EDGX exchange under its ‘‘Remove
Volume Tiers’’ at $0.00275 per share,
compared to its standard fee of $0.0030
per share, but requires different, but
similar, criteria than the Exchange’s
proposed Remove Volume Tier, which
are also based upon a Member’s
volume.30
The Exchange further believes the
proposed Remove Volume Tier is fair,
equitable and not unfairly
discriminatory because it is available to
all Members. Further, the proposed
Remove Volume Tier is comparable to
the fees charged for executions of
liquidity-removing orders charged by
Cboe EDGX under similar volume based
tiers.31
The Exchange believes that adding the
proposed definitions for the terms,
ADAV, ADV, and TCV, is reasonable,
equitable, and non-discriminatory
because such definitions are
substantially similar to the definitions
of such terms used by other exchanges
in connection with similar volumebased pricing tiers, as described
above,32 and their placement on the Fee
Schedule is designed to ensure that the
Fee Schedule is as clear and
understandable as possible with respect
to applicable pricing. Similarly, the
Exchange believes that specifying that
routed shares are not included in the
calculation of ADAV or ADV and that
Exchange System Disruptions, any day
with a scheduled early market close,
and the Russell Reconstitution Day are
excluded from the calculation of ADAV,
ADV, and TCV is reasonable, equitable,
and non-discriminatory as this further
clarifies the Exchange’s calculation
practices with respect to its volumebased pricing tiers, and such practices
30 See Cboe EDGX equities trading fee schedule
on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/).
31 Id.
32 Id.
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are consistent with those of at least one
other exchange in this regard.33
Increased Standard Fee for Removed
Volume
The Exchange believes that the
proposed change to increase the
standard fee for executions of Removed
Volume is reasonable, equitable, and
consistent with the Act because such a
change is designed to generate
additional revenue and decrease the
Exchange’s expenditures with respect to
transaction pricing in order to offset
some of the costs associated with the
various rebates provided by the
Exchange for liquidity-adding orders
and the Exchange’s operations
generally, in a manner that is consistent
with the Exchange’s overall pricing
philosophy of encouraging added
liquidity, as described above. The
Exchange also believes the proposed
increased standard fee for executions of
Removed Volume is reasonable and
appropriate because it represents a
modest increase from the current
standard fee and, as noted above,
remains lower than, and competitive
with, the standard fee charged by
several other exchanges to remove
liquidity in securities priced at or above
$1.00 per share.34 The Exchange further
believes that the proposed increased
standard fee for executions of Removed
Volume is equitably allocated and not
unfairly discriminatory because it will
apply to all Members.
Allow Members To Aggregate Volume
for Pricing Tiers
As noted above, the proposed
language permitting aggregation of
volume amongst affiliated Members for
purposes of the ADAV and ADV
calculations is intended to avoid
disparate treatment of firms that divided
their various business activities between
separate corporate entities as compared
to firms that operate those business
activities within a single corporate
entity, as allowing affiliated Member
firms to count their aggregate volume in
calculating ADAV and ADV would
produce the same result for purposes of
lotter on DSK11XQN23PROD with NOTICES1
33 See
Cboe EDGX equities trading fee schedule
on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/).
34 See the MEMX equities trading fee schedule on
its public website (available at https://
info.memxtrading.com/fee-schedule/) which
reflects a standard fee of $0.0029; Cboe EDGX
equities trading fee schedule on it its public website
(available at https://www.cboe.com/us/equities/
membership/fee_schedule/edgx/) which reflects a
standard fee of $0.0030; and Cboe BZX equities
trading fee schedule on its public website (available
at https://www.cboe.com/us/equities/membership/
fee_schedule/bzx/) which reflects a standard fee of
$0.0030.
VerDate Sep<11>2014
17:16 Jan 19, 2022
Jkt 256001
the Exchange’s volume-based tier
pricing as if such affiliated Member
firms were instead organized as a single
corporate entity. By way of example,
subject to appropriate information
barriers, many firms that are Members of
the Exchange operate both a market
making desk and a public customer
business within the same corporate
entity. In contrast, other firms may be
part of a corporate structure that
separates those business lines into
different corporate affiliates, either for
business, compliance or historical
reasons. Those corporate affiliates, in
turn, are required to maintain separate
memberships with the Exchange.
Absent the proposed policy, such
corporate affiliates would not receive
the same treatment as firms operating
similar business lines within a single
entity that is a Member of the Exchange.
Accordingly, the Exchange believes that
its proposed policy is fair and equitable,
and not unreasonably discriminatory. In
addition to ensuring fair and equal
treatment of its Members, the Exchange
does not want to create incentives for its
Members to restructure their business
operations or compliance functions
simply due to the Exchange’s pricing
structure. Moreover, as noted above, this
proposed policy is consistent with the
practice of other exchanges with respect
to the aggregation of affiliated Members’
volume for purposes of determining
ADAV and ADV with respect to pricing
tiers.35
Conforming Changes to Liquidity
Indicator Codes
The Exchange believes its proposal to
decrease the rebate provided for
Displayed Orders that add liquidity in
securities priced at or above $1.00 from
$0.0032 in Tapes A and C, and $0.0035
in Tape B, to $0.0029 per share is
reasonable and equitably allocated
among all Members of the Exchange.
Liquidity indicator codes AA, AB, and
AC are appended to orders that add
displayed non-retail liquidity. The
Exchange believes that the proposed
decrease to $0.0029 per share is
reasonable in that it represents a modest
decrease from the current rebate for
such executions.
Additionally, the Exchange believes
its proposal to decrease the rebate
provided for Non-Displayed Orders that
add liquidity in securities priced at or
above $1.00 from $0.0025 to $0.0021 per
share is reasonable and equitably
allocated among all Members of the
35 See Cboe EDGX equities trading fee schedule
on its public website (available at https://
www.cboe.com/us/equities/membership/fee_
schedule/edgx/).
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Exchange. Liquidity indicator codes Aa,
Ab, Ac, and Ar are appended to orders
that add non-displayed liquidity. The
Exchange believes its proposal is
equitable and not unfairly
discriminatory as it will apply to all
Members equally. Additionally, the
Exchange believes its proposed change
is reasonable as the Exchange is also
proposing new Add Volume Tiers by
which a Member can achieve rebates of
$0.0032, $0.0035, and $0.0036 per share
for securities priced at or above $1.00
upon satisfying certain criteria.
The Exchange believes its proposal to
increase the fee applied for orders that
remove liquidity in securities priced at
or above $1.00 per share is reasonable
and equitably allocated among all
Members of the Exchange. The
Exchange believes its proposal to update
the Liquidity Indicator Codes and
Associated Fees table to reflect the new
rate of $0.0029 per share for securities
priced at or above $1.00 with liquidity
indicator codes RA, RB, RC, RR, Ra, Rb,
Rc, and Rr is equitable and reasonable
because it will apply equally to all
Members of the Exchange. Additionally,
the Exchange believes its proposed
change is reasonable as the Exchange is
also proposing new Remove Volume
Tiers by which a Member can achieve
reduced fees of $0.0027 or $00.0265 per
share for securities priced at or above
$1.00 upon satisfying certain criteria.
For the reasons discussed above, the
Exchange submits that the proposal
satisfies the requirements of Sections
6(b)(4) and 6(b)(5) of the Act in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among its Members and other persons
using its facilities and is not designed to
unfairly discriminate between
customers, issuers, brokers, or dealers.
As described more fully below in the
Exchange’s statement regarding the
burden on competition, the Exchange
believes that its transaction pricing is
subject to significant competitive forces,
and that the proposed fees and rebates
described herein are appropriate to
address such forces.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act. The Exchange
believes the proposed change would
encourage Members to maintain or
increase their order flow to the
Exchange, thereby contributing to a
deeper and more liquid market to the
benefit of all market participants and
enhancing the attractiveness of the
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Exchange as a trading venue. As a
result, the Exchange believes the
proposal would enhance its
competitiveness as a market that attracts
actionable orders, thereby making it a
more desirable destination venue for its
customers. For these reasons, the
Exchange believes that the proposal
furthers the Commission’s goal in
adopting Regulation NMS of fostering
competition among orders, which
promotes ‘‘more efficient pricing of
individual stocks for all types of orders,
large and small.’’ 36
would apply equally to all Members. As
such, the Exchange believes the
proposed changes would not impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
Intramarket Competition
The Exchange believes that the
proposed changes would incentivize
market participants to direct order flow
to the Exchange, thereby contributing to
a deeper and more liquid market to the
benefit of all market participants and
enhancing the attractiveness of the
Exchange as a trading venue, which the
Exchange believes, in turn, would
continue to encourage market
participants to direct additional order
flow to the Exchange. Greater liquidity
benefits all Members by providing more
trading opportunities and encourages
Members to send orders to the
Exchange, thereby contributing to robust
levels of liquidity, which benefits all
Members. The opportunity to qualify for
the Add Volume Tiers and thus receive
the corresponding enhanced rebate for
executions of Added Displayed Volume
would be available to all Members that
meet the associated requirements in any
month. Further, as noted above, the
Exchange believes that the proposed
criteria for the Add Volume Tiers are
reasonably related to the enhanced
market quality that such tiers are
designed to promote.
The opportunity to qualify for the
Remove Volume Tier, and thus receive
the proposed lower fee for executions of
Removed Volume, would be available to
all Members that meet the associated
volume requirement in any month. The
Exchange believes that meeting the
volume requirement of the Remove
Volume Tier is attainable for market
participants, as the Exchange believes
the thresholds are relatively low and
reasonably related to the enhanced
liquidity and market quality that the
Remove Volume Tier is designed to
promote. Similarly, the proposed
increased standard fee for executions of
Removed Volume and the ability for
Members to aggregate volume amongst
affiliated Member firms for purposes of
the Exchange’s determination of ADAV
and ADV with respect to pricing tiers
Intermarket Competition
The Exchange believes its proposal
will benefit competition as the
Exchange operates in a highly
competitive market. Members have
numerous alternative venues they may
participate on and direct their order
flow to, including fifteen other equities
exchanges and numerous alternative
trading systems and other off-exchange
venues. As noted above, no single
registered equities exchange currently
has more than 18% of the total market
share of executed volume of equities
trading. Thus, in such a lowconcentrated and highly competitive
market, no single equities exchange
possesses significant pricing power in
the execution of order flow. Moreover,
the Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can shift order flow in response to new
or different pricing structures being
introduced to the market. Accordingly,
competitive forces constrain the
Exchange’s transaction fees and rebates
generally, including with respect to
executions of Removed Volume, and
market participants can readily choose
to send their orders to other exchanges
and off-exchange venues if they deem
fee levels at those other venues to be
more favorable.
As described above, the proposed
changes are competitive proposals
through which the Exchange is seeking
to encourage additional order flow to
the Exchange and to generate additional
revenue to offset some of the costs
associated with the Exchange’s current
pricing structure and its operations
generally, and such proposed rates
applicable to executions of Added and
Removed Volume are comparable to,
and competitive with, rates charged by
other exchanges.37
Additionally, the proposed change to
allow affiliated Members to aggregate
their volume for purposes of the
Exchange’s determination of ADAV and
ADV with respect to pricing tiers is
designed to avoid disparate treatment of
firms that have divided their various
business activities between separate
corporate entities as compared to firms
that operate those business activities
within a single corporate entity, which
36 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 47396 (June 29, 2005).
34.
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37 See
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3159
is consistent with the practice of other
exchanges, as discussed above.38
Accordingly, the Exchange believes the
proposal would not burden, but rather
promote, intermarket competition by
enabling it to better compete with other
exchanges that offer similar volumebased incentives and pricing with
respect to executions of Removed
Volume and volume aggregation
amongst affiliates with respect to
pricing tiers.
Additionally, the Commission has
repeatedly expressed its preference for
competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. Specifically, in Regulation
NMS, the Commission highlighted the
importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 39 The
fact that this market is competitive has
also long been recognized by the courts.
In NetCoalition v. Securities and
Exchange Commission, the D.C. circuit
stated: ‘‘[n]o one disputes that
competition for order flow is ‘fierce.’
. . . As the SEC explained, ‘[i]n the U.S.
national market system, buyers and
sellers of securities, and the brokerdealers that act as their routing agents,
have a wide range of choices of where
to route orders for execution’; [and] ‘no
exchange can afford to take its market
share percentages for granted’ because
‘no exchange possess a monopoly,
regulatory or otherwise, in the execution
of order flow from broker dealers’
. . .’’.40 Accordingly, the Exchange does
not believe its proposed pricing changes
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
38 See
supra note 18.
Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
40 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C.
Cir. 2010) (quoting Securities Exchange Act Release
No. 59039 (December 2, 2008), 73 FR 74770, 74782–
83 (December 9, 2008) (SR–NYSE–2006–21)).
39 See
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19(b)(3)(A)(ii) of the Act,41 and Rule
19b–4(f)(2) 42 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
lotter on DSK11XQN23PROD with NOTICES1
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–2022–01 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–2022–01. 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–2022–01, and
should be submitted on or before
February 10, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.43
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–01065 Filed 1–19–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93974; File No. SR–
CboeBZX–2022–002]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
January 13, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 4,
2022, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
amend its Fee Schedule. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
43 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
41 15
U.S.C. 78s(b)(3)(A)(ii).
42 17 CFR 240.19b–4(f)(2).
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to update its
Fee Schedule for its equity options
platform (‘‘BZX Options’’) to reflect a
recent change in connection with the
rates under its Customer Non-Penny
Add Volume Tiers. Specifically, the
Exchange submitted a rule filing on
August 2, 2021 to amend the Fee
Schedule (‘‘August Filing’’),3 which,
among other things, amended the rates
provided under the Customer NonPenny Add Volume Tiers to range from
between $0.92 and $1.06 per contract
across five tiers, to between $0.90 and
$1.05 across eight tiers. The Exchange,
however, inadvertently omitted to also
update the rates listed in the Standard
Rates table of the Fees Schedule
applicable to Customer orders that add
volume in Non-Penny Program
Securities to reflect the new rates
provided under the Customer NonPenny Add Volume Tiers. The Exchange
now proposes to update the rates listed
in the Standard Rates table for Customer
orders that add volume in Non-Penny
Program Securities to reflect the rates
applicable to such orders provided
under the Customer Non-Penny Add
Volume Tiers, as adopted in the August
Filing.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act,4
in general, and furthers the objectives of
Section 6(b)(4),5 in particular, as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
3 See Securities Exchange Act Release No. 92635
(August 11, 2021), 86 FR 46028 (August 17, 2021)
(SR–CboeBZX–2021–055).
4 15 U.S.C. 78f.
5 15 U.S.C. 78f(b)(4).
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]]>Agencies
[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3151-3160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01065]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93979; File No. SR-PEARL-2022-01]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Equities Fee Schedule
January 14, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 4, 2022, MIAX PEARL, LLC (``MIAX Pearl'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the fee schedule (the
``Fee Schedule'') applicable to MIAX Pearl Equities, an equities
trading facility of the Exchange.
The text of the proposed rule change is available on the Exchange's
website at https://www.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 purpose of the proposed rule change is to amend the Exchange's
Fee Schedule to (i) adopt new Add and Remove Volume Tiers for
executions of orders in securities priced at or above $1.00 that add or
remove liquidity from the Exchange; (ii) reduce the Adding Liquidity
Displayed Order rebate; (iii) reduce the Adding Liquidity Non-Displayed
Order rebate; (iv) increase the Removing Liquidity fee; (v) update
Liquidity Indicator Codes and Associated Fees table; (vi) adopt new
definitions in the Definitions section; and (vii) adopt new provisions
in the General Notes section.
The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues, to
which market participants may direct their order flow. Based on
publicly available information, no single registered equities exchange
currently has more than approximately 18% of the total market share of
executed volume of equities trading.\4\
---------------------------------------------------------------------------
\4\ Market share percentage calculated as of December 22, 2021.
The Exchange receives and processes data made available through
consolidated data feeds.
---------------------------------------------------------------------------
Add Volume Tiers
The Exchange is proposing to introduce a tiered pricing structure
applicable to the rebates applied for volume added to the Exchange.
Specifically, the Exchange proposes to adopt a new volume-based tier
structure, referred to as the Add Volume Tiers, in which the Exchange
will provide an enhanced rebate for executions of Added Displayed
Volume for Equity Members \5\ (``Members'') that meet the specified
volume thresholds on the Exchange, as described below.
---------------------------------------------------------------------------
\5\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
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[[Page 3152]]
The Exchange proposes to adopt three Add Volume Tiers (Tier 1, Tier
2, and Tier 3) in which it will provide an enhanced rebate per tier. A
Member would qualify for an enhanced rebate under Tier 1 by achieving
an ADAV \6\ of at least 0.07% of the TCV.\7\ Members that qualify for
Tier 1 would receive an enhanced rebate of $0.0032 per share for
executions of Added Displayed Volume for executions of orders in
securities priced at or above $1.00 per share across all Tapes. A
Member would qualify for an enhanced rebate under Tier 2 by achieving
an ADAV of at least 0.10% of the TCV. Members that qualify for Tier 2
would receive an enhanced rebate of $0.0035 per share for executions of
Added Displayed Volume for executions of orders in securities priced at
or above $1.00 per share across all Tapes. A Member would qualify for
an enhanced rebate under Tier 3 by achieving an ADAV of at least 0.20%
of the TCV. Members that qualify for Tier 3 would receive an enhanced
rebate of $0.0036 per share for executions of Added Displayed Volume
for executions of orders in securities priced at or above $1.00 per
share across all Tapes.
---------------------------------------------------------------------------
\6\ As proposed, the term ``ADAV'' means daily added volume
[sic] calculated as the number of shares added per day and ``ADV''
means average daily volume calculated as the number of shares added
or removed, combined, per day. ADAV and ADV are calculated on a
monthly basis. The Exchange excludes from its calculation of ADAV
and ADV shares added or removed on any day that the Exchange's
system experiences a disruptions that lasts for more than 60 minutes
during regular trading hours (``Exchange System Disruption''), on
any day with a scheduled early market close, and on the ``Russell
Reconstitution Day'' (typically the last Friday in June). Routed
shares are not included in the ADAV or ADV calculation.
\7\ As proposed, the term ``TCV'' means total consolidated
volume calculated as the volume in shares reported by all exchanges
and reporting facilities to a consolidated transaction reporting
plan for the month for which the fees apply. The Exchange excludes
from its calculation of TCV volume on any given day that the
Exchange's system experiences a disruption that lasts for more than
60 minutes during Regular Trading Hours. On [sic] any day with a
scheduled early market close, and on the ``Russell Reconstitution
Day'' (typically the last Friday in June).
---------------------------------------------------------------------------
The Exchange believes that basing the qualifications for the Add
Volume Tiers on an ADAV threshold that is a percentage of the TCV is
appropriate so that the threshold is variable based on overall volumes
in the equities industry, which fluctuate month to month.
The proposed Add Volume Tier 1 is designed to encourage Members to
maintain or increase their orders that add liquidity on the Exchange in
order to qualify for an enhanced rebate for executions of Added
Displayed Volume, thereby contributing to a deeper and more liquid
market to the benefit of all market participants and enhancing the
attractiveness of the Exchange as a trading venue. Further, the
proposed new Add Volume Tier 1 would provide Members with a higher
enhanced rebate ($0.0032) over the new proposed standard rebate of
($0.0029), as further described below, for satisfying more stringent
criteria.
The proposed Add Volume Tier 2 is designed to encourage Members to
maintain or increase their orders that add liquidity on the Exchange in
order to qualify for an enhanced rebate for executions of Added
Displayed Volume, thereby contributing to a deeper and more liquid
market to the benefit of all market participants and enhancing the
attractiveness of the Exchange as a trading venue. Further, the
proposed new Add Volume Tier 2 would provide Members with a higher
enhanced rebate ($0.0035) over Add Volume Tier 1 ($0.0032), for
satisfying increasingly more stringent criteria.
The proposed Add Volume Tier 3 is designed to encourage Members to
maintain or increase their orders that add liquidity on the Exchange in
order to qualify for an enhanced rebate for executions of Added
Displayed Volume, thereby contributing to a deeper and more liquid
market to the benefit of all market participants and enhancing the
attractiveness of the Exchange as a trading venue. Further, the
proposed new Add Volume Tier 3 would provide Members with a higher
enhanced rebate ($0.0036) over Add Volume Tier 2 ($0.0035), for
satisfying increasingly more stringent criteria.
For the purposes of calculating ADAV the Exchange proposes to
exclude from the calculation: (1) Any Exchange System Disruption Days;
(2) any day with a scheduled early market close; and (3) the Russell
Reconstitution day, which typically occurs on the last Friday in June.
The Exchange believes that the Exchange system disruptions could
preclude Members from participating on the Exchange to the extent that
they might have otherwise participated on such days, and thus, the
Exchange believes it is appropriate to exclude such days when
determining whether a Member qualifies for an Add Volume Tier to avoid
penalizing Members that might otherwise have met the applicable volume
threshold. Additionally, the Exchange believes that scheduled early
market closes, which typically are the day before, or the day after, a
holiday, may preclude some Members from submitting orders to the
Exchange at the same level that they might otherwise. For similar
reasons, the Exchange believes it is appropriate to exclude the Russell
Reconstitution Day, as the Exchange believes the change to normal
trading activity as a result of the Russell Reconstitution may skew the
calculation of ADAV and TCV. The Exchange also proposes to specify that
routed shares are not included in the calculation of ADAV.\8\
---------------------------------------------------------------------------
\8\ The Exchange notes that excluding routed shares from the
calculations of ADAV and ADV is also consistent with the practice of
other exchanges when calculating ADAV and ADV. See, e.g., the Cboe
BZX equities trading fee schedule on its public website (available
at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/
).
---------------------------------------------------------------------------
The Exchange will continue to provide a rebate of 0.05% of the
total dollar value of the transaction for executions of orders that add
liquidity to the Exchange in securities priced below $1.00 per share.
Thus, as under the Exchange's current pricing, the same rebate would be
applied to all Members for executions of orders that add liquidity on
the Exchange in securities priced below $1.00 per share.
The Exchange notes that the rebates provided for executions of
Added Displayed Volume under the Add Volume Tiers ($0.0032 in Tier 1;
$0.0035 in Tier 2; and $0.0036 in Tier 3), are comparable to, and
competitive with, the rebates for executions of liquidity adding
displayed orders provided by at least one other exchange under similar
volume-based tiers.\9\
---------------------------------------------------------------------------
\9\ See MEMX, LLC (``MEMX'') equities trading fee schedule on
its public website (available at https://info.memxtrading.com/fee-schedule/) which reflects rebates provided under ``Liquidity
Provision Tiers'' = tiers based on a member achieving certain ADAV
thresholds ranging from $0.0031 to $0.00335 [sic] per share for
adding displayed liquidity to the MEMX exchange.
---------------------------------------------------------------------------
The Exchange believes that the proposed tiered pricing structure
provides an incentive for Members to strive for higher ADAV on the
Exchange to receive the proposed enhanced rebate for executions of
Added Displayed Volume. As such, the proposed Add Volume Tiers are
designed to encourage Members that provide liquidity on the Exchange to
maintain or increase their order flow, thereby contributing to a deeper
and more liquid market to the benefit of all market participants and
enhancing the attractiveness of the Exchange as a trading venue.
Reduced Standard Rebate for Added Displayed Volume
The Exchange proposes to reduce the standard rebate for executions
of Added Displayed Volume. Currently, the Exchange provides a standard
rebate of $0.0032 per share for executions of Added Displayed Volume in
Tapes A and C, and $0.0035 per share for executions of Added Displayed
Volume in Tape B. The Exchange now proposes to reduce the standard
rebate for
[[Page 3153]]
executions of Added Displayed Volume to $0.0029 per share for all
Tapes.\10\ The Exchange notes that executions of orders in securities
priced below $1.00 per share that add displayed liquidity to the
Exchange will continue to receive the standard rebate applicable to
such executions (i.e., 0.05% of the total dollar value of the
transaction).
---------------------------------------------------------------------------
\10\ The standard pricing for executions of Added Displayed
Volume is referred to by the Exchange on its Fee Schedule in section
(1)(a) Standard Rates.
---------------------------------------------------------------------------
The purpose of reducing the standard rebate for executions of Added
Displayed Volume is for business and competitive reasons, as the
Exchange believes the reduction of such rebate would decrease the
Exchange's expenditures with respect to transaction pricing and would
also offset some of the costs associated with the proposed enhanced
rebates for executions for Members that qualify for an Add Volume Tier,
in a manner that is still consistent with the Exchange's overall
pricing philosophy of encouraging added displayed liquidity. The
Exchange notes that despite the modest reduction proposed herein, the
proposed standard rebate for execution of Added Displayed Volume (i.e.,
$0.0029 per share) remains higher than, and competitive with, the
standard rebates provided by other exchanges for executions of orders
in securities priced at or above $1.00 per share that add displayed
liquidity.\11\
---------------------------------------------------------------------------
\11\ See e.g., the Nasdaq PSX equities trading fee schedule on
its public website (available at https://www.nasdaqtrader.com/Trader.aspx?id=PSX_Pricing), which reflects a standard rebate of
$0.0020 per share to add displayed liquidity in securities priced at
or above $1.00 per share; see also the NYSE ARCA equities trading
fee schedule on its public website (available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf), which reflects a standard rebate of
$0.0020 per share to add displayed liquidity in securities priced at
or above $1.00 per share.
---------------------------------------------------------------------------
The Exchange proposes to reduce the standard rebate to $0.0021 per
share for executions of Added Non-Displayed Volume. Currently, the
Exchange provides a standard rebate of $0.0025 per share for executions
of non-displayed orders in securities priced at or above $1.00 per
share that add liquidity to the Exchange. The Exchange notes that
executions of orders in securities priced below $1.00 per share that
add non-displayed liquidity to the Exchange will continue to receive
the standard rebate applicable to such executions (i.e., 0.05% of the
total dollar value of the transaction).
The purpose of reducing the standard rebate for executions of Added
Non-Displayed Volume is for business and competitive reasons, as the
Exchange believes the reduction of such rebate would decrease the
Exchange's expenditures with respect to transaction pricing and would
also offset some of the costs associated with the proposed enhanced
rebates for executions for Members that qualify for an Add Volume Tier,
in a manner that is still consistent with the Exchange's overall
pricing philosophy of encouraging added displayed liquidity. The
Exchange notes that despite the modest reduction proposed herein, the
proposed standard rebate for execution of Added Non-Displayed Volume
(i.e., $0.0021 per share) remains higher than, and competitive with,
the standard rebates provided by other exchanges for executions of
orders in securities priced at or above $1.00 per share that add
displayed liquidity.\12\
---------------------------------------------------------------------------
\12\ See e.g., the Nasdaq PSX equities trading fee schedule on
its public website (available at https://www.nasdaqtrader.com/Trader.aspx?id=PSX_Pricing), which reflects a standard rebate of
$0.0015 per share to add non-displayed liquidity in securities
priced at or above $1.00 per share; see also the Cboe BZX equities
trading fee schedule on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), which
reflects a standard rebate of $0.0010 per share to add non-displayed
liquidity in securities priced at or above $1.00 per share.
---------------------------------------------------------------------------
Remove Volume Tiers
The Exchange is proposing to introduce a tiered pricing structure
applicable to the fees charged for executions of Removed Volume on the
Exchange. Specifically, the Exchange proposes to adopt a new volume-
based tier structure, referred to as the Remove Volume Tiers, in which
the Exchange will charge a fee that is lower than the standard fee for
executions of Removed Volume for Members that meet the specified volume
thresholds on the Exchange, as described below.
Currently, the Exchange charges a standard fee of $0.0025 per share
for all executions of Removed Volume, which the Exchange is proposing
to increase to $0.0029, as further described below. The Exchange now
proposes to adopt two new Remove Volume Tiers in which it will charge a
lower fee of $0.0027 per share for executions of Removed Volume for
Members that qualify for Tier 1 by achieving an ADV \13\ that is equal
to or greater than 0.10% of TCV; and a lower fee of $0.00265 per share
for Members that qualify for Tier 2 by achieving an ADV that is equal
to or greater than 0.15% of TCV. As proposed, the ADV will be
calculated on a monthly basis, and Members that qualify for the Remove
Volume Tier discount by achieving one of the thresholds specified above
in a particular month will be charged the proposed lower fee according
to the threshold tier achieved instead of the standard fee of $0.0029
per share, for all executions of Removed Volume in that month.
---------------------------------------------------------------------------
\13\ See supra note 6.
---------------------------------------------------------------------------
The Exchange will continue to charge Members a fee of 0.05% of the
total dollar value of the transaction for executions of orders that
remove liquidity from the Exchange in securities priced below $1.00 per
share. Thus, as under the Exchange's current pricing, the same fee
would be applied to all Members for executions of orders that remove
liquidity from the Exchange in securities priced below $1.00 per share.
For the purposes of calculating ADV the Exchange proposes to
exclude from the calculation: (1) Any Exchange System Disruption Days;
(2) any day with a scheduled early market close; and (3) the Russell
Reconstitution day, which typically occurs on the last Friday in June.
The Exchange believes that Exchange system disruptions could preclude
Members from participating on the Exchange to the extent that they
might have otherwise participated on such days, and thus, the Exchange
believes it is appropriate to exclude such days when determining
whether a Members qualifies for a Remove Volume Tier to avoid
penalizing Members that might otherwise have met the applicable volume
threshold. For similar reasons, the Exchange believes it is appropriate
to exclude days with a scheduled early market close, which are
typically the day before, or the day after, a holiday, as the early
market close may preclude some Members from submitting orders to the
Exchange at the same level that they might otherwise. Additionally, the
Exchange believes excluding the Russell Reconstitution day is
appropriate as the change to normal trading activity as a result of the
Russell Reconstitution may skew the calculation of ADV and TCV. The
Exchange also proposes to specify that routed shares are not included
in the calculation of ADV.\14\
---------------------------------------------------------------------------
\14\ See supra note 8.
---------------------------------------------------------------------------
The Exchange believes that the proposed Remove Volume Tier provides
an incentive for Members to strive for higher ADV on the Exchange in
order to qualify for the proposed lower fee for executions of Removed
Volume. As such, the proposed Remove Volume Tier is designed to
encourage Members to maintain or increase their order flow directed to
the Exchange, thereby contributing to a deeper and more liquid market
to the benefit of all market participants and enhancing the
attractiveness of the Exchange as a trading venue. The Exchange notes
that
[[Page 3154]]
the proposed lower fees for executions of Remove Volume applicable to
Members that qualify for one of the Remove Volume Tiers (i.e., $0.0027
or $0.00265) is comparable to, and competitive with, the fees charged
for executions of liquidity-removing orders charged by at least one
other exchange under similar volume-based tiers.\15\
---------------------------------------------------------------------------
\15\ See the Cboe EDGX equities trading fee schedule on its
public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/) which reflects fees charged under
``Remove Volume Tiers''--tiers based on a member achieving certain
step-up ADAV and ADV volume thresholds of $0.00275 per share for
removing volume from the Cboe EDGX exchange.
---------------------------------------------------------------------------
Increase Standard Fee for Removed Volume
In connection with the proposed adoption of the Remove Volume
Tiers, the Exchange also proposes to increase the standard fee charged
for executions of Removed Volume. Currently, the Exchange charges a
standard fee of $0.0025 per share for executions of Removed Volume. The
Exchange now proposes to increase the standard fee charged for
executions of Removed Volume to $0.0029 per share.\16\
---------------------------------------------------------------------------
\16\ The proposed pricing is referred to by the Exchange on the
Fee Schedule under the existing description ``Removing Liquidity''
in Section (1)(a) Standard Rates.
---------------------------------------------------------------------------
The purpose of increasing the standard fee for executions of
Removed Volume is for business and competitive reasons, as the Exchange
believes that increasing such fee as proposed would generate additional
revenue to offset some of the costs associated with the Exchange's
proposed pricing structure, which provides various rebates for
liquidity-adding orders and discounted fees for liquidity-removing
orders, and the Exchange's operations generally, in a manner that is
consistent with the Exchange's overall pricing philosophy of
encouraging added liquidity. The Exchange notes that despite the modest
increase proposed herein, the Exchange's proposed standard fee for
executions of Removed Volume ($0.0029) remains competitive with the
standard fee to remove liquidity in securities priced at or above $1.00
per share charged by other equity exchanges.\17\
---------------------------------------------------------------------------
\17\ See e.g., the Cboe BZX equities trading fee schedule on its
public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/) which reflects a standard fee of
$0.0030 per share to remove liquidity in securities priced at or
above $1.00 per share; and the Cboe EDGX equities trading fee
schedule on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/) which reflects a standard
fee of $0.0030 per share to remove liquidity in securities priced at
or above $1.00.
---------------------------------------------------------------------------
Liquidity Indicator Codes and Associated Fees Table Conforming Changes
In conjunction with the Exchange's proposal to (i) reduce the
rebate for Displayed Orders that Add Liquidity from $0.0032 for Tapes A
and C, and $0.0035 for Tape B, to $0.0029 for all tapes; (ii) reduce
the rebate for Non-Displayed Orders that Add Liquidity from $0.0025 to
$0.0021; and (iii) increase the fee for Removing Liquidity from $0.0025
to $0.0029, the Exchange now proposes to update the Liquidity Indicator
Codes and Associated Fees table to reflect the aforementioned changes.
The Exchange proposes to update the liquidity indicator codes as
follows:
Liquidity indicator code AA, Adds Liquidity, Displayed
Order (Tape A). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code AA would
receive a rebate of $0.0029 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code AB, Adds Liquidity, Displayed
Order (Tape B). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code AB would
receive a rebate of $0.0029 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code AC, Adds Liquidity, Displayed
Order (Tape C). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code AC would
receive a rebate of $0.0029 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code Aa, Adds Liquidity, Non-Displayed
Order (Tape A). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code Aa would
receive a rebate of $0.0021 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code Ab, Adds Liquidity, Non-Displayed
Order (Tape B). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code Ab would
receive a rebate of $0.0021 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code Ac, Adds Liquidity, Non-Displayed
Order (Tape C). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code Ac would
receive a rebate of $0.0021 per share in securities priced at or above
$1.00 and 0.05% of the transaction's dollar value in securities priced
below $1.00.
Liquidity indicator code Ar, Retail Order, Adds Liquidity,
Non-Displayed Order (All Tapes). The Liquidity Indicator Code and
Associated Fees table would specify that orders that yield liquidity
indicator code Ar would receive a rebate of $0.0021 per share in
securities priced at or above $1.00 and 0.05% of the transaction's
dollar value in securities priced below $1.00.
Liquidity indicator code RA, Removes Liquidity, Displayed
Order (Tape A). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code RA would
be subject to a fee of $0.0029 per share in securities priced at or
above $1.00 and 0.05% of the transaction's dollar value in securities
priced below $1.00.
Liquidity indicator code RB, Removes Liquidity, Displayed
Order (Tape B). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code RB would
be subject to a fee of $0.0029 per share in securities priced at or
above $1.00 and 0.05% of the transaction's dollar value in securities
priced below $1.00.
Liquidity indicator code RC, Removes Liquidity, Displayed
Order (Tape C). The Liquidity Indicator Code and Associated Fees table
would specify that orders that yield liquidity indicator code RC would
be subject to a fee of $0.0029 per share in securities priced at or
above $1.00 and 0.05% of the transaction's dollar value in securities
priced below $1.00.
Liquidity indicator code RR, Retail Order, Removes
Liquidity, Displayed Order (All Tapes). The Liquidity Indicator Code
and Associated Fees table would specify that orders that yield
liquidity indicator code RR would be subject to a fee of $0.0029 per
share in securities priced at or above $1.00 and 0.05% of the
transaction's dollar value in securities priced below $1.00.
Liquidity indicator code Ra, Removes Liquidity, Non-
Displayed Order (Tape A). The Liquidity Indicator Code and Associated
Fees table would specify that orders that yield liquidity indicator
code Ra would be subject to a fee of $0.0029 per share in securities
[[Page 3155]]
priced at or above $1.00 and 0.05% of the transaction's dollar value in
securities priced below $1.00.
Liquidity indicator code Rb, Removes Liquidity, Non-
Displayed Order (Tape B). The Liquidity Indicator Code and Associated
Fees table would specify that orders that yield liquidity indicator
code Rb would be subject to a fee of $0.0029 per share in securities
priced at or above $1.00 and 0.05% of the transaction's dollar value in
securities priced below $1.00.
Liquidity indicator code Rc, Removes Liquidity, Non-
Displayed Order (Tape C). The Liquidity Indicator Code and Associated
Fees table would specify that orders that yield liquidity indicator
code Rc would be subject to a fee of $0.0029 per share in securities
priced at or above $1.00 and 0.05% of the transaction's dollar value in
securities priced below $1.00.
Liquidity indicator code Rr, Retail Order, Removes
Liquidity, Non-Displayed Order (All Tapes). The Liquidity Indicator
Code and Associated Fees table would specify that orders that yield
liquidity indicator code Rr would be subject to a fee of $0.0029 per
share in securities priced at or above $1.00 and 0.05% of the
transaction's dollar value in securities priced below $1.00.
Definitions
The Exchange proposes to add definitions of the terms ADAV, ADV,
and TCV which are consistent with the definitions of those terms above
to the ``Definitions'' section of the Fee Schedule in connection with
the proposed Add and Remove Volume Tiers. The Exchange notes that the
proposed definitions of ADAV, ADV, and TCV are substantially similar to
the definitions of those terms used by at least one other exchange on
its fee schedule in connection with similar volume-based pricing
tiers.\18\
---------------------------------------------------------------------------
\18\ See e.g., the Cboe EDGX Exchange, Inc. (``Cboe EDGX'')
equities trading fee schedule on its public website (available at
https://www.cboe.com/us/equities/membership/fee_schedule/edgx/).
---------------------------------------------------------------------------
Allow Members To Aggregate Volume for Pricing Tiers
The Exchange proposes to include a provision in its definition of
ADAV and ADV to allow affiliated Members to aggregate their volume for
purposes of the Exchange's determination of ADAV and ADV with respect
to pricing tiers if such Members provide prior notice to the Exchange.
Specifically, to the extent that two or more affiliated companies
maintain separate memberships with the Exchange and can demonstrate
their affiliation by showing they control, are controlled by, or are
under common control with each other, the Exchange would permit such
Members to count aggregate volume of such affiliates in calculating
ADAV and ADV. As proposed, the Exchange will verify such affiliation
using a Member's Form BD, which lists control affiliates. The purposes
of this proposed change is to avoid disparate treatment of firms that
have divided business activities between separate corporate entities as
compared to firms that operate those business activities within a
single corporate entity, as allowing affiliated Member firms to count
their aggregate volume in calculating ADAV and ADV would produce the
same result for purposes of the Exchange's volume-based tier pricing as
if such affiliated Member firms were instead organized as a single
corporate entity. The Exchange notes that this proposed change is
consistent with the practice of at least one other exchange with
respect to the aggregation of affiliated member firms' volume for
purposes of ADAV and ADV calculations with respect to pricing
tiers.\19\
---------------------------------------------------------------------------
\19\ Id.
---------------------------------------------------------------------------
General Notes
The Exchange proposes to adopt two new provisions to the ``General
Notes'' section of its fee schedule. The Exchange proposes to add a
provision that states that, to the extent a Pearl Equity Member does
not qualify for any tiers contained herein, the rates listed in the
``Liquidity Indicator Codes and Associated Fees'' table shall apply.
Additionally, the Exchange proposes to add a provision that states
that, to the extent a Pearl Equity Member qualifies for higher rebates
and/or lower fees than those provided by a tier for which such Member
qualifies, the higher rebates and/or lower fees shall apply. These
provisions are intended to provide additional clarity regarding the
operation of the Fee Schedule.
Implementation
The Exchange proposes to implement the changes to the Fee Schedule
pursuant to this proposal on January 3, 2022.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \20\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \21\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among its Equity Members and issuers and other
persons using its facilities. The Exchange also believes that the
proposed rule change is consistent with the objectives of Section
6(b)(5) \22\ requirements that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, and 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, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(4).
\22\ 15 U.S.C 78f(b)(5).
---------------------------------------------------------------------------
The Exchange operates in a highly fragmented and competitive market
in which market participants can readily direct their order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of sixteen registered equities exchanges, and
there are a number of alternative trading systems and other off-
exchange venues, to which market participants may direct their order
flow. Based on publicly available information, no single registered
equities exchange currently has more than approximately 18% of the
total market share of executed volume of equities trading.\23\ Thus, in
such a low-concentrated and highly competitive market, no single
equities exchange possesses significant pricing power in the execution
of order flow, and the Exchange currently represents less than 1% of
the overall market share. The Commission and the courts have repeatedly
expressed their preference for competition over regulatory intervention
in determining prices, products, and services in the securities
markets. In Regulation NMS, the Commission highlighted the importance
of market forces in determining prices and SRO revenues and also
recognized that current regulation of the market system ``has been
remarkably successful in promoting market competition in its broader
forms that are most important to investors and listed companies.'' \24\
---------------------------------------------------------------------------
\23\ See supra note 4.
\24\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37499 (June 29, 2005).
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to
[[Page 3156]]
reduce use of certain categories of products, in response to new or
different pricing structures being introduced into the market.
Accordingly, competitive forces constrain the Exchange's transaction
fees and rebates, and market participants can readily trade on
competing venues if they deem pricing levels at those other venues to
be more favorable. The Exchange believes the proposal reflects a
reasonable and competitive pricing structure designed to incentivize
market participants to direct their order flow to the Exchange, which
the Exchange believes would enhance liquidity and market quality to the
benefit of all Members and market participants.
Add Volume Tier
The Exchange believes that the proposed Add Volume Tier is
reasonable because it would provide Members with an additional
incentive to achieve certain volume thresholds on the Exchange. The
Exchange notes that volume-based incentives and discounts have been
widely adopted by exchanges,\25\ and are reasonable, equitable, and not
unfairly discriminatory because they are open to all Members on an
equal basis and provide additional benefits or discounts that are
reasonably related to the value to an exchange's market quality
associated with higher levels of market activity, such as higher levels
of liquidity provision and the introduction of higher volumes of orders
into the price and volume discovery processes. The Exchange believes
the proposed Add Volume Tiers are equitable and not unfairly
discriminatory for these same reasons, as they are available to all
Members and are designed to encourage Members to maintain or increase
their orders that add liquidity on the Exchange, thereby contributing
to a deeper and more liquid market to the benefit of all market
participants and enhancing the attractiveness of the Exchange as a
trading venue. Moreover, the Exchange believes the proposed Add Volume
Tiers are a reasonable means to incentivize such increased activity, as
it provides Members with additional opportunities to qualify for an
enhanced rebate for executions of Added Displayed Volume.
---------------------------------------------------------------------------
\25\ See Cboe EDGX equities trading fee schedule on its public
website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/); Cboe BZX equities trading fee schedule on its
public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/); and MEMX equities trading fee
schedule on its public website (available at https://info.memxtrading.com/fee-schedule/).
---------------------------------------------------------------------------
Additionally, the Exchange believes that the proposed enhanced
rebate for executions of Added Displayed Volume under Add Volume Tier 1
(i.e., $0.0032 per share) is reasonable, in that it represents only a
modest increase from the proposed standard rebate for such executions
(i.e., of $0.0029 per share). Thus, the Exchange believes that it is
reasonable, consistent with an equitable allocation of fees, and not
unfairly discriminatory to provide an enhanced rebate for executions of
Added Displayed Volume to Members that qualify for Tier 1 in comparison
with the standard rebate for such executions in recognition of the
benefits that such Members provide to the Exchange and market
participants, as described above, particularly as the magnitude of the
enhanced rebate is not unreasonably high and is, instead, reasonably
related to the enhanced market quality it is designed to achieve.
The Exchange believes the proposed change for the required criteria
for Add Volume Tier 1 as an ADAV of at least 0.07% of TCV is reasonable
because, as noted above, the Exchange believes that basing
qualification for the Add Volume Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an ADAV threshold that is a
specified number of shares, is appropriate so that the threshold is
variable based on overall volumes in the equities industry, which
fluctuate from month to month.
The Exchange believes the proposed change for the required criteria
for Add Volume Tier 2 as an ADAV of at least 0.10% of TCV is reasonable
because, as noted above, the Exchange believes that basing
qualification for the Add Volume Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an ADAV threshold that is a
specified number of shares, is appropriate so that the threshold is
variable based on overall volumes in the equities industry, which
fluctuate from month to month.
The Exchange believes the proposed change for the required criteria
for Add Volume Tier 3 as an ADAV of at least 0.20% of TCV is reasonable
because, as noted above, the Exchange believes that basing
qualification for the Add Volume Tiers on an ADAV threshold that is a
percentage of the TCV, rather than an ADAV threshold that is a
specified number of shares, is appropriate so that the threshold is
variable based on overall volumes in the equities industry, which
fluctuate from month to month.
The Exchange further believes the proposed new criteria is
equitable and non-discriminatory because all Members will continue to
be eligible to qualify for Add Volume Tier 3 and have the opportunity
to receive the corresponding enhanced rebate if such criteria is
achieved. The Exchange notes that should a Member not meet the proposed
new criteria for Add Volume Tier 3, such member would merely not
receive that corresponding enhanced rebate, and such Member would still
have an opportunity to qualify for an enhanced rebate, although
slightly lower than Tier 3, for executions of Added Volume under the
proposed Add Volume Tier 2, which has slightly less stringent criteria
than Add Volume Tier 3, as described above. Members that do not meet
the proposed new criteria for Add Volume 2 would still have an
opportunity to qualify for an enhanced rebate, although slightly lower
than Add Volume Tier 2, for executions of Added Volume under the
proposed Add Volume Tier 1, which has slightly less stringent criteria
than Add Volume Tier 2, as described above.
The Exchange further believes that the proposed new criteria for
Add Volume Tier 1, Add Volume Tier 2, and Add Volume Tier 3, are
reasonable, in that the proposed new criteria for Add Volume Tier 2 is
incrementally more difficult to achieve than that of Add Volume Tier 1,
and the proposed new criteria for Add Volume Tier 3 is incrementally
more difficult to achieve than Add Volume Tier 2 thus, Add Volume Tier
3 appropriately offers the highest rebate commensurate with the
corresponding highest volume threshold. Similarly, the Exchange
believes that the proposed new criteria for Add Volume Tier 2 is
incrementally more difficult to achieve than that for Add Volume Tier
1, and thus Add Volume Tier 2 appropriately offers a higher rebate
commensurate with the higher volume threshold. Therefore, the Exchange
believes the Add Volume Tiers, as proposed, are consistent with an
equitable allocation of fees and rebates, as the more stringent
criteria correlates with the corresponding tier's higher rebate. The
Exchange further believes that the rebates provided under the Add
Volume Tiers, as proposed, (i.e., $0.0032 for Tier 1; $0.0035 for Tier
2; and $0.0036 for Tier 3) are reasonable, consistent with an equitable
allocation of fees, and not unfairly discriminatory to pay such higher
rebates for executions of Added Displayed Volume to Members that
qualify for an Add Volume Tier in comparison with the standard rebate
in recognition of the benefits to the Exchange and market participants
described above, particularly as the magnitude of the enhanced rebate
is not unreasonably high and is, instead, reasonably related to the
enhanced
[[Page 3157]]
market quality it is designed to achieve. Additionally, the Exchange
believes the proposed rebates are reasonable as such rebates are
comparable to, and competitive with, the rebates for executions of
liquidity-adding displayed orders provided by at least one other
exchange under similar volume-based tiers.\26\
---------------------------------------------------------------------------
\26\ See the Cboe BZX Exchange, Inc. (``Cboe BZX'') equities
trading fee schedule on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/) which
reflects rebates provided under ``Add Volume Tiers''--tiers based on
a member achieving certain ADAV thresholds--ranging from $0.0020 to
$0.0031 per share for adding displayed liquidity to the Cboe BZX
exchange.
---------------------------------------------------------------------------
Additionally, the Exchange believes that excluding Exchange System
Disruption Days, any day with a scheduled early market close, and the
Russell Reconstitution Day when determining whether a Member qualifies
for the proposed Add Volume Tier during a month is reasonable,
equitable, and non-discriminatory because, as explained above, the
Exchange believes doing so would help to avoid penalizing Members that
might otherwise have met the requirements to qualify for the proposed
Add Volume Tier due to Exchange system disruptions, reduced trading
hours, and/or abnormal market conditions. The Exchange notes that the
exclusion of the Exchange System Disruption Days, any day with a
scheduled early market close, and the Russell Reconstitution Day is
consistent with the methodology used by at least one other exchange
when calculating certain member trading and other volume metrics for
purposes of determining whether members qualify for certain pricing
incentives, including calculations of ADAV for Volume Tiers
specifically.\27\
---------------------------------------------------------------------------
\27\ See e.g., Cboe BZX equities trading fee schedule on its
public website available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/).
---------------------------------------------------------------------------
Reduce Standard Rebate for Added Displayed and Non-Displayed Volume
The Exchange believes that the proposed reduced standard rebate for
executions of Added Displayed Volume ($0.0029 per share) and Added Non-
Displayed Volume ($0.0021 per share) is reasonable and appropriate
because it represents a modest decrease from the current standard
rebate for executions of Added Displayed Volume and Added Non-Displayed
Volume, and remains competitive with the standard rebates provided by
at least one other exchange for orders in securities priced at or above
$1.00 per share that add liquidity.\28\ The Exchange further believes
that the proposed reduced standard rebate for executions of Added
Displayed Volume and Added Non-Displayed Volume are equitably allocated
and not unfairly discriminatory because each will apply equally to all
Members.
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\28\ See MEMX Exchange equities trading fee schedule on its
public website (available at https://info.memxtrading.com/fee-schedule/) which reflects a rebate of $0.0028 for Added Displayed
Volume and a rebate of $0.0020 for Added Non Displayed Volume.
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Remove Volume Tier
The Exchange believes that the proposed Remove Volume Tier is
reasonable because it would provide Members with an additional
incentive to achieve certain volume thresholds on the Exchange. Volume-
based incentives and discounts have been widely adopted by
exchanges,\29\ and are reasonable, equitable, and not unfairly
discriminatory because they are open to all Members on an equal basis
and provide additional benefits or discounts that are reasonably
related to the value to an exchange's market quality associated with
higher levels of market activity, such as higher levels of liquidity
provision and the introduction of higher volumes of orders into the
price and volume discovery processes. The Exchange believes the
proposed Remove Volume Tier is equitable and not unfairly
discriminatory for these same reasons, as it is open to all Members and
is designed to encourage Members to maintain or increase their order
flow directed to the Exchange, thereby contributing to a deeper and
more liquid market to the benefit of all market participants and
enhancing the attractiveness of the Exchange as a trading venue.
Moreover, the Exchange believes the proposed Remove Volume Tier is a
reasonable means to incentivize such increased activity, as it provides
two different thresholds that a Member may achieve by increasing their
ADV to an amount equal to or greater than the specified TCV threshold.
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\29\ See supra note 25.
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Additionally, the Exchange believes the proposed lower fee for
executions of Removed Volume for a qualifying Member (i.e., $0.0027 and
$0.00265 dependent upon the Tier) is reasonable, in that it represents
only a modest decrease from the proposed standard fee for such
executions (i.e., $0.0029 per share). The Exchange believes that it is
reasonable, consistent with an equitable allocation of fees, and not
unfairly discriminatory to charge such lower fees for executions of
Removed Volume to Members that qualify for the Remove Volume Tier in
comparison with the standard fee in recognition of the benefits that
such Members provide to the Exchange and market participants, as
described above, particularly as the magnitude of the lower fee is not
unreasonably high and is, instead, reasonably related to the enhanced
market quality it is designed to achieve. Further, as noted above,
competing exchanges offer tiered pricing structures similar to the
proposed Remove Volume Tier, including schedules of rebates and fees
that apply based upon Members achieving certain volume thresholds, and
the Exchange believes the proposed Remove Volume Tier's criteria are
reasonable when compared to such tiers provided for by other exchanges.
For example, Cboe EDGX charges lower fees for removing volume from the
Cboe EDGX exchange under its ``Remove Volume Tiers'' at $0.00275 per
share, compared to its standard fee of $0.0030 per share, but requires
different, but similar, criteria than the Exchange's proposed Remove
Volume Tier, which are also based upon a Member's volume.\30\
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\30\ See Cboe EDGX equities trading fee schedule on its public
website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/).
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The Exchange further believes the proposed Remove Volume Tier is
fair, equitable and not unfairly discriminatory because it is available
to all Members. Further, the proposed Remove Volume Tier is comparable
to the fees charged for executions of liquidity-removing orders charged
by Cboe EDGX under similar volume based tiers.\31\
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\31\ Id.
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The Exchange believes that adding the proposed definitions for the
terms, ADAV, ADV, and TCV, is reasonable, equitable, and non-
discriminatory because such definitions are substantially similar to
the definitions of such terms used by other exchanges in connection
with similar volume-based pricing tiers, as described above,\32\ and
their placement on the Fee Schedule is designed to ensure that the Fee
Schedule is as clear and understandable as possible with respect to
applicable pricing. Similarly, the Exchange believes that specifying
that routed shares are not included in the calculation of ADAV or ADV
and that Exchange System Disruptions, any day with a scheduled early
market close, and the Russell Reconstitution Day are excluded from the
calculation of ADAV, ADV, and TCV is reasonable, equitable, and non-
discriminatory as this further clarifies the Exchange's calculation
practices with respect to its volume-based pricing tiers, and such
practices
[[Page 3158]]
are consistent with those of at least one other exchange in this
regard.\33\
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\32\ Id.
\33\ See Cboe EDGX equities trading fee schedule on its public
website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/).
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Increased Standard Fee for Removed Volume
The Exchange believes that the proposed change to increase the
standard fee for executions of Removed Volume is reasonable, equitable,
and consistent with the Act because such a change is designed to
generate additional revenue and decrease the Exchange's expenditures
with respect to transaction pricing in order to offset some of the
costs associated with the various rebates provided by the Exchange for
liquidity-adding orders and the Exchange's operations generally, in a
manner that is consistent with the Exchange's overall pricing
philosophy of encouraging added liquidity, as described above. The
Exchange also believes the proposed increased standard fee for
executions of Removed Volume is reasonable and appropriate because it
represents a modest increase from the current standard fee and, as
noted above, remains lower than, and competitive with, the standard fee
charged by several other exchanges to remove liquidity in securities
priced at or above $1.00 per share.\34\ The Exchange further believes
that the proposed increased standard fee for executions of Removed
Volume is equitably allocated and not unfairly discriminatory because
it will apply to all Members.
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\34\ See the MEMX equities trading fee schedule on its public
website (available at https://info.memxtrading.com/fee-schedule/)
which reflects a standard fee of $0.0029; Cboe EDGX equities trading
fee schedule on it its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/) which
reflects a standard fee of $0.0030; and Cboe BZX equities trading
fee schedule on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/) which
reflects a standard fee of $0.0030.
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Allow Members To Aggregate Volume for Pricing Tiers
As noted above, the proposed language permitting aggregation of
volume amongst affiliated Members for purposes of the ADAV and ADV
calculations is intended to avoid disparate treatment of firms that
divided their various business activities between separate corporate
entities as compared to firms that operate those business activities
within a single corporate entity, as allowing affiliated Member firms
to count their aggregate volume in calculating ADAV and ADV would
produce the same result for purposes of the Exchange's volume-based
tier pricing as if such affiliated Member firms were instead organized
as a single corporate entity. By way of example, subject to appropriate
information barriers, many firms that are Members of the Exchange
operate both a market making desk and a public customer business within
the same corporate entity. In contrast, other firms may be part of a
corporate structure that separates those business lines into different
corporate affiliates, either for business, compliance or historical
reasons. Those corporate affiliates, in turn, are required to maintain
separate memberships with the Exchange. Absent the proposed policy,
such corporate affiliates would not receive the same treatment as firms
operating similar business lines within a single entity that is a
Member of the Exchange. Accordingly, the Exchange believes that its
proposed policy is fair and equitable, and not unreasonably
discriminatory. In addition to ensuring fair and equal treatment of its
Members, the Exchange does not want to create incentives for its
Members to restructure their business operations or compliance
functions simply due to the Exchange's pricing structure. Moreover, as
noted above, this proposed policy is consistent with the practice of
other exchanges with respect to the aggregation of affiliated Members'
volume for purposes of determining ADAV and ADV with respect to pricing
tiers.\35\
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\35\ See Cboe EDGX equities trading fee schedule on its public
website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/).
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Conforming Changes to Liquidity Indicator Codes
The Exchange believes its proposal to decrease the rebate provided
for Displayed Orders that add liquidity in securities priced at or
above $1.00 from $0.0032 in Tapes A and C, and $0.0035 in Tape B, to
$0.0029 per share is reasonable and equitably allocated among all
Members of the Exchange. Liquidity indicator codes AA, AB, and AC are
appended to orders that add displayed non-retail liquidity. The
Exchange believes that the proposed decrease to $0.0029 per share is
reasonable in that it represents a modest decrease from the current
rebate for such executions.
Additionally, the Exchange believes its proposal to decrease the
rebate provided for Non-Displayed Orders that add liquidity in
securities priced at or above $1.00 from $0.0025 to $0.0021 per share
is reasonable and equitably allocated among all Members of the
Exchange. Liquidity indicator codes Aa, Ab, Ac, and Ar are appended to
orders that add non-displayed liquidity. The Exchange believes its
proposal is equitable and not unfairly discriminatory as it will apply
to all Members equally. Additionally, the Exchange believes its
proposed change is reasonable as the Exchange is also proposing new Add
Volume Tiers by which a Member can achieve rebates of $0.0032, $0.0035,
and $0.0036 per share for securities priced at or above $1.00 upon
satisfying certain criteria.
The Exchange believes its proposal to increase the fee applied for
orders that remove liquidity in securities priced at or above $1.00 per
share is reasonable and equitably allocated among all Members of the
Exchange. The Exchange believes its proposal to update the Liquidity
Indicator Codes and Associated Fees table to reflect the new rate of
$0.0029 per share for securities priced at or above $1.00 with
liquidity indicator codes RA, RB, RC, RR, Ra, Rb, Rc, and Rr is
equitable and reasonable because it will apply equally to all Members
of the Exchange. Additionally, the Exchange believes its proposed
change is reasonable as the Exchange is also proposing new Remove
Volume Tiers by which a Member can achieve reduced fees of $0.0027 or
$00.0265 per share for securities priced at or above $1.00 upon
satisfying certain criteria.
For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act in that it provides for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities and is not designed to unfairly discriminate between
customers, issuers, brokers, or dealers. As described more fully below
in the Exchange's statement regarding the burden on competition, the
Exchange believes that its transaction pricing is subject to
significant competitive forces, and that the proposed fees and rebates
described herein are appropriate to address such forces.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes the proposed change
would encourage Members to maintain or increase their order flow to the
Exchange, thereby contributing to a deeper and more liquid market to
the benefit of all market participants and enhancing the attractiveness
of the
[[Page 3159]]
Exchange as a trading venue. As a result, the Exchange believes the
proposal would enhance its competitiveness as a market that attracts
actionable orders, thereby making it a more desirable destination venue
for its customers. For these reasons, the Exchange believes that the
proposal furthers the Commission's goal in adopting Regulation NMS of
fostering competition among orders, which promotes ``more efficient
pricing of individual stocks for all types of orders, large and
small.'' \36\
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\36\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 47396 (June 29, 2005).
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Intramarket Competition
The Exchange believes that the proposed changes would incentivize
market participants to direct order flow to the Exchange, thereby
contributing to a deeper and more liquid market to the benefit of all
market participants and enhancing the attractiveness of the Exchange as
a trading venue, which the Exchange believes, in turn, would continue
to encourage market participants to direct additional order flow to the
Exchange. Greater liquidity benefits all Members by providing more
trading opportunities and encourages Members to send orders to the
Exchange, thereby contributing to robust levels of liquidity, which
benefits all Members. The opportunity to qualify for the Add Volume
Tiers and thus receive the corresponding enhanced rebate for executions
of Added Displayed Volume would be available to all Members that meet
the associated requirements in any month. Further, as noted above, the
Exchange believes that the proposed criteria for the Add Volume Tiers
are reasonably related to the enhanced market quality that such tiers
are designed to promote.
The opportunity to qualify for the Remove Volume Tier, and thus
receive the proposed lower fee for executions of Removed Volume, would
be available to all Members that meet the associated volume requirement
in any month. The Exchange believes that meeting the volume requirement
of the Remove Volume Tier is attainable for market participants, as the
Exchange believes the thresholds are relatively low and reasonably
related to the enhanced liquidity and market quality that the Remove
Volume Tier is designed to promote. Similarly, the proposed increased
standard fee for executions of Removed Volume and the ability for
Members to aggregate volume amongst affiliated Member firms for
purposes of the Exchange's determination of ADAV and ADV with respect
to pricing tiers would apply equally to all Members. As such, the
Exchange believes the proposed changes would not impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Intermarket Competition
The Exchange believes its proposal will benefit competition as the
Exchange operates in a highly competitive market. Members have numerous
alternative venues they may participate on and direct their order flow
to, including fifteen other equities exchanges and numerous alternative
trading systems and other off-exchange venues. As noted above, no
single registered equities exchange currently has more than 18% of the
total market share of executed volume of equities trading. Thus, in
such a low-concentrated and highly competitive market, no single
equities exchange possesses significant pricing power in the execution
of order flow. Moreover, the Exchange believes that the ever-shifting
market share among the exchanges from month to month demonstrates that
market participants can shift order flow in response to new or
different pricing structures being introduced to the market.
Accordingly, competitive forces constrain the Exchange's transaction
fees and rebates generally, including with respect to executions of
Removed Volume, and market participants can readily choose to send
their orders to other exchanges and off-exchange venues if they deem
fee levels at those other venues to be more favorable.
As described above, the proposed changes are competitive proposals
through which the Exchange is seeking to encourage additional order
flow to the Exchange and to generate additional revenue to offset some
of the costs associated with the Exchange's current pricing structure
and its operations generally, and such proposed rates applicable to
executions of Added and Removed Volume are comparable to, and
competitive with, rates charged by other exchanges.\37\
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\37\ See supra notes 9, 11, 12, 15, 17, 26, 28, and 34.
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Additionally, the proposed change to allow affiliated Members to
aggregate their volume for purposes of the Exchange's determination of
ADAV and ADV with respect to pricing tiers is designed to avoid
disparate treatment of firms that have divided their various business
activities between separate corporate entities as compared to firms
that operate those business activities within a single corporate
entity, which is consistent with the practice of other exchanges, as
discussed above.\38\ Accordingly, the Exchange believes the proposal
would not burden, but rather promote, intermarket competition by
enabling it to better compete with other exchanges that offer similar
volume-based incentives and pricing with respect to executions of
Removed Volume and volume aggregation amongst affiliates with respect
to pricing tiers.
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\38\ See supra note 18.
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Additionally, the Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \39\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
circuit stated: ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their routing agents, have a wide range of choices of where to
route orders for execution'; [and] `no exchange can afford to take its
market share percentages for granted' because `no exchange possess a
monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers' . . .''.\40\ Accordingly, the Exchange does not believe
its proposed pricing changes impose any burden on competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
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\39\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\40\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSE-2006-21)).
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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 has become effective pursuant to Section
[[Page 3160]]
19(b)(3)(A)(ii) of the Act,\41\ and Rule 19b-4(f)(2) \42\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\41\ 15 U.S.C. 78s(b)(3)(A)(ii).
\42\ 17 CFR 240.19b-4(f)(2).
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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-2022-01 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-2022-01. 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-2022-01, and should be submitted
on or before February 10, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
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\43\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01065 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P
