Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule To Establish a Monthly Membership Fee, 79376-79378 [2022-28083]

Download as PDF 79376 Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II. II. Docketed Proceeding(s) 1. Docket No(s).: MC2023–94 and CP2023–95; Filing Title: USPS Request to Add Priority Mail Express, Priority Mail & First-Class Package Service Contract 80 to Competitive Product List and Notice of Filing Materials Filed Under Seal; Filing Acceptance Date: December 19, 2022; Filing Authority: 39 U.S.C. 3642, 39 CFR 3040.130 through 3040.135, and 39 CFR 3035.105; Public Representative: Christopher C. Mohr; Comments Due: December 28, 2022. This Notice will be published in the Federal Register. Erica A. Barker, Secretary. [FR Doc. 2022–28097 Filed 12–23–22; 8:45 am] BILLING CODE 7710–FW–P RAILROAD RETIREMENT BOARD Civil Monetary Penalty Inflation Adjustment Railroad Retirement Board. Notice announcing updated penalty inflation adjustments for civil monetary penalties for 2023. Dated: December 21, 2022. By Authority of the Board. Stephanie Hillyard, Secretary to the Board. As required by the Bipartisan Budget Act of 2015, entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Railroad Retirement Board (Board) hereby publishes its 2023 annual adjustment of civil penalties for inflation. FOR FURTHER INFORMATION CONTACT: Peter J. Orlowicz, Senior Counsel, Railroad Retirement Board, 844 North Rush Street, Chicago, IL 60611–1275, (312) 751–4922, TTD (312) 751–4701. SUPPLEMENTARY INFORMATION: Section 701 of the Bipartisan Budget Act of 2015, Public Law 114–74 (Nov. 2, 2015), entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (Inflation Adjustment Act) to require agencies to publish regulations adjusting the amount of civil monetary penalties provided by law within the jurisdiction of the agency not later than January 15th of every year. For the 2023 annual adjustment for inflation of the maximum civil penalty under the Program Fraud Civil Remedies Act of 1986, the Board applies the formula provided by the 2015 Act and the Board’s regulations at title 20, [FR Doc. 2022–28113 Filed 12–23–22; 8:45 am] AGENCY: ACTION: SUMMARY: TKELLEY on DSK125TN23PROD with NOTICES Code of Federal Regulations, part 356. In accordance with the 2015 Act, the amount of the adjustment is based on the percent increase between the Consumer Price Index (CPI–U) for the month of October preceding the date of the adjustment and the CPI–U for the October one year prior to the October immediately preceding the date of the adjustment. If there is no increase, there is no adjustment of civil penalties. The percent increase between the CPI–U for October 2022 and October 2023, as provided by Office of Management and Budget Memorandum M–23–05 (December 15, 2022) is 1.07745 percent. Therefore, the new maximum penalty under the Program Fraud Civil Remedies Act is $13,508 (the 2022 maximum penalty of $12,537 multiplied by 1.07745, rounded to the nearest dollar). The new minimum penalty under the False Claims Act is $13,508 (the 2022 minimum penalty of $12,537 multiplied by 1.07745, rounded to the nearest dollar), and the new maximum penalty is $27,018 (the 2022 maximum penalty of $25,076 multiplied by 1.07745, rounded to the nearest dollar). The adjustments in penalties will be effective December 27, 2022. VerDate Sep<11>2014 22:43 Dec 23, 2022 Jkt 259001 BILLING CODE P 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 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 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. 34–96546; File No. SR– PEARL–2022–59] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange’s Fee Schedule To Establish a Monthly Membership Fee December 20, 2022. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 9, 2022 MIAX PEARL, LLC (‘‘MIAX Pearl’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a 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 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00104 Fmt 4703 Sfmt 4703 The Exchange proposes to establish a $200 monthly Membership Fee for Equity Members of the Exchange. The Exchange proposes to assess the monthly Membership Fee to each active Equity Member at the close of business on the first day of each month. The Exchange proposes to specify within the Fee Schedule that an active membership means any month the Equity Member is certified in the membership system and the Equity Member is credentialed to use one or more ports in the production environment. For example, the monthly Membership Fee for January 2023 will be assessed to all active Equity Members at the close of business on January 2, 2023, the first business day of the month. This filing and the proposed fee amount ($200 per month per Equity Member) are identical to a recent monthly Membership fee adopted by MEMX, LLC (‘‘MEMX’’). The Exchange is not proposing anything different than what was adopted in the MEMX filing. The Exchange also proposes that if an Equity Member is pending a voluntary termination of rights as a Member pursuant to Exchange Rule 206 prior to E:\FR\FM\27DEN1.SGM 27DEN1 Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices the time any monthly Membership Fee will be assessed (i.e., the close of business on January 2, 2023), and the Equity Member does not utilize the facilities of the Exchange while such voluntary termination of rights is pending, then the Equity Member will not be obligated to pay the monthly Membership Fee, as such Member will not be considered to have an ‘‘active’’ membership. The Exchange believes this to be appropriate because there are several pre-conditions before a voluntary resignation shall take effect pursuant to Exchange Rule 206. This is also similar to the MEMX filing to adopt the MEMX monthly Membership fee. As proposed, the monthly Membership Fee for an Equity Member will not be pro-rated, which the Exchange believes is reasonable based on the frequency that the proposed fee would be assessed (i.e., monthly instead of applying to a longer period) and the relatively low proposed fee amount of $200 for the monthly Membership Fee. This is also similar to the MEMX filing to adopt the MEMX monthly Membership fee. The Exchange does not presently contemplate proposing any application fees, trading rights or trading permit fees, market participant identifier (‘‘MPID’’) fees or so-called ‘‘headcount’’ fees. The Exchange further notes that it is separately filing a proposal to amend fees for physical connectivity and ports (with the same implementation date as the proposed changes in this filing). The Exchange proposes to establish the monthly Membership fee as Section 4), Membership Fees, and move current Section 4), Additional Fees, to new Section 5 in the Fee Schedule. TKELLEY on DSK125TN23PROD with NOTICES Implementation Date The Exchange proposes to implement the proposed Membership Fee beginning January 1, 2023. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of 6 of the Act,3 in general, and with s 6(b)(4) and 6(b)(5) of the Act,4 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its Equity Members and other persons using its facilities and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that there is value in becoming an Equity Member of the Exchange and that the proposed 3 15 4 15 U.S.C. 78f. U.S.C. 78f(b)(4) and (5). VerDate Sep<11>2014 22:43 Dec 23, 2022 Jkt 259001 monthly Membership Fee is reasonable. The proposed monthly Membership Fee is identical in amount and the way the Exchange proposes to assess it as the monthly Membership fee recently adopted by MEMX.5 The proposed monthly Membership fee is also lower than or comparable to the membership fees imposed by several other national securities exchanges that charge such fees.6 Moreover, insofar as the Exchange does not charge—nor does it presently contemplate charging—application fees, trading rights fees, trading permit fees, or fees for multiple MPIDs, the comparative price of membership is less or significantly less than comparative prices at other exchanges. The Exchange also does not charge—nor does it presently contemplate charging—socalled ‘‘headcount fees,’’ e.g., fees charged for each Form U–4 filed for registration of a representative or a principal or the transfer or re-licensing of such personnel,7 further highlighting the reasonableness of the proposed monthly Membership Fee. The Exchange believes that the proposed monthly Membership Fee is not unfairly discriminatory because it would be assessed equally across all Equity Members or firms that seek to become Equity Members. The Exchange believes that the proposed monthly Membership Fee is not unfairly discriminatory because no broker-dealer is required to become a member of the Exchange. Instead, many market participants awaited the Exchange 5 See supra note 4 [sic]. e.g., the New York Stock Exchange LLC (‘‘NYSE’’) annual trading license fee for member organizations ranges from approximately $2,080 per month to $4,165 per month based on the type of member organization and number of trading licenses. See NYSE Price List 2022, Trading Licenses, page 23, available at: https:// www.nyse.com/publicdocs/nyse/markets/nyse/ NYSE_Price_List.pdf (last visited December 6, 2022). The Nasdaq Stock Market LLC (‘‘Nasdaq’’) annual membership fee is $3,000 plus a monthly $1,250 trading rights fee (together with the annual membership fee, totaling $18,000 per year). See ‘‘NASDAQ Membership Fees,’’ Nasdaq Price List, available at: https://nasdaqtrader.com/ Trader.aspx?id=PriceListTrading2#membership (last visited December 6, 2022). See also Securities Exchange Act Release No. 81133 (July 12, 2017), 82 FR 32904 (July 18, 2017) (SR–NASDAQ–2017–065) (discussing the reasonableness of Nasdaq’s fees). Finally, Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’) charges an annual membership fee of $2,500 plus an additional fee of $350 per month for each additional MPID a member maintains other than their first (i.e., an annual fee of $4,200 per additional MPID). See ‘‘Membership Fees’’ and ‘‘Market Participant Identifier (‘MPID’) Fees’’ sections of the Cboe BZX Fee Schedule, available at: Cboe BZX Fee Schedule (last visited December 6, 2022). 7 See, e.g., ‘‘NASDAQ Membership Fees,’’ supra note 11 [sic] ($55 for each Form U–4 filed for the registration of a Representative or Principal, and $55 for each Form U–4 filed for the transfer or relicensing of a Representative or Principal). 6 See, PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 79377 growing to a certain percentage of market share before they would join as an Equity Member of the Exchange. In addition, many market participants still have not joined the Exchange despite the Exchange’s growth in one year to more than 1% of the overall equities market share. To illustrate, the Exchange currently has 49 Equity Members.8 However, based on publicly available information regarding a sample of the Exchange’s competitors, MEMX has 66 members, NYSE has 142 members, Cboe BZX has 140 members, and Investors Exchange LLC (‘‘IEX’’) has 133 members.9 Accordingly, the vigorous competition among national securities exchanges provides many alternatives for firms to voluntarily decide whether membership to the Exchange is appropriate and worthwhile, and no broker-dealer is required to become a member of the Exchange. Specifically, neither the trade-through requirements under Regulation NMS nor brokerdealers’ best execution obligations require a broker-dealer to become a member of every exchange. The Exchange acknowledges that competitive forces may require certain broker-dealers to be members of all equities exchanges. However, the Exchange believes that the proposed fee of $200 as a monthly Membership Fee is reasonable, equitably allocated and not unfairly discriminatory, even for a broker-dealer that deemed it necessary to join the Exchange for business purposes, as those business reasons should presumably result in revenue capable of covering the proposed fee. The Exchange further believes that the proposed fee would be an equitable allocation of reasonable dues, fees, and other charges among its Equity Members and issuers and other persons using its facilities, and are not unfairly discriminatory. As the Commission noted in its Concept Release Concerning Self-Regulation: The Commission to date has not issued detailed rules specifying proper funding levels of [self-regulatory organization (‘‘SRO’’)] regulatory programs, or how costs should be allocated among the various SRO constituencies. Rather, the Commission has 8 See MIAX Pearl Equities Exchange Member Directory, available at https:// www.miaxoptions.com/sites/default/files/pagefiles/MIAX_Pearl_Equities_Exchange_Members_ 11012022.pdf (last visited December 6, 2022). 9 See supra note 4 [sic]; see also NYSE Membership Directory, available at: https:// www.nyse.com/markets/nyse/membership; Cboe BZX Form 1 filed November 19, 2021, available at: https://www.sec.gov/Archives/edgar/vprr/2100/ 21009368.pdf; IEX Current Members list, available at: https://exchange.iex.io/resources/trading/ current- membership/. E:\FR\FM\27DEN1.SGM 27DEN1 TKELLEY on DSK125TN23PROD with NOTICES 79378 Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices examined the SROs to determine whether they are complying with their statutory responsibilities. This approach was developed in response to the diverse characteristics and roles of the various SROs and the markets they operate. The mechanics of SRO funding, including the amount of revenue that is spent on regulation and how that amount is allocated among various regulatory operations, is related to the type of market that an SRO is operating. Thus, each SRO and its financial structure is, to a certain extent, unique. While this uniqueness can result in different levels of SRO funding across markets, it also is a reflection of one of the primary underpinnings of the National Market System. Specifically, by fostering an environment in which diverse markets with diverse business models compete within a unified National Market System, investors and market participants benefit.10 from joining the Exchange. In addition, membership fees are subject to competition from other exchanges. Accordingly, if the changes proposed herein are unattractive to market participants, it is likely the Exchange will see a decline in membership as a result. The Exchange believes that the proposed fee change will not impact intermarket [sic] competition because it will apply to all Equity Members equally. The Exchange operates in a highly competitive market in which market participants can determine whether or not to join the Exchange based on the value received compared to the cost of joining and maintaining membership on the Exchange. For the reasons discussed above, the Exchange submits that the proposal satisfies the requirements of s 6(b)(4) and 6(b)(5) of the Act 11 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its Equity Members and other persons using its facilities and is not designed to unfairly discriminate between customers, issuers, brokers, or dealers. Effective regulation is central to the proper functioning of the securities markets. Recognizing the importance of such efforts, Congress decided to require national securities exchanges to register with the Commission as self-regulatory organizations to carry out the purposes of the Act. The Exchange therefore believes that it is critical to ensure that regulation is appropriately funded. The monthly Membership Fee is expected to provide a source of funding towards the Exchange’s costs related to onboarding Equity Members and providing ongoing support. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with 6(b)(8) of the Act,12 the Exchange believes that the proposed rule change would not impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange’s proposed Membership Fee will be lower than the cost of membership on other exchanges,13 and therefore, may stimulate intramarket [sic] competition by attracting additional firms to become Equity Members on the Exchange or at least should not deter interested participants 10 See Securities Exchange Act Release No. 50700 (November 22, 2004), 69 FR 71255, 71267–68 (December 8, 2004) (File No. S7–40–04). 11 15 U.S.C. 78f(b)(4) and (5). 12 15 U.S.C. 78f(b)(8). 13 See supra note 11 [sic]. VerDate Sep<11>2014 22:43 Dec 23, 2022 Jkt 259001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to 19(b)(3)(A)(ii) of the Act,14 and Rule 19b–4(f)(2) 15 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: Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–PEARL–2022–59. 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–2022–59 and should be submitted on or before January 17, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2022–28083 Filed 12–23–22; 8:45 am] BILLING CODE 8011–01–P 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–2022–59 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 14 15 15 17 PO 00000 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00106 Fmt 4703 Sfmt 9990 16 17 E:\FR\FM\27DEN1.SGM CFR 200.30–3(a)(12). 27DEN1

Agencies

[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79376-79378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28083]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96546; File No. SR-PEARL-2022-59]


Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Fee Schedule To Establish a Monthly Membership Fee

December 20, 2022.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 9, 2022 MIAX PEARL, LLC (``MIAX Pearl'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing 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 Exchange proposes to establish a $200 monthly Membership Fee 
for Equity Members of the Exchange. The Exchange proposes to assess the 
monthly Membership Fee to each active Equity Member at the close of 
business on the first day of each month. The Exchange proposes to 
specify within the Fee Schedule that an active membership means any 
month the Equity Member is certified in the membership system and the 
Equity Member is credentialed to use one or more ports in the 
production environment. For example, the monthly Membership Fee for 
January 2023 will be assessed to all active Equity Members at the close 
of business on January 2, 2023, the first business day of the month. 
This filing and the proposed fee amount ($200 per month per Equity 
Member) are identical to a recent monthly Membership fee adopted by 
MEMX, LLC (``MEMX''). The Exchange is not proposing anything different 
than what was adopted in the MEMX filing.
    The Exchange also proposes that if an Equity Member is pending a 
voluntary termination of rights as a Member pursuant to Exchange Rule 
206 prior to

[[Page 79377]]

the time any monthly Membership Fee will be assessed (i.e., the close 
of business on January 2, 2023), and the Equity Member does not utilize 
the facilities of the Exchange while such voluntary termination of 
rights is pending, then the Equity Member will not be obligated to pay 
the monthly Membership Fee, as such Member will not be considered to 
have an ``active'' membership. The Exchange believes this to be 
appropriate because there are several pre-conditions before a voluntary 
resignation shall take effect pursuant to Exchange Rule 206. This is 
also similar to the MEMX filing to adopt the MEMX monthly Membership 
fee.
    As proposed, the monthly Membership Fee for an Equity Member will 
not be pro-rated, which the Exchange believes is reasonable based on 
the frequency that the proposed fee would be assessed (i.e., monthly 
instead of applying to a longer period) and the relatively low proposed 
fee amount of $200 for the monthly Membership Fee. This is also similar 
to the MEMX filing to adopt the MEMX monthly Membership fee. The 
Exchange does not presently contemplate proposing any application fees, 
trading rights or trading permit fees, market participant identifier 
(``MPID'') fees or so-called ``headcount'' fees. The Exchange further 
notes that it is separately filing a proposal to amend fees for 
physical connectivity and ports (with the same implementation date as 
the proposed changes in this filing).
    The Exchange proposes to establish the monthly Membership fee as 
Section 4), Membership Fees, and move current Section 4), Additional 
Fees, to new Section 5 in the Fee Schedule.
Implementation Date
    The Exchange proposes to implement the proposed Membership Fee 
beginning January 1, 2023.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of 6 of the Act,\3\ in general, and with s 6(b)(4) 
and 6(b)(5) of the Act,\4\ in particular, in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its Equity Members and other persons using its facilities and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that there is value in becoming an Equity 
Member of the Exchange and that the proposed monthly Membership Fee is 
reasonable. The proposed monthly Membership Fee is identical in amount 
and the way the Exchange proposes to assess it as the monthly 
Membership fee recently adopted by MEMX.\5\ The proposed monthly 
Membership fee is also lower than or comparable to the membership fees 
imposed by several other national securities exchanges that charge such 
fees.\6\ Moreover, insofar as the Exchange does not charge--nor does it 
presently contemplate charging--application fees, trading rights fees, 
trading permit fees, or fees for multiple MPIDs, the comparative price 
of membership is less or significantly less than comparative prices at 
other exchanges. The Exchange also does not charge--nor does it 
presently contemplate charging--so-called ``headcount fees,'' e.g., 
fees charged for each Form U-4 filed for registration of a 
representative or a principal or the transfer or re-licensing of such 
personnel,\7\ further highlighting the reasonableness of the proposed 
monthly Membership Fee.
---------------------------------------------------------------------------

    \5\ See supra note 4 [sic].
    \6\ See, e.g., the New York Stock Exchange LLC (``NYSE'') annual 
trading license fee for member organizations ranges from 
approximately $2,080 per month to $4,165 per month based on the type 
of member organization and number of trading licenses. See NYSE 
Price List 2022, Trading Licenses, page 23, available at: https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf (last 
visited December 6, 2022). The Nasdaq Stock Market LLC (``Nasdaq'') 
annual membership fee is $3,000 plus a monthly $1,250 trading rights 
fee (together with the annual membership fee, totaling $18,000 per 
year). See ``NASDAQ Membership Fees,'' Nasdaq Price List, available 
at: https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2#membership (last visited December 
6, 2022). See also Securities Exchange Act Release No. 81133 (July 
12, 2017), 82 FR 32904 (July 18, 2017) (SR-NASDAQ-2017-065) 
(discussing the reasonableness of Nasdaq's fees). Finally, Cboe BZX 
Exchange, Inc. (``Cboe BZX'') charges an annual membership fee of 
$2,500 plus an additional fee of $350 per month for each additional 
MPID a member maintains other than their first (i.e., an annual fee 
of $4,200 per additional MPID). See ``Membership Fees'' and ``Market 
Participant Identifier (`MPID') Fees'' sections of the Cboe BZX Fee 
Schedule, available at: Cboe BZX Fee Schedule (last visited December 
6, 2022).
    \7\ See, e.g., ``NASDAQ Membership Fees,'' supra note 11 [sic] 
($55 for each Form U-4 filed for the registration of a 
Representative or Principal, and $55 for each Form U-4 filed for the 
transfer or re-licensing of a Representative or Principal).
---------------------------------------------------------------------------

    The Exchange believes that the proposed monthly Membership Fee is 
not unfairly discriminatory because it would be assessed equally across 
all Equity Members or firms that seek to become Equity Members. The 
Exchange believes that the proposed monthly Membership Fee is not 
unfairly discriminatory because no broker-dealer is required to become 
a member of the Exchange. Instead, many market participants awaited the 
Exchange growing to a certain percentage of market share before they 
would join as an Equity Member of the Exchange. In addition, many 
market participants still have not joined the Exchange despite the 
Exchange's growth in one year to more than 1% of the overall equities 
market share. To illustrate, the Exchange currently has 49 Equity 
Members.\8\ However, based on publicly available information regarding 
a sample of the Exchange's competitors, MEMX has 66 members, NYSE has 
142 members, Cboe BZX has 140 members, and Investors Exchange LLC 
(``IEX'') has 133 members.\9\
---------------------------------------------------------------------------

    \8\ See MIAX Pearl Equities Exchange Member Directory, available 
at https://www.miaxoptions.com/sites/default/files/page-files/MIAX_Pearl_Equities_Exchange_Members_11012022.pdf (last visited 
December 6, 2022).
    \9\ See supra note 4 [sic]; see also NYSE Membership Directory, 
available at: https://www.nyse.com/markets/nyse/membership; Cboe BZX 
Form 1 filed November 19, 2021, available at: https://www.sec.gov/Archives/edgar/vprr/2100/21009368.pdf; IEX Current Members list, 
available at: https://exchange.iex.io/resources/trading/current- 
membership/.
---------------------------------------------------------------------------

    Accordingly, the vigorous competition among national securities 
exchanges provides many alternatives for firms to voluntarily decide 
whether membership to the Exchange is appropriate and worthwhile, and 
no broker-dealer is required to become a member of the Exchange. 
Specifically, neither the trade-through requirements under Regulation 
NMS nor broker-dealers' best execution obligations require a broker-
dealer to become a member of every exchange. The Exchange acknowledges 
that competitive forces may require certain broker-dealers to be 
members of all equities exchanges. However, the Exchange believes that 
the proposed fee of $200 as a monthly Membership Fee is reasonable, 
equitably allocated and not unfairly discriminatory, even for a broker-
dealer that deemed it necessary to join the Exchange for business 
purposes, as those business reasons should presumably result in revenue 
capable of covering the proposed fee.
    The Exchange further believes that the proposed fee would be an 
equitable allocation of reasonable dues, fees, and other charges among 
its Equity Members and issuers and other persons using its facilities, 
and are not unfairly discriminatory. As the Commission noted in its 
Concept Release Concerning Self-Regulation:

    The Commission to date has not issued detailed rules specifying 
proper funding levels of [self-regulatory organization (``SRO'')] 
regulatory programs, or how costs should be allocated among the 
various SRO constituencies. Rather, the Commission has

[[Page 79378]]

examined the SROs to determine whether they are complying with their 
statutory responsibilities. This approach was developed in response 
to the diverse characteristics and roles of the various SROs and the 
markets they operate. The mechanics of SRO funding, including the 
amount of revenue that is spent on regulation and how that amount is 
allocated among various regulatory operations, is related to the 
type of market that an SRO is operating. Thus, each SRO and its 
financial structure is, to a certain extent, unique. While this 
uniqueness can result in different levels of SRO funding across 
markets, it also is a reflection of one of the primary underpinnings 
of the National Market System. Specifically, by fostering an 
environment in which diverse markets with diverse business models 
compete within a unified National Market System, investors and 
market participants benefit.\10\
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    \10\ See Securities Exchange Act Release No. 50700 (November 22, 
2004), 69 FR 71255, 71267-68 (December 8, 2004) (File No. S7-40-04).

    For the reasons discussed above, the Exchange submits that the 
proposal satisfies the requirements of s 6(b)(4) and 6(b)(5) of the Act 
\11\ in that it provides for the equitable allocation of reasonable 
dues, fees and other charges among its Equity Members and other persons 
using its facilities and is not designed to unfairly discriminate 
between customers, issuers, brokers, or dealers. Effective regulation 
is central to the proper functioning of the securities markets. 
Recognizing the importance of such efforts, Congress decided to require 
national securities exchanges to register with the Commission as self-
regulatory organizations to carry out the purposes of the Act. The 
Exchange therefore believes that it is critical to ensure that 
regulation is appropriately funded. The monthly Membership Fee is 
expected to provide a source of funding towards the Exchange's costs 
related to onboarding Equity Members and providing ongoing support.
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    \11\ 15 U.S.C. 78f(b)(4) and (5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with 6(b)(8) of the Act,\12\ the Exchange believes 
that the proposed rule change would not impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange's 
proposed Membership Fee will be lower than the cost of membership on 
other exchanges,\13\ and therefore, may stimulate intramarket [sic] 
competition by attracting additional firms to become Equity Members on 
the Exchange or at least should not deter interested participants from 
joining the Exchange. In addition, membership fees are subject to 
competition from other exchanges. Accordingly, if the changes proposed 
herein are unattractive to market participants, it is likely the 
Exchange will see a decline in membership as a result.
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    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra note 11 [sic].
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    The Exchange believes that the proposed fee change will not impact 
intermarket [sic] competition because it will apply to all Equity 
Members equally. The Exchange operates in a highly competitive market 
in which market participants can determine whether or not to join the 
Exchange based on the value received compared to the cost of joining 
and maintaining membership on the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to 
19(b)(3)(A)(ii) of the Act,\14\ and Rule 19b-4(f)(2) \15\ 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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    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 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-2022-59 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-2022-59. 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-2022-59 and 
should be submitted on or before January 17, 2023. For the Commission, 
by the Division of Trading and Markets, pursuant to delegated 
authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-28083 Filed 12-23-22; 8:45 am]
BILLING CODE 8011-01-P
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