Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule, 64002-64004 [2023-20084]
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64002
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20085 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98363; File No. SR–
PEARL–2023–43]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fee
Schedule
September 12, 2023.
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
September 6, 2023, 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 selfregulatory organization. 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 MIAX Pearl Options Fee
Schedule (‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-options/pearl-options/rule-filings at
MIAX Pearl’s principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
exchange grouping of options exchanges
within the routing fee table in Section
1)b) of the Fee Schedule, Fees for
Customer Orders Routed to Another
Options Exchange, to add applicable
Member 3 orders routed to MEMX LLC
(‘‘MEMX’’), in anticipation of the launch
of MEMX Options, the new options
trading facility of MEMX.4 The
Exchange originally filed this proposal
on August 31, 2023 (SR–PEARL–2023–
40). On September 6, 2023, the
Exchange withdrew SR–PEARL–2023–
40 and refiled this proposal. The
proposed changes are immediately
effective.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order; (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 5 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
(or other explicitly identified classes);
and (iii) to which away market it is
being routed. This assessment practice
is identical to the routing fees
assessment practice currently utilized
by the Exchange’s affiliates, Miami
International Securities Exchange, LLC
(‘‘MIAX Options’’) and MIAX Emerald,
LLC (‘‘MIAX Emerald’’). This is also
similar to the methodology utilized by
the Cboe BZX Exchange, Inc. (‘‘Cboe
BZX Options’’), a competing options
exchange, in assessing routing fees.
Cboe BZX Options has exchange
groupings in its fee schedule, similar to
those of the Exchange, whereby several
exchanges are grouped into the same
category, dependent upon the order’s
origin type and whether it is a Penny or
Non-Penny class.6
As a result of the anticipated launch
of the options trading facility of MEMX
in the third quarter of 2023, the
Exchange has determined to amend the
exchange groupings of options
exchanges within the routing fee table to
include MEMX and the anticipated
associated costs of routing customer
orders to MEMX for execution.
The impact of this proposed change
will be increased routing options for
Members. The Exchange notes that
routing through the Exchange is
optional and that Members will
continue to be able to choose where to
route applicable Member orders. Under
this proposed change, the Exchange will
not amend the fees associated with the
exchange groupings. This proposal
merely seeks to add MEMX to the
exchange groupings as described in the
routing fee table below.
According, with the proposed change,
the routing fee table will be as follows:
Description
Fees
lotter on DSK11XQN23PROD with NOTICES1
Routed, Priority Customer, Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq PHLX (except SPY) .........................................................................................................................................................................................
Routed, Priority Customer, Penny Program, to: Nasdaq MRX ...........................................................................................................
Routed, Priority Customer, Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq ISE,
NOM, Nasdaq PHLX (SPY only), MIAX Emerald, Nasdaq BX Options, MEMX ............................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, MIAX,
Nasdaq PHLX ..................................................................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: Nasdaq MRX ...................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, NOM,
MIAX Emerald, Nasdaq BX Options, MEMX ...................................................................................................................................
29 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
1 15
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18:29 Sep 15, 2023
Jkt 259001
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
4 See Securities Exchange Act Release No. 95445
(August 8, 2022), 87 FR 49894 (August 12, 2022)
(SR–MEMX–2022–10) (Notice of Filing of
Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified
by Amendment No. 1, to Adopt Rules to Govern the
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
$0.15
0.30
0.65
0.15
0.50
1.00
Trading of Options on the Exchange for a New
Facility Called MEMX Options).
5 See Exchange Rule 510(c).
6 See Cboe U.S. Options Fee Schedules, BZX
Options, ‘‘Fee Codes and Associated Fees,’’ at
https://www.cboe.com/us/options/membership/fee_
schedule/bzx/(last visited September 6, 2023).
E:\FR\FM\18SEN1.SGM
18SEN1
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
Description
Fees
Routed, Public Customer that is not a Priority Customer, Penny Program, to: NYSE American, NYSE Arca Options, Cboe BZX
Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX Emerald, MIAX,
NOM, Nasdaq PHLX, Nasdaq BX Options, MEMX .........................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: NYSE American, MIAX, Cboe, Nasdaq PHLX,
Cboe EDGX Options ........................................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe C2, NOM, BOX, Nasdaq ISE ................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe BZX Options, NYSE Arca Options,
Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options, MIAX Emerald, MEMX .................................................................................
lotter on DSK11XQN23PROD with NOTICES1
In determining to amend its routing
fee table to determine which category
MEMX belongs to the Exchange took
into account anticipated transaction fees
and rebates assessed by the away
markets to which the Exchange routes
orders, as well as the Exchange’s
clearing costs, administrative,
regulatory, and technical costs
associated with routing orders to an
away market. The Exchange uses
unaffiliated routing brokers to route
orders to the away markets; the costs
associated with the use of these services
are included in the routing fees
specified in the Fee Schedule. This
routing fees structure is not only similar
to the Exchange’s affiliates, MIAX
Options and MIAX Emerald, but is also
comparable to the structure in place on
at least one other competing options
exchange, such as Cboe BZX Options.7
The Exchange’s routing fee structure
approximates the Exchange’s costs
associated with routing orders to away
markets. The per-contract transaction
fee amount associated with each
grouping closely approximates the
Exchange’s all-in cost (plus an
additional, non-material amount) 8 to
execute that corresponding contract(s) at
that corresponding exchange. The
Exchange notes that in determining
whether to include certain exchanges in
a certain groupings of options exchanges
in the routing fee table, the Exchange
considered the transaction fees and
rebates assessed by away markets, and
determined to amend the grouping of
exchanges that assess transaction fees
7 The Cboe BZX Options fee schedule is similar
to the Exchange’s Fee Schedule in that it has
exchange groupings, whereby several exchanges are
grouped into the same category. See supra note 6.
Furthermore, Cboe BZX Options recently filed with
the Commission a proposal to amend fee codes RQ
and RR to include MEMX in those exchange
groupings. See Securities Exchange Act Release No.
98126 (August 14, 2023), 88 FR 56681 (August 18,
2023) (SR–CboeBZX–2023–056) (Notice of Filing
and Immediate Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule).
8 This amount is to cover de minimis differences/
changes to away market fees (i.e., minor increases
or decreases) that would not necessitate a fee filing
by the Exchange to re-categorize the away exchange
into a different grouping. Routing fees are not
intended to be a profit center for the Exchange and
the Exchange’s target regarding routing fees and
expenses is to be as close as possible to net neutral.
VerDate Sep<11>2014
18:29 Sep 15, 2023
Jkt 259001
for routed orders within a similar range.
This same logic and structure applies to
all of the groupings in the routing fee
table. By utilizing the same structure
that is utilized by the Exchange’s
affiliates, MIAX Options and MIAX
Emerald, the Exchange’s Members will
be assessed routing fees in a similar
manner. The Exchange believes that this
structure will minimize any confusion
as to the method of assessing routing
fees between the three exchanges. The
Exchange notes that its affiliates, MIAX
Options and MIAX Emerald, will file to
make the same proposed routing fee
changes contained herein.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 9
in general, and furthers the objectives of
Section 6(b)(4) of the Act 10 in
particular, in that it is an equitable
allocation of reasonable dues, fees, and
other charges among its Members and
issuers and other persons using its
facilities. The Exchange also believes
the proposal furthers the objectives of
Section 6(b)(5) of the Act 11 in that it is
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest and is not designed to
permit unfair discrimination between
customers, issuers, brokers and dealers.
The Exchange believes the proposed
change to add the new options facility
of MEMX to the exchange groupings of
options exchanges within the routing
fee table furthers the objectives of
Section 6(b)(4) of the Act and is
reasonable, equitable and not unfairly
discriminatory because the proposed
change will continue to apply in the
same manner to all Members that are
subject to routing fees. The Exchange
believes the proposed change to add the
new options facility of MEMX to the
routing fee table of exchange groupings
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
11 15 U.S.C. 78f(b)(5).
Frm 00075
Fmt 4703
1.00
1.15
1.25
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe the proposed
rule change to add MEMX to the routing
fee table will impose any burden on
intramarket competition. Rather, the
Exchange believes that the proposal will
promote competition by increasing the
available away markets to which
Members can route orders to. The
Exchange notes that another options
exchange recently added MEMX to its
routing fee tables.12
12 See
Sfmt 4703
0.65
furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote
just and equitable principles of trade
and is not unfairly discriminatory
because the proposed change seeks to
recoup costs that will be incurred by the
Exchange when routing customer orders
to MEMX on behalf of Members and
does so in the same manner to all
Members that are subject to routing fees.
The costs to the Exchange to route
orders to away markets for execution
primarily includes transaction fees and
rebates assessed by the away markets to
which the Exchange routes orders, in
addition to the Exchange’s clearing
costs, administrative, regulatory and
technical costs. The Exchange believes
that the proposed addition of MEMX to
the exchange groupings would increase
the routing options available to
Members. The per-contract transaction
fee amount associated with each
grouping approximates the Exchange’s
all-in cost (plus an additional, nonmaterial amount) to execute the
corresponding contract at the
corresponding exchange.
The Exchange believes that the
proposed rule change is equitable and
not unfairly discriminatory because all
Members’ orders in Penny classes and
Non-Penny classes routed to MEMX will
be uniformly assessed the
corresponding fee.
10 15
PO 00000
64003
E:\FR\FM\18SEN1.SGM
supra note 7.
18SEN1
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Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act,13 and Rule
19b–4(f)(2) 14 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–2023–43 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–2023–43. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–PEARL–2023–43 and should be
submitted on or before October 10,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20084 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98360; File No. SR–MEMX–
2023–21]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Exchange’s Fee
Schedule
September 12, 2023.
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 August
31, 2023, MEMX LLC (‘‘MEMX’’ or the
‘‘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.
15 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
13 15
14 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
18:29 Sep 15, 2023
Jkt 259001
PO 00000
Frm 00076
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Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
amend the Exchange’s fee schedule
applicable to Members 4 (the ‘‘Fee
Schedule’’) pursuant to Exchange Rules
15.1(a) and (c). The Exchange proposes
to implement the changes to the Fee
Schedule pursuant to this proposal
immediately. The text of the proposed
rule change is provided in Exhibit 5.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend the Fee Schedule to
make orders that add non-displayed
volume in securities priced at or below
$1.00 per share eligible to receive the
Sub-Dollar Rebate Tier. This change in
the Fee Schedule would make all
executions that add volume eligible for
the Sub-Dollar Rebate when a Member
reaches the applicable criteria,
regardless of whether such added
volume is displayed or non-displayed.
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 15% of
the total market share of executed
4 See
E:\FR\FM\18SEN1.SGM
Exchange Rule 1.5(p).
18SEN1
]]>Agencies
[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Notices]
[Pages 64002-64004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20084]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98363; File No. SR-PEARL-2023-43]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule
September 12, 2023.
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 September 6, 2023, 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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Pearl Options
Fee Schedule (``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings at MIAX Pearl's principal office, and at the Commission's
Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the exchange grouping of options
exchanges within the routing fee table in Section 1)b) of the Fee
Schedule, Fees for Customer Orders Routed to Another Options Exchange,
to add applicable Member \3\ orders routed to MEMX LLC (``MEMX''), in
anticipation of the launch of MEMX Options, the new options trading
facility of MEMX.\4\ The Exchange originally filed this proposal on
August 31, 2023 (SR-PEARL-2023-40). On September 6, 2023, the Exchange
withdrew SR-PEARL-2023-40 and refiled this proposal. The proposed
changes are immediately effective.
---------------------------------------------------------------------------
\3\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\4\ See Securities Exchange Act Release No. 95445 (August 8,
2022), 87 FR 49894 (August 12, 2022) (SR-MEMX-2022-10) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 1, to Adopt
Rules to Govern the Trading of Options on the Exchange for a New
Facility Called MEMX Options).
---------------------------------------------------------------------------
Currently, the Exchange assesses routing fees based upon (i) the
origin type of the order; (ii) whether or not it is an order for
standard option classes in the Penny Interval Program \5\ (``Penny
classes'') or an order for standard option classes which are not in the
Penny Interval Program (``Non-Penny classes'') (or other explicitly
identified classes); and (iii) to which away market it is being routed.
This assessment practice is identical to the routing fees assessment
practice currently utilized by the Exchange's affiliates, Miami
International Securities Exchange, LLC (``MIAX Options'') and MIAX
Emerald, LLC (``MIAX Emerald''). This is also similar to the
methodology utilized by the Cboe BZX Exchange, Inc. (``Cboe BZX
Options''), a competing options exchange, in assessing routing fees.
Cboe BZX Options has exchange groupings in its fee schedule, similar to
those of the Exchange, whereby several exchanges are grouped into the
same category, dependent upon the order's origin type and whether it is
a Penny or Non-Penny class.\6\
---------------------------------------------------------------------------
\5\ See Exchange Rule 510(c).
\6\ See Cboe U.S. Options Fee Schedules, BZX Options, ``Fee
Codes and Associated Fees,'' at https://www.cboe.com/us/options/membership/fee_schedule/bzx/(last visited September 6, 2023).
---------------------------------------------------------------------------
As a result of the anticipated launch of the options trading
facility of MEMX in the third quarter of 2023, the Exchange has
determined to amend the exchange groupings of options exchanges within
the routing fee table to include MEMX and the anticipated associated
costs of routing customer orders to MEMX for execution.
The impact of this proposed change will be increased routing
options for Members. The Exchange notes that routing through the
Exchange is optional and that Members will continue to be able to
choose where to route applicable Member orders. Under this proposed
change, the Exchange will not amend the fees associated with the
exchange groupings. This proposal merely seeks to add MEMX to the
exchange groupings as described in the routing fee table below.
According, with the proposed change, the routing fee table will be
as follows:
------------------------------------------------------------------------
Description Fees
------------------------------------------------------------------------
Routed, Priority Customer, Penny Program, to: NYSE $0.15
American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq
PHLX (except SPY)......................................
Routed, Priority Customer, Penny Program, to: Nasdaq MRX 0.30
Routed, Priority Customer, Penny Program, to: NYSE Arca 0.65
Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq
ISE, NOM, Nasdaq PHLX (SPY only), MIAX Emerald, Nasdaq
BX Options, MEMX.......................................
Routed, Priority Customer, Non-Penny Program, to: NYSE 0.15
American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE,
MIAX, Nasdaq PHLX......................................
Routed, Priority Customer, Non-Penny Program, to: Nasdaq 0.50
MRX....................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE 1.00
Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX,
NOM, MIAX Emerald, Nasdaq BX Options, MEMX.............
[[Page 64003]]
Routed, Public Customer that is not a Priority Customer, 0.65
Penny Program, to: NYSE American, NYSE Arca Options,
Cboe BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX
Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX
Emerald, MIAX, NOM, Nasdaq PHLX, Nasdaq BX Options,
MEMX...................................................
Routed, Public Customer that is not a Priority Customer, 1.00
Non-Penny Program, to: NYSE American, MIAX, Cboe,
Nasdaq PHLX, Cboe EDGX Options.........................
Routed, Public Customer that is not a Priority Customer, 1.15
Non-Penny Program, to: Cboe C2, NOM, BOX, Nasdaq ISE...
Routed, Public Customer that is not a Priority Customer, 1.25
Non-Penny Program, to: Cboe BZX Options, NYSE Arca
Options, Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options,
MIAX Emerald, MEMX.....................................
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In determining to amend its routing fee table to determine which
category MEMX belongs to the Exchange took into account anticipated
transaction fees and rebates assessed by the away markets to which the
Exchange routes orders, as well as the Exchange's clearing costs,
administrative, regulatory, and technical costs associated with routing
orders to an away market. The Exchange uses unaffiliated routing
brokers to route orders to the away markets; the costs associated with
the use of these services are included in the routing fees specified in
the Fee Schedule. This routing fees structure is not only similar to
the Exchange's affiliates, MIAX Options and MIAX Emerald, but is also
comparable to the structure in place on at least one other competing
options exchange, such as Cboe BZX Options.\7\ The Exchange's routing
fee structure approximates the Exchange's costs associated with routing
orders to away markets. The per-contract transaction fee amount
associated with each grouping closely approximates the Exchange's all-
in cost (plus an additional, non-material amount) \8\ to execute that
corresponding contract(s) at that corresponding exchange. The Exchange
notes that in determining whether to include certain exchanges in a
certain groupings of options exchanges in the routing fee table, the
Exchange considered the transaction fees and rebates assessed by away
markets, and determined to amend the grouping of exchanges that assess
transaction fees for routed orders within a similar range. This same
logic and structure applies to all of the groupings in the routing fee
table. By utilizing the same structure that is utilized by the
Exchange's affiliates, MIAX Options and MIAX Emerald, the Exchange's
Members will be assessed routing fees in a similar manner. The Exchange
believes that this structure will minimize any confusion as to the
method of assessing routing fees between the three exchanges. The
Exchange notes that its affiliates, MIAX Options and MIAX Emerald, will
file to make the same proposed routing fee changes contained herein.
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\7\ The Cboe BZX Options fee schedule is similar to the
Exchange's Fee Schedule in that it has exchange groupings, whereby
several exchanges are grouped into the same category. See supra note
6. Furthermore, Cboe BZX Options recently filed with the Commission
a proposal to amend fee codes RQ and RR to include MEMX in those
exchange groupings. See Securities Exchange Act Release No. 98126
(August 14, 2023), 88 FR 56681 (August 18, 2023) (SR-CboeBZX-2023-
056) (Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee Schedule).
\8\ This amount is to cover de minimis differences/changes to
away market fees (i.e., minor increases or decreases) that would not
necessitate a fee filing by the Exchange to re-categorize the away
exchange into a different grouping. Routing fees are not intended to
be a profit center for the Exchange and the Exchange's target
regarding routing fees and expenses is to be as close as possible to
net neutral.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable dues, fees, and other
charges among its Members and issuers and other persons using its
facilities. The Exchange also believes the proposal furthers the
objectives of Section 6(b)(5) of the Act \11\ in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed change to add the new options
facility of MEMX to the exchange groupings of options exchanges within
the routing fee table furthers the objectives of Section 6(b)(4) of the
Act and is reasonable, equitable and not unfairly discriminatory
because the proposed change will continue to apply in the same manner
to all Members that are subject to routing fees. The Exchange believes
the proposed change to add the new options facility of MEMX to the
routing fee table of exchange groupings furthers the objectives of
Section 6(b)(5) of the Act and is designed to promote just and
equitable principles of trade and is not unfairly discriminatory
because the proposed change seeks to recoup costs that will be incurred
by the Exchange when routing customer orders to MEMX on behalf of
Members and does so in the same manner to all Members that are subject
to routing fees. The costs to the Exchange to route orders to away
markets for execution primarily includes transaction fees and rebates
assessed by the away markets to which the Exchange routes orders, in
addition to the Exchange's clearing costs, administrative, regulatory
and technical costs. The Exchange believes that the proposed addition
of MEMX to the exchange groupings would increase the routing options
available to Members. The per-contract transaction fee amount
associated with each grouping approximates the Exchange's all-in cost
(plus an additional, non-material amount) to execute the corresponding
contract at the corresponding exchange.
The Exchange believes that the proposed rule change is equitable
and not unfairly discriminatory because all Members' orders in Penny
classes and Non-Penny classes routed to MEMX will be uniformly assessed
the corresponding fee.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
the proposed rule change to add MEMX to the routing fee table will
impose any burden on intramarket competition. Rather, the Exchange
believes that the proposal will promote competition by increasing the
available away markets to which Members can route orders to. The
Exchange notes that another options exchange recently added MEMX to its
routing fee tables.\12\
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\12\ See supra note 7.
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[[Page 64004]]
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
19(b)(3)(A)(ii) of the Act,\13\ and Rule 19b-4(f)(2) \14\ 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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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 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-2023-43 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-2023-43. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-PEARL-2023-43 and should be
submitted on or before October 10, 2023.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20084 Filed 9-15-23; 8:45 am]
BILLING CODE 8011-01-P
