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 To Extend the Sunset Period for the Step-Added Liquidity Rebate, 75631-75635 [2023-24271]

Download as PDF lotter on DSK11XQN23PROD with NOTICES1 Federal Register / Vol. 88, No. 212 / Friday, November 3, 2023 / Notices information related to whether the reinstatement of UTP in the subject security is consistent with the maintenance of fair and orderly markets and the protection of investors. Rule 12f–1 further requires a national securities exchange seeking to reinstate its ability to extend unlisted trading privileges in a security to indicate that it has provided a copy of such application to the issuer of the security, as well as to any other national securities exchange on which the security is listed or admitted to unlisted trading privileges. The information required by Rule 12f–1 enables the Commission to make the necessary findings under the Act prior to granting applications to reinstate unlisted trading privileges. This information is also made available to members of the public who may wish to comment upon the applications. Without the Rule, the Commission would be unable to fulfill these statutory responsibilities. There are currently 24 national securities exchanges subject to Rule 12f–1. The burden of complying with Rule 12f–1 arises when a potential respondent seeks to reinstate its ability to extend unlisted trading privileges to any security for which unlisted trading privileges have been suspended by the Commission, pursuant to Section 12(f)(2)(A) of the Act. The staff estimates that each application would require approximately one hour to complete. Thus, each potential respondent would incur on average one burden hour in complying with the Rule. The Commission staff estimates that there could be as many as 24 responses annually for an aggregate annual hour burden for all respondents of approximately 24 hours (24 responses × 1 hour per response). Each respondent’s related internal cost of compliance for Rule 12f–1 would be approximately $242.00 (the cost of one hour of professional work of a paralegal needed to complete the application). The total annual cost of compliance for all potential respondents, therefore, is approximately $5,808 (24 responses × $242.00 per response). Compliance with Rule 12f–1 is mandatory. Rule 12f–1 does not have a record retention requirement per se. However, responses made pursuant to Rule 12f–1 are subject to the recordkeeping requirements of Rules 17a–3 and 17a–4 of the Act. Information received in response to Rule 12f–1 shall not be kept confidential; the information collected is public information. Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper VerDate Sep<11>2014 17:02 Nov 02, 2023 Jkt 262001 performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted by January 2, 2024. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: October 31, 2023. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–24370 Filed 11–2–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–98826; File No. SR– PEARL–2023–59] 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 To Extend the Sunset Period for the Step-Added Liquidity Rebate October 30, 2023. Pursuant to the provisions of 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 October 18, 2023, MIAX PEARL, LLC (‘‘MIAX Pearl’’ or ‘‘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 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00095 Fmt 4703 Sfmt 4703 75631 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.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 Section 1)f) of the Fee Schedule to modify the expiration month (referred to herein as the ‘‘sunset period’’) of the required criteria of the Step-Up Added Liquidity Rebate table. This table provides that Equity Members 3 who satisfy the required criteria will receive the Step-Up Added Liquidity Rebate (described below). The Exchange originally filed this proposal on October 12, 2023, (SR–PEARL–2023–57). On October 18, 2023, the Exchange withdrew SR–PEARL–2023–57 and resubmitted this proposal. Background The Exchange currently provides a standard rebate of ($0.0024) 4 per share for executions of orders in securities priced at or above $1.00 per share that add displayed liquidity to the Exchange. The Exchange also currently offers various volume-based tiers and incentives through which an Equity Member may receive an enhanced 3 The term ‘‘Equity Member’’ is a Member authorized by the Exchange to transact business on MIAX Pearl Equities. See Exchange Rule 1901. 4 Rebates are indicated by parentheses. See the General Notes Section of the Fee Schedule. E:\FR\FM\03NON1.SGM 03NON1 75632 Federal Register / Vol. 88, No. 212 / Friday, November 3, 2023 / Notices rebate for executions of orders that add displayed liquidity to the Exchange by achieving the specified criteria that corresponds to a particular tier/ incentive. In particular, the Exchange adopted a volume based pricing incentive, referred to as the ‘‘Step-Up Added Liquidity Rebate,’’ in which qualifying Equity Members receive an enhanced rebate of ($0.0031) per share for executions of orders in securities priced at or above $1.00 per share that add displayed liquidity to the Exchange.5 The enhanced rebate provided by the StepUp Added Liquidity Rebate applies to Liquidity Indicator Codes AA (adds liquidity, displayed order, Tape A), AB (adds liquidity, displayed order, Tape B) and AC (adds liquidity, displayed order, Tape C).6 On September 27, 2023, the Exchange filed SR–PEARL–2023–50 which amended the baseline month from May 2023 to July 2023 and extended the sunset period from September 29, 2023 to January 31, 2024. These changes were scheduled to become effective on October 1, 2023. However, prior to these changes becoming effective the Exchange filed SR–PEARL–2023–54 which superseded SR–PEARL–2023–50 and reverted the baseline month back to May 2023 and changed the sunset period to November 30, 2023, with an effective implementation date of October 1, 2023. Insofar as Equity Members are concerned, the baseline month has not changed, as it was May 2023 for the month of September and remains May 2023 for the month of October. The only substantive change for Equity Members is the extension of the sunset period from September 2023 to November 2023. Equity Members qualify for the StepUp Added Liquidity Rebate by achieving a ‘‘Step-Up ADAV as a % of TCV’’ 7 of at least 0.03% over the baseline month of May 2023. Average daily added volume (‘‘ADAV’’) means average daily added volume calculated as the number of shares added per day and average daily volume (‘‘ADV’’) means average daily volume calculated as the number of shares added or lotter on DSK11XQN23PROD with NOTICES1 5 See Securities Exchange Act Release No. 95614 (August 26, 2022), 87 FR 53813 (September 1, 2022) (SR–PEARL–2022–33). 6 See Fee Schedule, Section 1)b), Liquidity Indicator Codes and Associated Fees. 7 The term ‘‘Step-Up ADAV as a % of TCV’’ means ADAV as a percent of TCV in the relevant baseline month subtracted from the current month’s ADAV as a percent of TCV. See the Definitions Section of the Fee Schedule. The Exchange notes that the Step-Up Added Liquidity Rebate does not apply to executions of orders in securities priced below $1.00 per share or executions of orders that constitute added non-displayed liquidity. VerDate Sep<11>2014 17:02 Nov 02, 2023 Jkt 262001 removed, combined, per day. ADAV and ADV are calculated on a monthly basis.8 Total consolidated volume (‘‘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.9 For example, if an Equity Member had an ADAV as a percent of TCV of 0.01% in May 2023, then that Equity Member has to achieve an ADAV as a percent of TCV equal to or greater than 0.04% in any subsequent month in order to qualify for the StepUp Added Liquidity Rebate. Proposal The Exchange now proposes to amend Section 1)f) of the Fee Schedule to modify the required criteria for Equity Members to receive the Step-Up Added Liquidity Rebate. In particular, the Exchange proposes that the criteria to qualify for the Step-Up Added Liquidity Rebate will expire no later than November 30, 2023.10 The Exchange will issue an alert to market participants should the Exchange determine that the Step-Up Added Liquidity Rebate will expire earlier than November 30, 2023, or if the Exchange determines to amend the criteria or rate applicable to the Step-Up Added Liquidity Rebate prior to the end of the sunset period. The Exchange notes that at least one other competing equities exchange provides a similar ‘‘sunset period’’ for one of its enhanced rebates subject to the same baseline month as the Exchange proposes.11 8 The Exchange excludes from its calculation of ADAV and ADV shares added or removed on any day that the Exchange’s system experiences a disruption that lasts for more than 60 minutes during regular trading hours, 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. With prior notice to the Exchange, an Equity Member may aggregate ADAV or ADV with other Equity Members that control, are controlled by, or are under common control with such Equity Member (as evidenced on such Equity Member’s Form BD). See the Definitions Section of the Fee Schedule. 9 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 any day with a scheduled early market close, and on the ‘‘Russell Reconstitution Day’’ (typically the last Friday in June). See the Definitions Section of the Fee Schedule. 10 The Exchange notes that at the end of the sunset period, the Step-Up Added Liquidity Rebate will no longer apply unless the Exchange files another 19b–4 Filing with the Commission to amend the criteria terms. 11 See Securities Exchange Act Release No. 97662 (June 7, 2023), 88 FR 38576 (June 13, 2023) (SR– MEMX–2023–09); see also MEMX LLC (‘‘MEMX’’) Fee Schedule, Liquidity Provision Tiers, Tier 6, PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 The Exchange does not propose any other changes to the qualifying criteria for Equity Members to receive the StepUp Added Liquidity Rebate. The Exchange also does not propose to amend the amount of the enhanced rebate of ($0.0031) per share for Equity Members that qualify for the Step-Up Added Liquidity Rebate. Finally, the Exchange does not propose to change the baseline ADAV of 0.00% of TCV used for firms that become Equity Members of the Exchange after May 2023 for the purpose of the Step-Up Added Liquidity Rebate calculation. The purpose of this proposed change is to simply extend the sunset period two months, from September 2023 to November 2023. The Exchange believes that the Step-Up Added Liquidity Rebate will continue to provide an incentive for Equity Members to strive for higher ADAV on the Exchange (above their ADAV in the baseline month of May 2023) to receive the enhanced rebate for qualifying executions of orders in securities priced at or above $1.00 per share that add displayed liquidity to the Exchange. The Exchange believes that with the extension of the sunset period the StepUp Added Liquidity Rebate will continue to encourage the submission of additional displayed added liquidity to the Exchange, thereby promoting price discovery and contributing to a deeper and more liquid market, which benefits all market participants and enhances the attractiveness of the Exchange as a trading venue. The Exchange notes that earlier this year, MEMX filed a proposal to use May 2023 as the baseline month for one of its enhanced Liquidity Provision Tiers (Tier 6) for MEMX’s members to receive an enhanced rebate and used November 30, 2023, as the sunset period.12 The purpose of including the proposed sunset period in the Fee Schedule is to provide clarity to Equity Members that, unless the Exchange determines to amend or otherwise modify the Step-Up Added Liquidity Rebate, the Step-Up Added Liquidity Rebate will expire at the end of the sunset period. Implementation The proposed changes will become immediately effective. 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with section 6(b) of the Act 13 available at https://info.memxtrading.com/feeschedule/ (last visited September 29, 2023). 12 See id. 13 15 U.S.C. 78f(b). E:\FR\FM\03NON1.SGM 03NON1 Federal Register / Vol. 88, No. 212 / Friday, November 3, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES1 in general, and furthers the objectives of section 6(b)(4) of the Act 14 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 and 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. As of September 29, 2023, based on publicly available information, no single registered equities exchange currently has more than approximately 15–16% of the total market share of executed volume of equities trading for the month of September 2023.15 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 represents approximately 1.79% of the overall market share as of September 29, 2023, for the month of September 2023.16 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.’’ 17 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 reduce use of certain categories of products, in response to new or different pricing structures being introduced into the market. Accordingly, competitive forces 14 15 U.S.C. 78f(b)(4). MIAX’s ‘‘The market at a glance/MTD AVERAGE,’’ available at https:// www.miaxglobal.com/ (Data as of 9/1/2023—9/28/ 2023). 16 See id. 17 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37499 (June 29, 2005). 15 See VerDate Sep<11>2014 17:02 Nov 02, 2023 Jkt 262001 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 additional orders that add liquidity to the Exchange, which the Exchange believes would deepen liquidity and promote market quality on the Exchange to the benefit of all market participants. The Exchange notes that volumebased incentives and discounts (such as tiers) have been widely adopted by exchanges (including the Exchange), and believes they are reasonable, equitable and not unfairly discriminatory because they are available to all Equity Members on an equal basis, provide additional benefits or discounts that are reasonably related to the value of an exchange’s market quality associated with higher levels of market activity (such as higher levels of liquidity provision and/or growth patterns), and the introduction of higher volumes of orders into the price and volume discovery process. The Exchange believes that the StepUp Added Liquidity Rebate, as modified by the proposed change to the sunset period, is reasonable, equitable and not unfairly discriminatory as the Step-Up Added Liquidity Rebate will continue to be available to all Equity Members on an equal basis, and is reasonably designed to encourage Equity Members to maintain or increase their order flow in liquidity-adding volume. The Exchange believes this will continue to promote price discovery, enhance liquidity and market quality, and contribute to a more robust and well-balanced market ecosystem on the Exchange to the benefit of all Equity Members and market participants. The Exchange also notes that MEMX filed a proposal which also uses May 2023 as the baseline month as well as November 2023 as its expiration month, for one of its enhanced Liquidity Provision Tiers (Tier 6) for its members to receive an enhanced rebate.18 The Exchange believes it is reasonable, equitable and not unfairly discriminatory to amend the sunset period in the Fee Schedule for the StepUp Added Liquidity Rebate because it will provide clarity to Equity Members that, unless the Exchange determines to amend or otherwise modify the Step-Up Added Liquidity Rebate, the Step-Up Added Liquidity Rebate will expire at 18 See PO 00000 supra note 11. Frm 00097 Fmt 4703 the end of the sunset period. This will allow Equity Members to take into account that the enhanced rebate provided for by the Step-Up Added Liquidity Rebate may be discontinued at the end of sunset period unless the Exchange announces otherwise and files a revised proposal with the Commission. The Exchange further notes that it will issue an alert to market participants should the Exchange determine that the Step-Up Added Liquidity Rebate will expire earlier than November 30, 2023, or if the Exchange determines to amend the criteria or rate applicable to the Step-Up Added Liquidity Rebate prior to the end of the sunset period. At least one other competing equities exchange provided a similar sunset period in its fee schedule for one of its enhanced rebates.19 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Intramarket Competition The Exchange does not believe that the proposal will impose any burden on intramarket competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the Step-Up Added Liquidity Rebate, as modified by this proposal, will continue to incentivize Equity Members to submit additional orders that add liquidity to the Exchange, thereby contributing to a deeper and more liquid market and promoting price discovery and market quality on the Exchange 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 Equity Members by providing more trading opportunities and encourages Equity Members to send additional orders to the Exchange, thereby contributing to robust levels of liquidity, which benefits all market participants. As described above, the opportunity to qualify for the proposed new Step-Up Added Liquidity Rebate, and thus receive the proposed rebate for qualifying executions of orders in securities priced at or above $1.00 per share that add displayed volume will continue to be available to all Equity Members that meet the associated volume requirement, and the 19 See Sfmt 4703 75633 E:\FR\FM\03NON1.SGM id. 03NON1 75634 Federal Register / Vol. 88, No. 212 / Friday, November 3, 2023 / Notices Exchange believes the proposed extension of the sunset period is reasonably related to the enhanced market quality that the Step-Up Added Liquidity Rebate is designed to promote. As such the Exchange does not believe the proposed changes would impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange believes its proposal to extend the sunset period in the Fee Schedule for the Step-Up Added Liquidity Rebate will not impose any burden on intramarket competition not necessary or appropriate in furtherance of the purposes of the Act because it will provide clarity to Equity Members that, unless the Exchange determines to amend or otherwise modify the Step-Up Added Liquidity Rebate, the Step-Up Added Liquidity Rebate will be discontinued at the end of the sunset period. This will allow Equity Members to take into account that the enhanced rebate provided for by the Step-Up Added Liquidity Rebate may be discontinued at the end of the sunset period unless the Exchange announces otherwise. The Exchange further notes that it will issue an alert to market participants should the Exchange determine that the Step-Up Added Liquidity Rebate will expire earlier than November 30, 2023, or if the Exchange determines to amend the criteria or rate applicable to the Step-Up Added Liquidity Rebate prior to the end of the sunset period. At least one other competing equities exchange provided a similar sunset period in its fee schedule for one of its enhanced rebates.20 lotter on DSK11XQN23PROD with NOTICES1 Intermarket Competition The Exchange believes its proposal will benefit competition, and the Exchange notes that it operates in a highly competitive market. The Exchange notes that by extending its sunset period to November 2023, its program has a sunset period similar to that of at least one other equities exchange.21 Equity 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, as of September 29, 2023, based on publicly available information, no single registered equities exchange currently has more than approximately 15–16% of the total market share of executed volume of equities trading for the month of 20 See 21 See supra note 11. id. VerDate Sep<11>2014 17:02 Nov 02, 2023 Jkt 262001 September 2023.22 Thus, in such a lowconcentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow, and the Exchange represents approximately 1.79% of the overall market share as of September 29, 2023 for the month of September 2023.23 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 the criteria for Equity Members to achieve the Step-Up Added Liquidity Rebate, and market participants can readily choose to send their orders to other exchanges and offexchange venues if they deem rebate criteria at those other venues to be more favorable. As described above, the proposed changes represent a competitive proposal through which the Exchange is seeking to continue to encourage additional order flow to the Exchange through a volume-based incentive that is comparable to the criteria for volumebased incentives adopted by at least one other competing exchange that has a similar sunset period for a specific enhanced rebate that adds liquidity to that market.24 Accordingly, the Exchange believes that its proposal would not burden, but rather promote, intermarket competition by enabling it to better compete with other exchanges that offer similar pricing incentives to market participants that achieve certain volume criteria and thresholds. 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.’’ 25 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and 22 See supra note 15. id. 24 See supra note 11. 25 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 23 See PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 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 possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . .’’.26 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 19(b)(3)(A)(ii) of the Act,27 and Rule 19b–4(f)(2) 28 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: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or 26 See 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)). 27 15 U.S.C. 78s(b)(3)(A)(ii). 28 17 CFR 240.19b–4(f)(2). E:\FR\FM\03NON1.SGM 03NON1 Federal Register / Vol. 88, No. 212 / Friday, November 3, 2023 / Notices • Send an email to rule-comments@ sec.gov. Please include file number SR– PEARL–2023–59 on the subject line. SMALL BUSINESS ADMINISTRATION Paper Comments Argentum Capital Partners, LP; Surrender of License of Small Business Investment Company • 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–2023–59. 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 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–2023–59 and should be submitted on or before November 24, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–24271 Filed 11–2–23; 8:45 am] lotter on DSK11XQN23PROD with NOTICES1 BILLING CODE 8011–01–P [License No. 02/02–0535] Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, under section 309 of the Act and section 107.1900 of the Small Business Administration Rules and Regulations (13 CFR 107.1900) to function as a small business investment company under the Small Business Investment Company License No. 02/ 02–0535 issued to Argentum Capital Partners, LP said license is hereby declared null and void. Bailey DeVries, Associate Administrator, Office of Investment and Innovation, United States Small Business Administration. [FR Doc. 2023–24298 Filed 11–2–23; 8:45 am] BILLING CODE P SMALL BUSINESS ADMINISTRATION [License No. 05/05–0301] Monroe Capital Partners Fund LP; Surrender of License of Small Business Investment Company Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, under section 309 of the Act and section 107.1900 of the Small Business Administration Rules and Regulations (13 CFR 107.1900) to function as a small business investment company under the Small Business Investment Company License No. 05/ 05–0301 issued to Monroe Capital Partners Fund LP, said license is hereby declared null and void. Bailey Devries, Associate Administrator, Office of Investment and Innovation, United States Small Business Administration. [FR Doc. 2023–24303 Filed 11–2–23; 8:45 am] BILLING CODE P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #20026 and #20027; FLORIDA Disaster Number FL–20000] Administrative Declaration of a Disaster for the State of Florida Small Business Administration. Notice. AGENCY: 29 17 ACTION: CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:02 Nov 02, 2023 Jkt 262001 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 75635 This is a notice of an Administrative declaration of a disaster for the State of Florida dated 10/30/ 2023. Incident: Tornado. Incident Period: 10/12/2023. SUMMARY: Issued on 10/30/2023. Physical Loan Application Deadline Date: 12/29/2023. Economic Injury (EIDL) Loan Application Deadline Date: 07/30/2024. DATES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. ADDRESSES: FOR FURTHER INFORMATION CONTACT: Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: SUPPLEMENTARY INFORMATION: Primary Counties: Citrus. Contiguous Counties: Florida: Hernando, Levy, Marion, Sumter. The Interest Rates are: Percent For Physical Damage: Homeowners with Credit Available Elsewhere ...................... Homeowners without Credit Available Elsewhere .............. Businesses with Credit Available Elsewhere ...................... Businesses without Credit Available Elsewhere .............. Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: Business and Small Agricultural Cooperatives without Credit Available Elsewhere .............. Non-Profit Organizations without Credit Available Elsewhere ..................................... 5.000 2.500 8.000 4.000 2.375 2.375 4.000 2.375 The number assigned to this disaster for physical damage is 20026C and for economic injury is 200270. The State which received an EIDL Declaration is Florida. E:\FR\FM\03NON1.SGM 03NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 212 (Friday, November 3, 2023)]
[Notices]
[Pages 75631-75635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24271]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98826; File No. SR-PEARL-2023-59]


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 To Extend the Sunset Period for the Step-
Added Liquidity Rebate

October 30, 2023.
    Pursuant to the provisions of 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 October 18, 2023, MIAX PEARL, LLC (``MIAX 
Pearl'' or ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the 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.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 Section 1)f) of the Fee Schedule to 
modify the expiration month (referred to herein as the ``sunset 
period'') of the required criteria of the Step-Up Added Liquidity 
Rebate table. This table provides that Equity Members \3\ who satisfy 
the required criteria will receive the Step-Up Added Liquidity Rebate 
(described below). The Exchange originally filed this proposal on 
October 12, 2023, (SR-PEARL-2023-57). On October 18, 2023, the Exchange 
withdrew SR-PEARL-2023-57 and resubmitted this proposal.
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    \3\ 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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Background
    The Exchange currently provides a standard rebate of ($0.0024) \4\ 
per share for executions of orders in securities priced at or above 
$1.00 per share that add displayed liquidity to the Exchange. The 
Exchange also currently offers various volume-based tiers and 
incentives through which an Equity Member may receive an enhanced

[[Page 75632]]

rebate for executions of orders that add displayed liquidity to the 
Exchange by achieving the specified criteria that corresponds to a 
particular tier/incentive.
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    \4\ Rebates are indicated by parentheses. See the General Notes 
Section of the Fee Schedule.
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    In particular, the Exchange adopted a volume based pricing 
incentive, referred to as the ``Step-Up Added Liquidity Rebate,'' in 
which qualifying Equity Members receive an enhanced rebate of ($0.0031) 
per share for executions of orders in securities priced at or above 
$1.00 per share that add displayed liquidity to the Exchange.\5\ The 
enhanced rebate provided by the Step-Up Added Liquidity Rebate applies 
to Liquidity Indicator Codes AA (adds liquidity, displayed order, Tape 
A), AB (adds liquidity, displayed order, Tape B) and AC (adds 
liquidity, displayed order, Tape C).\6\
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    \5\ See Securities Exchange Act Release No. 95614 (August 26, 
2022), 87 FR 53813 (September 1, 2022) (SR-PEARL-2022-33).
    \6\ See Fee Schedule, Section 1)b), Liquidity Indicator Codes 
and Associated Fees.
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    On September 27, 2023, the Exchange filed SR-PEARL-2023-50 which 
amended the baseline month from May 2023 to July 2023 and extended the 
sunset period from September 29, 2023 to January 31, 2024. These 
changes were scheduled to become effective on October 1, 2023. However, 
prior to these changes becoming effective the Exchange filed SR-PEARL-
2023-54 which superseded SR-PEARL-2023-50 and reverted the baseline 
month back to May 2023 and changed the sunset period to November 30, 
2023, with an effective implementation date of October 1, 2023. Insofar 
as Equity Members are concerned, the baseline month has not changed, as 
it was May 2023 for the month of September and remains May 2023 for the 
month of October. The only substantive change for Equity Members is the 
extension of the sunset period from September 2023 to November 2023.
    Equity Members qualify for the Step-Up Added Liquidity Rebate by 
achieving a ``Step-Up ADAV as a % of TCV'' \7\ of at least 0.03% over 
the baseline month of May 2023. Average daily added volume (``ADAV'') 
means average daily added volume calculated as the number of shares 
added per day and average daily volume (``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.\8\ Total 
consolidated volume (``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.\9\ For example, if an Equity Member 
had an ADAV as a percent of TCV of 0.01% in May 2023, then that Equity 
Member has to achieve an ADAV as a percent of TCV equal to or greater 
than 0.04% in any subsequent month in order to qualify for the Step-Up 
Added Liquidity Rebate.
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    \7\ The term ``Step-Up ADAV as a % of TCV'' means ADAV as a 
percent of TCV in the relevant baseline month subtracted from the 
current month's ADAV as a percent of TCV. See the Definitions 
Section of the Fee Schedule. The Exchange notes that the Step-Up 
Added Liquidity Rebate does not apply to executions of orders in 
securities priced below $1.00 per share or executions of orders that 
constitute added non-displayed liquidity.
    \8\ The Exchange excludes from its calculation of ADAV and ADV 
shares added or removed on any day that the Exchange's system 
experiences a disruption that lasts for more than 60 minutes during 
regular trading hours, 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. With prior notice to the Exchange, an Equity Member may 
aggregate ADAV or ADV with other Equity Members that control, are 
controlled by, or are under common control with such Equity Member 
(as evidenced on such Equity Member's Form BD). See the Definitions 
Section of the Fee Schedule.
    \9\ 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 
any day with a scheduled early market close, and on the ``Russell 
Reconstitution Day'' (typically the last Friday in June). See the 
Definitions Section of the Fee Schedule.
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Proposal
    The Exchange now proposes to amend Section 1)f) of the Fee Schedule 
to modify the required criteria for Equity Members to receive the Step-
Up Added Liquidity Rebate. In particular, the Exchange proposes that 
the criteria to qualify for the Step-Up Added Liquidity Rebate will 
expire no later than November 30, 2023.\10\ The Exchange will issue an 
alert to market participants should the Exchange determine that the 
Step-Up Added Liquidity Rebate will expire earlier than November 30, 
2023, or if the Exchange determines to amend the criteria or rate 
applicable to the Step-Up Added Liquidity Rebate prior to the end of 
the sunset period. The Exchange notes that at least one other competing 
equities exchange provides a similar ``sunset period'' for one of its 
enhanced rebates subject to the same baseline month as the Exchange 
proposes.\11\
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    \10\ The Exchange notes that at the end of the sunset period, 
the Step-Up Added Liquidity Rebate will no longer apply unless the 
Exchange files another 19b-4 Filing with the Commission to amend the 
criteria terms.
    \11\ See Securities Exchange Act Release No. 97662 (June 7, 
2023), 88 FR 38576 (June 13, 2023) (SR-MEMX-2023-09); see also MEMX 
LLC (``MEMX'') Fee Schedule, Liquidity Provision Tiers, Tier 6, 
available at https://info.memxtrading.com/fee-schedule/ (last 
visited September 29, 2023).
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    The Exchange does not propose any other changes to the qualifying 
criteria for Equity Members to receive the Step-Up Added Liquidity 
Rebate. The Exchange also does not propose to amend the amount of the 
enhanced rebate of ($0.0031) per share for Equity Members that qualify 
for the Step-Up Added Liquidity Rebate. Finally, the Exchange does not 
propose to change the baseline ADAV of 0.00% of TCV used for firms that 
become Equity Members of the Exchange after May 2023 for the purpose of 
the Step-Up Added Liquidity Rebate calculation.
    The purpose of this proposed change is to simply extend the sunset 
period two months, from September 2023 to November 2023. The Exchange 
believes that the Step-Up Added Liquidity Rebate will continue to 
provide an incentive for Equity Members to strive for higher ADAV on 
the Exchange (above their ADAV in the baseline month of May 2023) to 
receive the enhanced rebate for qualifying executions of orders in 
securities priced at or above $1.00 per share that add displayed 
liquidity to the Exchange. The Exchange believes that with the 
extension of the sunset period the Step-Up Added Liquidity Rebate will 
continue to encourage the submission of additional displayed added 
liquidity to the Exchange, thereby promoting price discovery and 
contributing to a deeper and more liquid market, which benefits all 
market participants and enhances the attractiveness of the Exchange as 
a trading venue. The Exchange notes that earlier this year, MEMX filed 
a proposal to use May 2023 as the baseline month for one of its 
enhanced Liquidity Provision Tiers (Tier 6) for MEMX's members to 
receive an enhanced rebate and used November 30, 2023, as the sunset 
period.\12\ The purpose of including the proposed sunset period in the 
Fee Schedule is to provide clarity to Equity Members that, unless the 
Exchange determines to amend or otherwise modify the Step-Up Added 
Liquidity Rebate, the Step-Up Added Liquidity Rebate will expire at the 
end of the sunset period.
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    \12\ See id.
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Implementation
    The proposed changes will become immediately effective.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with section 6(b) of the Act \13\

[[Page 75633]]

in general, and furthers the objectives of section 6(b)(4) of the Act 
\14\ 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 and is not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4).
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    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. As of September 29, 2023, based on publicly available 
information, no single registered equities exchange currently has more 
than approximately 15-16% of the total market share of executed volume 
of equities trading for the month of September 2023.\15\ 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 represents approximately 1.79% of the overall 
market share as of September 29, 2023, for the month of September 
2023.\16\ 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.'' \17\
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    \15\ See MIAX's ``The market at a glance/MTD AVERAGE,'' 
available at https://www.miaxglobal.com/ (Data as of 9/1/2023--9/28/
2023).
    \16\ See id.
    \17\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37499 (June 29, 2005).
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    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 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 additional orders 
that add liquidity to the Exchange, which the Exchange believes would 
deepen liquidity and promote market quality on the Exchange to the 
benefit of all market participants.
    The Exchange notes that volume-based incentives and discounts (such 
as tiers) have been widely adopted by exchanges (including the 
Exchange), and believes they are reasonable, equitable and not unfairly 
discriminatory because they are available to all Equity Members on an 
equal basis, provide additional benefits or discounts that are 
reasonably related to the value of an exchange's market quality 
associated with higher levels of market activity (such as higher levels 
of liquidity provision and/or growth patterns), and the introduction of 
higher volumes of orders into the price and volume discovery process.
    The Exchange believes that the Step-Up Added Liquidity Rebate, as 
modified by the proposed change to the sunset period, is reasonable, 
equitable and not unfairly discriminatory as the Step-Up Added 
Liquidity Rebate will continue to be available to all Equity Members on 
an equal basis, and is reasonably designed to encourage Equity Members 
to maintain or increase their order flow in liquidity-adding volume. 
The Exchange believes this will continue to promote price discovery, 
enhance liquidity and market quality, and contribute to a more robust 
and well-balanced market ecosystem on the Exchange to the benefit of 
all Equity Members and market participants. The Exchange also notes 
that MEMX filed a proposal which also uses May 2023 as the baseline 
month as well as November 2023 as its expiration month, for one of its 
enhanced Liquidity Provision Tiers (Tier 6) for its members to receive 
an enhanced rebate.\18\
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    \18\ See supra note 11.
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    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to amend the sunset period in the Fee Schedule for the 
Step-Up Added Liquidity Rebate because it will provide clarity to 
Equity Members that, unless the Exchange determines to amend or 
otherwise modify the Step-Up Added Liquidity Rebate, the Step-Up Added 
Liquidity Rebate will expire at the end of the sunset period. This will 
allow Equity Members to take into account that the enhanced rebate 
provided for by the Step-Up Added Liquidity Rebate may be discontinued 
at the end of sunset period unless the Exchange announces otherwise and 
files a revised proposal with the Commission. The Exchange further 
notes that it will issue an alert to market participants should the 
Exchange determine that the Step-Up Added Liquidity Rebate will expire 
earlier than November 30, 2023, or if the Exchange determines to amend 
the criteria or rate applicable to the Step-Up Added Liquidity Rebate 
prior to the end of the sunset period. At least one other competing 
equities exchange provided a similar sunset period in its fee schedule 
for one of its enhanced rebates.\19\
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    \19\ See id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed change will not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
Intramarket Competition
    The Exchange does not believe that the proposal will impose any 
burden on intramarket competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes the Step-
Up Added Liquidity Rebate, as modified by this proposal, will continue 
to incentivize Equity Members to submit additional orders that add 
liquidity to the Exchange, thereby contributing to a deeper and more 
liquid market and promoting price discovery and market quality on the 
Exchange 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 Equity Members by providing more trading opportunities and 
encourages Equity Members to send additional orders to the Exchange, 
thereby contributing to robust levels of liquidity, which benefits all 
market participants. As described above, the opportunity to qualify for 
the proposed new Step-Up Added Liquidity Rebate, and thus receive the 
proposed rebate for qualifying executions of orders in securities 
priced at or above $1.00 per share that add displayed volume will 
continue to be available to all Equity Members that meet the associated 
volume requirement, and the

[[Page 75634]]

Exchange believes the proposed extension of the sunset period is 
reasonably related to the enhanced market quality that the Step-Up 
Added Liquidity Rebate is designed to promote. As such the Exchange 
does not believe the proposed changes would impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purpose of the Act.
    The Exchange believes its proposal to extend the sunset period in 
the Fee Schedule for the Step-Up Added Liquidity Rebate will not impose 
any burden on intramarket competition not necessary or appropriate in 
furtherance of the purposes of the Act because it will provide clarity 
to Equity Members that, unless the Exchange determines to amend or 
otherwise modify the Step-Up Added Liquidity Rebate, the Step-Up Added 
Liquidity Rebate will be discontinued at the end of the sunset period. 
This will allow Equity Members to take into account that the enhanced 
rebate provided for by the Step-Up Added Liquidity Rebate may be 
discontinued at the end of the sunset period unless the Exchange 
announces otherwise. The Exchange further notes that it will issue an 
alert to market participants should the Exchange determine that the 
Step-Up Added Liquidity Rebate will expire earlier than November 30, 
2023, or if the Exchange determines to amend the criteria or rate 
applicable to the Step-Up Added Liquidity Rebate prior to the end of 
the sunset period. At least one other competing equities exchange 
provided a similar sunset period in its fee schedule for one of its 
enhanced rebates.\20\
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    \20\ See supra note 11.
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Intermarket Competition
    The Exchange believes its proposal will benefit competition, and 
the Exchange notes that it operates in a highly competitive market. The 
Exchange notes that by extending its sunset period to November 2023, 
its program has a sunset period similar to that of at least one other 
equities exchange.\21\ Equity 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, as of September 
29, 2023, based on publicly available information, no single registered 
equities exchange currently has more than approximately 15-16% of the 
total market share of executed volume of equities trading for the month 
of September 2023.\22\ 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 
represents approximately 1.79% of the overall market share as of 
September 29, 2023 for the month of September 2023.\23\ 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 the criteria for Equity Members to achieve 
the Step-Up Added Liquidity Rebate, and market participants can readily 
choose to send their orders to other exchanges and off-exchange venues 
if they deem rebate criteria at those other venues to be more 
favorable.
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    \21\ See id.
    \22\ See supra note 15.
    \23\ See id.
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    As described above, the proposed changes represent a competitive 
proposal through which the Exchange is seeking to continue to encourage 
additional order flow to the Exchange through a volume-based incentive 
that is comparable to the criteria for volume-based incentives adopted 
by at least one other competing exchange that has a similar sunset 
period for a specific enhanced rebate that adds liquidity to that 
market.\24\ Accordingly, the Exchange believes that its proposal would 
not burden, but rather promote, intermarket competition by enabling it 
to better compete with other exchanges that offer similar pricing 
incentives to market participants that achieve certain volume criteria 
and thresholds.
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    \24\ See supra note 11.
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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.'' \25\ 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 possesses a 
monopoly, regulatory or otherwise, in the execution of order flow from 
broker dealers'. . .''.\26\ 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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    \25\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \26\ See 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 
19(b)(3)(A)(ii) of the Act,\27\ and Rule 19b-4(f)(2) \28\ 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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    \27\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \28\ 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

[[Page 75635]]

     Send an email to [email protected]. Please include 
file number SR-PEARL-2023-59 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-2023-59. 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 
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-2023-59 and should be 
submitted on or before November 24, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-24271 Filed 11-2-23; 8:45 am]
BILLING CODE 8011-01-P

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