Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 2615(d) To Eliminate the Contingent Open, 88689-88693 [2023-28197]

Download as PDF Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Notices thus making its market price converge to its NAV.’’ 33 Do commenters agree with the Exchange? Why or why not? 8. Some sponsors of proposed ether exchange-traded products have made statements regarding the correlation between ether spot markets and the CME ether futures market.34 What are commenters’ views on the correlation between the ether spot market and the CME ether futures market? What are commenters’ views on the extent to which a surveillance-sharing agreement with the CME would assist in detecting and deterring fraud and manipulation that impacts an exchange-traded product (‘‘ETP’’) that also holds spot ether, and on whether correlation analysis provides any evidence to this effect? What are commenters’ views on the Sponsor’s own statistical analysis of the relationship between prices in certain unregulated ether markets and prices of CME ether futures contracts? 35 What are commenters’ views generally on whether an ETP that holds only CME ether futures and an ETP that also holds spot ether are similar products? III. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, and the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.36 33 See id. e.g., Notice of Filing of a Proposed Rule Change to List and Trade Shares of the VanEck Ethereum ETF under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares, Securities Exchange Act Release No. 98457 (Sept. 20, 2023), 88 FR 66076 (Sept. 26, 2023), 66081 (stating that ‘‘The Sponsor’s research indicates daily correlation between the spot ETH and the CME ETH Futures is 0.998 from the period of 9/1/22 through 9/1/ 23.’’). 35 See Notice, 88 FR at 68226–27. 36 Section 19(b)(2) of the Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding— either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory ddrumheller on DSK120RN23PROD with NOTICES1 34 See, VerDate Sep<11>2014 18:10 Dec 21, 2023 Jkt 262001 Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change should be approved or disapproved by January 12, 2024. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by January 26, 2024. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– NASDAQ–2023–035 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–NASDAQ–2023–035. 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–NASDAQ–2023–035 and should be organization. See Securities Acts Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 88689 submitted on or before January 12, 2024. Rebuttal comments should be submitted by January 26, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.37 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–28196 Filed 12–21–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99203; File No. SR– PEARL–2023–71] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 2615(d) To Eliminate the Contingent Open December 18, 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 December 14, 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 and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Exchange Rule 2615(d) regarding the Contingent Open performed on the Exchange’s equity trading platform (referred to herein as ‘‘MIAX Pearl Equities’’). The text of the proposed rule change is available on the Exchange’s website at https://www.miaxglobal.com/markets/ us-equities/pearl-equities/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 37 17 CFR 200.30–3(a)(57). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\22DEN1.SGM 22DEN1 88690 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Notices 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 Exchange Rule 2615(d) regarding the Contingent Open performed on MIAX Pearl Equities. In sum, the Exchange proposes to amend Exchange Rule 2615(d) to no longer provide for a Contingent Open at 9:45 a.m. Eastern Time. As amended, Exchange Rule 2615(d) would instead provide that the Exchange would perform its Opening Process after the security begins trading on the primary listing market at any time during the trading day. The Exchange also proposes to make a corresponding change to remove a reference to the Contingent Open in the definition of Regular Trading Session in Exchange Rule 1901. These changes are described in more detail below. ddrumheller on DSK120RN23PROD with NOTICES1 Background Exchange Rule 2615 sets forth the Exchange’s Opening Process and Contingent Open. Each trading day, the Exchange begins trading in an equities security by performing its Opening Process after the start of Regular Trading Hours 3 by matching eligible buy and sell orders at the midpoint of the National Best Bid and Offer (‘‘NBBO’’),4 as described below. Prior to the beginning of Regular Trading Hours,5 Users 6 who wish to participate in the Opening Process may enter orders to buy or sell that are designated as Regular Trading Hours Only (‘‘RHO’’).7 Pursuant to Exchange Rule 2615(a), only orders that include a time-in-force of RHO may participate in the Opening Process. Orders designated as Post Only,8 Intermarket Sweep Orders, (‘‘ISOs’’),9 include a Minimum 3 The term ‘‘Regular Trading Hours’’ means ‘‘the time between 9:30 a.m. and 4:00 p.m. Eastern Time.’’ See Exchange Rule 1901. 4 The term ‘‘NBBO’’ means ‘‘the national best bid and offer.’’ See Exchange Rule 1901. 5 According to Exchange Rule 2600(a), Users may begin to enter orders starting at 7:30 a.m. Eastern Time. 6 The term ‘‘User’’ means ‘‘any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Exchange Rule 2602.’’ See Exchange Rule 1901. 7 Exchange Rule 2614(b)(2). 8 Exchange Rule 2614(c)(2). 9 Exchange Rule 2614(d). VerDate Sep<11>2014 18:10 Dec 21, 2023 Jkt 262001 Execution Quantity instruction,10 and orders that include a time-in-force other than RHO are not eligible to participate in the Opening Process. Market Orders 11 may include a time-in-force of Immediate-or-Cancel (‘‘IOC’’),12 and are, therefore, not eligible to participate in the Opening Process. Meanwhile, Limit Orders,13 Primary Peg Orders,14 and Midpoint Peg Orders 15 that include a time-in-force of RHO are eligible to participate in the Opening Process. All Self-Trade-Protection (‘‘STP’’) modifiers, as described in Exchange Rule 2614(f), are honored during the Opening Process. Exchange Rule 2615(b) provides that during the Opening Process, the Exchange attempts to match eligible buy and sell orders at the midpoint of the NBBO. All orders eligible to trade at the midpoint are processed in time sequence, beginning with the order with the oldest timestamp. The Opening Process concludes when no remaining orders, if any, can be matched at the midpoint of the NBBO. At the conclusion of the Opening Process, the unexecuted portion of orders that were eligible to participate in the Opening Process are placed on the MIAX PEARL Equities Book 16 in time sequence, cancelled, executed, or routed to away Trading Centers 17 in accordance with the terms of the order. Pursuant to Exchange Rule 2615(c), the Exchange calculates the midpoint of the NBBO as follows. When the primary listing exchange is the New York Stock Exchange LLC (‘‘NYSE’’) or NYSE American LLC (‘‘NYSE American’’), the Opening Process is priced at the midpoint of the: (i) first NBBO subsequent to the first reported trade and first two-sided quotation on the primary listing exchange after 9:30:00 a.m. Eastern Time; or (ii) then prevailing NBBO when the first two-sided quotation is published by the primary listing exchange after 9:30:00 a.m. Eastern Time, but before 9:45:00 a.m. Eastern Time if no first trade is reported 10 Exchange Rule 2614(c)(7). Rule 2614(a)(2). 12 Exchange Rule 2614(b)(1). Market Orders may include a time-in-force of RHO solely when coupled with the PAC routing option for purposes of routing away to participate in the primary listing market’s opening or re-opening process and will continue to not be eligible to participate in the Exchange’s Opening Process. See Exchange Rule 2617(b)(5)(ii). 13 Exchange Rule 2614(a)(1). 14 Exchange Rule 2614(a)(3)(i)(B) [sic]. 15 Exchange Rule 2614(a)(3)(i)(A) [sic]. 16 The term ‘‘MIAX Pearl Equities Book’’ means the electronic book of orders in equity securities maintained by the System. See Exchange Rule 1901. 17 The term ‘‘Trading Center’’ has the same meaning as in Rule 600(b)(82) of Regulation NMS. See Exchange Rule 100. 11 Exchange PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 by the primary listing exchange within one second of publication of the first two-sided quotation by the primary listing exchange. For any other primary listing exchange, such as The Nasdaq Stock Market LLC (‘‘Nasdaq’’), NYSE Arca, LLC (‘‘NYSE Arca’’), and Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’), the Opening Process is priced at the midpoint of the first NBBO subsequent to the first two-sided quotation published by the primary listing exchange after 9:30:00 a.m. Eastern Time. Exchange Rule 2615(d) describes the Contingent Open and provides that if the conditions to establish the price of the Opening Process described above do not occur by 9:45:00 a.m. Eastern Time, the Exchange will conduct a Contingent Open and match all orders eligible to participate in the Opening Process at the midpoint of the then prevailing NBBO. Exchange Rule 2615(d) further provides that if the midpoint of the NBBO is not available for the Contingent Open, all orders are handled in time sequence, beginning with the order with the oldest timestamp, and are placed on the MIAX PEARL Equities Book, cancelled, executed, or routed to away Trading Centers in accordance with the terms of the order. Proposed Change The Exchange proposes to amend Exchange Rule 2615(d) to no longer provide for a Contingent Open at 9:45 a.m. Eastern Time. Instead, the Exchange would not open trading in an equity security until that equity security began trading on the primary listing market and the conditions to establish the opening price set forth under Exchange Rule 2615(c) described above occur. At such time, the Exchange will perform its Opening Process and match all eligible orders at the midpoint of the NBBO, if any, and feed any unexecuted orders onto the MIAX Pearl Equities Book in time sequence, as described above. The Opening Process may occur anytime during Regular Trading Hours, including at or after 9:45 a.m. Eastern Time. The Exchange initially adopted the Contingent Open under Exchange Rule 2615(d) as part of its proposal to adopt rules governing the trading of equity securities on MIAX Pearl Equities.18 The initial intent was to align Exchange Rule 2615 with similar rules and functionality available on other equities exchanges. The other exchanges on 18 See Securities Exchange Act Release No. 89563 (August 14, 2020), 85 FR 51510 (August 20, 2020) (SR–PEARL–2020–03) (adopting rules for MIAX Pearl Equities including Exchange Rule 2615(d)). E:\FR\FM\22DEN1.SGM 22DEN1 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Notices which the Exchange based Rule 2615(d) are non-primary listing exchanges that, unlike the Exchange, offer an early trading session.19 The Exchange currently only offers a Regular Trading Session.20 Normally, an early trading session ends and a regular trading session begins when a security is opened for trading on that market. On a non-primary listing market like on which the Exchange based its Rules, this requires the security is to be [sic] open for trading on the primary listing market. Where a security has not begun to trade on the primary listing market, a Contingent Open serves an important purpose of prescribing an end to the early trading session and beginning of the regular trading session on that nonprimary listing exchange. A Contingent Open allows a non-primary listing exchange that provides an early trading session to transition to a regular trading session in a timely manner where a security has not opened for trading on the primary listing market.21 The Exchange currently does not offer an early trading session and, therefore, the Contingent Open does not serve as a transition from an early trading session to a regular trading session. A Contingent Open simply allows the Exchange to trade a security when that security has not yet opened on the primary listing market. Once open on the primary listing market, the market for that security may be more robust and the security is likely trading at prices that more closely resemble its value due to that security having been subject to the primary listing market’s opening auction process. Therefore, in the absence of an early trading session, the Exchange believes it is not necessary for it perform a Contingent Open at 9:45 a.m. Eastern Time. Instead, the Exchange believes it is appropriate for it to wait for a security to be trading on the primary listing market before it also begins to trade that security. The Exchange believes this could result in eligible orders being matched in the ddrumheller on DSK120RN23PROD with NOTICES1 19 See, e.g., Cboe EDGX Exchange Rules 11.1(a)(1) and 11.7(d), and Cboe EDGA Exchange, Inc. Rules 11.1(a)(1) and 11.7(d). 20 The term ‘‘Regular Trading Session’’ means ‘‘the time between the completion of the Opening Process or Contingent Open as defined in Exchange Rule 2615 and 4:00 p.m. Eastern Time.’’ See Exchange Rule 1901. 21 See, e.g., Securities Exchange Act Release Nos. 72676 (July 25, 2014), 79 FR 44520 (July 31, 2014) (Notice); and 73468 (October 29, 2014), 79 FR 65450 (November 4, 2014) SR–EDGX–2014–18 (Notice of Filing of Amendment Nos. 1 and 3 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1 and 3, To Amend EDGX Rule 1.5 and Chapter XI Regarding Current System Functionality Including the Operation of Order Types and Order Instructions) (SR–EDGX–2014–18). VerDate Sep<11>2014 18:10 Dec 21, 2023 Jkt 262001 Opening Process at a midpoint of the NBBO that better reflects the security’s trading characteristics and value. In the Exchange’s experience, most securities are open by 9:45:00 a.m. Eastern Time and the Exchange performs its Opening Process and is trading practically the entire market. However, at times, a security may not open by 9:45:00 a.m. This is common in less liquid securities. In these cases, the Exchange would not begin to trade a security if and until that security opens for trading on the primary listing market.22 As a result of the proposed changes, Exchange Rule 2615(d) would be amended to no longer provide for a Contingent Open. Instead, Exchange Rule 2615(d) would provide that ‘‘[t]he Exchange will perform the Opening Process at any time during Regular Trading Hours when the conditions to establish the price of the Opening Process set forth under paragraph (c) [of Exchange Rule 2615] occur.’’ Lastly, the Exchange proposes to make a corresponding change to remove a reference to the Contingent Open in the definition of Regular Trading Session in Exchange Rule 1901. Currently, the term ‘‘Regular Trading Session’’ shall mean the time between the completion of the Opening Process or Contingent Open as defined in Exchange Rule 2615 and 4:00 p.m. Eastern Time. The Exchange proposes to remove the reference to the Contingent Open so that the Regular Trading Session would now be from the time of the completion of the Opening Process as defined in Exchange Rule 2615 and 4:00 p.m. Eastern Time. Implementation The Exchange will implement the proposed changes to Exchange Rule 2615(d) on the effective date of this proposed rule change. The Exchange will issue a Regulatory Alert announcing the exact implementation date of this proposal. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,23 in general, and furthers the objectives of Section 6(b)(5),24 in 22 Should the Exchange seek to adopt an early trading session in the future, it anticipates that it would also seek to readopt a Contingent Opening Process at that time to set a time at which a security would transition from the early to regular trading sessions where it has not begun trading on the primary listing market. The Exchange will submit a filing with the Commission pursuant to Section 19(b)(1) should it decide to adopt an early trading session in the future. 23 15 U.S.C. 78f(b). 24 15 U.S.C. 78f(b)(5). PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 88691 particular, because it is designed to promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 25 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. As discussed above, the Exchange initially adopted the Contingent Open to align its rule with similar functionality available at other equities exchanges.26 These other exchanges on which the Exchange based Rule 2615(d) currently offer early trading sessions,27 while the Exchange does not. On these exchanges, a Contingent Open serves as the end to the early trading session and beginning of the regular trading session. As discussed above, the Exchange believes it is not necessary for it perform a Contingent Open at 9:45 a.m. Eastern Time. The Exchange does not currently offer an early trading session and does not have a need for a Contingent Open to serve as a transition to its Regular Trading Session. Instead, the Exchange would prefer to wait to perform its Opening Process until the security begins to trade on the primary listing market before it also begins to trade that security. As noted above, the Exchange matches orders during its Opening Process at the midpoint of the NBBO. The Exchange believes that the midpoint of the NBBO present after the security is opened by the primary listing exchange may better reflect the true market for the security due to increased liquidity and improved market quality. Therefore, the Exchange believes the proposal promotes just and equitable principles of trade, and removes impediments to and perfects the mechanism of a free and open market and a national market system because a security might be trading at prices that are more in-line with its normal trading behavior. The proposed rule change would also not permit unfair discrimination between customers, issuers, brokers, or dealers because no User would be able to trade the security until the Exchange performs its Opening Process as described herein. The proposal is not designed to target any single type of market participant. It is simply intended to amend Exchange Rule 2615(d) to no longer provide for a Contingent Open. Should the Exchange begin to offer an 25 Id. 26 See 27 See E:\FR\FM\22DEN1.SGM supra note 18. supra note 19. 22DEN1 88692 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Notices early trading session, the Contingent Open Process would serve as a transition period from the early to regular trading sessions, as it does today on other markets. The Exchange believes that, in the meantime, it may benefit all market participants for the Exchange to wait to trade a security until that security is opened by the primary listing exchange where that security’s market may be more robust. The Exchange is not aware of any rule or regulation that requires an exchange to perform a Contingent Open or trade all securities for a full trading day. Should the Exchange seek to adopt an early trading session in the future, it anticipates that it would also seek to readopt a Contingent Open to set a time at which a security would transition from the early to regular trading sessions where it has not begun trading on the primary listing market. Lastly, the Exchange’s proposal to make a corresponding change to remove a reference to the Contingent Open in the definition of Regular Trading Session in Exchange Rule 1901 remove impediments to and perfect the mechanism of a free and open market and a national market system because it would ensure the Exchange’s rules are clear and continue to not include an ambiguities and references that could cause potential investor confusion. ddrumheller on DSK120RN23PROD with NOTICES1 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange does not believe the proposed rule change would impose an undue burden on intramarket competition on the Exchange because all Users would be impacted equally. No User would be able to trade an equity security on the Exchange until that security is opened by the primary listing market and the Exchange conducts its Opening Process. Other exchanges simply begin trading equity securities at 9:30:00 a.m. Eastern Time regardless of whether the security was opened by the primary listing exchange.28 Meanwhile, as noted above, other exchanges employ a contingent open at 9:45 a.m. Eastern Time.29 Market participants that wish to trade between 9:30 a.m. Eastern Time and the time the security is opened by the primary listing exchange may send their orders to these exchanges. 28 See, e.g., NYSE National, Inc. Rule 7.34(a)(2) (defining Core Trading Session), and NYSE Chicago Rule 7.34(a)(2) (defining Core Trading Session). 29 See supra note 27. VerDate Sep<11>2014 18:10 Dec 21, 2023 Jkt 262001 Therefore, the proposed rule change should not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. In addition, the Exchange does not believe the proposed rule change would impose an undue burden on intermarket competition between exchanges. The Exchange is not aware of any rule or regulation that requires an exchange to perform a Contingent Open or trade all securities for a full trading day. The Exchange simply proposes to wait until an equity security is open for trading by the primary listing market before it conducts its own Opening Process and begins to trade that security. As stated above, other exchanges begin to trade an equity security at 9:30 a.m. Eastern Time and those exchanges may enjoy some competitive advantage as a result of the proposed rule change. The Exchange understands that it may suffer the competitive disadvantage until the time it performs its Opening Process. However, the Exchange does not believe the amount of trading volume that may be directed away from the Exchange to these exchanges would cause an unfair burden on competition between it and its exchange competitors. This competitive dynamic exists today with regard to pre-market and post-market trading on exchanges. The Exchange does not currently compete for order flow pre or post market because it does not offer trading outside of Regular Trading Hours. Therefore, the proposed rule change does not introduce any new competitive issues between exchanges. Based on the above, the Exchange does not believe the proposed rule change would impose a burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Lastly, the Exchange’s proposal to make a corresponding change to remove a reference to the Contingent Open in the definition of Regular Trading Session in Exchange Rule 1901 will have no competitive impact because it is simply a corresponding change to ensure the Exchange’s rules are clear and continue to not include an ambiguities and references that could cause potential investor confusion. 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. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to Section 19(b)(3)(A) of the Act 30 and Rule 19b–4(f)(6) 31 thereunder, the Exchange has designated this proposal as one that effects a change that: (i) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.32 A proposed rule change filed under Rule 19b–4(f)(6) 33 normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b–4(f)(6)(iii) 34 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that matching orders at the midpoint of the NBBO after a security is open on the primary market, as occurs during the Exchange’s Opening Process, may better reflect the true market for the security than a midpoint execution during the Contingent Open, which may occur prior to the security being open on the primary listing market. The Exchange also states that waiver of the operative delay would not have a material impact on trading because: (i) the Exchange currently does not offer an early trading session and, therefore, the Contingent Open does not serve as a transition from an early trading session to a regular trading session; and (ii) the Exchange does not currently attract a material amount of order flow at the beginning of the trading day, and thus any impact by the Exchange not performing a Contingent Open would be minimal. Therefore, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and 30 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 32 In addition, Rule 19b–4(f)(6) requires a selfregulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 33 17 CFR 240.19b–4(f)(6). 34 17 CFR 240.19b–4(f)(6)(iii). 31 17 E:\FR\FM\22DEN1.SGM 22DEN1 Federal Register / Vol. 88, No. 245 / Friday, December 22, 2023 / Notices designates the proposed rule change operative upon filing.35 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 under Section 19(b)(2)(B) of the Act 36 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: ddrumheller on DSK120RN23PROD 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–2023–71 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–2023–71. 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–2023–71 and should be submitted on or before January 12, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.37 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–28197 Filed 12–21–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. IA–6507] Notice of Intention To Cancel Registration Pursuant to the Investment Advisers Act of 1940 Notice is given that the Securities and Exchange Commission (the ‘‘Commission’’) intends to issue an order, pursuant to section 203(h) of the Investment Advisers Act of 1940 (the ‘‘Act’’), cancelling the registration of Vista Financial Advisors, LLC File No. 801–122832, hereinafter referred to as the ‘‘registrant.’’ Section 203(h) provides, in pertinent part, that if the Commission finds that any person registered under section 203, or who has pending an application for registration filed under that section, is no longer in existence, is not engaged in business as an investment adviser, or is prohibited from registering as an investment adviser under section 203A, the Commission shall by order, cancel the registration of such person. The registrant indicated on its most recent Form ADV filing that it is a large advisory firm that has regulatory assets under management of $100 million or more.1 The Commission believes, based on the facts it has, that the registrant did not at the time of the Form ADV filing, and does not currently, maintain the required assets under management to remain registered with the Commission, 37 17 35 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 36 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 18:10 Dec 21, 2023 Jkt 262001 CFR 200.30–3(a)(12), 59. 203A of the Act generally prohibits an investment adviser from registering with the Commission unless it meets certain requirements. See Advisers Act section 203A(a); 17 CFR 275.203A–2. 1 Section PO 00000 Frm 00135 Fmt 4703 Sfmt 9990 88693 nor does it appear eligible to register with the Commission pursuant to any other provision of the Advisers Act. Accordingly, the Commission believes that reasonable grounds exist for a finding that this registrant is no longer eligible to be registered with the Commission as an investment adviser and that the registration should be cancelled pursuant to section 203(h) of the Act. Notice is also given that any interested person may, by January 12, 2024, at 5:30 p.m., submit to the Commission in writing a request for a hearing on the cancellation, accompanied by a statement as to the nature of his or her interest, the reason for such request, and the issues, if any, of fact or law proposed to be controverted, and he or she may request that he or she be notified if the Commission should order a hearing thereon. Any such communication should be emailed to the Commission’s Secretary at Secretarys-Office@sec.gov. At any time after January 12, 2024, the Commission may issue an order cancelling the registration, upon the basis of the information stated above, unless an order for a hearing on the cancellation shall be issued upon request or upon the Commission’s own motion. Persons who requested a hearing, or who requested to be advised as to whether a hearing is ordered, will receive any notices and orders issued in this matter, including the date of the hearing (if ordered) and any postponements thereof. Any adviser whose registration is cancelled under delegated authority may appeal that decision directly to the Commission in accordance with rules 430 and 431 of the Commission’s rules of practice (17 CFR 201.430 and 431). The Commission: Secretarys-Office@sec.gov. ADDRESSES: Asaf Barouk, Senior Counsel at 202–551– 6999; SEC, Division of Investment Management, Office of Chief Counsel, 100 F Street NE, Washington, DC 20549–8549. FOR FURTHER INFORMATION CONTACT: For the Commission, by the Division of Investment Management, pursuant to delegated authority.2 Dated: December 18, 2023. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–28212 Filed 12–21–23; 8:45 am] BILLING CODE 8011–01–P 2 17 E:\FR\FM\22DEN1.SGM CFR 200.30–5(e)(2). 22DEN1

Agencies

[Federal Register Volume 88, Number 245 (Friday, December 22, 2023)]
[Notices]
[Pages 88689-88693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28197]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99203; File No. SR-PEARL-2023-71]


Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange 
Rule 2615(d) To Eliminate the Contingent Open

December 18, 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 December 14, 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 and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Exchange Rule 2615(d) regarding the 
Contingent Open performed on the Exchange's equity trading platform 
(referred to herein as ``MIAX Pearl Equities'').
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-equities/pearl-equities/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

[[Page 88690]]

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 Exchange Rule 2615(d) regarding the 
Contingent Open performed on MIAX Pearl Equities. In sum, the Exchange 
proposes to amend Exchange Rule 2615(d) to no longer provide for a 
Contingent Open at 9:45 a.m. Eastern Time. As amended, Exchange Rule 
2615(d) would instead provide that the Exchange would perform its 
Opening Process after the security begins trading on the primary 
listing market at any time during the trading day. The Exchange also 
proposes to make a corresponding change to remove a reference to the 
Contingent Open in the definition of Regular Trading Session in 
Exchange Rule 1901. These changes are described in more detail below.
Background
    Exchange Rule 2615 sets forth the Exchange's Opening Process and 
Contingent Open. Each trading day, the Exchange begins trading in an 
equities security by performing its Opening Process after the start of 
Regular Trading Hours \3\ by matching eligible buy and sell orders at 
the midpoint of the National Best Bid and Offer (``NBBO''),\4\ as 
described below. Prior to the beginning of Regular Trading Hours,\5\ 
Users \6\ who wish to participate in the Opening Process may enter 
orders to buy or sell that are designated as Regular Trading Hours Only 
(``RHO'').\7\ Pursuant to Exchange Rule 2615(a), only orders that 
include a time-in-force of RHO may participate in the Opening Process. 
Orders designated as Post Only,\8\ Intermarket Sweep Orders, 
(``ISOs''),\9\ include a Minimum Execution Quantity instruction,\10\ 
and orders that include a time-in-force other than RHO are not eligible 
to participate in the Opening Process. Market Orders \11\ may include a 
time-in-force of Immediate-or-Cancel (``IOC''),\12\ and are, therefore, 
not eligible to participate in the Opening Process. Meanwhile, Limit 
Orders,\13\ Primary Peg Orders,\14\ and Midpoint Peg Orders \15\ that 
include a time-in-force of RHO are eligible to participate in the 
Opening Process. All Self-Trade-Protection (``STP'') modifiers, as 
described in Exchange Rule 2614(f), are honored during the Opening 
Process.
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    \3\ The term ``Regular Trading Hours'' means ``the time between 
9:30 a.m. and 4:00 p.m. Eastern Time.'' See Exchange Rule 1901.
    \4\ The term ``NBBO'' means ``the national best bid and offer.'' 
See Exchange Rule 1901.
    \5\ According to Exchange Rule 2600(a), Users may begin to enter 
orders starting at 7:30 a.m. Eastern Time.
    \6\ The term ``User'' means ``any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Exchange Rule 2602.'' See Exchange Rule 1901.
    \7\ Exchange Rule 2614(b)(2).
    \8\ Exchange Rule 2614(c)(2).
    \9\ Exchange Rule 2614(d).
    \10\ Exchange Rule 2614(c)(7).
    \11\ Exchange Rule 2614(a)(2).
    \12\ Exchange Rule 2614(b)(1). Market Orders may include a time-
in-force of RHO solely when coupled with the PAC routing option for 
purposes of routing away to participate in the primary listing 
market's opening or re-opening process and will continue to not be 
eligible to participate in the Exchange's Opening Process. See 
Exchange Rule 2617(b)(5)(ii).
    \13\ Exchange Rule 2614(a)(1).
    \14\ Exchange Rule 2614(a)(3)(i)(B) [sic].
    \15\ Exchange Rule 2614(a)(3)(i)(A) [sic].
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    Exchange Rule 2615(b) provides that during the Opening Process, the 
Exchange attempts to match eligible buy and sell orders at the midpoint 
of the NBBO. All orders eligible to trade at the midpoint are processed 
in time sequence, beginning with the order with the oldest timestamp. 
The Opening Process concludes when no remaining orders, if any, can be 
matched at the midpoint of the NBBO. At the conclusion of the Opening 
Process, the unexecuted portion of orders that were eligible to 
participate in the Opening Process are placed on the MIAX PEARL 
Equities Book \16\ in time sequence, cancelled, executed, or routed to 
away Trading Centers \17\ in accordance with the terms of the order.
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    \16\ The term ``MIAX Pearl Equities Book'' means the electronic 
book of orders in equity securities maintained by the System. See 
Exchange Rule 1901.
    \17\ The term ``Trading Center'' has the same meaning as in Rule 
600(b)(82) of Regulation NMS. See Exchange Rule 100.
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    Pursuant to Exchange Rule 2615(c), the Exchange calculates the 
midpoint of the NBBO as follows. When the primary listing exchange is 
the New York Stock Exchange LLC (``NYSE'') or NYSE American LLC (``NYSE 
American''), the Opening Process is priced at the midpoint of the: (i) 
first NBBO subsequent to the first reported trade and first two-sided 
quotation on the primary listing exchange after 9:30:00 a.m. Eastern 
Time; or (ii) then prevailing NBBO when the first two-sided quotation 
is published by the primary listing exchange after 9:30:00 a.m. Eastern 
Time, but before 9:45:00 a.m. Eastern Time if no first trade is 
reported by the primary listing exchange within one second of 
publication of the first two-sided quotation by the primary listing 
exchange. For any other primary listing exchange, such as The Nasdaq 
Stock Market LLC (``Nasdaq''), NYSE Arca, LLC (``NYSE Arca''), and Cboe 
BZX Exchange, Inc. (``Cboe BZX''), the Opening Process is priced at the 
midpoint of the first NBBO subsequent to the first two-sided quotation 
published by the primary listing exchange after 9:30:00 a.m. Eastern 
Time.
    Exchange Rule 2615(d) describes the Contingent Open and provides 
that if the conditions to establish the price of the Opening Process 
described above do not occur by 9:45:00 a.m. Eastern Time, the Exchange 
will conduct a Contingent Open and match all orders eligible to 
participate in the Opening Process at the midpoint of the then 
prevailing NBBO. Exchange Rule 2615(d) further provides that if the 
midpoint of the NBBO is not available for the Contingent Open, all 
orders are handled in time sequence, beginning with the order with the 
oldest timestamp, and are placed on the MIAX PEARL Equities Book, 
cancelled, executed, or routed to away Trading Centers in accordance 
with the terms of the order.
Proposed Change
    The Exchange proposes to amend Exchange Rule 2615(d) to no longer 
provide for a Contingent Open at 9:45 a.m. Eastern Time. Instead, the 
Exchange would not open trading in an equity security until that equity 
security began trading on the primary listing market and the conditions 
to establish the opening price set forth under Exchange Rule 2615(c) 
described above occur. At such time, the Exchange will perform its 
Opening Process and match all eligible orders at the midpoint of the 
NBBO, if any, and feed any unexecuted orders onto the MIAX Pearl 
Equities Book in time sequence, as described above. The Opening Process 
may occur anytime during Regular Trading Hours, including at or after 
9:45 a.m. Eastern Time.
    The Exchange initially adopted the Contingent Open under Exchange 
Rule 2615(d) as part of its proposal to adopt rules governing the 
trading of equity securities on MIAX Pearl Equities.\18\ The initial 
intent was to align Exchange Rule 2615 with similar rules and 
functionality available on other equities exchanges. The other 
exchanges on

[[Page 88691]]

which the Exchange based Rule 2615(d) are non-primary listing exchanges 
that, unlike the Exchange, offer an early trading session.\19\ The 
Exchange currently only offers a Regular Trading Session.\20\ Normally, 
an early trading session ends and a regular trading session begins when 
a security is opened for trading on that market. On a non-primary 
listing market like on which the Exchange based its Rules, this 
requires the security is to be [sic] open for trading on the primary 
listing market. Where a security has not begun to trade on the primary 
listing market, a Contingent Open serves an important purpose of 
prescribing an end to the early trading session and beginning of the 
regular trading session on that non-primary listing exchange. A 
Contingent Open allows a non-primary listing exchange that provides an 
early trading session to transition to a regular trading session in a 
timely manner where a security has not opened for trading on the 
primary listing market.\21\
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    \18\ See Securities Exchange Act Release No. 89563 (August 14, 
2020), 85 FR 51510 (August 20, 2020) (SR-PEARL-2020-03) (adopting 
rules for MIAX Pearl Equities including Exchange Rule 2615(d)).
    \19\ See, e.g., Cboe EDGX Exchange Rules 11.1(a)(1) and 11.7(d), 
and Cboe EDGA Exchange, Inc. Rules 11.1(a)(1) and 11.7(d).
    \20\ The term ``Regular Trading Session'' means ``the time 
between the completion of the Opening Process or Contingent Open as 
defined in Exchange Rule 2615 and 4:00 p.m. Eastern Time.'' See 
Exchange Rule 1901.
    \21\ See, e.g., Securities Exchange Act Release Nos. 72676 (July 
25, 2014), 79 FR 44520 (July 31, 2014) (Notice); and 73468 (October 
29, 2014), 79 FR 65450 (November 4, 2014) SR-EDGX-2014-18 (Notice of 
Filing of Amendment Nos. 1 and 3 and Order Granting Accelerated 
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1 
and 3, To Amend EDGX Rule 1.5 and Chapter XI Regarding Current 
System Functionality Including the Operation of Order Types and 
Order Instructions) (SR-EDGX-2014-18).
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    The Exchange currently does not offer an early trading session and, 
therefore, the Contingent Open does not serve as a transition from an 
early trading session to a regular trading session. A Contingent Open 
simply allows the Exchange to trade a security when that security has 
not yet opened on the primary listing market. Once open on the primary 
listing market, the market for that security may be more robust and the 
security is likely trading at prices that more closely resemble its 
value due to that security having been subject to the primary listing 
market's opening auction process. Therefore, in the absence of an early 
trading session, the Exchange believes it is not necessary for it 
perform a Contingent Open at 9:45 a.m. Eastern Time. Instead, the 
Exchange believes it is appropriate for it to wait for a security to be 
trading on the primary listing market before it also begins to trade 
that security. The Exchange believes this could result in eligible 
orders being matched in the Opening Process at a midpoint of the NBBO 
that better reflects the security's trading characteristics and value.
    In the Exchange's experience, most securities are open by 9:45:00 
a.m. Eastern Time and the Exchange performs its Opening Process and is 
trading practically the entire market. However, at times, a security 
may not open by 9:45:00 a.m. This is common in less liquid securities. 
In these cases, the Exchange would not begin to trade a security if and 
until that security opens for trading on the primary listing 
market.\22\
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    \22\ Should the Exchange seek to adopt an early trading session 
in the future, it anticipates that it would also seek to readopt a 
Contingent Opening Process at that time to set a time at which a 
security would transition from the early to regular trading sessions 
where it has not begun trading on the primary listing market. The 
Exchange will submit a filing with the Commission pursuant to 
Section 19(b)(1) should it decide to adopt an early trading session 
in the future.
---------------------------------------------------------------------------

    As a result of the proposed changes, Exchange Rule 2615(d) would be 
amended to no longer provide for a Contingent Open. Instead, Exchange 
Rule 2615(d) would provide that ``[t]he Exchange will perform the 
Opening Process at any time during Regular Trading Hours when the 
conditions to establish the price of the Opening Process set forth 
under paragraph (c) [of Exchange Rule 2615] occur.''
    Lastly, the Exchange proposes to make a corresponding change to 
remove a reference to the Contingent Open in the definition of Regular 
Trading Session in Exchange Rule 1901. Currently, the term ``Regular 
Trading Session'' shall mean the time between the completion of the 
Opening Process or Contingent Open as defined in Exchange Rule 2615 and 
4:00 p.m. Eastern Time. The Exchange proposes to remove the reference 
to the Contingent Open so that the Regular Trading Session would now be 
from the time of the completion of the Opening Process as defined in 
Exchange Rule 2615 and 4:00 p.m. Eastern Time.
Implementation
    The Exchange will implement the proposed changes to Exchange Rule 
2615(d) on the effective date of this proposed rule change. The 
Exchange will issue a Regulatory Alert announcing the exact 
implementation date of this proposal.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\23\ in general, and furthers the objectives of Section 
6(b)(5),\24\ in particular, because it is designed to promote just and 
equitable principles of trade, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \25\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(5).
    \25\ Id.
---------------------------------------------------------------------------

    As discussed above, the Exchange initially adopted the Contingent 
Open to align its rule with similar functionality available at other 
equities exchanges.\26\ These other exchanges on which the Exchange 
based Rule 2615(d) currently offer early trading sessions,\27\ while 
the Exchange does not. On these exchanges, a Contingent Open serves as 
the end to the early trading session and beginning of the regular 
trading session. As discussed above, the Exchange believes it is not 
necessary for it perform a Contingent Open at 9:45 a.m. Eastern Time. 
The Exchange does not currently offer an early trading session and does 
not have a need for a Contingent Open to serve as a transition to its 
Regular Trading Session. Instead, the Exchange would prefer to wait to 
perform its Opening Process until the security begins to trade on the 
primary listing market before it also begins to trade that security. As 
noted above, the Exchange matches orders during its Opening Process at 
the midpoint of the NBBO. The Exchange believes that the midpoint of 
the NBBO present after the security is opened by the primary listing 
exchange may better reflect the true market for the security due to 
increased liquidity and improved market quality. Therefore, the 
Exchange believes the proposal promotes just and equitable principles 
of trade, and removes impediments to and perfects the mechanism of a 
free and open market and a national market system because a security 
might be trading at prices that are more in-line with its normal 
trading behavior.
---------------------------------------------------------------------------

    \26\ See supra note 18.
    \27\ See supra note 19.
---------------------------------------------------------------------------

    The proposed rule change would also not permit unfair 
discrimination between customers, issuers, brokers, or dealers because 
no User would be able to trade the security until the Exchange performs 
its Opening Process as described herein. The proposal is not designed 
to target any single type of market participant. It is simply intended 
to amend Exchange Rule 2615(d) to no longer provide for a Contingent 
Open. Should the Exchange begin to offer an

[[Page 88692]]

early trading session, the Contingent Open Process would serve as a 
transition period from the early to regular trading sessions, as it 
does today on other markets. The Exchange believes that, in the 
meantime, it may benefit all market participants for the Exchange to 
wait to trade a security until that security is opened by the primary 
listing exchange where that security's market may be more robust.
    The Exchange is not aware of any rule or regulation that requires 
an exchange to perform a Contingent Open or trade all securities for a 
full trading day. Should the Exchange seek to adopt an early trading 
session in the future, it anticipates that it would also seek to 
readopt a Contingent Open to set a time at which a security would 
transition from the early to regular trading sessions where it has not 
begun trading on the primary listing market.
    Lastly, the Exchange's proposal to make a corresponding change to 
remove a reference to the Contingent Open in the definition of Regular 
Trading Session in Exchange Rule 1901 remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
because it would ensure the Exchange's rules are clear and continue to 
not include an ambiguities and references that could cause potential 
investor confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
    Specifically, the Exchange does not believe the proposed rule 
change would impose an undue burden on intramarket competition on the 
Exchange because all Users would be impacted equally. No User would be 
able to trade an equity security on the Exchange until that security is 
opened by the primary listing market and the Exchange conducts its 
Opening Process. Other exchanges simply begin trading equity securities 
at 9:30:00 a.m. Eastern Time regardless of whether the security was 
opened by the primary listing exchange.\28\ Meanwhile, as noted above, 
other exchanges employ a contingent open at 9:45 a.m. Eastern Time.\29\ 
Market participants that wish to trade between 9:30 a.m. Eastern Time 
and the time the security is opened by the primary listing exchange may 
send their orders to these exchanges. Therefore, the proposed rule 
change should not impose any burden on intramarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \28\ See, e.g., NYSE National, Inc. Rule 7.34(a)(2) (defining 
Core Trading Session), and NYSE Chicago Rule 7.34(a)(2) (defining 
Core Trading Session).
    \29\ See supra note 27.
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    In addition, the Exchange does not believe the proposed rule change 
would impose an undue burden on intermarket competition between 
exchanges. The Exchange is not aware of any rule or regulation that 
requires an exchange to perform a Contingent Open or trade all 
securities for a full trading day. The Exchange simply proposes to wait 
until an equity security is open for trading by the primary listing 
market before it conducts its own Opening Process and begins to trade 
that security. As stated above, other exchanges begin to trade an 
equity security at 9:30 a.m. Eastern Time and those exchanges may enjoy 
some competitive advantage as a result of the proposed rule change. The 
Exchange understands that it may suffer the competitive disadvantage 
until the time it performs its Opening Process. However, the Exchange 
does not believe the amount of trading volume that may be directed away 
from the Exchange to these exchanges would cause an unfair burden on 
competition between it and its exchange competitors. This competitive 
dynamic exists today with regard to pre-market and post-market trading 
on exchanges. The Exchange does not currently compete for order flow 
pre or post market because it does not offer trading outside of Regular 
Trading Hours. Therefore, the proposed rule change does not introduce 
any new competitive issues between exchanges. Based on the above, the 
Exchange does not believe the proposed rule change would impose a 
burden on intermarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    Lastly, the Exchange's proposal to make a corresponding change to 
remove a reference to the Contingent Open in the definition of Regular 
Trading Session in Exchange Rule 1901 will have no competitive impact 
because it is simply a corresponding change to ensure the Exchange's 
rules are clear and continue to not include an ambiguities and 
references that could cause potential investor confusion.

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

    Pursuant to Section 19(b)(3)(A) of the Act \30\ and Rule 19b-
4(f)(6) \31\ thereunder, the Exchange has designated this proposal as 
one that effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\32\
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f)(6).
    \32\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change at least five business days prior to 
the date of filing of the proposed rule change, or such shorter time 
as designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \33\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \34\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requests 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The Exchange 
states that matching orders at the midpoint of the NBBO after a 
security is open on the primary market, as occurs during the Exchange's 
Opening Process, may better reflect the true market for the security 
than a midpoint execution during the Contingent Open, which may occur 
prior to the security being open on the primary listing market. The 
Exchange also states that waiver of the operative delay would not have 
a material impact on trading because: (i) the Exchange currently does 
not offer an early trading session and, therefore, the Contingent Open 
does not serve as a transition from an early trading session to a 
regular trading session; and (ii) the Exchange does not currently 
attract a material amount of order flow at the beginning of the trading 
day, and thus any impact by the Exchange not performing a Contingent 
Open would be minimal. Therefore, the Commission believes that waiver 
of the 30-day operative delay is consistent with the protection of 
investors and the public interest. Accordingly, the Commission hereby 
waives the 30-day operative delay and

[[Page 88693]]

designates the proposed rule change operative upon filing.\35\
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    \33\ 17 CFR 240.19b-4(f)(6).
    \34\ 17 CFR 240.19b-4(f)(6)(iii).
    \35\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 under 
Section 19(b)(2)(B) of the Act \36\ to determine whether the proposed 
rule should be approved or disapproved.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-PEARL-2023-71 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-2023-71. 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-2023-71 and should be 
submitted on or before January 12, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
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    \37\ 17 CFR 200.30-3(a)(12), 59.
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-28197 Filed 12-21-23; 8:45 am]
BILLING CODE 8011-01-P
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