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, 78359-78364 [2024-21872]
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Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices
test a new market data product. The
Exchange further believes that providing
a free trial for one calendar month
would ease administrative burdens for
data recipients to subscribe to a new
data product and eliminate fees for a
period before such users are able to
derive any benefit from the data.
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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would result
in any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive environment, and its ability
to price these data products is
constrained by competition among
exchanges that offer similar data
products to their customers. The
Exchange believes that the proposed
free trial program does not put any
market participants at a relative
disadvantage compared to other market
participants. As discussed, the proposed
trial would apply to first time
subscribers on an equal and nondiscriminatory basis. Further, the
Exchange believes that the proposed
program does not impose a burden on
competition on other SROs that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposal would cause any unnecessary
or inappropriate burden on intermarket
competition as other exchanges are free
to lower their prices or provide a free
trial to better compete with the
Exchange’s offering. Indeed, other
national securities exchanges already
offer similar free trial programs today.10
The proposed rule change is also
designed to enhance competition by
providing an incentive to Redistributors
to enlist new subscribers to subscribe to
Exchange’s real-time market data
products.
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
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A) 11 of the Act and paragraph
(f) thereunder. At any time within 60
10 See
note 5, supra.
11 15 U.S.C. 78s(b)(3)(A).
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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–
NYSEAMER–2024–58 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–NYSEAMER–2024–58. 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
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submissions should refer to file number
SR–NYSEAMER–2024–58 and should
be submitted on or before October 16,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–21877 Filed 9–24–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101100; File No. SR–
PEARL–2024–41]
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
September 19, 2024.
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 September 9, 2024, 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.
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-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
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / 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
ddrumheller on DSK120RN23PROD with NOTICES1
1. Purpose
The Exchange proposes to: (1) amend
Sections 1)a)–b) of the Fee Schedule to
decrease the fee for executions of orders
that remove liquidity from the Exchange
in securities priced at or above $1.00 per
share from $0.00295 to $0.00285 per
share for all Tapes; and (2) amend
Section 1)c) of the Fee Schedule to
modify one aspect of the criteria that is
required for Equity Members 3 to receive
the Step-Up Rebate (described below)
and extend the sunset period (described
below). The Exchange initially filed this
proposal on August 30, 2024 (SR–
PEARL–2024–40). On September 9,
2024, the Exchange withdrew SR–
PEARL–2024–40 and refiled this
proposal.
Proposal To Decrease the Fee To
Remove Liquidity in Securities Priced at
or Above $1.00 per Share
The Exchange proposes to amend
Sections 1)a)–b) of the Fee Schedule to
decrease the fee for executions of orders
that remove liquidity from the Exchange
in securities priced at or above $1.00 per
share from $0.00295 to $0.00285 per
share for all Tapes.
The Exchange currently charges a
standard fee of $0.00295 per share for
executions of orders in securities priced
at or above $1.00 per share that remove
liquidity from the Exchange for all
Tapes.4
The Exchange now proposes to amend
the Standard Rates in Section 1)a) of the
Fee Schedule to decrease the fee to
remove liquidity from the Exchange in
securities priced at or above $1.00 per
share from $0.00295 to $0.00285 per
share for all Tapes.
Further, the Exchange proposes to
amend the Liquidity Indicator Codes
and Associated Fees table in Section
1)b) of the Fee Schedule to reflect the
aforementioned change. The Exchange
proposes to amend the fee associated
with Liquidity Indicator Codes ‘‘RA,’’
‘‘Ra,’’ ‘‘RB,’’ ‘‘Rb,’’ ‘‘RC,’’ ‘‘Rc,’’ ‘‘RR,’’
‘‘Rr,’’ ‘‘RT,’’ ‘‘Rt,’’ and ‘‘Rp’’, from
3 The term ‘‘Equity Member’’ is a Member
authorized by the Exchange to transact business on
MIAX Pearl Equities. See Exchange Rule 1901.
4 See Fee Schedule, Section 1)a).
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$0.00295 to now be $0.00285 per share,
to reflect the proposed change to the fee
for executions of orders in securities
priced at or above $1.00 per share that
remove liquidity from the Exchange in
all Tapes. The Exchange does not
propose to amend the fees for
executions of orders in securities priced
below $1.00 per share that remove
liquidity from the Exchange in all
Tapes, which is currently set at 0.25%
of the total dollar value of the
transaction.5
The purpose of these proposed
changes is for business and competitive
reasons. The Exchange believes it is
appropriate to decrease the fee to
remove liquidity from the Exchange in
securities priced at or above $1.00 per
share from $0.00295 to $0.00285 per
share for all Tapes to further encourage
market participants to enter liquidity
removing orders on the Exchange,
thereby increasing the execution
opportunities for the liquidity adding
orders resting on the MIAX Pearl
Equities Book.6 The Exchange notes that
the Exchange’s proposed standard fee of
$0.00285 per share for executions of all
orders in securities priced at or above
$1.00 per share that remove liquidity
from the Exchange remains competitive
with the standard fee to remove
liquidity in securities priced at or above
$1.00 per share charged by other equity
exchanges.7
Proposal To Amend the NBBO Setter
Plus Table To Modify the Baseline
Month and Sunset Period for the StepUp Rebate
The Exchange proposes to amend the
Step-Up Rebate in footnote #4 of the
NBBO Setter Plus Table in Section 1)c)
of the Fee Schedule to amend the
baseline month and sunset period for
Step-Up Rebate.8
By way of background, the NBBO
Setter Plus Program (referred to in this
filing as the ‘‘NBBO Program’’) was
implemented beginning September 1,
2023 and subsequently amended several
times.9 In general, the NBBO Program
5 See
Fee Schedule, Sections 1)a)–b).
term ‘‘MIAX Pearl Equities Book’’ shall
mean the electronic book of orders in equity
securities maintained by the System. See Exchange
Rule 1901.
7 See e.g., MEMX LLC (‘‘MEMX’’) Equities Fee
Schedule, Transaction Fees, Fee Code ‘‘R’’
(providing standard remove volume fee of $0.0030
per share for executions of orders in securities
priced at or above $1.00 per share); and Cboe EDGX
Exchange, Inc. (‘‘EDGX’’), Equities Fee Schedule,
Standard Rates (providing standard remove volume
fee of $0.0030 per share for executions of orders in
securities priced at or above $1.00 per share).
8 See Fee Schedule, Section 1)c), note #4.
9 See, e.g., Securities Exchange Act Release Nos.
98472 (September 21, 2023), 88 FR 66533
(September 27, 2023) (SR–PEARL–2023–45); 99318
6 The
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provides enhanced rebates for Equity
Members that add displayed liquidity
(‘‘Added Displayed Volume’’) in
securities priced at or above $1.00 per
share in all Tapes based on increasing
volume thresholds and increasing
market quality levels. The NBBO
Program provides the following
additional incentives: (1) an NBBO
Setter Additive Rebate 10 applied to
executions of orders in securities priced
at or above $1.00 per share that set the
NBB or NBO upon entry; (2) an NBBO
First Joiner Additive Rebate 11 applied
to executions of orders in securities
priced at or above $1.00 per share that
bring MIAX Pearl Equities to the
established NBB or NBO; and (3) a StepUp Rebate for Equity Members that
satisfy the following requirements: (i)
minimum displayed ADAV 12 as a
percentage of TCV 13 of 0.35% and (ii)
an increase in the percentage of
displayed ADAV as a percentage of TCV
of at least 0.05% as compared to the
Equity Member’s February 2024
displayed ADAV percentage.
Alternatively, an Equity Member may
qualify for the Step-Up Rebate by
satisfying the following requirements:
(1) minimum displayed ADAV as a
percentage of TCV of 0.35% (excluding
sub-dollar volume); and (2) increase in
the percentage of displayed ADAV as
percentage of TCV of at least 0.05% as
compared to the Equity Member’s
February 2024 displayed ADAV
percentage (excluding sub-dollar
volume). Currently, the Step-Up Rebate
(January 11, 2024), 89 FR 3488 (January 18, 2024)
(SR–PEARL–2023–73); and 99695 (March 8, 2024),
89 FR 18694 (March 14, 2024) (SR–PEARL–2024–
11).
10 The Exchange does not propose to amend the
NBBO Setter Additive Rebate, which is an additive
rebate of ($0.0004) per share for executions of
orders in securities priced at or above $1.00 per
share that set the NBB or NBO on MIAX Pearl
Equities with a minimum size of a round lot. See
Fee Schedule, Section 1)c). The Exchange notes that
rebates are indicated by parentheses in the Fee
Schedule. See the General Notes section of the Fee
Schedule.
11 The Exchange does not propose to amend the
NBBO First Joiner Additive Rebate, which is an
additive rebate of ($0.0002) per share for executions
of orders in securities priced at or above $1.00 per
share that bring MIAX Pearl Equities to the
established NBB or NBO with a minimum size of
a round lot. See Fee Schedule, Section 1)c).
12 ‘‘ADAV’’ means average daily added volume
calculated as the number of shares added per day
and ‘‘ADV’’ means average daily volume calculated
as the number of shares added or removed,
combined, per day. ADAV and ADV are calculated
on a monthly basis. ‘‘NBBO Set Volume’’ means the
ADAV in all securities of an Equity Member that
sets the NBB or NBO on MIAX Pearl Equities. See
the Definitions section of the Fee Schedule.
13 ‘‘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. See id.
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ddrumheller on DSK120RN23PROD with NOTICES1
is set to expire no later than August 31,
2024 (referred to herein as the ‘‘sunset
period’’).
The Exchange now proposes to amend
Section 1)c) of the Fee Schedule to
modify one aspect of the criteria for
Equity Members to receive the Step-Up
Rebate and the sunset period. In
particular, the Exchange proposes to
amend the baseline month from
February 2024 to now be July 2024.
With the proposed change, Equity
Members will qualify for the Step-Up
Rebate by satisfying the following
requirements: (i) minimum displayed
ADAV as a percentage of TCV of 0.35%
and (ii) an increase in the percentage of
displayed ADAV as a percentage of TCV
of at least 0.05% over the baseline
month of July 2024.14 Alternatively,
Equity Members will qualify for the
Step-Up Rebate by satisfying the
following requirements: (1) minimum
displayed ADAV as a percentage of TCV
of 0.35% (excluding sub-dollar volume);
and (2) increase in the percentage of
displayed ADAV as percentage of TCV
of at least 0.05% over the baseline
month of July 2024 (excluding subdollar volume).
Additionally, the Exchange proposes
to amend the sunset period by
extending the Step-Up Rebate until
January 31, 2025 (the last trading day for
the month of January 2025).15 The
Exchange will issue a proposed filing
and alert to market participants should
the Exchange determine that the StepUp Rebate will expire earlier than
January 31, 2025 or if the Exchange
determines to amend the criteria or rate
applicable to the Step-Up Rebate prior
to the end of the sunset period. The
Exchange notes that at least one other
competing equities exchange recently
filed a proposal to use a more recent
month (June 2024) as the baseline
month comparison for one of its
enhanced rebates and included a similar
‘‘sunset period’’.16 Accordingly, this
proposal is not new or novel.
The Exchange does not propose any
other changes to the qualifying criteria
for Equity Members to receive the Step14 The Exchange will use a baseline ADAV of
0.00% of TCV for firms that become Equity
Members of the Exchange after July 2024 for the
purpose of the Step-Up Rebate calculation.
15 The Exchange notes that at the end of the
sunset period, the Step-Up Rebate will no longer
apply unless the Exchange files another 19b–4
Filing with the Commission to amend the criteria
terms or update the baseline month to a more recent
month.
16 See Securities Exchange Act Release No.
100469 (July 9, 2024), 89 FR 57463 (June 15, 2024)
(SR–MEMX–2024–26); see also MEMX Equities Fee
Schedule, Liquidity Provision Tiers, Tier 1,
available at https://info.memxtrading.com/equitiestrading-resources/us-equities-fee-schedule/ (last
visited August 25, 2024).
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Up Rebate. The Exchange also does not
propose to amend the amount of the
Step-Up rebate of ($0.001) per share.17
The purpose of this proposed change
is to update the baseline month for the
Step-Up Rebate calculation to a more
recent month as volume on the
Exchange has changed since the
Exchange last amended the Step-Up
Rebate. The Exchange believes that with
the updated baseline month, the StepUp Rebate will continue to provide an
incentive for Equity Members to strive
for higher ADAV on the Exchange 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
this will, in turn, promote price
discovery and contribute to a deeper
and more liquid market, which benefits
all market participants and enhances the
attractiveness of the Exchange as a
trading venue.
The purpose of modifying the sunset
period in the Fee Schedule is to extend
the sunset period for the Step-Up Rebate
until January 31, 2025. This will allow
Equity Members to take into account
that the enhanced rebate provided by
the Step-Up Rebate will be discontinued
at the end of the new sunset period
unless the Exchange announces
otherwise and files a new proposal with
the Commission.
Implementation
The proposed fee changes are
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 18
in general, and furthers the objectives of
Section 6(b)(4) of the Act 19 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among its Equity Members and
issuers and other persons using its
facilities. The Exchange also believes
that the proposal is consistent with the
objectives of Section 6(b)(5) 20
requirements that the rules of an
exchange be designed to prevent
fraudulent and manipulative acts and
practices, and to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
17 See
Fee Schedule, Section 1)c), note #4.
U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(4).
20 15 U.S.C 78f(b)(5).
18 15
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78361
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest, and,
particularly, is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange operates in a highly
fragmented and competitive market in
which market participants can readily
direct their order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
incentives to be insufficient. More
specifically, the Exchange is only one of
sixteen registered equities exchanges,
and there are a number of alternative
trading systems and other off-exchange
venues, to which market participants
may direct their order flow. For the
month of July 2024, based on publicly
available information, no single
registered equities exchange had more
than approximately 15–16% of the total
market share of executed volume of
equities trading.21 Thus, in such a lowconcentrated and highly competitive
market, no single equities exchange
possesses significant pricing power in
the execution of order flow. For the
month of July 2024, the Exchange
represented 1.61% of the total market
share of executed volume of equities
trading.22 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.’’ 23
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
constrain the Exchange’s transaction
fees and rebates, and market
participants can readily trade on
competing venues if they deem pricing
21 See the ‘‘Market Share’’ section of the
Exchange’s website, available at https://
www.miaxglobal.com/ (last visited August 26,
2024).
22 Id.
23 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37499 (June 29, 2005).
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Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices
levels at those other venues to be more
favorable. The Exchange believes the
proposal reflects a reasonable and
competitive pricing structure designed
to continue to incentivize market
participants to direct their order flow to
the Exchange, which the Exchange
believes would continue to enhance
liquidity and market quality to the
benefit of all Equity Members and
market participants.
ddrumheller on DSK120RN23PROD with NOTICES1
Proposal To Decrease the Fee To
Remove Liquidity in Securities Priced at
or Above $1.00 per Share
The Exchange believes the proposed
change to decrease the fee to remove
liquidity in securities priced at or above
$1.00 per share from $0.00295 to
$0.00285 per share for all tapes is
reasonable because the proposed fee
remains lower than, and competitive
with, the standard fee charged by
competing exchanges to remove
liquidity in securities priced at or above
$1.00 per share.24 The Exchange further
believes that the proposed change is
equitably allocated and not unfairly
discriminatory because the proposed fee
of $0.00285 per share for executions of
all orders in securities priced at or
above $1.00 per share that remove
liquidity from the Exchange will apply
equally to all Equity Members that
remove liquidity.
Proposal To Amend the NBBO Setter
Plus Table To Amend the Baseline
Month and Sunset Period for the StepUp Rebate
The Exchange believes its proposal to
update the baseline month for the StepUp Rebate is reasonable, equitably
allocated and not unfairly
discriminatory because volume on the
Exchange has changed since the
Exchange last amended the Step-Up
Rebate and the Exchange now proposes
to update the baseline month to a more
recent month. The Exchange believes
that with the updated baseline month,
the Step-Up Rebate will continue to
provide an incentive for Equity
Members to strive for higher ADAV on
the Exchange 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 the proposal is reasonable
because even with the updated baseline
month, the Step-Up Rebate will
continue to encourage the submission of
added displayed 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 believes that the StepUp Rebate, as modified by the proposed
change to the baseline month, is
reasonable, equitable and not unfairly
discriminatory as the Step-Up 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
recently filed a proposal to use a more
recent month (June 2024) as the baseline
month for MEMX’s members to receive
one of its enhanced rebates.25
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to extend the sunset
period for the Step-Up Rebate until
January 31, 2025. Unless the Exchange
determines to amend or otherwise
modify the Step-Up Rebate, the Step-Up
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 Rebate will be discontinued at
the end of sunset period unless the
Exchange announces otherwise and files
a new proposal with the Commission.
The Exchange further notes that it will
issue a proposed filing and alert to
market participants should the
Exchange determine that the Step-Up
Rebate will expire earlier than January
31, 2025 or if the Exchange determines
to amend the criteria or rate applicable
to the Step-Up 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 subject
to a baseline month comparison with a
more recent month.26
For the reasons discussed above, the
Exchange submits that the proposal
satisfies the requirements of Sections
6(b)(4) and 6(b)(5) of the Act in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among its Equity Members and other
persons using its facilities and is not
designed to unfairly discriminate
between customers, issuers, brokers, or
dealers.
25 See
24 See
supra note 7.
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26 See
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supra note 16.
id.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed changes will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
Intramarket Competition
The Exchange believes that the
proposed change to decrease the fee
from $0.00295 to $0.00285 per share for
executions of orders in securities priced
at or above $1.00 per share for all Tapes
will not impose any burden on
intramarket competition because it
represents a decrease from the current
fee for such executions. The Exchange
believes the proposed reduced fee will
further encourage market participants to
enter liquidity removing orders on the
Exchange, thereby increasing the
execution opportunities for the liquidity
adding orders resting on the MIAX Pearl
Equities Book, thereby promoting
competition on the Exchange. The
proposed reduced fee for executions of
orders in securities priced at or above
$1.00 per share that remove liquidity
from the Exchange will apply equally to
all Equity Members. Further, the
Exchange notes that the Exchange’s
proposed reduced fee of $0.00285 per
share for executions of all orders in
securities priced at or above $1.00 per
share that remove liquidity from the
Exchange remains lower than, and
competitive with, the standard fee to
remove liquidity in securities priced at
or above $1.00 per share charged by
competing equity exchanges.27
The Exchange does not believe that
the proposal to update the baseline
month for Step-Up Rebate 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
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.
The Exchange believes its proposal to
modify the sunset period in the Fee
Schedule for the Step-Up Rebate will
not impose any burden on intramarket
27 See
Sfmt 4703
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supra note 7.
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Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
competition not necessary or
appropriate in furtherance of the
purposes of the Act. With the proposed
extension of the sunset period, all
Equity Members may continue to
qualify for the enhanced rebate
provided by the Step-Up Rebate until
January 31, 2025. Unless the Exchange
determines to amend or otherwise
modify the Step-Up Rebate, the Step-Up
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 Rebate will be discontinued
at the end of sunset period unless the
Exchange announces otherwise. The
Exchange further notes that it will issue
a proposed filing and alert to market
participants should the Exchange
determine that the Step-Up Rebate will
expire earlier than January 31, 2025 or
if the Exchange determines to amend
the criteria or rate applicable to the
Step-Up 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 subject
to a baseline month comparison with a
more recent month.28
For the foregoing reasons, the
Exchange believes the proposed changes
would not impose any burden on
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
Intermarket Competition
The Exchange believes its proposal
will benefit competition as the
Exchange operates in a highly
competitive market. 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, no
single registered equities exchange
currently has more than approximately
15–16% of the total market share of
executed volume of equities trading.
Thus, in such a low-concentrated and
highly competitive market, no single
equities exchange possesses significant
pricing power in the execution of order
flow. Moreover, the Exchange believes
that the ever-shifting market share
among the exchanges from month to
month demonstrates that market
participants can shift order flow in
response to new or different pricing
structures being introduced to the
market. Accordingly, competitive forces
constrain the Exchange’s transaction
fees and rebates generally, including
28 See
supra note 16.
VerDate Sep<11>2014
17:28 Sep 24, 2024
Jkt 262001
with respect to executions of all orders
in securities priced at or above $1.00 per
share that remove liquidity from the
Exchange, and market participants can
readily choose to send their orders to
other exchanges and off-exchange
venues if they deem fee levels at those
other venues to be more favorable. As
described above, the proposed changes
are competitive proposals and the
proposed reduce fee of $0.00285 per
share for removing liquidity in
securities priced at or above $1.00 per
share remains lower than, or similar to,
the standard fee to remove liquidity in
securities priced at or above $1.00 per
share charged by competing equities
exchanges.29 Further, the proposed
reduce fee to remove liquidity from
securities priced at or above $1.00 per
share will apply to all Equity Members
equally.
As described above, the proposed
changes to modify the baseline month
and extend the sunset period for the
Step-Up Rebate 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 which also
updated its baseline month to a more
recent month for a specific enhanced
rebate that adds liquidity to that
market.30 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.’’ 31 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
29 See
supra note 7.
supra note 16.
31 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
30 See
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
78363
competition for order flow is ‘fierce.’
. . . As the SEC explained, ‘[i]n the U.S.
national market system, buyers and
sellers of securities, and the brokerdealers that act as their routing agents,
have a wide range of choices of where
to route orders for execution’; [and] ‘no
exchange can afford to take its market
share percentages for granted’ because
‘no exchange possess a monopoly,
regulatory or otherwise, in the execution
of order flow from broker dealers’
. . . .’’ 32 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
Pursuant to Section 19(b)(3)(A)(ii) of
the Act,33 and Rule 19b–4(f)(2)
thereunder 34 the Exchange has
designated this proposal as establishing
or changing a due, fee, or other charge
imposed on any person, whether or not
the person is a member of the selfregulatory organization, which renders
the proposed rule change effective upon
filing.
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 rule-comments@
sec.gov. Please include File Number SR–
PEARL–2024–41 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Vanessa Countryman, Secretary,
Securities and Exchange Commission,
100 F Street NE, Washington, DC
20549–1090.
32 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)).
33 15 U.S.C. 78s(b)(3)(A)(ii).
34 17 CFR 240.19b–4.
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Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices
All submissions should refer to file
number SR–PEARL–2024–41. 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–2024–41 and should be
submitted on or before October 16,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–21872 Filed 9–24–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
ddrumheller on DSK120RN23PROD with NOTICES1
[Release No. 34–101109; File No. SR–NYSE–
2024–55]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
NYSE Proprietary Market Data Fee
Schedule To Establish an Access Fee
for the NYSE Pillar Depth Data Feed
September 19, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
35 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate Sep<11>2014
17:28 Sep 24, 2024
Jkt 262001
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
September 6, 2024, New York Stock
Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE Proprietary Market Data Fee
Schedule to establish an Access Fee for
the NYSE Pillar Depth data feed. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, 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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
NYSE Proprietary Market Data Fee
Schedule (‘‘Fee Schedule’’).
Specifically, the Exchange proposes to
establish an Access Fee for the NYSE
Pillar Depth (‘‘Pillar Depth’’) data feed,
effective September 6, 2024.4
The proposed fee for Pillar Depth
would be $250 per month, provided that
the market data recipient separately
pays the applicable fees for the five
2 15
U.S.C. 78a.
CFR 240.19b–4.
4 The Exchange originally filed to amend the Fee
Schedule on May 13, 2024 (SR–NYSE–2024–30).
On July 11, 2024, the Exchange withdrew SR–
NYSE–2024 30 and replaced it with SR–NYSE–
2024–39. On September 6, 2024, the Exchange
withdrew SR–NYSE–2024–39 and replaced it with
this filing.
3 17
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
existing market data products
underlying the Pillar Depth data feed,
consistent with the existing fee
structures for those market data
products.
The Pillar Depth data feed is a
frequency-based depth of book market
data feed that provides a consolidated
view of the ten (10) best price levels on
both the bid and offer sides across the
NYSE Group’s combined limit order
books for securities traded on the NYSE
Group equities markets, i.e., NYSE,
NYSE American LLC (‘‘NYSE
American’’), NYSE Arca, Inc. (‘‘NYSE
Arca’’), NYSE Chicago, Inc. (‘‘NYSE
Chicago’’) and NYSE National, Inc.
(‘‘NYSE National’’), for which the NYSE
Group equities markets report quotes
and trades under the Consolidated Tape
Association (‘‘CTA’’) Plan or the
Nasdaq/UTP Plan.5 In other words,
Pillar Depth would be a compilation of
limit order data that the Exchange
provides to vendors and subscribers,
updated no less frequently than once
per second. Specifically, the Pillar
Depth data feed consists of certain data
elements from five market data feeds 6—
NYSE Aggregated Lite,7 NYSE American
Aggregated Lite,8 NYSE Arca
Aggregated Lite,9 NYSE Chicago
Aggregated Lite 10 and NYSE National
Aggregated Lite.11
5 See Securities Exchange Act Release No. 100030
(April 25, 2024), 89 FR 35260 (May 1, 2024) (Notice
of Filing and Immediate Effectiveness of Proposed
Rule Change To Establish the NYSE Pillar Depth
Data Feed) (SR–NYSE–2024–24) (‘‘Pillar Depth
Product Filing’’).
6 Each of these data feeds are offered pursuant to
preexisting and effective rules and fees filed with
the Commission. This filing does not affect those
rules, or the fees associated with these underlying
data feeds or the ability for the Exchange, NYSE
American, NYSE Arca, NYSE Chicago or NYSE
National to amend the data feeds or fees associated
with those data feeds pursuant to a separate rule
filing.
7 See Securities Exchange Act Release No. 99689
(March 7, 2024) 89 FR 18466 (March 13, 2024)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Establish the NYSE
Aggregated Lite Market Data Feed) (SR–NYSE–
2024–12).
8 See Securities Exchange Act Release No. 99690
(March 7, 2024) 89 FR 18445 (March 13, 2024)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Establish the NYSE
American Aggregated Lite Market Data Feed) (SR–
NYSEAMER–2024–14).
9 See Securities Exchange Act Release No. 99713
(March 12, 2024) 89 FR 19381 (March 18, 2024)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Establish the NYSE Arca
Aggregated Lite Market Data Feed) (SR–
NYSEARCA–2024–22).
10 See Securities Exchange Act Release No. 99691
(March 7, 2024) 89 FR 18468 (March 13, 2024)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Establish the NYSE
Chicago Aggregated Lite Market Data Feed) (SR–
NYSECHX–2024–08).
11 See Securities Exchange Act Release No. 99715
(March 12, 2024) 89 FR 19383 (March 18, 2024)
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]]>Agencies
[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78359-78364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21872]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101100; File No. SR-PEARL-2024-41]
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
September 19, 2024.
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 September 9, 2024, 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 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the 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-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 78360]]
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: (1) amend Sections 1)a)-b) of the Fee
Schedule to decrease the fee for executions of orders that remove
liquidity from the Exchange in securities priced at or above $1.00 per
share from $0.00295 to $0.00285 per share for all Tapes; and (2) amend
Section 1)c) of the Fee Schedule to modify one aspect of the criteria
that is required for Equity Members \3\ to receive the Step-Up Rebate
(described below) and extend the sunset period (described below). The
Exchange initially filed this proposal on August 30, 2024 (SR-PEARL-
2024-40). On September 9, 2024, the Exchange withdrew SR-PEARL-2024-40
and refiled this proposal.
---------------------------------------------------------------------------
\3\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
---------------------------------------------------------------------------
Proposal To Decrease the Fee To Remove Liquidity in Securities Priced
at or Above $1.00 per Share
The Exchange proposes to amend Sections 1)a)-b) of the Fee Schedule
to decrease the fee for executions of orders that remove liquidity from
the Exchange in securities priced at or above $1.00 per share from
$0.00295 to $0.00285 per share for all Tapes.
The Exchange currently charges a standard fee of $0.00295 per share
for executions of orders in securities priced at or above $1.00 per
share that remove liquidity from the Exchange for all Tapes.\4\
---------------------------------------------------------------------------
\4\ See Fee Schedule, Section 1)a).
---------------------------------------------------------------------------
The Exchange now proposes to amend the Standard Rates in Section
1)a) of the Fee Schedule to decrease the fee to remove liquidity from
the Exchange in securities priced at or above $1.00 per share from
$0.00295 to $0.00285 per share for all Tapes.
Further, the Exchange proposes to amend the Liquidity Indicator
Codes and Associated Fees table in Section 1)b) of the Fee Schedule to
reflect the aforementioned change. The Exchange proposes to amend the
fee associated with Liquidity Indicator Codes ``RA,'' ``Ra,'' ``RB,''
``Rb,'' ``RC,'' ``Rc,'' ``RR,'' ``Rr,'' ``RT,'' ``Rt,'' and ``Rp'',
from $0.00295 to now be $0.00285 per share, to reflect the proposed
change to the fee for executions of orders in securities priced at or
above $1.00 per share that remove liquidity from the Exchange in all
Tapes. The Exchange does not propose to amend the fees for executions
of orders in securities priced below $1.00 per share that remove
liquidity from the Exchange in all Tapes, which is currently set at
0.25% of the total dollar value of the transaction.\5\
---------------------------------------------------------------------------
\5\ See Fee Schedule, Sections 1)a)-b).
---------------------------------------------------------------------------
The purpose of these proposed changes is for business and
competitive reasons. The Exchange believes it is appropriate to
decrease the fee to remove liquidity from the Exchange in securities
priced at or above $1.00 per share from $0.00295 to $0.00285 per share
for all Tapes to further encourage market participants to enter
liquidity removing orders on the Exchange, thereby increasing the
execution opportunities for the liquidity adding orders resting on the
MIAX Pearl Equities Book.\6\ The Exchange notes that the Exchange's
proposed standard fee of $0.00285 per share for executions of all
orders in securities priced at or above $1.00 per share that remove
liquidity from the Exchange remains competitive with the standard fee
to remove liquidity in securities priced at or above $1.00 per share
charged by other equity exchanges.\7\
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\6\ The term ``MIAX Pearl Equities Book'' shall mean the
electronic book of orders in equity securities maintained by the
System. See Exchange Rule 1901.
\7\ See e.g., MEMX LLC (``MEMX'') Equities Fee Schedule,
Transaction Fees, Fee Code ``R'' (providing standard remove volume
fee of $0.0030 per share for executions of orders in securities
priced at or above $1.00 per share); and Cboe EDGX Exchange, Inc.
(``EDGX''), Equities Fee Schedule, Standard Rates (providing
standard remove volume fee of $0.0030 per share for executions of
orders in securities priced at or above $1.00 per share).
---------------------------------------------------------------------------
Proposal To Amend the NBBO Setter Plus Table To Modify the Baseline
Month and Sunset Period for the Step-Up Rebate
The Exchange proposes to amend the Step-Up Rebate in footnote #4 of
the NBBO Setter Plus Table in Section 1)c) of the Fee Schedule to amend
the baseline month and sunset period for Step-Up Rebate.\8\
---------------------------------------------------------------------------
\8\ See Fee Schedule, Section 1)c), note #4.
---------------------------------------------------------------------------
By way of background, the NBBO Setter Plus Program (referred to in
this filing as the ``NBBO Program'') was implemented beginning
September 1, 2023 and subsequently amended several times.\9\ In
general, the NBBO Program provides enhanced rebates for Equity Members
that add displayed liquidity (``Added Displayed Volume'') in securities
priced at or above $1.00 per share in all Tapes based on increasing
volume thresholds and increasing market quality levels. The NBBO
Program provides the following additional incentives: (1) an NBBO
Setter Additive Rebate \10\ applied to executions of orders in
securities priced at or above $1.00 per share that set the NBB or NBO
upon entry; (2) an NBBO First Joiner Additive Rebate \11\ applied to
executions of orders in securities priced at or above $1.00 per share
that bring MIAX Pearl Equities to the established NBB or NBO; and (3) a
Step-Up Rebate for Equity Members that satisfy the following
requirements: (i) minimum displayed ADAV \12\ as a percentage of TCV
\13\ of 0.35% and (ii) an increase in the percentage of displayed ADAV
as a percentage of TCV of at least 0.05% as compared to the Equity
Member's February 2024 displayed ADAV percentage. Alternatively, an
Equity Member may qualify for the Step-Up Rebate by satisfying the
following requirements: (1) minimum displayed ADAV as a percentage of
TCV of 0.35% (excluding sub-dollar volume); and (2) increase in the
percentage of displayed ADAV as percentage of TCV of at least 0.05% as
compared to the Equity Member's February 2024 displayed ADAV percentage
(excluding sub-dollar volume). Currently, the Step-Up Rebate
[[Page 78361]]
is set to expire no later than August 31, 2024 (referred to herein as
the ``sunset period'').
---------------------------------------------------------------------------
\9\ See, e.g., Securities Exchange Act Release Nos. 98472
(September 21, 2023), 88 FR 66533 (September 27, 2023) (SR-PEARL-
2023-45); 99318 (January 11, 2024), 89 FR 3488 (January 18, 2024)
(SR-PEARL-2023-73); and 99695 (March 8, 2024), 89 FR 18694 (March
14, 2024) (SR-PEARL-2024-11).
\10\ The Exchange does not propose to amend the NBBO Setter
Additive Rebate, which is an additive rebate of ($0.0004) per share
for executions of orders in securities priced at or above $1.00 per
share that set the NBB or NBO on MIAX Pearl Equities with a minimum
size of a round lot. See Fee Schedule, Section 1)c). The Exchange
notes that rebates are indicated by parentheses in the Fee Schedule.
See the General Notes section of the Fee Schedule.
\11\ The Exchange does not propose to amend the NBBO First
Joiner Additive Rebate, which is an additive rebate of ($0.0002) per
share for executions of orders in securities priced at or above
$1.00 per share that bring MIAX Pearl Equities to the established
NBB or NBO with a minimum size of a round lot. See Fee Schedule,
Section 1)c).
\12\ ``ADAV'' means average daily added volume calculated as the
number of shares added per day and ``ADV'' means average daily
volume calculated as the number of shares added or removed,
combined, per day. ADAV and ADV are calculated on a monthly basis.
``NBBO Set Volume'' means the ADAV in all securities of an Equity
Member that sets the NBB or NBO on MIAX Pearl Equities. See the
Definitions section of the Fee Schedule.
\13\ ``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. See id.
---------------------------------------------------------------------------
The Exchange now proposes to amend Section 1)c) of the Fee Schedule
to modify one aspect of the criteria for Equity Members to receive the
Step-Up Rebate and the sunset period. In particular, the Exchange
proposes to amend the baseline month from February 2024 to now be July
2024. With the proposed change, Equity Members will qualify for the
Step-Up Rebate by satisfying the following requirements: (i) minimum
displayed ADAV as a percentage of TCV of 0.35% and (ii) an increase in
the percentage of displayed ADAV as a percentage of TCV of at least
0.05% over the baseline month of July 2024.\14\ Alternatively, Equity
Members will qualify for the Step-Up Rebate by satisfying the following
requirements: (1) minimum displayed ADAV as a percentage of TCV of
0.35% (excluding sub-dollar volume); and (2) increase in the percentage
of displayed ADAV as percentage of TCV of at least 0.05% over the
baseline month of July 2024 (excluding sub-dollar volume).
---------------------------------------------------------------------------
\14\ The Exchange will use a baseline ADAV of 0.00% of TCV for
firms that become Equity Members of the Exchange after July 2024 for
the purpose of the Step-Up Rebate calculation.
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Additionally, the Exchange proposes to amend the sunset period by
extending the Step-Up Rebate until January 31, 2025 (the last trading
day for the month of January 2025).\15\ The Exchange will issue a
proposed filing and alert to market participants should the Exchange
determine that the Step-Up Rebate will expire earlier than January 31,
2025 or if the Exchange determines to amend the criteria or rate
applicable to the Step-Up Rebate prior to the end of the sunset period.
The Exchange notes that at least one other competing equities exchange
recently filed a proposal to use a more recent month (June 2024) as the
baseline month comparison for one of its enhanced rebates and included
a similar ``sunset period''.\16\ Accordingly, this proposal is not new
or novel.
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\15\ The Exchange notes that at the end of the sunset period,
the Step-Up Rebate will no longer apply unless the Exchange files
another 19b-4 Filing with the Commission to amend the criteria terms
or update the baseline month to a more recent month.
\16\ See Securities Exchange Act Release No. 100469 (July 9,
2024), 89 FR 57463 (June 15, 2024) (SR-MEMX-2024-26); see also MEMX
Equities Fee Schedule, Liquidity Provision Tiers, Tier 1, available
at https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/ (last visited August 25, 2024).
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The Exchange does not propose any other changes to the qualifying
criteria for Equity Members to receive the Step-Up Rebate. The Exchange
also does not propose to amend the amount of the Step-Up rebate of
($0.001) per share.\17\
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\17\ See Fee Schedule, Section 1)c), note #4.
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The purpose of this proposed change is to update the baseline month
for the Step-Up Rebate calculation to a more recent month as volume on
the Exchange has changed since the Exchange last amended the Step-Up
Rebate. The Exchange believes that with the updated baseline month, the
Step-Up Rebate will continue to provide an incentive for Equity Members
to strive for higher ADAV on the Exchange 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 this will, in turn, promote price discovery and
contribute to a deeper and more liquid market, which benefits all
market participants and enhances the attractiveness of the Exchange as
a trading venue.
The purpose of modifying the sunset period in the Fee Schedule is
to extend the sunset period for the Step-Up Rebate until January 31,
2025. This will allow Equity Members to take into account that the
enhanced rebate provided by the Step-Up Rebate will be discontinued at
the end of the new sunset period unless the Exchange announces
otherwise and files a new proposal with the Commission.
Implementation
The proposed fee changes are 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 \18\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \19\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among its Equity Members and issuers and other
persons using its facilities. The Exchange also believes that the
proposal is consistent with the objectives of Section 6(b)(5) \20\
requirements that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, and to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(4).
\20\ 15 U.S.C 78f(b)(5).
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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. For the month of July 2024, based on publicly available
information, no single registered equities exchange had more than
approximately 15-16% of the total market share of executed volume of
equities trading.\21\ Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. For the month of July
2024, the Exchange represented 1.61% of the total market share of
executed volume of equities trading.\22\ 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.'' \23\
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\21\ See the ``Market Share'' section of the Exchange's website,
available at https://www.miaxglobal.com/ (last visited August 26,
2024).
\22\ Id.
\23\ 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
[[Page 78362]]
levels at those other venues to be more favorable. The Exchange
believes the proposal reflects a reasonable and competitive pricing
structure designed to continue to incentivize market participants to
direct their order flow to the Exchange, which the Exchange believes
would continue to enhance liquidity and market quality to the benefit
of all Equity Members and market participants.
Proposal To Decrease the Fee To Remove Liquidity in Securities Priced
at or Above $1.00 per Share
The Exchange believes the proposed change to decrease the fee to
remove liquidity in securities priced at or above $1.00 per share from
$0.00295 to $0.00285 per share for all tapes is reasonable because the
proposed fee remains lower than, and competitive with, the standard fee
charged by competing exchanges to remove liquidity in securities priced
at or above $1.00 per share.\24\ The Exchange further believes that the
proposed change is equitably allocated and not unfairly discriminatory
because the proposed fee of $0.00285 per share for executions of all
orders in securities priced at or above $1.00 per share that remove
liquidity from the Exchange will apply equally to all Equity Members
that remove liquidity.
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\24\ See supra note 7.
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Proposal To Amend the NBBO Setter Plus Table To Amend the Baseline
Month and Sunset Period for the Step-Up Rebate
The Exchange believes its proposal to update the baseline month for
the Step-Up Rebate is reasonable, equitably allocated and not unfairly
discriminatory because volume on the Exchange has changed since the
Exchange last amended the Step-Up Rebate and the Exchange now proposes
to update the baseline month to a more recent month. The Exchange
believes that with the updated baseline month, the Step-Up Rebate will
continue to provide an incentive for Equity Members to strive for
higher ADAV on the Exchange 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 the proposal is reasonable because even with the updated
baseline month, the Step-Up Rebate will continue to encourage the
submission of added displayed 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 believes that the Step-Up Rebate, as modified by the
proposed change to the baseline month, is reasonable, equitable and not
unfairly discriminatory as the Step-Up 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 recently filed a
proposal to use a more recent month (June 2024) as the baseline month
for MEMX's members to receive one of its enhanced rebates.\25\
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\25\ See supra note 16.
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The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to extend the sunset period for the Step-Up Rebate until
January 31, 2025. Unless the Exchange determines to amend or otherwise
modify the Step-Up Rebate, the Step-Up 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 Rebate will be
discontinued at the end of sunset period unless the Exchange announces
otherwise and files a new proposal with the Commission. The Exchange
further notes that it will issue a proposed filing and alert to market
participants should the Exchange determine that the Step-Up Rebate will
expire earlier than January 31, 2025 or if the Exchange determines to
amend the criteria or rate applicable to the Step-Up 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 subject to a baseline month comparison with a
more recent month.\26\
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\26\ See id.
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For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act in that it provides for the equitable allocation of reasonable
dues, fees and other charges among its Equity Members and other persons
using its facilities and is not designed to unfairly discriminate
between customers, issuers, brokers, or dealers.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed changes will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act.
Intramarket Competition
The Exchange believes that the proposed change to decrease the fee
from $0.00295 to $0.00285 per share for executions of orders in
securities priced at or above $1.00 per share for all Tapes will not
impose any burden on intramarket competition because it represents a
decrease from the current fee for such executions. The Exchange
believes the proposed reduced fee will further encourage market
participants to enter liquidity removing orders on the Exchange,
thereby increasing the execution opportunities for the liquidity adding
orders resting on the MIAX Pearl Equities Book, thereby promoting
competition on the Exchange. The proposed reduced fee for executions of
orders in securities priced at or above $1.00 per share that remove
liquidity from the Exchange will apply equally to all Equity Members.
Further, the Exchange notes that the Exchange's proposed reduced fee of
$0.00285 per share for executions of all orders in securities priced at
or above $1.00 per share that remove liquidity from the Exchange
remains lower than, and competitive with, the standard fee to remove
liquidity in securities priced at or above $1.00 per share charged by
competing equity exchanges.\27\
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\27\ See supra note 7.
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The Exchange does not believe that the proposal to update the
baseline month for Step-Up Rebate 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 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.
The Exchange believes its proposal to modify the sunset period in
the Fee Schedule for the Step-Up Rebate will not impose any burden on
intramarket
[[Page 78363]]
competition not necessary or appropriate in furtherance of the purposes
of the Act. With the proposed extension of the sunset period, all
Equity Members may continue to qualify for the enhanced rebate provided
by the Step-Up Rebate until January 31, 2025. Unless the Exchange
determines to amend or otherwise modify the Step-Up Rebate, the Step-Up
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 Rebate will be discontinued at the end of
sunset period unless the Exchange announces otherwise. The Exchange
further notes that it will issue a proposed filing and alert to market
participants should the Exchange determine that the Step-Up Rebate will
expire earlier than January 31, 2025 or if the Exchange determines to
amend the criteria or rate applicable to the Step-Up 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 subject to a baseline month comparison with a
more recent month.\28\
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\28\ See supra note 16.
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For the foregoing reasons, the Exchange believes the proposed
changes would not impose any burden on intramarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
Intermarket Competition
The Exchange believes its proposal will benefit competition as the
Exchange operates in a highly competitive market. 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, no single registered equities exchange currently has more than
approximately 15-16% of the total market share of executed volume of
equities trading. Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. Moreover, the Exchange
believes that the ever-shifting market share among the exchanges from
month to month demonstrates that market participants can shift order
flow in response to new or different pricing structures being
introduced to the market. Accordingly, competitive forces constrain the
Exchange's transaction fees and rebates generally, including with
respect to executions of all orders in securities priced at or above
$1.00 per share that remove liquidity from the Exchange, and market
participants can readily choose to send their orders to other exchanges
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. As described above, the proposed changes are
competitive proposals and the proposed reduce fee of $0.00285 per share
for removing liquidity in securities priced at or above $1.00 per share
remains lower than, or similar to, the standard fee to remove liquidity
in securities priced at or above $1.00 per share charged by competing
equities exchanges.\29\ Further, the proposed reduce fee to remove
liquidity from securities priced at or above $1.00 per share will apply
to all Equity Members equally.
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\29\ See supra note 7.
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As described above, the proposed changes to modify the baseline
month and extend the sunset period for the Step-Up Rebate 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 which also
updated its baseline month to a more recent month for a specific
enhanced rebate that adds liquidity to that market.\30\ 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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\30\ See supra note 16.
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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.'' \31\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
circuit stated: ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their routing agents, have a wide range of choices of where to
route orders for execution'; [and] `no exchange can afford to take its
market share percentages for granted' because `no exchange possess a
monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers' . . . .'' \32\ 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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\31\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\32\ 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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\33\ and Rule 19b-
4(f)(2) thereunder \34\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed on any
person, whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing.
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\33\ 15 U.S.C. 78s(b)(3)(A)(ii).
\34\ 17 CFR 240.19b-4.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-PEARL-2024-41 on the subject line.
Paper Comments
Send paper comments in triplicate to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
[[Page 78364]]
All submissions should refer to file number SR-PEARL-2024-41. 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-2024-41 and should be
submitted on or before October 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-21872 Filed 9-24-24; 8:45 am]
BILLING CODE 8011-01-P
