Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Non-Substantive, Clarifying Changes to the Exchange's Rulebook, 97660-97664 [2024-28762]
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97660
Federal Register / Vol. 89, No. 236 / Monday, December 9, 2024 / Notices
Representative: Jennaca Upperman;
Comments Due: December 10, 2024.
III. Summary Proceeding(s)
None. See Section II for public
proceedings.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
BILLING CODE 7710–FW–P
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DATES:
Date of Notice: December 9, 2024
FOR FURTHER INFORMATION CONTACT:
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The
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SUPPLEMENTARY INFORMATION:
ddrumheller on DSK120RN23PROD with NOTICES1
Colleen Hibbert-Kapler,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2024–28860 Filed 12–6–24; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–126, OMB Control No.
3235–0287]
[Release No. 34–101798; File No. SR–
PEARL–2024–55]
Submission for OMB Review;
Comment Request; Extension: Form
4—Statement of Changes in Beneficial
Ownership of Securities
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Make NonSubstantive, Clarifying Changes to the
Exchange’s Rulebook
Upon Written Request Copies
Available From: Securities and
Exchange Commission, Office of FOIA
Services, 100 F Street NE, Washington,
DC 20549–2736.
[FR Doc. 2024–28843 Filed 12–6–24; 8:45 am]
AGENCY:
SECURITIES AND EXCHANGE
COMMISSION
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Under the Exchange Act of 1934 (15
U.S.C. 78a et seq.) every person who is
directly or indirectly the beneficial
owner of more than 10 percent of any
class of any equity security (other than
an exempted security) which registered
under Section 12 of the Exchange Act
(15 U.S.C. 78l), or who is a director or
any officer of the issuer of such security
(collectively ‘‘insider), must file a
statement with the Commission
reporting their ownership. Form 4 is a
statement to disclose changes in an
insider’s ownership of securities. The
information is used for the purpose of
disclosing the equity holdings of
insiders of reporting companies.
Approximately 186,052 insiders file
Form 4 annually and it takes
approximately 0.5 hours to prepare for
a total of 93,026 annual burden hours
(0.5 hours per response × 93,026
responses).
Public Comment Instructions: The 30day public comment period for this
information collection request opens on
December 10, 2024 and closes at the end
of the day on January 9, 2025. The
public may view the full information
request and submit comments at https://
www.reginfo.gov/public/do/
PRAViewICR?ref_nbr=202412-3235-003
or email comments to
MBX.OMB.OIRA.SEC_desk_officer@
omb.eop.gov.
December 3, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
21, 2024, MIAX PEARL, LLC (‘‘MIAX
Pearl’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the 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 is filing a proposal to
make non-substantive, clarifying
changes to the Exchange’s Rulebook.
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
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.
Dated: December 4, 2024.
Sherry R. Haywood,
Assistant Secretary.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Proposal To Amend Chapter III
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The Exchange proposes to make nonsubstantive clarifying changes to the
second paragraph of Chapter III to
provide accuracy and precision within
the rule text. For background,
Regulation SCI and MIAX 3 Rule 321
require MIAX Pearl to designate certain
members of both the options and
equities trading facilities of MIAX Pearl
to participate in business continuity and
disaster recovery testing in a manner
specified by MIAX Pearl and at a
frequency of not less than once every 12
months.4 Such testing ordinarily is part
of an annual industry-wide test. MIAX
Rule 321, as incorporated into the MIAX
Pearl Rulebook, governs mandatory
participation in testing of MIAX Pearl’s
backup systems. In particular, MIAX
Rule 321, as incorporated, requires
MIAX Pearl to designate certain
Members 5 and Equity Members 6 that
account for a specified percentage of
executed volume on MIAX Pearl
(separately, with respect to the options
and equities trading facilities of MIAX
Pearl), measured on quarterly basis, to
connect to the MIAX Pearl backup
systems and participate in functional
and performance testing of such
system.7
On August 14, 2020, the U.S.
Securities and Exchange Commission
(‘‘Commission’’) approved the
Exchange’s proposal to adopt rules
governing the trading of equity
securities, referred to as MIAX Pearl
Equities.8 MIAX Pearl Equities began
3 The term ‘‘MIAX’’ means Miami International
Securities Exchange, LLC. See Exchange Rule 100.
The rules contained in MIAX Chapter III, as such
rules may be in effect from time to time, are
incorporated by reference into MIAX Pearl Chapter
III, and are thus MIAX Pearl Rules and thereby
applicable to MIAX Pearl Members. See Chapter III
of Exchange’s Rulebook.
4 See MIAX Rule 321(a)–(b).
5 The term ‘‘Member’’ means an individual or
organization that is registered with the Exchange
pursuant to Chapter II of these Rules for purposes
of trading on the Exchange as an ‘‘Electronic
Exchange Member’’ or ‘‘Market Maker.’’ Members
are deemed ‘‘members’’ under the Exchange Act.
See Exchange Rule 100.
6 The term ‘‘Equity Member’’ is a Member
authorized by the Exchange to transact business on
MIAX Pearl Equities. See Exchange Rule 1901. The
term ‘‘MIAX Pearl Equities’’ shall mean MIAX Pearl
Equities, a facility of MIAX PEARL, LLC. See id.
7 See MIAX Rule 321(b).
8 See Securities Exchange Act Release No. 89563
(August 14, 2020), 85 FR 51510 (August 20, 2020)
(SR–PEARL–2020–03).
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trading on September 25, 2020.9 For
calendar year 2020, the annual business
continuity and disaster recovery
industry-wide test was scheduled for
October 24, 2020. MIAX Pearl Equities
did not have two quarters of trading
data on which to base its Equity
Member designation prior to the
October 24, 2020 test. Thus, MIAX Rule
321 would not permit MIAX Pearl
Equities to designate any Equity
Members to participate in the industrywide test for 2020 because no Equity
Members would have the requisite
trading volume on MIAX Pearl Equities
upon which a designation could be
made at that time.
To address the unique circumstances
for disaster recovery testing in 2020, the
year in which MIAX Pearl Equities
became operational, the Exchange
amended Chapter III of the Exchange’s
Rules to provide that for calendar year
2020, notwithstanding paragraph (b)
and Interpretations and Policies .01 of
MIAX Rule 321, which assigns the
Exchange responsibility of ‘‘identifying
Members that account for a meaningful
percentage of the Exchange’s overall
volume,’’ the Exchange instead
designated at least three Equity
Members on MIAX Pearl Equities who
have a meaningful percentage of trading
volume in NMS Stocks across the other
equity exchanges in 2020.10 This
allowed MIAX Pearl Equities to identify
Equity Members for industry-wide
disaster recovery testing in the absence
of the metrics that are used in the
ordinary course to designate such firms.
MIAX Pearl Equities now has
sufficient trading data each year to
designate Equity Members that account
for a specified percentage of executed
volume on MIAX Pearl Equities,
measured on quarterly basis, to require
certain Equity Members to connect to
the MIAX Pearl backup systems and
participate in functional and
performance testing of such system.
Since the unique circumstances for
disaster recovery testing in 2020 no
longer exists, the Exchange now
proposes to delete the second paragraph
of Chapter III. The purpose of the
purposed change is to delete the
outdated rule text.
9 See ‘‘MIAX PEARL Receives Approval to
Operate Equities Exchange; Launch Date Confirmed
for September 25, 2020,’’ available at https://
www.miaxglobal.com/sites/default/files/alert-files/
MIAX_Press_Release_08182020.pdf.
10 See Securities Exchange Act Release No. 89736
(September 2, 2020), 85 FR 55730 (September 9,
2020) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change Relating to the
Designation of Members for Mandatory Disaster
Recovery Testing Pursuant to Regulation SCI for
Calendar Year 2020).
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Proposal To Amend Exchange Rule 503
The Exchange proposes to make nonsubstantive, clarifying changes to
subparagraphs (a)(3)–(4) of Exchange
Rule 503 to provide consistency within
the rule text.
Specifically, the Exchange proposes to
amend the announcement method by
requiring announcements through a
Regulatory Circular, instead of a post on
the Exchange’s website, for the purpose
of Exchange Rule 503. The Exchange
proposes to replace ‘‘on the Exchange’s
website’’ with ‘‘through a Regulatory
Circular’’ at the end of subparagraph
(a)(3) of Exchange Rule 503. The
Exchange proposes to replace
‘‘published by the Exchange on its
website’’ with ‘‘announced to Members
through a Regulatory Circular’’ at the
end of the first sentence of subparagraph
(a)(4) of Exchange Rule 503. The
Exchange proposes to replace ‘‘posted
by MIAX Pearl on its website’’ with
‘‘announced to Members through a
Regulatory Circular’’ at the end of the
second sentence of subparagraph (a)(4)
of Exchange Rule 503. The purpose of
the proposed changes is to harmonize
the Exchange’s rules and provide
consistency within the Exchange’s
Rulebook as the Exchange, and its
affiliates, historically announce such
information through a Regulatory
Circular.11 The proposed changes do not
impact or alter the information provided
to any Member. Accordingly, with the
proposed changes, subparagraphs (a)(3)–
(4) of Exchange Rule 503 will provide as
follows:
(3) ‘‘Market for the Underlying Security’’
shall mean either the primary listing market,
the primary volume market (defined as the
market with the most liquidity in that
underlying security for the previous two
calendar months), or the first market to open
the underlying security, as determined by the
Exchange on a class by class basis and
announced to Members through a Regulatory
Circular.
(4) ‘‘Valid Width National Best Bid or
Offer’’ or ‘‘Valid Width NBBO’’ shall mean
the combination of all away market quotes
and any combination of MIAX Pearl Market
Maker orders and quotes received from a
minimum number of away markets and a
minimum number of MIAX Pearl Market
Makers within a specified bid/ask differential
each as established and announced to
Members through a Regulatory Circular. The
Valid Width NBBO will be configurable by
the underlying, and tables with valid width
11 See, e.g., MIAX Rule 503(d); see also MIAX
Pearl Options Exchange Regulatory Circular 2024–
58, Market for Underlying Security Used for
Openings on MIAX Options, MIAX Pearl Options,
MIAX Emerald Options and MIAX Sapphire
Options for Newly Listed Symbols Effective
Wednesday, October 23, 2024, available at https://
www.miaxglobal.com/sites/default/files/circularfiles/MIAX_Pearl_Options_RC_2024_58.pdf.
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Federal Register / Vol. 89, No. 236 / Monday, December 9, 2024 / Notices
differentials will be announced to Members
through a Regulatory Circular. Away markets
that are crossed will void all Valid Width
NBBO calculations. If any Market Maker
orders or quotes on MIAX Pearl are crossed
internally, then all such orders and quotes
will be excluded from the Valid Width NBBO
calculation. If any Market Maker orders or
quotes on MIAX Pearl are locking or crossing
the ABBO, the Market Maker’s orders or
quotes will be considered to be at the locked
or crossed ABBO price for purposes of
calculating the Valid Width NBBO.
Proposal To Delete All References to
Mini-Options
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The Exchange proposes to delete all
outdated references to mini-options in
the rule text.12 On September 8, 2016,
the Commission approved the
Exchange’s Form 1 application to
register as a national securities exchange
under Section 6 of the Exchange Act.13
At that time, the Exchange established
rule text for mini-options. Mini-options
never gained significant market
acceptance and have not achieved the
expected level of traction or success in
its target market. Accordingly, all minioptions were delisted several years ago
and the Exchange does not have plans
to re-list them in the foreseeable future.
As the Exchange no longer offers minioption contracts, the Exchange proposes
to delete all references to mini-options
to provide greater clarity to Members
and the public regarding the Exchange’s
offerings and Rulebook. The Exchange
also notes that other exchanges filed
similar proposals to delete references to
mini-options.14 In the event that the
Exchange desires to list mini-options in
the future, the Exchange will file a rule
change with the Commission to adopt
rules to list mini-options and
corresponding fees and rebates for
12 The Exchange anticipates it will file a separate
rule filing pursuant to Rule 19b–4 of the Exchange
Act with the Commission to remove references to
‘‘mini-options’’ in the MIAX Pearl Options
Exchange Fee Schedule, including outdated tables
that still list fees (or rebates) for transactions by
market participants in mini-options.
13 See Securities Exchange Act Release No. 78793
(September 8, 2016), 81 FR 63238 (September 14,
2016) (File No. 10–227) (Exhibit B) (establishing
rules for mini-options).
14 See Securities Exchange Act Release No. 88374
(March 12, 2020), 85 FR 15522 (March 18, 2020)
(SR–Phlx–2020–08) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Amend
Certain Phlx Rules To Remove References to Mini
Options); see also Securities Exchange Act Release
No. 88458 (March 23, 2020), 85 FR 17372 (March
27, 2020) (SR–MRX–2020–07) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
Related to the Removal of Obsolete Listing Rules);
see also Securities Exchange Act Release No. 88456
(March 23, 2020), 85 FR 17126 (March 26, 2020)
(SR–ISE–2020–11) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change Related to
the Removal of Obsolete Listing Rules).
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transactions in mini-options, if
applicable.
Specifically, the Exchange proposes to
delete the content in Interpretations and
Policies .08 of Exchange Rule 404 and
then insert ‘‘Reserved’’ so as to keep the
remainder of the Rulebook as currently
formatted. The Exchange proposes to
delete the content in subparagraph (c) of
Exchange Rule 509 and then insert
‘‘Reserved’’ so as to keep the remainder
of the Rulebook as currently formatted.
The Exchange proposes to delete the
content in Interpretations and Policies
.02 of Exchange Rule 510 and then
insert ‘‘Reserved’’ so as to keep the
remainder of the Rulebook as currently
formatted.
Proposal To Update Citations to Rule
600(b) of Regulation NMS
The Exchange proposes to update
citations to Rule 600(b) of Regulation
NMS in Exchange Rule 100, Definitions,
Rule 530, Limit Up-Limit Down, Rule
2612, Minimum Price Variations, Rule
2614, Orders and Order Instructions,
and Rule 2705, Prohibition Against
Trading Ahead of Customer Orders.
In 2024, the Commission amended
Regulation NMS under the Act to
update the rule that requires disclosures
for order executions in national market
system (‘‘NMS’’) stocks.15 As part of that
initiative, the Commission adopted new
definitions in Rule 600(b) of Regulation
NMS and renumbered the remaining
definitions, including the definitions of
Trading Center (formerly Rule
600(b)(95)), Regular Trading Hours
(formerly Rule 600(b)(77)), NMS Stock
(formerly Rule 600(b)(55)), and
Intermarket Sweep Orders (formerly
Rule 600(b)(38)).
The Exchange accordingly proposes to
update the relevant citations to Rule
600(b) in its rules as follows:
• The citation to the definition of
Trading Center in Rule 100 would be
changed to Rule 600(b)(106).
• The citation to the definition of
Regular Trading Hours in Rule 530,
Limit Up-Limit Down, would be
changed to Rule 600(b)(88).
• The citation to the definition of
NMS Stock in Rule 2612 would be
changed to Rule 600(b)(65).
• The citation to the definition of
Intermarket Sweep Orders in Rule 2614
would be changed to Rule 600(b)(47).
The citation to the second
requirement of the definition of
Intermarket Sweep Order would be
changed to Rule 600(b)(47)(ii).
15 See Securities Exchange Act Release No. 99679,
89 FR 26428 (April 15, 2024) (S7–29–22).
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2. Statutory Basis
The Exchange believes that the
proposed changes are consistent with
Section 6(b) of the Act 16 in general, and
further the objectives of Section 6(b)(1)
of the Act 17 in particular, in that they
are designed to enforce compliance by
the Exchange’s Members and persons
associated with its Members and Equity
Members, with the provisions of the
rules of the Exchange.
In particular, the Exchange believes
that the proposed changes are designed
to enforce compliance by the Exchange’s
Members and Equity Members with the
provisions of the rules of the Exchange
because the changes will provide greater
clarity to Members, Equity Members and
the public regarding the Exchange’s
Rulebook by deleting the outdated rule
text in Chapter III that is no longer
applicable, amending the
announcement method for certain types
of openings on the Exchange, deleting
outdated references to mini-options that
are no longer offered by the Exchange,
and updating the citations to Rule
600(b) of Regulation NMS.
The proposed change to delete the
second paragraph of Chapter III of the
Rulebook is to delete the outdated rule
text since the unique circumstances for
disaster recovery testing in 2020 no
longer exists for Equity Members of
MIAX Pearl Equities. The proposed
changes to amend the announcement
method for certain types of openings on
the Exchange are to harmonize the rules
and provide consistency within the
Exchange’s Rulebook as the Exchange,
and its affiliates, historically announce
such information through a Regulatory
Circular. The proposed changes to
remove outdated references to minioptions will help enforce compliance
with the Exchange’s rules by removing
obsolete rule text. Mini-options were
delisted from the Exchange years ago
since mini-options failed to gain
significant market acceptance and never
achieved the expected level of traction
or success in its target market.
The proposed changes to update the
citations to Rule 600(b) of Regulation
NMS are to correct inaccurate rule
citations, thereby reducing potential
confusion and ensuring that those
subject to the Exchange’s jurisdiction,
regulators, and the investing public can
more easily navigate and understand the
Exchange’s rules. The Exchange believes
that the proposed changes will help
enforce compliance with the Exchange’s
rules by providing clarity and
consistency within the Exchange’s
16 15
17 15
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Rulebook, thereby making it easier for
Members and Equity Members to
interpret the Exchange’s Rulebook. The
Exchange believes that Members and
Equity Members would benefit from the
increased clarity and consistency,
thereby alleviating potential investor or
market participant confusion.
The Exchange believes that the
proposed rule changes also further the
objectives of Section 6(b)(5) of the Act.
In particular, they are designed to
prevent fraudulent and manipulative
acts and practices, promote just and
equitable principles of trade, foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, remove impediments to
and perfect the mechanisms of a free
and open market and a national market
system and, in general, protect investors
and the public interest.
The Exchange believes the proposed
changes promote just and equitable
principles of trade and remove
impediments to and perfect the
mechanism of a free and open market
and a national market system because
the proposed rule changes will provide
greater clarity to Members and Equity
Members and the public regarding the
Exchange’s Rulebook by deleting the
outdated rule text in Chapter III of the
Rulebook that is no longer applicable to
Equity Members, amending the
announcement method for certain types
of openings on the Exchange to provide
consistency within the Rulebook,
deleting outdated references to minioptions that are no longer offered by the
Exchange, and updating citations to
Rule 600(b) of Regulation NMS. It is in
the public interest for the Exchange’s
Rulebook to be accurate and consistent
so as to eliminate the potential for
confusion.
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. Specifically, the
Exchange believes the proposed changes
will not impose any burden on intramarket competition as there is no
functional change to the Exchange’s
System 18 and because the rules of the
Exchange apply to all Members and
Equity Members equally.
The proposed change to delete the
second paragraph of Chapter III of the
18 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
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Rulebook is to delete the outdated rule
text applicable to Equity Members since
the unique circumstances for disaster
recovery testing in 2020 no longer
exists. The proposed changes to amend
the announcement method for certain
types of openings on the Exchange are
to harmonize the rules and provide
consistency within the Exchange’s
Rulebook as the Exchange, and its
affiliates, historically announce such
information through a Regulatory
Circular. The proposed changes to
remove obsolete rule text include the
removal of outdated references to minioptions. Mini-options are no longer
offered by the Exchange since minioptions failed to gain significant market
acceptance and have not achieved the
expected level of traction or success in
its target market. The proposed changes
to update the citations to Rule 600(b) of
Regulation NMS are to correct
inaccurate rule citations, reduce
potential confusion, and ensure that
market participants can more easily
navigate and understand the Exchange’s
rules. The proposed rule changes will
have no impact on competition as they
are not designed to address any
competitive issue but rather are
designed to remedy minor, nonsubstantive issues and provide added
clarity to the Exchange’s Rulebook.
In addition, the Exchange does not
believe the proposal will impose any
burden on inter-market competition as
the proposal does not address any
competitive issues but rather would
provide additional clarity in the
Exchange’s rule by deleting the outdated
rule text in Chapter III of the Rulebook
that is no longer applicable, amending
the announcement method for certain
types of openings on the Exchange,
deleting outdated references to minioptions that are no longer offered by the
Exchange, and updating citations to
Rule 600(b) of Regulation NMS. Since
the proposal does not substantively
modify System functionality or
processes on the Exchange, the
proposed changes will not impose any
burden on competition nor are they
meant to affect competition among the
exchanges.
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
Because the foregoing proposed rule
change does not: (i) significantly affect
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the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative prior to 30 days from the date
on which it was filed, or such shorter
time as the Commission may designate,
if consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) of the Act 19 and Rule
19b–4(f)(6) thereunder.20
A proposed rule change filed under
Rule 19b–4(f)(6) 21 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),22 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing.
The Exchange states that waiver of the
operative delay would permit the
Exchange to delete outdated rule text
regarding unique circumstances for
disaster recovery that applied in 2020
and no longer exist, amend the
announcement method for certain types
of openings on the Exchange to make it
consistent with the Exchange’s
historical announcement method, delete
outdated references to mini-options that
are no longer offered by the Exchange,
and correct inaccurate rule citations,
thereby alleviating potential confusion
and adding clarity to its rules. For these
reasons, and because the proposal does
not raise any new or novel issues, the
Commission believes that waiver of the
operative delay is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.23
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
19 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). 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, along with a brief
description and text of 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.
21 17 CFR 240.19b–4(f)(6).
22 17 CFR 240.19b–4(f)(6)(iii).
23 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
20 17
E:\FR\FM\09DEN1.SGM
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97664
Federal Register / Vol. 89, No. 236 / Monday, December 9, 2024 / Notices
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) 24 of the Act to
determine whether the proposed rule
change 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–2024–55 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–2024–55. 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
24 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
16:08 Dec 06, 2024
Jkt 265001
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–PEARL–2024–55 and should be
submitted on or before December 30,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–28762 Filed 12–6–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101803; File No. SR–MIAX–
2024–44]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Exchange Rule
1306 (Branch Offices) and Exchange
Rule 1308 (Supervision of Accounts)
To Harmonize With FINRA Rules
December 3, 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 November 25, 2024, Miami
International Securities Exchange, LLC
(‘‘MIAX’’ 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: (i) amend
Rule 1306 (Branch Offices) to adopt the
definition used by Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’) of
Office of Supervisory Jurisdiction
(‘‘OSJ’’); (ii) amend Rule 1308
(Supervision of Accounts) to adopt
FINRA’s inspection requirement for
non-branch location; (iii) harmonize
Rule 1308 (Supervision of Accounts)
with certain changes by FINRA to
FINRA Rule 3110 to permit eligible
Members 3 to participate in FINRA’s
25 17
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
1 15
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
remote inspections program (‘‘FINRA
Pilot Program’’); 4 and (iv) adopt
FINRA’s Residential Supervisory
Location (‘‘RSL’’) classification.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-options/miax-options/rule-filings, at
MIAX’s principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to (i) amend
Rule 1306 to adopt FINRA’s definition
of OSJ; (ii) amend Rule 1308 to adopt
FINRA’s inspection requirement for
non-branch location; (iii) harmonize
Rule 1308 with certain changes by
FINRA to FINRA Rule 3110 to permit
eligible Members to participate in
FINRA’s Remote Inspections Pilot
Program; and (iv) adopt FINRA’s RSL
classification. The proposed changes
would harmonize the Exchange’s office
and other location inspection rules with
those of FINRA and thus promote
uniform inspection standards across the
securities industry resulting in less
burdensome and more efficient
regulatory compliance for common
members.5 Additionally, the proposed
changes would allow Members who
participate in FINRA’s Remote
Inspections Pilot Program to also satisfy
the equivalent internal inspections
requirements set out in Rule 1308. The
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
4 See Securities Exchange Act Release No. 97398
(April 28, 2023), 88 FR 28620 (May 4, 2023)
(‘‘Remote Inspections Pilot Program Proposal’’);
Securities Exchange Act Release No. 98982
(November 17, 2023), 88 FR 82464 (November 24,
2023) (‘‘Remote Inspections Pilot Program Approval
Order’’) (SR–FINRA–2023–007).
5 Currently, all Exchange Members are also
FINRA members.
E:\FR\FM\09DEN1.SGM
09DEN1
]]>Agencies
[Federal Register Volume 89, Number 236 (Monday, December 9, 2024)]
[Notices]
[Pages 97660-97664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28762]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101798; File No. SR-PEARL-2024-55]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Make Non-
Substantive, Clarifying Changes to the Exchange's Rulebook
December 3, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 21, 2024, MIAX PEARL, LLC (``MIAX Pearl'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
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.
---------------------------------------------------------------------------
\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 make non-substantive,
clarifying changes to the Exchange's Rulebook.
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 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.
[[Page 97661]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Proposal To Amend Chapter III
The Exchange proposes to make non-substantive clarifying changes to
the second paragraph of Chapter III to provide accuracy and precision
within the rule text. For background, Regulation SCI and MIAX \3\ Rule
321 require MIAX Pearl to designate certain members of both the options
and equities trading facilities of MIAX Pearl to participate in
business continuity and disaster recovery testing in a manner specified
by MIAX Pearl and at a frequency of not less than once every 12
months.\4\ Such testing ordinarily is part of an annual industry-wide
test. MIAX Rule 321, as incorporated into the MIAX Pearl Rulebook,
governs mandatory participation in testing of MIAX Pearl's backup
systems. In particular, MIAX Rule 321, as incorporated, requires MIAX
Pearl to designate certain Members \5\ and Equity Members \6\ that
account for a specified percentage of executed volume on MIAX Pearl
(separately, with respect to the options and equities trading
facilities of MIAX Pearl), measured on quarterly basis, to connect to
the MIAX Pearl backup systems and participate in functional and
performance testing of such system.\7\
---------------------------------------------------------------------------
\3\ The term ``MIAX'' means Miami International Securities
Exchange, LLC. See Exchange Rule 100. The rules contained in MIAX
Chapter III, as such rules may be in effect from time to time, are
incorporated by reference into MIAX Pearl Chapter III, and are thus
MIAX Pearl Rules and thereby applicable to MIAX Pearl Members. See
Chapter III of Exchange's Rulebook.
\4\ See MIAX Rule 321(a)-(b).
\5\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of these
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See Exchange Rule 100.
\6\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901. The term ``MIAX Pearl Equities'' shall mean MIAX Pearl
Equities, a facility of MIAX PEARL, LLC. See id.
\7\ See MIAX Rule 321(b).
---------------------------------------------------------------------------
On August 14, 2020, the U.S. Securities and Exchange Commission
(``Commission'') approved the Exchange's proposal to adopt rules
governing the trading of equity securities, referred to as MIAX Pearl
Equities.\8\ MIAX Pearl Equities began trading on September 25,
2020.\9\ For calendar year 2020, the annual business continuity and
disaster recovery industry-wide test was scheduled for October 24,
2020. MIAX Pearl Equities did not have two quarters of trading data on
which to base its Equity Member designation prior to the October 24,
2020 test. Thus, MIAX Rule 321 would not permit MIAX Pearl Equities to
designate any Equity Members to participate in the industry-wide test
for 2020 because no Equity Members would have the requisite trading
volume on MIAX Pearl Equities upon which a designation could be made at
that time.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 89563 (August 14,
2020), 85 FR 51510 (August 20, 2020) (SR-PEARL-2020-03).
\9\ See ``MIAX PEARL Receives Approval to Operate Equities
Exchange; Launch Date Confirmed for September 25, 2020,'' available
at https://www.miaxglobal.com/sites/default/files/alert-files/MIAX_Press_Release_08182020.pdf.
---------------------------------------------------------------------------
To address the unique circumstances for disaster recovery testing
in 2020, the year in which MIAX Pearl Equities became operational, the
Exchange amended Chapter III of the Exchange's Rules to provide that
for calendar year 2020, notwithstanding paragraph (b) and
Interpretations and Policies .01 of MIAX Rule 321, which assigns the
Exchange responsibility of ``identifying Members that account for a
meaningful percentage of the Exchange's overall volume,'' the Exchange
instead designated at least three Equity Members on MIAX Pearl Equities
who have a meaningful percentage of trading volume in NMS Stocks across
the other equity exchanges in 2020.\10\ This allowed MIAX Pearl
Equities to identify Equity Members for industry-wide disaster recovery
testing in the absence of the metrics that are used in the ordinary
course to designate such firms.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 89736 (September 2,
2020), 85 FR 55730 (September 9, 2020) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change Relating to the
Designation of Members for Mandatory Disaster Recovery Testing
Pursuant to Regulation SCI for Calendar Year 2020).
---------------------------------------------------------------------------
MIAX Pearl Equities now has sufficient trading data each year to
designate Equity Members that account for a specified percentage of
executed volume on MIAX Pearl Equities, measured on quarterly basis, to
require certain Equity Members to connect to the MIAX Pearl backup
systems and participate in functional and performance testing of such
system. Since the unique circumstances for disaster recovery testing in
2020 no longer exists, the Exchange now proposes to delete the second
paragraph of Chapter III. The purpose of the purposed change is to
delete the outdated rule text.
Proposal To Amend Exchange Rule 503
The Exchange proposes to make non-substantive, clarifying changes
to subparagraphs (a)(3)-(4) of Exchange Rule 503 to provide consistency
within the rule text.
Specifically, the Exchange proposes to amend the announcement
method by requiring announcements through a Regulatory Circular,
instead of a post on the Exchange's website, for the purpose of
Exchange Rule 503. The Exchange proposes to replace ``on the Exchange's
website'' with ``through a Regulatory Circular'' at the end of
subparagraph (a)(3) of Exchange Rule 503. The Exchange proposes to
replace ``published by the Exchange on its website'' with ``announced
to Members through a Regulatory Circular'' at the end of the first
sentence of subparagraph (a)(4) of Exchange Rule 503. The Exchange
proposes to replace ``posted by MIAX Pearl on its website'' with
``announced to Members through a Regulatory Circular'' at the end of
the second sentence of subparagraph (a)(4) of Exchange Rule 503. The
purpose of the proposed changes is to harmonize the Exchange's rules
and provide consistency within the Exchange's Rulebook as the Exchange,
and its affiliates, historically announce such information through a
Regulatory Circular.\11\ The proposed changes do not impact or alter
the information provided to any Member. Accordingly, with the proposed
changes, subparagraphs (a)(3)-(4) of Exchange Rule 503 will provide as
follows:
---------------------------------------------------------------------------
\11\ See, e.g., MIAX Rule 503(d); see also MIAX Pearl Options
Exchange Regulatory Circular 2024-58, Market for Underlying Security
Used for Openings on MIAX Options, MIAX Pearl Options, MIAX Emerald
Options and MIAX Sapphire Options for Newly Listed Symbols Effective
Wednesday, October 23, 2024, available at https://www.miaxglobal.com/sites/default/files/circular-files/MIAX_Pearl_Options_RC_2024_58.pdf.
(3) ``Market for the Underlying Security'' shall mean either the
primary listing market, the primary volume market (defined as the
market with the most liquidity in that underlying security for the
previous two calendar months), or the first market to open the
underlying security, as determined by the Exchange on a class by
class basis and announced to Members through a Regulatory Circular.
(4) ``Valid Width National Best Bid or Offer'' or ``Valid Width
NBBO'' shall mean the combination of all away market quotes and any
combination of MIAX Pearl Market Maker orders and quotes received
from a minimum number of away markets and a minimum number of MIAX
Pearl Market Makers within a specified bid/ask differential each as
established and announced to Members through a Regulatory Circular.
The Valid Width NBBO will be configurable by the underlying, and
tables with valid width
[[Page 97662]]
differentials will be announced to Members through a Regulatory
Circular. Away markets that are crossed will void all Valid Width
NBBO calculations. If any Market Maker orders or quotes on MIAX
Pearl are crossed internally, then all such orders and quotes will
be excluded from the Valid Width NBBO calculation. If any Market
Maker orders or quotes on MIAX Pearl are locking or crossing the
ABBO, the Market Maker's orders or quotes will be considered to be
at the locked or crossed ABBO price for purposes of calculating the
Valid Width NBBO.
Proposal To Delete All References to Mini-Options
The Exchange proposes to delete all outdated references to mini-
options in the rule text.\12\ On September 8, 2016, the Commission
approved the Exchange's Form 1 application to register as a national
securities exchange under Section 6 of the Exchange Act.\13\ At that
time, the Exchange established rule text for mini-options. Mini-options
never gained significant market acceptance and have not achieved the
expected level of traction or success in its target market.
Accordingly, all mini-options were delisted several years ago and the
Exchange does not have plans to re-list them in the foreseeable future.
As the Exchange no longer offers mini-option contracts, the Exchange
proposes to delete all references to mini-options to provide greater
clarity to Members and the public regarding the Exchange's offerings
and Rulebook. The Exchange also notes that other exchanges filed
similar proposals to delete references to mini-options.\14\ In the
event that the Exchange desires to list mini-options in the future, the
Exchange will file a rule change with the Commission to adopt rules to
list mini-options and corresponding fees and rebates for transactions
in mini-options, if applicable.
---------------------------------------------------------------------------
\12\ The Exchange anticipates it will file a separate rule
filing pursuant to Rule 19b-4 of the Exchange Act with the
Commission to remove references to ``mini-options'' in the MIAX
Pearl Options Exchange Fee Schedule, including outdated tables that
still list fees (or rebates) for transactions by market participants
in mini-options.
\13\ See Securities Exchange Act Release No. 78793 (September 8,
2016), 81 FR 63238 (September 14, 2016) (File No. 10-227) (Exhibit
B) (establishing rules for mini-options).
\14\ See Securities Exchange Act Release No. 88374 (March 12,
2020), 85 FR 15522 (March 18, 2020) (SR-Phlx-2020-08) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Certain Phlx Rules To Remove References to Mini Options); see also
Securities Exchange Act Release No. 88458 (March 23, 2020), 85 FR
17372 (March 27, 2020) (SR-MRX-2020-07) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Related to the
Removal of Obsolete Listing Rules); see also Securities Exchange Act
Release No. 88456 (March 23, 2020), 85 FR 17126 (March 26, 2020)
(SR-ISE-2020-11) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Related to the Removal of Obsolete Listing
Rules).
---------------------------------------------------------------------------
Specifically, the Exchange proposes to delete the content in
Interpretations and Policies .08 of Exchange Rule 404 and then insert
``Reserved'' so as to keep the remainder of the Rulebook as currently
formatted. The Exchange proposes to delete the content in subparagraph
(c) of Exchange Rule 509 and then insert ``Reserved'' so as to keep the
remainder of the Rulebook as currently formatted. The Exchange proposes
to delete the content in Interpretations and Policies .02 of Exchange
Rule 510 and then insert ``Reserved'' so as to keep the remainder of
the Rulebook as currently formatted.
Proposal To Update Citations to Rule 600(b) of Regulation NMS
The Exchange proposes to update citations to Rule 600(b) of
Regulation NMS in Exchange Rule 100, Definitions, Rule 530, Limit Up-
Limit Down, Rule 2612, Minimum Price Variations, Rule 2614, Orders and
Order Instructions, and Rule 2705, Prohibition Against Trading Ahead of
Customer Orders.
In 2024, the Commission amended Regulation NMS under the Act to
update the rule that requires disclosures for order executions in
national market system (``NMS'') stocks.\15\ As part of that
initiative, the Commission adopted new definitions in Rule 600(b) of
Regulation NMS and renumbered the remaining definitions, including the
definitions of Trading Center (formerly Rule 600(b)(95)), Regular
Trading Hours (formerly Rule 600(b)(77)), NMS Stock (formerly Rule
600(b)(55)), and Intermarket Sweep Orders (formerly Rule 600(b)(38)).
---------------------------------------------------------------------------
\15\ See Securities Exchange Act Release No. 99679, 89 FR 26428
(April 15, 2024) (S7-29-22).
---------------------------------------------------------------------------
The Exchange accordingly proposes to update the relevant citations
to Rule 600(b) in its rules as follows:
The citation to the definition of Trading Center in Rule
100 would be changed to Rule 600(b)(106).
The citation to the definition of Regular Trading Hours in
Rule 530, Limit Up-Limit Down, would be changed to Rule 600(b)(88).
The citation to the definition of NMS Stock in Rule 2612
would be changed to Rule 600(b)(65).
The citation to the definition of Intermarket Sweep Orders
in Rule 2614 would be changed to Rule 600(b)(47).
The citation to the second requirement of the definition of
Intermarket Sweep Order would be changed to Rule 600(b)(47)(ii).
2. Statutory Basis
The Exchange believes that the proposed changes are consistent with
Section 6(b) of the Act \16\ in general, and further the objectives of
Section 6(b)(1) of the Act \17\ in particular, in that they are
designed to enforce compliance by the Exchange's Members and persons
associated with its Members and Equity Members, with the provisions of
the rules of the Exchange.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposed changes are
designed to enforce compliance by the Exchange's Members and Equity
Members with the provisions of the rules of the Exchange because the
changes will provide greater clarity to Members, Equity Members and the
public regarding the Exchange's Rulebook by deleting the outdated rule
text in Chapter III that is no longer applicable, amending the
announcement method for certain types of openings on the Exchange,
deleting outdated references to mini-options that are no longer offered
by the Exchange, and updating the citations to Rule 600(b) of
Regulation NMS.
The proposed change to delete the second paragraph of Chapter III
of the Rulebook is to delete the outdated rule text since the unique
circumstances for disaster recovery testing in 2020 no longer exists
for Equity Members of MIAX Pearl Equities. The proposed changes to
amend the announcement method for certain types of openings on the
Exchange are to harmonize the rules and provide consistency within the
Exchange's Rulebook as the Exchange, and its affiliates, historically
announce such information through a Regulatory Circular. The proposed
changes to remove outdated references to mini-options will help enforce
compliance with the Exchange's rules by removing obsolete rule text.
Mini-options were delisted from the Exchange years ago since mini-
options failed to gain significant market acceptance and never achieved
the expected level of traction or success in its target market.
The proposed changes to update the citations to Rule 600(b) of
Regulation NMS are to correct inaccurate rule citations, thereby
reducing potential confusion and ensuring that those subject to the
Exchange's jurisdiction, regulators, and the investing public can more
easily navigate and understand the Exchange's rules. The Exchange
believes that the proposed changes will help enforce compliance with
the Exchange's rules by providing clarity and consistency within the
Exchange's
[[Page 97663]]
Rulebook, thereby making it easier for Members and Equity Members to
interpret the Exchange's Rulebook. The Exchange believes that Members
and Equity Members would benefit from the increased clarity and
consistency, thereby alleviating potential investor or market
participant confusion.
The Exchange believes that the proposed rule changes also further
the objectives of Section 6(b)(5) of the Act. In particular, they are
designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, remove impediments to and perfect the mechanisms of a
free and open market and a national market system and, in general,
protect investors and the public interest.
The Exchange believes the proposed changes promote just and
equitable principles of trade and remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed rule changes will provide greater clarity to
Members and Equity Members and the public regarding the Exchange's
Rulebook by deleting the outdated rule text in Chapter III of the
Rulebook that is no longer applicable to Equity Members, amending the
announcement method for certain types of openings on the Exchange to
provide consistency within the Rulebook, deleting outdated references
to mini-options that are no longer offered by the Exchange, and
updating citations to Rule 600(b) of Regulation NMS. It is in the
public interest for the Exchange's Rulebook to be accurate and
consistent so as to eliminate the potential for confusion.
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. Specifically, the Exchange believes the
proposed changes will not impose any burden on intra-market competition
as there is no functional change to the Exchange's System \18\ and
because the rules of the Exchange apply to all Members and Equity
Members equally.
---------------------------------------------------------------------------
\18\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
---------------------------------------------------------------------------
The proposed change to delete the second paragraph of Chapter III
of the Rulebook is to delete the outdated rule text applicable to
Equity Members since the unique circumstances for disaster recovery
testing in 2020 no longer exists. The proposed changes to amend the
announcement method for certain types of openings on the Exchange are
to harmonize the rules and provide consistency within the Exchange's
Rulebook as the Exchange, and its affiliates, historically announce
such information through a Regulatory Circular. The proposed changes to
remove obsolete rule text include the removal of outdated references to
mini-options. Mini-options are no longer offered by the Exchange since
mini-options failed to gain significant market acceptance and have not
achieved the expected level of traction or success in its target
market. The proposed changes to update the citations to Rule 600(b) of
Regulation NMS are to correct inaccurate rule citations, reduce
potential confusion, and ensure that market participants can more
easily navigate and understand the Exchange's rules. The proposed rule
changes will have no impact on competition as they are not designed to
address any competitive issue but rather are designed to remedy minor,
non-substantive issues and provide added clarity to the Exchange's
Rulebook.
In addition, the Exchange does not believe the proposal will impose
any burden on inter-market competition as the proposal does not address
any competitive issues but rather would provide additional clarity in
the Exchange's rule by deleting the outdated rule text in Chapter III
of the Rulebook that is no longer applicable, amending the announcement
method for certain types of openings on the Exchange, deleting outdated
references to mini-options that are no longer offered by the Exchange,
and updating citations to Rule 600(b) of Regulation NMS. Since the
proposal does not substantively modify System functionality or
processes on the Exchange, the proposed changes will not impose any
burden on competition nor are they meant to affect competition among
the exchanges.
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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative prior to 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, if consistent
with the protection of investors and the public interest, the proposed
rule change has become effective pursuant to Section 19(b)(3)(A)(iii)
of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\
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\19\ 15 U.S.C. 78s(b)(3)(A)(iii).
\20\ 17 CFR 240.19b-4(f)(6). 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, along
with a brief description and text of 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) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\22\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange states that waiver of the operative delay would permit
the Exchange to delete outdated rule text regarding unique
circumstances for disaster recovery that applied in 2020 and no longer
exist, amend the announcement method for certain types of openings on
the Exchange to make it consistent with the Exchange's historical
announcement method, delete outdated references to mini-options that
are no longer offered by the Exchange, and correct inaccurate rule
citations, thereby alleviating potential confusion and adding clarity
to its rules. For these reasons, and because the proposal does not
raise any new or novel issues, the Commission believes that waiver of
the operative delay is consistent with the protection of investors and
the public interest. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon
filing.\23\
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\23\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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
[[Page 97664]]
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) \24\ of the Act to
determine whether the proposed rule change should be approved or
disapproved.
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\24\ 15 U.S.C. 78s(b)(2)(B).
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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-2024-55 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-2024-55. 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-2024-55 and should be
submitted on or before December 30, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-28762 Filed 12-6-24; 8:45 am]
BILLING CODE 8011-01-P
