5296 Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Notices 

23 15 U.S.C. 78s(b)(3)(A)(iii). 

24 17 CFR 240.19b-4(f)(6). In addition, Rule 19b4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

25 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘Market Maker’’ means a Member registered 

with the Exchange for the purpose of making 

markets in options contracts traded on the 

Exchange and that is vested with the rights and 

responsibilities specified in Chapter VI of Exchange 

Rules. See the Definitions Section of the Fee 

Schedule. 

improve its competitive standing 

relative to other exchanges. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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 for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 23 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.24

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ISE–2020–43 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2020–43. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–ISE–2020–43 and should be 

submitted on or before February 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00948 Filed 1–15–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90906; File No. SR– 

PEARL–2020–38] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Amend the MIAX 

PEARL Fee Schedule 

January 12, 2021. 

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 December 

31, 2020, 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 MIAX PEARL Fee Schedule 

(the ‘‘Fee Schedule’’) for the Exchange’s 

options market. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Add/Remove Tiered Rebates/Fees set 

forth in Section (1)(a) of the Fee 

Schedule that apply to the MIAX 

PEARL Market Maker 3 Origin, to: (i) 

Modify the volume threshold for the 

alternative Volume Criteria in Tier 2; 

and (ii) add a new, alternative Volume 

Criteria to Tier 3. 

Background 

The Exchange currently assesses 

transaction rebates and fees to all 

market participants which are based 

upon the total monthly volume 


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4 ‘‘Member’’ means an individual or organization 

that is registered with the Exchange pursuant to 

Chapter II of the Exchange 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 the 

Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

5 ‘‘Excluded Contracts’’ means any contracts 

routed to an away market for execution. See the 

Definitions Section of the Fee Schedule. 

6 ‘‘TCV’’ means total consolidated volume 

calculated as the total national volume in those 

classes listed on MIAX PEARL for the month for 

which the fees apply, excluding consolidated 

volume executed during the period time in which 

the Exchange experiences an ‘‘Exchange System 

Disruption’’ (solely in the option classes of the 

affected Matching Engine (as defined below)). The 

term Exchange System Disruption, which is defined 

in the Definitions section of the Fee Schedule, 

means an outage of a Matching Engine or collective 

Matching Engines for a period of two consecutive 

hours or more, during trading hours. The term 

Matching Engine, which is also defined in the 

Definitions section of the Fee Schedule, is a part of 

the MIAX PEARL electronic system that processes 

options orders and trades on a symbol-by-symbol 

basis. Some Matching Engines will process option 

classes with multiple root symbols, and other 

Matching Engines may be dedicated to one single 

option root symbol (for example, options on SPY 

may be processed by one single Matching Engine 

that is dedicated only to SPY). A particular root 

symbol may only be assigned to a single designated 

Matching Engine. A particular root symbol may not 

be assigned to multiple Matching Engines. The 

Exchange believes that it is reasonable and 

appropriate to select two consecutive hours as the 

amount of time necessary to constitute an Exchange 

System Disruption, as two hours equates to 

approximately 1.4% of available trading time per 

month. The Exchange notes that the term 

‘‘Exchange System Disruption’’ and its meaning 

have no applicability outside of the Fee Schedule, 

as it is used solely for purposes of calculating 

volume for the threshold tiers in the Fee Schedule. 

See the Definitions Section of the Fee Schedule. 

7 ‘‘Affiliate’’ means (i) an affiliate of a Member of 

at least 75% common ownership between the firms 

as reflected on each firm’s Form BD, Schedule A, 

or (ii) the Appointed Market Maker of an Appointed 

EEM (or, conversely, the Appointed EEM of an 

Appointed Market Maker). An ‘‘Appointed Market 

Maker’’ is a MIAX PEARL Market Maker (who does 

not otherwise have a corporate affiliation based 

upon common ownership with an EEM) that has 

been appointed by an EEM and an ‘‘Appointed 

EEM’’ is an EEM (who does not otherwise have a 

corporate affiliation based upon common 

ownership with a MIAX PEARL Market Maker) that 

has been appointed by a MIAX PEARL Market 

Maker, pursuant to the process described in the Fee 

Schedule. See the Definitions Section of the Fee 

Schedule. 

8The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 9 ‘‘ABBO’’ means the best bid(s) or offer(s) 

disseminated by other Eligible Exchanges (defined 

in Exchange Rule 1400(g) and calculated by the 

Exchange based on market information received by 

the Exchange from OPRA. See the Definitions 

Section of the Fee Schedule and Exchange Rule 

100. 

10See Securities Exchange Act Release No. 88992 

(June 2, 2020), 85 FR 35142 (June 8, 2020) (SR– 

PEARL–2020–06). 11See Securities Exchange Act Release No. 84592 

(November 14, 2018), 83 FR 58646 (November 20, 

2018) (SR–PEARL–2018–23). 

12 ‘‘SPY/QQQ/IWM TCV’’ means total 

consolidated volume in SPY, QQQ, and IWM 

calculated as the total national volume in SPY, 

QQQ, and IWM for the month for which the fees 

apply, excluding consolidated volume executed 

during the period of time in which the Exchange 

experiences an Exchange System Disruption (solely 

in SPY, QQQ, or IWM options). See the Definitions 

Section of the Fee Schedule. 

executed by the Member 4 on MIAX 

PEARL in the relevant, respective origin 

type (not including Excluded 

Contracts) 5 (as the numerator) 

expressed as a percentage of (divided 

by) TCV 6 (as the denominator). In 

addition, the per contract transaction 

rebates and fees are applied 

retroactively to all eligible volume for 

that origin type once the respective 

threshold tier (‘‘Tier’’) has been reached 

by the Member. The Exchange 

aggregates the volume of Members and 

their Affiliates.7 Members that place 

resting liquidity, i.e., orders resting on 

the book of the MIAX PEARL System,8

are paid the specified ‘‘maker’’ rebate 

(each a ‘‘Maker’’), and Members that 

execute against resting liquidity are 

assessed the specified ‘‘taker’’ fee (each 

a ‘‘Taker’’). For opening transactions 

and ABBO 9 uncrossing transactions, per 

contract transaction rebates and fees are 

waived for all market participants. 

Finally, Members are assessed lower 

transaction fees and receive lower 

rebates for order executions in standard 

option classes in the Penny Interval 

Program 10 (‘‘Penny Classes’’) than for 

order executions in standard option 

classes which are not in the Penny 

Interval Program (‘‘Non-Penny 

Classes’’), where Members are assessed 

higher transaction fees and receive 

higher rebates. 

Alternative Volume Criteria Threshold 

Change in Tier 2 

The Exchange proposes to amend the 

Add/Remove Tiered Rebates/Fees set 

forth in Section (1)(a) of the Fee 

Schedule that apply to the MIAX 

PEARL Market Maker Origin, to modify 

the volume threshold for the alternative 

Volume Criteria in Tier 2. The MIAX 

PEARL Market Maker Origin set forth in 

Section 1)a) of the Fee Schedule 

currently provides an alternative 

Volume Criteria in Tier 2, which is 

based upon the total monthly volume 

executed by a MIAX PEARL Market 

Maker collectively in SPY/QQQ/IWM 

options on MIAX PEARL, expressed as 

a percentage of total consolidated 

national volume in SPY/QQQ/IWM 

options.11 Pursuant to this alternative 

Volume Criteria, a Market Maker is able 

to reach the Tier 2 threshold if the 

Market Maker’s total executed monthly 

volume, not including Excluded 

Contracts, in SPY/QQQ/IWM options on 

MIAX PEARL is above 0.45% of total 

consolidated national monthly volume 

in SPY/QQQ/IWM options. For this 

calculation, volume that is from resting 

liquidity (Maker) and taking liquidity 

(Taker) in SPY/QQQ/IWM options is 

counted towards the alternative Volume 

Criteria, and the 0.45% threshold does 

not have to be reached individually in 

each of the three symbols. A Market 

Maker is able to qualify for Tier 2 

rebates and fees which will then be 

applicable to all volume executed by the 

MIAX PEARL Market Maker on MIAX 

PEARL. The two Volume Criteria 

available for Tier 2 is based upon either: 

(a) The total monthly volume executed 

by the Market Maker in all options 

classes on MIAX PEARL, not including 

Excluded Contracts, (as the numerator), 

expressed as a percentage of (divided 

by) TCV (as the denominator); or (b) the 

total monthly volume executed by the 

MIAX PEARL Market Maker collectively 

in SPY/QQQ/IWM options on MIAX 

PEARL, not including Excluded 

Contracts, (as the numerator), expressed 

as a percentage of (divided by) SPY/ 

QQQ/IWM TCV 12 (as the denominator). 

Once either Volume Criteria threshold 

in Tier 2 is reached by the Market 

Maker, the Tier 2 per contract rebates 

and fees apply to all volume in all 

options classes executed by that MIAX 

PEARL Market Maker on MIAX PEARL. 

The Exchange proposes to modify the 

threshold for the alternative Volume 

Criteria in Tier 2 from 0.45% to 0.75% 

of total consolidated national monthly 

volume in SPY/QQQ/IWM options. 

With the proposed change, a Market 

Maker will be able to reach the 

alternative Volume Criteria in Tier 2 if 

the Market Maker’s total executed 

monthly volume, not including 

Excluded Contracts, in SPY/QQQ/IWM 

options on MIAX PEARL is above 

0.75% of total consolidated national 

monthly volume in SPY/QQQ/IWM 

options. The Exchange is not modifying 

the calculation method for a Market 

Maker to reach the alternative Volume 

Criteria in Tier 2, only the threshold 

percentage. The Exchange proposes to 

make the corresponding change to the 

volume threshold percentage described 

in the explanatory paragraph for the 

alternative Volume Criteria for Tier 2 

that is below the tables in Section 1)a) 

of the Fee Schedule. 

The purpose of this proposed change 

is for business and competitive reasons. 

In order to attract order flow, the 

Exchange initially set its volume 

threshold for the alternative Volume 

Criteria in Tier 2 at a meaningful low 

level. The Exchange now believes that it 

is appropriate to adjust this volume 

threshold so that it is more in line with 


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13 ‘‘SPY TCV’’ means total consolidated volume 

in SPY calculated as the total national volume in 

SPY for the month for which the fees apply, 

excluding consolidated volume executed during the 

period of time in which the Exchange experiences 

an Exchange System Disruption (solely in SPY 

options). See the Definitions Section of the Fee 

Schedule. 

14 15 U.S.C. 78f(b). 

15 15 U.S.C. 78f(b)(4). 

16 15 U.S.C. 78f(b)(1) and (b)(5). 

17See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

18See https://www.cboe.com/us/options/market_

share/. 

19See id. 

20See Securities Exchange Act Release No. 85304 

(March 13, 2019), 84 FR 10144 (March 19, 2019) 

(SR–PEARL–2019–07). 

the volume threshold that Market 

Makers currently achieve in SPY/QQQ/ 

IWM options on MIAX PEARL. The 

Exchange believes that the proposed 

volume threshold will still remain 

highly competitive such that the 

threshold should enable the Exchange to 

continue to attract order flow in SPY/ 

QQQ/IWM options and maintain market 

share. The Exchange cannot predict 

with certainty how many Market Makers 

would achieve the alternative Volume 

Criteria in Tier 2 with the increased 

threshold percentage, but the Exchange 

anticipates that each Market Maker that 

is currently in Tier 2 with that 

alternative method will likely continue 

to reach that Tier. 

Alternative Volume Criteria for Tier 3 

The Exchange proposes to amend the 

Add/Remove Tiered Rebates/Fees set 

forth in Section (1)(a) of the Fee 

Schedule that apply to the MIAX 

PEARL Market Maker Origin, to add a 

new, alternative Volume Criteria to Tier 

3, based upon the total monthly volume 

executed in SPY options on MIAX 

PEARL by a MIAX PEARL Market 

Maker when adding liquidity. Pursuant 

to this alternative Volume Criteria, 

Market Makers will qualify for: (i) 

Maker rebates of ($0.44) in SPY, QQQ 

and IWM options for their Market Maker 

Origin when trading against Origins not 

Priority Customer, and (ii) Maker 

rebates of ($0.42) in SPY, QQQ and 

IWM options for their Market Maker 

Origin when trading against Priority 

Customer Origins, if the Market Maker 

executes at least 1.10% in SPY options 

when adding liquidity. The Exchange 

proposes that, in Tier 3 for MIAX 

PEARL Market Makers, the alternative 

Volume Criteria (above 1.10% in SPY 

when Adding Liquidity) will be 

calculated based on the total monthly 

volume that added liquidity executed by 

the Market Maker solely in SPY options 

on MIAX PEARL, not including 

Excluded Contracts, (as the numerator) 

expressed as a percentage of (divided 

by) SPY TCV 13 (as the denominator). 

The Exchange notes that Market Makers 

that achieve the standard Tier 3 volume 

percentage but do not qualify for the 

proposed alternative Volume Criteria in 

that Tier, will receive the Tier 3 rates in 

the Market Maker Origin table in Penny 

Classes and Non-Penny Classes. 

Members will receive the highest tier 

based on the thresholds achieved. Other 

Penny classes and Non-Penny classes 

will receive the Tier 3 rates in the 

Market Maker Origin table. The 

Exchange proposes to designate the Tier 

3 alternative Volume Criteria with the 

new symbol ‘‘✦’’ in Tier 3 of the Market 

Maker Origin table in Section (1)(a) of 

the Fee Schedule, with an explanatory 

paragraph listed below the tables in 

Section (1)(a) of the Fee Schedule. 

The purpose of this proposed change 

is for business and competitive reasons. 

The Exchange cannot predict with 

certainty how many Market Makers 

would achieve the proposed Tier 3 

alternative Volume Criteria, but 

anticipates that approximately three 

Market Makers are within reasonable 

proximity to potentially achieve the 

higher rebates in SPY/QQQ/IWM 

options based upon the total monthly 

volume executed in SPY options on 

MIAX PEARL by the current MIAX 

PEARL Market Makers. 

The proposed changes are scheduled 

to become operative January 4, 2021. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 14

in general, and furthers the objectives of 

Section 6(b)(4) of the Act,15 in that it is 

an equitable allocation of reasonable 

dues, fees and other charges among 

Exchange members and issuers and 

other persons using its facilities, and 

6(b)(5) of the Act,16 in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The Exchange believes its proposal to 

modify the volume threshold for the 

alternative Volume Criteria in Tier 2 

and add a new, alternative Volume 

Criteria to Tier 3 provides for the 

equitable allocation of reasonable dues 

and fees and is not unfairly 

discriminatory for the following 

reasons. The Exchange operates in a 

highly competitive market. The 

Commission has repeatedly expressed 

its preference for competition over 

regulatory intervention in determining 

prices, products, and services in the 

securities markets. In Regulation NMS, 

the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 17

There are currently 16 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has more 

than approximately 15% of the market 

share of executed volume of multiplylisted equity and ETF options trades as 

of December 24, 2020, for the month of 

December 2020.18 Therefore, no 

exchange possesses significant pricing 

power in the execution of multiplylisted equity and ETF options order 

flow. More specifically, as of December 

30, 2020, the Exchange had an 

approximately 3.10% market share of 

executed volume of multiply-listed 

equity and ETF options for the month of 

December 2020.19

The Exchange believes that the evershifting market shares among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow, or discontinue or 

reduce use of certain categories of 

products, in response to transaction 

and/or non-transaction fee changes. For 

example, on February 28, 2019, the 

Exchange filed with the Commission a 

proposal to increase Taker fees in 

certain Tiers for options transactions in 

certain Penny classes for Priority 

Customers and decrease Maker rebates 

in certain Tiers for options transactions 

in Penny classes for Priority Customers 

(which fee was to be effective March 1, 

2019).20 The Exchange experienced a 

decrease in total market share between 

the months of February and March of 

2019, after the fees were in effect. 

Accordingly, the Exchange believes that 

the March 1, 2019 fee change may have 

contributed to the decrease in the 

Exchange’s market share and, as such, 

the Exchange believes competitive 

forces constrain options exchange 

transaction fees and market participants 

can shift order flow based on fee 

changes instituted by the exchanges. 

The Exchange believes its proposal to 

modify the volume threshold for the 

alternative Volume Criteria in Tier 2 


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21See supra note 11. See generally, Section (1)(a) 

of the Fee Schedule for Market Maker Origin. 

22See MIAX Options Fee Schedule, Section 

(1)(a)(iii). 

23See Nasdaq ISE, LLC (‘‘ISE’’) Fee Schedule, 

Section 3, Regular Order Fees and Rebates. The ISE 

Fee Schedule provides for a ‘‘Market Maker Plus’’ 

program for Select and Non-Select Symbols, with 

tiered incentives for Market Makers. Further, the 

ISE Fee Schedule provides for a linked maker rebate 

for SPY, QQQ and IWM, in which the linked maker 

rebate applies to executions in SPY, QQQ, and IWM 

if the ISE Market Maker does not achieve the 

applicable tier in that symbol but achieves the tier 

(i.e., any of the Market Maker Plus Tiers 2–4) for 

any badge/suffix combination in the other linked 

symbol, in which case the higher tier achieved 

applies to both symbols. 

24 15 U.S.C. 78s(b)(3)(A)(ii). 

25 17 CFR 240.19b–4(f)(2). 

and add a new, alternative Volume 

Criteria to Tier 3 is reasonable, equitably 

allocated and not unfairly 

discriminatory because these changes 

are for business and competitive 

reasons. In order to attract order flow, 

the Exchange initially set its volume 

threshold for the alternative Volume 

Criteria in Tier 2 at a meaningful low 

level. The Exchange now believes that it 

is appropriate to adjust this volume 

threshold so that it is more in line with 

the volume threshold that Market 

Makers currently achieve in SPY/QQQ/ 

IWM options on MIAX PEARL. The 

Exchange believes that the proposed 

volume threshold will still remain 

highly competitive such that the 

threshold should enable the Exchange to 

continue to attract order flow in SPY/ 

QQQ/IWM options and maintain market 

share. 

The Exchange believes its proposal to 

establish the alternative Volume Criteria 

for Tier 3 is reasonable, equitable, and 

not unfairly discriminatory, as it is a 

form of pricing already adopted by the 

Exchange 21 and a form of pricing based 

upon trading activity in a select group 

of symbols, which is a common practice 

on many U.S. options exchanges as a 

means to incentivize order flow to be 

sent to an exchange for execution in 

actively traded options classes. The 

Exchange’s affiliate, Miami International 

Securities Exchange, LLC (‘‘MIAX 

Options’’), offers differentiated pricing 

for transactions in options underlying 

certain select symbols.22 Other options 

exchanges’ fee schedules distinguish by 

symbol and specifically assess different 

fees and rebates for transactions in 

select symbols for the same market 

participants.23

The Exchange believes its proposal to 

offer an alternative Tier 3 Volume 

Criteria based upon the total monthly 

volume executed in SPY options on 

MIAX PEARL by a MIAX PEARL Market 

Maker when adding liquidity, will 

incentivize Market Makers to improve 

their posted liquidity to the benefit of 

the entire market, which will increase 

order flow sent to the Exchange, 

benefiting all market participants 

through increased liquidity, tighter 

markets and order interaction. 

The Exchange also believes that its 

proposal is not unfairly discriminatory 

as all Market Makers can qualify for the 

alternative Volume Criteria in Tiers 2 

and 3 by meeting the requirements that 

are designed to incentivize Market 

Makers to maintain quality markets. In 

addition, the Exchange continues to 

believe that it is not unfairly 

discriminatory to offer rebates pursuant 

to this proposal to only Market Makers 

because Market Makers add value 

through continuous quoting and are 

subject to additional requirements and 

obligations (such as quoting obligations) 

that other market participants are not. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange believes its proposal 

will not impose any burden on intramarket competition because the 

Exchange believes that its proposal will 

not place any category of Exchange 

market participant at a competitive 

disadvantage. The proposal to modify 

the volume threshold for the alternative 

Volume Criteria in Tier 2 and add a 

new, alternative Volume Criteria to Tier 

3, is intended to improve market 

quality. The Exchange believes that its 

proposal will encourage Market Makers 

to improve market quality by providing 

an additional incentive to Market 

Makers in SPY and QQQ/IWM options 

to send additional SPY and QQQ/IWM 

orders, which results in narrower bidask spreads and increased depth of 

liquidity. This in turn will attract 

additional order flow to the Exchange. 

Accordingly, the Exchange believes that 

the proposed changes will continue to 

attract order flow to the Exchange, 

thereby encouraging additional volume 

and liquidity to the benefit of all market 

participants. 

The Exchange believes its proposal 

will not impose any burden on intermarket competition because the 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

options exchanges. Because competitors 

are free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. The Exchange believes that the 

proposed rule changes reflect this 

competitive environment because they 

modify the Exchange’s fees in a manner 

that encourages market participants to 

continue to provide liquidity and to 

send order flow to the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,24 and Rule 

19b–4(f)(2) 25 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

PEARL–2020–38 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. 


khammond on DSKJM1Z7X2PROD with NOTICES
5300 Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Notices 

26 17 CFR 200.30–3(a)(12). 

1See Natixis ETF Trust II, et al., Investment 

Company Act Release No. 33684 (Nov. 14, 2019) 

(notice) and Investment Company Act Release No. 

33711 (Dec. 10, 2019) (order). Except as specifically 

noted in the application, all representations and 

conditions contained in the application previously 

submitted with the Commission (File No. 812– 

14870), as amended and restated, and filed with the 

Commission on October 21, 2019 (the ‘‘Prior 

Application’’) remain applicable to the operation of 

the Funds and will apply to any Funds relying on 

the Amended Order. 

2The relief granted in the Prior Order under 

section 12(d)(1)(J) of the Act for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of the 1940 Act 

(the ‘‘Section 12(d)(1) Relief’’), and relief under 

sections 6(c) and 17(b) of the Act for an exemption 

from sections 17(a)(1) and 17(a)(2) of the Act 

relating to the Section 12(d)(1) Relief, will expire 

one year from the effective date of rule 12d1–4. See 

Fund of Funds Arrangements, Investment Company 

Act Rel. No. 10871 (Oct. 7, 2020), at III. 

3All capitalized terms not otherwise defined in 

this notice have the meanings ascribed to them in 

the Prior Application. 

4 Deposit Instruments and Redemption 

Instruments may include cash and/or securities. 

5The Funds are not be able to operate in reliance 

on rule 6c–11 because they do not disclose their 

portfolio holdings on a daily basis as required by 

the rule. See rule 6c–11(c)(1)(i) (requiring an ETF 

to disclose prominently on its website, publicly 

available and free of charge, the portfolio holdings 

that will form the basis for each calculation of NAV 

per share). 

All submissions should refer to File 

Number SR–PEARL–2020–38. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–PEARL–2020–38 and 

should be submitted on or before 

February 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00949 Filed 1–15–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34171; 812–15157] 

Natixis ETF Trust II, et al. 

January 12, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application to 

amend a prior order for exemptive 

relief. 

SUMMARY OF APPLICATION: Applicants 

request an order (‘‘Amended Order’’) 

that would amend a prior order to 

permit the Funds, as defined below, to 

use Creation Baskets (as defined below) 

that include instruments that are not 

included, or are included with different 

weightings, in the Fund’s proxy 

portfolio. 

APPLICANTS: Natixis Advisors, L.P. 

(‘‘Natixis’’), Natixis ETF Trust II (the 

‘‘Trust’’) and NYSE Group, Inc. 

(‘‘NYSE’’). 

FILING DATES: The application was filed 

on August 31, 2020, and amended on 

November 16, 2020 and on December 8, 

2020. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants 

with a copy of the request by email. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on 

February 8, 2021 and should be 

accompanied by proof of service on the 

Applicants, in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the 

Investment Company Act of 1940 

(‘‘Act’’), hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing to the Commission’s Secretary 

at Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

peter.shea@klgates.com. 

FOR FURTHER INFORMATION CONTACT: 

Marc Mehrespand, Senior Counsel; 

Trace Rakestraw, Branch Chief, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

I. Introduction 

1. On December 10, 2019, the 

Commission issued an order (‘‘Prior 

Order’’) 1 under section 6(c) of the Act 

for an exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) of the Act for an exemption 

from sections 12(d)(1)(A) and 

12(d)(1)(B) of the Act.2 The Prior Order 

permitted Applicants to introduce a 

novel type of actively-managed 

exchange-traded fund (‘‘ETF’’) that is 

not required to disclose its portfolio 

holdings on a daily basis (each, a 

‘‘Fund’’). Rather, pursuant to the Prior 

Order, each Business Day 3 a Fund 

publishes a basket of securities and cash 

that, while different from the Fund’s 

portfolio, is designed to closely track its 

daily performance (the ‘‘Proxy 

Portfolio’’). 

2. Pursuant to the Prior Order, a Fund 

sells and redeems its shares (‘‘Shares’’) 

only in Creation Units and generally on 

an in-kind basis. Purchasers are 

required to purchase Creation Units by 

making a deposit of Deposit Instruments 

and shareholders redeeming their 

Shares receive a transfer of Redemption 

Instruments.4 Under the Prior Order, the 

names and quantities of the instruments 

that constitute the Deposit Instruments 

and the Redemption Instruments for a 

Fund (collectively, the ‘‘Creation 

Basket’’) are the same as the Fund’s 

Proxy Portfolio, except to the extent 

purchases and redemptions are made 

entirely or in part on a cash basis. 

3. Applicants now seek to amend the 

Prior Order to, in effect, give the Funds 

the same flexibility with respect to 

Creation Basket composition as afforded 

to ETFs relying on rule 6c–11.5 More 


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