Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 60999 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Rule 2614(a)(1) for a description 

of Limit Orders. 

4The term ‘‘User’’ means any Member or 

Sponsored Participant who is authorized to obtain 

access to the System pursuant to Exchange Rule 

2602. See Exchange Rule 1901. 

5The Exchange intends to implement this 

proposed rule change and begin to notify Users 

whether their displayed Limit Order established a 

new NBBO upon entry or when modified via a 

Cancel/Replace message on August 31, 2023 (if 

waiver of the operative delay is granted) or on the 

effective date of this filing. See, e.g., MIAX Pearl 

Equities—Updated Interface Specifications 

Published for Future Enhancements—New NBBO 

Setter Flag and Cancellation Feature if Order is Not 

Setting the NBBO, dated July 26, 2023, available at 

https://www.miaxglobal.com/alert/2023/07/26/ 

miax-pearl-equities-updated-interfacespecifications-published-future, and MIAX Pearl 

Equities—Previously Announced New NBBO Setter 

Flag and Cancellation Feature will be available on 

Thursday, August 31, 2023; Corresponding Updated 

Risk Protections Guide and Order Type 

Combinations Guide Now on website, dated August 

11, 2023, available at https://www.miaxglobal.com/ 

alert/2023/08/11/miax-pearl-equities-previouslyannounced-new-nbbo-setter-flag-and. This 

functionality is limited to displayed Limit Orders 

because that is the only order type offered by the 

Exchange that may establish a new NBBO. 

6The Exchange intends to submit a separate filing 

with the Commission for immediate effectiveness 

pursuant to section 19(b)(1) of the Exchange Act 

and Rule 19b–4(f)(2) thereunder a proposal to 

establish the NBBO Setter Plus Program. The 

Exchange notes that other exchanges have adopted 

similar programs. See Securities Exchange Act 

Release Nos. 95124 (June 17, 2022) 87 FR 37894 

(June 24, 2022) (SR–CboeBZX–2022–034); 14923 

(March 10, 2022) 87 FR 14923 (March 16, 2022) 

(SR–MEMX–2022–01); 68209 (November 9, 2012) 

77 FR 69519 (November 19, 2012) (SR–NASDAQ– 

2012–126); and 89754 (September 2, 2020), 85 FR 

55550 (September 8, 2020) (SR–NYSE–2020–71). 

7The term ‘‘MIAX Pearl Equities Book’’ means 

the electronic book of orders in equity securities 

maintained by the System. See Exchange Rule 1901. 

SR–MIAX–2023–32 and should be 

submitted on or before September 27, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19122 Filed 9–5–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98252; File No. SR– 

PEARL–2023–39] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 2614 of the MIAX Pearl Equities 

Rulebook 

August 30, 2023. 

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 August 

25, 2023, MIAX PEARL, LLC (‘‘MIAX 

Pearl’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

description of Limit Orders under 

Exchange Rule 2614(a)(1) to provide 

optional functionality that would cancel 

displayed Limit Orders 3 on the 

Exchange’s equity trading platform 

(referred to herein as ‘‘MIAX Pearl 

Equities’’) that do not establish a new 

National Best Bid or Offer (‘‘NBBO’’), as 

described below. 

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 

description of Limit Orders under 

Exchange Rule 2614(a)(1) to provide 

optional functionality that cancel a 

displayed Limit Order to buy (sell) on 

MIAX Pearl Equities that does not 

establish a new NBB (NBO), as 

described herein. The Exchange intends 

to begin to notify Users 4 whether their 

displayed Limit Order established a new 

NBBO upon entry or when modified via 

a Cancel/Replace message and such 

modification causes the order to lose 

time priority.5 This functionality is 

related to a separate proposal to adopt 

a fee program to be known as NBBO 

Setter Plus on September 1, 2023 that 

would provide an enhanced rebate to 

those displayed Limit Orders that 

establish the NBBO.6 Users that are 

notified that their displayed Limit Order 

or modification of such order did not 

establish a new NBBO may then submit 

a new displayed Limit Order in an 

attempt to then establish a new NBBO 

and qualify for the upcoming NBBO 

Setter Plus program. 

In connection with the above 

initiatives, Users requested the ability to 

instruct the Exchange to cancel their 

displayed Limit Order where it does not 

establish a new NBBO. Therefore, the 

Exchange proposes to allow Users to 

instruct the Exchange, on an order-byorder basis, to cancel their displayed 

Limit Order to buy (sell) when that 

order does not establish a new NBB 

(NBO) upon entry or when modified via 

a Cancel/Replace message in accordance 

with Exchange Rule 2614(e) and such 

modification results in the order losing 

time priority in accordance with 

Exchange Rule 2616(a)(5). The proposed 

functionality would be set forth under 

Exchange Rule 2614(a)(1)(J). For the 

avoidance of doubt, the default behavior 

would be for the Exchange to not cancel 

the order under this proposal, unless 

otherwise instructed to do so upon entry 

on an order-by-order basis. 

The following example illustrates the 

proposed functionality upon entry. 

Assume the NBBO is $10.00 by $10.05. 

A User submits a displayed Limit Order 

to buy with a limit price of $10.01 and 

instructs the Exchange to cancel such 

order should it not establish a new NBB. 

The order does establish a new NBB 

upon entry and is posted to the MIAX 

Pearl Equities Book,7 resulting in a new 

NBBO of $10.01 by $10.05. However, 

such order would have been cancelled 

by the Exchange if its limit price was 

$10.00 or lower. 

The Exchange also proposes to allow 

Users to instruct the Exchange to cancel 

a displayed Limit Order when that order 

does not establish a new NBB (NBO) 

after being modified via a Cancel/ 

Replace message in accordance with 

Exchange Rule 2614(e) and such 

modification results in the order losing 

time priority in accordance with 

Exchange Rule 2616(a)(5). In sum, 

Exchange Rule 2614(e) provides that 


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61000 Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 

8See, e.g., Securities Exchange Act Release No. 

93506 (November 2, 2021), 86 FR 61796 (November 

8, 2021) (SR–PEARL–2021–35). 

9However, such order would not have been 

cancelled by the Exchange if its new limit price was 

$10.02. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

12See reason code 240 on page 110 of the NYSE 

Pillar Gateway Binary Protocol Specifications, dated 

June 27, 2023, available at NYSE_Pillar_Gateway_

Binary_Protocol_Specification.pdf. See also 

Securities Exchange Act Release No. 89754 

(September 2, 2020), 85 FR 55550 (September 8, 

2020) (SR–NYSE–2020–71). Functionality to cancel 

the order if it does not set the NBBO was not 

included in SR–NYSE–2020–71. 

13 Id. 

only the price, sell long, sell short, or 

short exempt indicator, and size terms 

of the order may be changed by a 

Cancel/Replace Message. Exchange Rule 

2616(a)(5) provides that in the event an 

order has been modified via a Cancel/ 

Replace message in accordance with 

Exchange Rule 2614(e) above, such 

order only retains its timestamp if such 

modification involves a decrease in the 

size of the order, a change to the Max 

Floor of an order with a Reserve 

Quantity, or when a Short Sale Period, 

as defined in Exchange Rule 

2614(g)(3)(A), is not in effect, a change 

in position from (A) sell to sell short; (B) 

sell to sell short exempt; (C) sell short 

to sell; (D) sell short to sell short 

exempt; (E) sell short exempt to sell; 

and (F) sell short exempt to sell short.8

Any other modification to an order, 

including an increase in the size of the 

order and/or price change, will result in 

such order losing time priority as 

compared to other orders in the MIAX 

Pearl Equities Book and the timestamp 

for such order being revised to reflect 

the time of the modification. 

The following illustrates how the 

order from the above example would be 

handled if later modified via a Cancel/ 

Replace message that results in a loss in 

time priority. As illustrated in the above 

example, the displayed Limit Order to 

buy established a new NBBO of $10.01 

by $10.05 upon entry and now 

continues to rest on the MIAX Pearl 

Equities Book at $10.01. Assume the 

away BBO is $10.00 by $10.05 and a 

User submit a Cancel/Replace message 

to change the order’s limit price to 

$9.99. This would result in the away 

BBO of $10.00 by $10.05 becoming the 

new NBBO. The displayed Limit Order 

resting on the MIAX Pearl Equities Book 

would, therefore, be cancelled because 

its price is inferior to the new NBB of 

$10.00 and would no longer set the 

NBB.9

Users would need to instruct the 

Exchange upon entry on an order-byorder basis to cancel their order as 

proposed herein. The proposed 

functionality would be entirely optional 

and, absent an instruction from the User 

on entry to the contrary, a displayed 

Limit Order that does not establish a 

new NBBO as described above would 

not be cancelled by the Exchange. Users 

may choose to use the proposed 

functionality based on their own 

business needs and trading behavior. 

All Users would be notified that their 

displayed Limit Order or modification 

to such order did not establish a new 

NBBO, regardless of whether a User 

instructs the Exchange to cancel a 

displayed Limit Order when it does not 

establish a new NBBO as described 

herein. Users that do not inform the 

Exchange upon entry to cancel such 

order may choose to cancel that order 

on their own and submit a new order in 

an attempt to then establish a new 

NBBO and qualify for the upcoming 

NBBO Setter Plus program. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with the 

requirements of the Act and the rules 

and regulations thereunder that are 

applicable to a national securities 

exchange, and, in particular, with the 

requirements of section 6(b) of the 

Act.10 Specifically, the proposal is 

consistent with section 6(b)(5) of the 

Act 11 because it would promote just 

and equitable principles of trade, 

remove impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest because it would provide Users 

optional functionality to assist them in 

managing their order flow and attempts 

to establish a new NBBO. The proposal 

further remove impediments to, and 

perfect the mechanism of, a free and 

open market and a national market 

system because Users may instruct the 

Exchange upon entry to cancel their 

displayed Limit Order or modification 

to such order that did not establish a 

new NBBO so that they may then 

submit a new order to again attempt to 

establish a new NBBO and qualify for 

the upcoming NBBO Setter Plus 

program. The proposal would also 

promote just and equitable principles of 

trade because it would facilitate a User’s 

ability to enter orders that establish a 

new NBBO by enabling them to enter a 

new order in a timelier manner and not 

submit a separate cancellation message 

prior to entering the new order. The 

proposed optional functionality should 

encourage more aggressively priced 

displayed liquidity on the Exchange, 

thereby, improving price discovery and 

potentially attracting additional contraside order flow. 

As stated above, the proposed 

functionality would be entirely optional 

and, absent an instruction from the User 

to the contrary, a displayed Limit Order 

that does not establish a new NBBO as 

described above would not be cancelled 

by the Exchange. Users may choose to 

not use the proposed functionality and 

make their own decision whether to 

cancel the order on their own based on 

their business needs and trading 

behavior. 

Lastly, the exchange notes that at least 

one other exchange that currently offers 

a similar NBBO Setter Plus program also 

provides for the ability to instruct the 

exchange to cancel an order if it does 

not establish the NBBO.12

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would result 

in any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The proposed rule change would not 

have any impact on intramarket 

competition because it would be 

available to all Users and Users may 

choose to use the proposed functionality 

based on their own business needs or 

trading behavior. The proposal may 

enhance intermarket competition 

because it would allow the Exchange to 

better compete with at least one other 

exchange that currently offers the ability 

to instruct the exchange to cancel an 

order if it does not establish the NBBO 

as part of its own NBBO Setter Plus 

program.13 The proposal may also 

improve the Exchange’s competitive 

position by encouraging the entry of 

displayed orders priced more 

aggressively than the NBBO, improving 

the Exchange’s market quality, and 

attracting additional liquidity. The 

proposal responds to the current 

competitive environment where order 

flow providers have a choice of where 

to direct liquidity-providing orders by 

providing optional functionality to 

facilitate the entry of aggressively priced 

displayed liquidity on 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. 


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Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 61001 

14 15 U.S.C. 78s(b)(3)(A)(iii). 

15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires the Exchange 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. 

16 Id. 

17 17 CFR 240.19b–4(f)(6)(iii). 

18For 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). 

19 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

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 14 and Rule 

19b–4(f)(6) thereunder.15

A proposed rule change filed under 

Rule 19b–4(f)(6) 16 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 17 permits the 

Commission to 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 this 

proposal provides Users optional 

functionality to manage their order flow 

and is designed to facilitate their ability 

to enter aggressively priced displayed 

Limit Orders that establish a new 

NBBO. The Exchange represents that a 

waiver of the operative delay would 

permit the Exchange to offer the 

proposed cancellation and connected 

NBBO notification functionality by 

September 1, 2023, the date that it 

intends to begin to offer an NBBO Setter 

Plus program and allow it to better 

compete with other exchanges that offer 

similar programs and functionality. The 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because the proposed 

functionality is optional and could 

encourage more aggressively priced 

displayed liquidity on the Exchange. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change as 

operative upon filling.18

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2023–39 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–PEARL–2023–39. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–PEARL–2023–39 and should be 

submitted on or before September 27, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19126 Filed 9–5–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98247; File No. SR– 

NYSEAMER–2023–42] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Change To Modify Rule 900.3NYP 

August 30, 2023. 

Pursuant to section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on August 

23, 2023, NYSE American LLC (‘‘NYSE 

American’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

Rule 900.3NYP (Orders and Modifiers) 

regarding the handling of certain Market 

Orders subject to Trading Collars and 

conforming changes to Rule 952NYP 

(Auction Process). The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 


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