60996 Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98013 

(July 27, 2023) 88 FR 50927 (August 2, 2023)(SR– 

NYSEAMER–2023–27)(Order Granting Approval of 

a Proposed Rule Change to Amend Rule 915 

(Criteria for Underlying Securities) to Accelerate the 

Listing of Options on Certain IPOs). 

4 Id. 

5Rule 402(a) requires that, for underlying 

securities to be eligible for option transactions, such 

securities must be duly registered and be an ‘‘NMS 

stock’’ as defined in Rule 600 of Regulation NMS 

under the Act and will be characterized by a 

substantial number of outstanding shares which are 

widely held and actively traded. See Rule 402(a)(1) 

and (2). 

6See Rule 402(b)(5)(i). The Exchange is not 

proposing to make any changes to the guidelines for 

listing securities that are not a ‘‘covered security.’’ 

See Rule 402(b)(5)(ii). 

7See proposed Rule 402(b)(5)(i). The Exchange 

proposes a non-substantive change to number the 

existing and proposed criteria for covered securities 

as (A) and (B) of paragraph (5)(i). See proposed Rule 

402(b)(5)(i). 

8While the Exchange acknowledges that market 

participants may utilize options for speculative 

purposes (in addition to as a hedging tool), the 

Exchange believes (as set forth below) that its 

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–MEMX–2023–17 and should be 

submitted on or before September 27, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19123 Filed 9–5–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98249; File No. SR–MIAX– 

2023–32] 

Self-Regulatory Organizations; Miami 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Exchange Rule 402 

(Criteria for Underlying Securities) To 

Accelerate the Listing of Options on 

Certain IPOs 

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 

23, 2023, Miami International Securities 

Exchange LLC (‘‘MIAX’’ 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 

amend Exchange Rule 402. The text of 

the proposed rule change is available on 

the Exchange’s website at https://

www.miaxglobal.com/markets/usoptions/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 amend 

Exchange Rule 402, Criteria for 

Underlying Securities, to permit an 

underlying security having a market 

capitalization of at least $3 billion based 

upon the offering price of its initial 

public offering, to be listed and traded 

starting on or after the second business 

day following the initial public offering 

day. The Exchange is proposing a listing 

rule change that is substantially similar 

in all material respects to the proposal 

approved for NYSE American LLC 

(‘‘NYSE American’’).3 Following 

discussions with other exchanges and a 

cross-section of industry participants 

and in coordination with the Listed 

Options Market Structure Working 

Group (‘‘LOMSWG’’) (collectively, the 

‘‘Industry Working Group’’), NYSE 

American filed a proposed rule change,4

which was recently approved, to modify 

the standard for the listing and trading 

of options on ‘‘covered securities’’ to 

reduce the time to market. At this time, 

the Exchange proposes to adopt an 

identical rule. 

Rule 402 sets forth the guidelines to 

be considered in evaluating for option 

transactions underlying securities that 

are ‘‘covered securities,’’ as defined in 

section 18(b)(1)(A) of the Securities Act 

of 1933 (hereinafter ‘‘covered security’’ 

or ‘‘covered securities’’).5 Currently, the 

Exchange permits the listing of an 

option on an underlying covered 

security that, amongst other things, has 

a market price of at least $3.00 per share 

for the previous three consecutive 

business days preceding the date on 

which the Exchange submits a 

certificate to The Options Clearing 

Corporation (‘‘OCC’’) to list and trade 

options on the underlying security (the 

‘‘three-day lookback period’’).6 Under 

the current rule, if an initial public 

offering (‘‘IPO’’) occurs on a Monday, 

the earliest date the Exchange could 

submit its listing certificate to OCC 

would be on Thursday, with the market 

price determined by the closing price 

over the three-day lookback period from 

Monday through Wednesday. The 

option on the IPO’d security would then 

be eligible for trading on the Exchange 

on Friday (i.e., within four business 

days of the IPO inclusive of the day the 

listing certificate is submitted to OCC).7

The Exchange notes that the three-day 

look back period helps ensure that 

options on underlying securities may be 

listed and traded in a timely manner 

while also allowing time for OCC to 

accommodate the certification request. 

However, there are certain large IPOs 

that issue high-priced securities—well 

above the $3.00 per share threshold— 

that would obviate the need for the 

three-day lookback period. In this 

regard, the Industry Working Group has 

recently identified proposed changes to 

Rule 402(b)(5)(i) that would help 

options on covered securities that have 

a market capitalization of at least $3 

billion based upon the offering price of 

its IPO come to market earlier. The 

proposed change, which is intended to 

be harmonized across options 

exchanges, is designed to provide 

investors the opportunity to hedge their 

interest in IPO investments in a shorter 

amount of time than what is currently 

permitted.8 The Exchange believes that 


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Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 60997 

existing surveillance technologies and procedures 

adequately address potential violations of exchange 

rules and federal securities laws applicable to 

trading on the Exchange. 

9The Exchange acknowledges that the Options 

Listing Procedures Plan (‘‘OLPP’’) requires that the 

listing certificate be provided to OCC no earlier 

than 12:01 a.m. and no later than 11:00 a.m. 

(Chicago time) on the trading day prior to the day 

on which trading is to begin. See the OLPP, at p. 

3., available here: https://ncuoccblobdev.

blob.core.windows.net/media/theocc/media/ 

clearing-services/services/options_listing_

procedures_plan.pdf. The OLPP is a national 

market system plan that, among other things, sets 

forth procedures governing the listing of new 

options series. 

10FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 

11See supra note 8. 

12The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 15See supra note 8. 

options serve a valuable tool to the 

trading community and help markets 

function efficiently by mitigating risk. 

To that end, the Exchange believes that 

the absence of options in the early days 

after an IPO may heighten volatility in 

the trading of IPO’d securities. 

Accordingly, the Exchange proposes 

to modify Rule 402 to waive the threeday lookback period for covered 

securities that have a market 

capitalization of at least $3 billion based 

upon the offering price of the IPO of 

such securities and to allow options on 

such securities to be listed and traded 

starting on or after the second business 

day following the initial public offering 

day (i.e., not inclusive of the day of the 

IPO).9 NYSE American has stated that it 

has reviewed trading data for IPO’d 

securities dating back to 2017 and is 

unaware of any such security that 

achieved a market capitalization of $3 

billion based upon the offering price of 

its IPO that would not have also 

qualified for listing options based on the 

three-day lookback requirement. 

Specifically, NYSE American has 

determined that 202 of the 1,179 IPOs 

that took place between January 1, 2017, 

and October 21, 2022, met the $3 billion 

market capitalization/IPO offering price 

threshold. Options on all 202 of those 

IPO shares subsequently satisfied the 

three-day lookback requirement for 

listing and trading, i.e., none of these 

large IPOs closed below the $3.00/share 

threshold during its first three days of 

its trading. As such, the Exchange 

believes the proposed capitalization 

threshold of $3 billion based upon the 

offering price of its IPO is appropriate. 

Under the proposed rule, if an IPO for 

a company with a market capitalization 

of $3 billion based upon the offering 

price of its IPO occurs on a Monday, the 

Exchange could submit its listing 

certificate to OCC (to list and trade 

options on the IPO’d security) as soon 

as all the other requirements for listing 

are satisfied. If, on Tuesday, all 

requirements are deemed satisfied, the 

IPO’d security could then be eligible for 

trading on the Exchange on Wednesday 

(i.e., starting on or after the second 

business day following the IPO day). 

Thus, the proposal could potentially 

accelerate the listing of options on IPO’d 

securities by two days. 

The Exchange believes the proposed 

change would allow options on IPO’d 

securities to come to market sooner 

without sacrificing investor protection. 

The Exchange represents that trading in 

IPO’d securities—like all other 

securities traded on the Exchange—is 

subject to surveillances administered by 

the Exchange and to cross-market 

surveillances administered by FINRA on 

behalf of the Exchange. Those 

surveillances are designed to detect 

violations of Exchange rules and 

applicable federal securities laws.10 The 

Exchange represents that those 

surveillances are adequate to reasonably 

monitor Exchange trading of IPO’d 

securities in all trading sessions and to 

reasonably deter and detect violations of 

Exchange rules and federal securities 

laws applicable to trading on the 

Exchange.11 As such, the Exchange 

believes that its existing surveillance 

technologies and procedures, coupled 

with NYSE American’s findings related 

to the IPOs reviewed as described 

herein, adequately address potential 

concerns regarding possible 

manipulation or price stability. 

Implementation Date 

The Exchange will announce the 

effective date of the proposed change by 

Notice distributed to all Members.12 The 

Exchange will coordinate the effective 

date to coincide with the 

implementation of the proposed change 

on the other options exchanges. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

section 6(b) of the Act.13 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the section 

6(b)(5) 14 requirements that the rules of 

an exchange be 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 regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

In particular, the Exchange believes 

the proposed change would facilitate 

options transactions and would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, which 

would, in turn, protect investors and the 

public interest by providing an avenue 

for options on IPO’d securities to come 

to market earlier. The Exchange notes 

that the three-day look back period 

helps ensure that options on underlying 

securities may be listed and traded in a 

timely manner while also allowing time 

for OCC to accommodate the 

certification request. However, there are 

certain large IPOs that issue high-priced 

securities—well above the $3.00 per 

share threshold—that would obviate the 

need for the three-day lookback period. 

As noted above, NYSE American has 

reviewed trading data for IPO’d 

securities dating back to 2017 and is 

unaware of an IPO’d security with a 

market capitalization of $3 billion or 

more (based upon the offering price of 

its IPO) that subsequently would have 

failed to qualify for listing and trading 

as options under the three-day lookback 

requirement. The Exchange believes that 

the proposed amendment, which would 

be harmonized across options 

exchanges, would remove impediments 

to and perfect the mechanism of a free 

and open market and a national market 

system by providing an avenue for 

investors to hedge their interest in IPO 

investments in a shorter amount of time 

than what is currently permitted. The 

Exchange believes that options serve a 

valuable tool to the trading community 

and help markets function efficiently by 

mitigating risk. To that end, the 

Exchange believes that the absence of 

options in the early days after an IPO 

may heighten volatility to IPO’d 

securities.15

Further, as noted herein, the 

Exchange believes the proposed change 

would allow options on IPO’d securities 

to come to market sooner (i.e., at least 

two business days post-IPO not 

inclusive of the day of the IPO) without 

sacrificing investor protection. The 

Exchange represents that trading in 

IPO’d securities—like all other 

securities traded on the Exchange—is 


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60998 Federal Register / Vol. 88, No. 171 / Wednesday, September 6, 2023 / Notices 

16See supra note 10. 

17See supra note 3. 

18 15 U.S.C. 78s(b)(3)(A). 

19 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. 

20 17 CFR 240.19b–4(f)(6). 

21 17 CFR 240.19b–4(f)(6)(iii). 

22For 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). 

subject to surveillances administered by 

the Exchange and to cross-market 

surveillances administered by FINRA on 

behalf of the Exchange. Those 

surveillances are designed to detect 

violations of Exchange rules and 

applicable federal securities laws.16 The 

Exchange represents that those 

surveillances are adequate to reasonably 

monitor Exchange trading of IPO’d 

securities in all trading sessions and to 

reasonably deter and detect violations of 

Exchange rules and federal securities 

laws applicable to trading on the 

Exchange, including wrongful efforts to 

manipulate the prices of those securities 

in order to bring them in compliance 

with the $3.00/share threshold for the 

listing of options. As such, the Exchange 

believes that its existing surveillance 

technologies and procedures, coupled 

with NYSE American’s findings related 

to the IPOs reviewed as described 

herein, would adequately address 

potential concerns regarding possible 

manipulation or price stability. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. In this regard 

and as indicated above, the Exchange 

notes that the rule change is being 

proposed as a competitive response to a 

filing submitted by NYSE American that 

was recently approved by the 

Commission.17 The Exchange 

anticipates that the other options 

exchanges will adopt substantively 

similar proposals, such that there would 

be no burden on intermarket 

competition from the Exchange’s 

proposal. 

Accordingly, the proposed change is 

not meant to affect competition among 

the options exchanges. For these 

reasons, the Exchange believes that the 

proposed rule change reflects this 

competitive environment and does not 

impose any undue burden on 

intermarket competition. 

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 for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to section 19(b)(3)(A) of the 

Act 18 and Rule 19b–4(f)(6) 19

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 20 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),21 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 a waiver 

of the operative delay is consistent with 

the protection of investors and the 

public interest because it will ensure 

fair competition among the exchanges 

by allowing the Exchange to allow 

options on IPO’d securities to come to 

market sooner (i.e., at least two business 

days post-IPO not inclusive of the day 

of the IPO) without sacrificing investor 

protection. 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 rule change does 

not raise any new or novel issues. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change as 

operative upon filing.22

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– 

MIAX–2023–32 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–MIAX–2023–32. 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 


lotter on DSK11XQN23PROD with NOTICES1
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 


lotter on DSK11XQN23PROD with NOTICES1