66526 Federal Register / Vol. 88, No. 186 / Wednesday, September 27, 2023 / Notices 

54 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

market of significant size, and that on 

the whole the manipulation concerns 

previously articulated by the 

Commission are sufficiently mitigated to 

the point that they are outweighed by 

investor protection issues that would be 

resolved by approving this proposal. 

The Exchange believes that the 

proposal is, in particular, designed to 

protect investors and the public interest. 

The investor protection issues for U.S. 

investors has grown significantly over 

the last several years, through roll costs 

for ether Futures ETFs and premium/ 

discount volatility and management fees 

for OTC Ether Funds. As discussed 

throughout, this growth investor 

protection concerns need to be reevaluated and rebalanced with the 

prevention of fraudulent and 

manipulative acts and practices 

concerns that previous disapproval 

orders have relied upon. Finally, the 

Exchange notes that in addition to all of 

the arguments herein which it believes 

sufficiently establish the CME Ether 

Futures market as a regulated market of 

significant size, it is logically 

inconsistent to find that the CME Ether 

Futures market is a significant market as 

it relates to the CME Ether Futures 

market, but not a significant market as 

it relates to the ether spot market for the 

numerous reasons laid out above. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

Section 6(b)(5) of the Act. 

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 that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change, 

rather will facilitate the listing and 

trading of an additional exchange-traded 

product that will enhance competition 

among both market participants and 

listing venues, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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– 

CboeBZX–2023–070 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–CboeBZX–2023–070. 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-CboeBZX–2023–070 and should be 

submitted on or before October 18, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.54

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20959 Filed 9–26–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98474; File No. SR–CBOE– 

2023–048] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rules 5.87 and 

8.21 

September 21, 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 

September 14, 2023, Cboe Exchange, 

Inc. (‘‘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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rules 5.87 and 8.21. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 


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3See Rule 8.21(b). 

4See Rule 8.21(a). 

5See Securities Exchange Act Release No. 34– 

61715 (May 16, 2010), 75 FR 13626 (March 22, 

2010) (SR–CBOE–2010–028). 6See Cboe Regulatory Circular 23–006, dated July 

21, 2023. 

7Current Rule 8.21.02(j) erroneously refers to 

Rule 6.1(d); as part of the proposed rule change, the 

Exchange proposes to update the rule to refer to 

Rule 6.1(e). 

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 is proposing to amend 

certain open outcry trading procedures, 

set forth in the Exchange Rulebook. 

Rule 8.21 (Multiple Representation 

Prohibited) generally prohibits multiple 

representation in open outcry trading 

crowds by a Trading Permit Holder 

(‘‘TPH’’) for any account in which a 

TPH has an interest or on behalf of a 

customer. The rule provides in relevant 

part that, except in accordance with 

procedures established by the Exchange 

or with the Exchange’s permission in 

individual cases, no individual MarketMaker shall enter or be present in a 

trading crowd while a Floor Broker 

present in the trading crowd is holding 

an order on behalf of the MarketMaker’s individual account or an order 

initiated by the Market-Maker for an 

account in which the Market-Maker has 

an interest.3 Further, the rule provides 

that no TPH, for any account in which 

the TPH has an interest or on behalf of 

a customer, shall maintain with more 

than one broker orders for the purchase 

or sale of the same option contract or 

other security, or the same combination 

of option contracts or other securities, 

with the knowledge that such orders are 

for the account of the same principal.4

Interpretations and Policies .01 and 

.02 to Rule 8.21 set forth exception 

procedures that would permit multiple 

representation for individual MarketMakers in certain circumstances, with 

Interpretation .01 including exception 

procedures related to an individual 

Market-Maker placing orders with a 

Floor Broker and Interpretation .02 

including exception procedures related 

to the simultaneous representation of 

Market-Maker joint accounts. 

Specifically, Interpretation and Policy 

.02 to Rule 8.21 sets out various 

procedures that, if followed, would 

permit the simultaneous presence in a 

trading crowd of participants in and 

orders for the same Market-Maker joint 

account. These procedures are intended 

to ensure that Market-Makers who 

choose to employ a joint account for 

their Exchange trading are not 

disadvantaged in participating in trades 

versus those Market-Makers that choose 

to employ individual accounts.5 These 

exception procedures apply only to 

individual Market-Makers. Currently, 

the Exchange has interpreted the term 

‘‘individual Market-Maker’’ to mean a 

person who is registered with the 

Exchange as an individual TPH and 

holds a Market-Maker Floor Permit, 

which entitles the holder to act as a 

Market-Maker on the floor of the 

Exchange.6 The current exception 

procedures and requirements are as 

follows: 

• Joint accounts may be simultaneously 

represented in a trading crowd by 

participants trading in-person for the joint 

account. (See Rule 8.21.02(a).) 

• Joint account participants who are not 

trading in-person in a trading crowd may 

enter orders for the joint account with Floor 

Brokers even if other participants are trading 

the same joint account in-person. (See Rule 

8.21.02(b).) 

• When series are simultaneously opened 

during rotation, joint account participants 

trading the joint account in-person may enter 

orders for the joint account with Floor 

Brokers in series where they are unable to 

trade the joint account in-person. (See Rule 

8.21.02(c).) 

• There is no restriction on the number of 

joint account participants that may 

participate on behalf of the joint account on 

the same trade. (See Rule 8.21.02(d).) 

• When joint account participants are 

trading in-person in a trading crowd for their 

individual account or as a Floor Broker, 

another participant of the joint account may 

trade for the joint account in-person or enter 

orders for the joint account with Floor 

Brokers. (See Rule 8.21.02(e).) 

• Except as otherwise permitted under this 

Rule 8.21, TPHs are prohibited from entering 

orders for their individual or joint accounts 

while they are trading in-person in a trading 

crowd even if the orders are for an account 

they are not then actively trading. (See Rule 

8.21.02(f).) 

• TPHs must ensure that they do not trade 

in-person or by orders such that (1) a trade 

occurs between a joint account participant’s 

individual market-maker account and the 

joint account of which he or she is a 

participant, or (2) a trade occurs in which the 

buyer and seller are representing the same 

joint account and are on opposite sides of a 

transaction. It is the responsibility of a joint 

account participant to ascertain whether joint 

account orders have been entered in a crowd 

prior to trading the joint account in-person. 

(See Rule 8.21.02(g).) 

• Joint account participants may not act as 

a Floor Broker for the joint account of which 

they are a participant. (See Rule 8.21.02(h).) 

• TPHs may alternate trading in-person for 

their individual account and their joint 

account while in a trading crowd. (See Rule 

8.21.02(i) 7.) 

• When completing a trade ticket for 

Market-Maker joint account transactions, it 

must contain such information as may be 

required by the Exchange under Rule 6.1(e). 

All procedures and requirements 

contained in Interpretation and Policy 

.02 must be satisfied, and each 

individual Market-Maker must also 

separately satisfy the procedures and 

requirements of Interpretation and 

Policy .01. These joint account 

requirements also remain subject to 

other applicable open outcry trading 

procedures, such as open outcry priority 

and facilitation/solicitation 

requirements, including Rule 5.86 

(Facilitated and Solicited Transactions) 

and Rule 5.87 (Crossing Orders), as 

applicable. 

Since the enactment of these rules, 

changes have occurred in the trading 

environment. First, the Exchange 

migrated from a floor-based market, 

where individuals traded in-person as a 

Floor Broker or a Market-Maker, to a 

hybrid environment, whereby 

individuals can trade in-person on the 

floor, or remotely. Further, the capacity 

in which individual Market-Makers 

trade has shifted. Historically, Trading 

Permits were most commonly held by 

individuals. While current Exchange 

rules still allow for an individual to be 

an individual Trading Permit Holder, it 

has become far more common for a 

Trading Permit Holder organization to 

become a Trading Permit Holder, 

purchase Trading Permits, and, under 

Rule 3.9(b), designate individual 

nominees to represent the organization 

with respect to each Floor Broker 

Trading Permit or Market-Maker Floor 

Trading Permit or, under Rule 3.9(a), 

designate at least one individual as the 

Responsible Person for that TPH 

organization, with respect to the TPH 

organization’s electronic Trading 

Permit(s). Thus, it is common practice 

that a TPH organization has, at any 

given time, designated numerous 

individuals to be nominees and perform 

trading functions on behalf of the TPH 

organization, either on the floor or 

electronically, with respect to any 

Trading Permit which the organization 

holds. As a result, instead of 

participating in joint accounts, MarketMakers often trade for the accounts of 

those TPH organizations. 

Under the current exception 

procedures in Interpretation and Policy 


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8The term ‘‘nominee’’ means an individual who 

is authorized by a TPH organization, in accordance 

with Rule 3.9, to represent such TPH organization 

in all matters relating to the Exchange with respect 

to a Floor Broker or Market-Maker Floor Trading 

Permit. See Rule 1.1 (definition of ‘‘nominee’’). 

Pursuant to Rule 3.9, each TPH organization must 

designate an individual nominee to represent the 

organization with respect to each Market-Maker 

Floor Trading Permit in all matters relating to the 

Exchange. 

9The Exchange currently maintains five types of 

Trading Permits: a Market-Maker Electronic Access 

Permit, an Electronic Access Permit, a Clearing TPH 

Permit, a Market-Maker Floor Trading Permit and 

a Floor Broker Trading Permit. 10There are no changes to Rule 8.21(g) as part of 

the proposed rule change, as the provision, and 

responsibilities described therein, continue to apply 

to Trading Permit Holders. 

11As noted above, the current exception 

procedures would permit in-crowd Market-Makers 

to participate on a trade only if the Floor Broker 

was representing an order initiated by another 

individual Market-Maker from the same TPH 

organization. 

12For the avoidance of doubt, all other 

procedures and requirements contained in 

Interpretation and Policy .02, including all 

provisions in Interpretation .02(g) except the last 

sentence, must be satisfied and each individual 

Market-Maker must also separately satisfy the 

procedures and requirements of Interpretation and 

Policy .01. 

13 If a TPH organization were to enter an order 

with a Floor Broker, in addition to the solicited 

order, then the TPH organization (not the Floor 

.02, because an individual MarketMaker only contemplates an individual 

with a Market-Maker Floor Permit, an 

individual Market-Maker trading inperson on the trading floor may 

participate on the same trade as a Floor 

Broker who holds a solicited order from 

the same TPH organization only if 

initiated by someone who also meets the 

definition of an individual MarketMaker (i.e., an individual with a MarketMaker Floor Permit). As noted above, 

Market-Makers are currently nominees 

of TPH organizations as opposed to 

individual TPHs and trade for the 

accounts of their TPH organizations as 

opposed to joint accounts. Therefore, 

few Market-Makers may take advantage 

of the current exception procedures 

intended to not disadvantage MarketMakers from participating in trades 

versus those Market-Makers that choose 

to employ individual accounts, because 

many individuals trading off the floor 

(who may solicited) likely no longer 

have floor permits. Currently, there are 

no exceptions to the multiple 

representation prohibition for TPH 

organizations’ associated persons who 

are not registered as individual MarketMakers (and thus do not have a MarketMaker Floor Trading Permit) and place 

solicited orders on behalf of their 

associated TPH organizations with Floor 

Brokers. Therefore, an individual 

Market-Maker trading in-person on the 

trading floor currently may not 

participate on the same trade as a Floor 

Broker who holds a solicited order 

initiated by an associated person of the 

same TPH organization (that is not also 

an individual Market-Maker) as the 

individual Market-Maker. 

The Exchange now proposes changes 

to Rules 8.21 and 5.87. 

First, the Exchange proposes to 

amend Rule 8.21(b) to the definition of 

‘‘individual Market-Maker’’ and update 

this definition in the Rules. The 

Exchange proposes to add a 

parenthetical to the rule to define 

explicitly an individual Market-Maker 

as an individual nominee 8 of a TPH 

organization or an individual Trading 

Permit Holder, either of which holds a 

Market-Maker Floor Trading Permit.9

This change merely updates this 

definition to reflect current rule 

terminology and industry changes, 

pursuant to which most (if not all) 

individual Market-Makers are part of 

larger TPH organizations. 

Similarly, the Exchange proposes to 

amend Rule 8.21, Interpretation and 

Policy .02 to clarify the applicability of 

the exception procedures. As noted 

above, Rule 8.21.02 provides exception 

procedures related to the simultaneous 

representation of Market-Maker joint 

accounts. The Exchange proposes to 

delete reference to ‘‘participants’’ from 

the introduction in Interpretation .02, as 

well as Interpretation .02(a), (b), (c), and 

(d), and proposes to instead refer to an 

‘‘individual Market-Maker.’’ Likewise, 

the Exchange proposes to delete 

references to ‘‘joint account 

participants’’ from Interpretation .02(b), 

(e), and (h), and proposes to instead 

refer to an ‘‘individual Market-Maker.’’ 

Finally, the Exchange proposes to delete 

‘‘Trading Permit Holders’’ from 

Interpretation Rule .02(i) and (f) and 

replace with ‘‘Individual MarketMakers.’’ 10 The Exchange notes that the 

application of the rule is not changing 

per these proposed replacements, but 

rather the Exchange seeks to simplify 

the multiple representation rule using 

clearer and more unified terminology. 

These terminology changes are 

consistent with who may participate in 

joint accounts (and thus who may take 

advantage of the exception procedures 

in this rule). 

The Exchange also proposes to add a 

new Interpretation .03 to Rule 8.21 to 

provide an additional exception to the 

prohibition on multiple representation 

to incorporate the market changes 

described above to, similar to the 

exception in Interpretation and Policy 

.02, ensure that Market-Makers on the 

floor who choose to be part of a larger 

TPH organization and trade for the 

account of that TPH organization 

(similar to the concept of trading for a 

joint account) are not disadvantaged in 

participating in trades versus those 

Market-Makers that choose to employ 

individual accounts. Under the current 

exception, as noted above, while a Floor 

Broker may represent an order initiated 

by a nominee of a TPH organization 

who is not an individual Market-Maker 

(and thus has a Trading Permit other 

than a Market-Maker Floor Permit), the 

in-crowd Market-Makers from the same 

TPH organization are unable to 

participate on the trade.11 The Exchange 

proposes to add Interpretation .03 to 

provide that, subject to the requirements 

of Rule 5.87(f), as applicable, an 

individual Market-Maker trading inperson in a trading crowd and not 

through orders placed with a Floor 

Broker may participate on the same 

trade as a Floor Broker who holds a 

solicited order on behalf of the same 

TPH Organization, provided the 

individual Market-Maker did not 

initiate the solicited order. As 

individual Market-Makers are generally 

part of larger TPH organizations and 

trade for the accounts of those 

organizations, which have multiple 

individuals functioning as MarketMakers on the trading floor (i.e., with 

Market-Maker Floor Permits) or through 

electronic trading from off the trading 

floor (i.e., with Electronic Access 

Permits), the Exchange believes this 

proposed exception is appropriate to 

reflect current organizational structures 

within the industry. This proposed 

exception aligns in purpose with the 

current exception in Interpretation and 

Policy .02 and will further ensure that 

Market-Makers trading on the 

Exchange’s floor are not prevented from 

participating in trades that include 

solicited interest merely because the 

solicited party happens to be trading for 

the same account (TPH organization 

account instead of joint account). 

The proposed Rule 8.21.03 also 

provides that the last sentence of 

Interpretation .02(g) to this Rule 8.21, 

which states that it is the responsibility 

of a joint account participant to 

ascertain whether joint account orders 

have been entered in a crowd prior to 

trading the joint account in-person, does 

not apply to this new Interpretation 

.03.12 Under the proposed changes, as 

further detailed below, there would be 

no obligation on behalf of the individual 

Market-Maker to ascertain whether 

someone from his or her firm initiated 

the solicited order or had knowledge of 

the solicited order, prior to trading inperson in a trading crowd.13


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Broker) would be in violation of the multiple 

representation rule. 14As part of this proposed rule change, the 

Exchange proposes to make a non-substantive 

change to correct the cross-reference in Rule 

5.87(f)(4), to refer to paragraph (f) of the Rule rather 

than paragraph (d). 15Pursuant to Rule 5.87(f)(2), the Floor Broker 

crossing entitlement takes effect after all public 

customer orders that were on the limit order book 

and then represented in the trading crowd at the 

time the market was established have been satisfied. 16See Rule 1.1 for definition of In-Crowd Market 

Participant. 17Rule 5.87(f)(6) currently provides in relevant 

part that the ‘‘the ICMPs who established the 

market will have priority over all other orders that 

were not represented in the trading crowd at the 

time the market was established (but not over 

Priority Customer orders on the Book) and will 

maintain priority over such orders except for orders 

that improve upon the market.’’ 

18The proposed rule change deletes Rule 

5.87(f)(6)(A) and (B), as they are no longer 

applicable, and moves language from current 

5.87(f)(6)(C) to be included in 5.87(f)(6). 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

21 Id. 

The Exchange proposes to amend 

Rule 5.87(f), which contains procedures 

and requirements related to open outcry 

crossing entitlement for solicitations 

and facilitations.14 Under current rules, 

in the event a Floor Broker represents an 

order that is of the eligible order size or 

greater (‘‘original order’’) and is also 

holding a facilitation order or a solicited 

order, the Floor Broker may proceed 

under the provisions of Rule 5.87(f) to 

obtain a crossing participation 

entitlement.15 The crossing 

participation entitlement permits the 

Floor Broker to transact either 20% or 

40% (currently 40% for all classes), of 

the remainder of the original order 

against the facilitation or solicited order. 

Further, if an On-Floor DPM or OnFloor LMM is granted participation 

rights under Rule 5.85, Rule 5.87(f)(5) 

provides that the On-Floor DPM or OnFloor LMM participation entitlement is 

applied if the trade occurs at the OnFloor DPM’s/LMM’s principal bid or 

offer, provided that the On-Floor DPM/ 

LMM participation entitlement will be 

limited to a percentage of contracts that, 

when combined with the percentage the 

originating firm crossed, may not exceed 

40% of the original order size. After the 

applicable public customer orders and 

participation entitlements have been 

satisfied, Rule 5.87(f)(6) provides that 

the remaining balance of the order will 

be allocated among the In-Crowd Market 

Participants (‘‘ICMPs’’) 16 who 

established the market.17 Rule 

5.87(f)(6)(B) further provides that 

priority to trade the remaining portion 

of the order shall be afforded to bids 

(offers) made by ICMPs in the sequence 

in which they are made. If bids (offers) 

were made at the same time, or in the 

event that the sequence cannot be 

reasonably determined, priority shall be 

apportioned equally among the ICMPs 

who established the market. 

In light of the proposed changes to 

Rule 8.21, the Exchange proposes to 

update Rule 5.87(f) to modify the 

priority of members in the trading 

crowd after the crossing participation 

entitlement and other applicable 

participation entitlements have been 

satisfied. Specifically, the Exchange 

proposes to update Rule 5.87(f)(6) 18 to 

state that priority to trade the remaining 

portion of the order shall be 

apportioned equally among ICMPs who 

established the market, as is the case 

currently if bid (offers) were made at the 

same time, or in the event that the 

sequence cannot be reasonably 

determined. As under the current rule, 

in the event an ICMP declines to accept 

any portion of the available contracts, 

any remaining contracts shall be 

apportioned equally among the other 

ICMPs who established the market until 

all contracts have been apportioned. 

The Exchange also proposes to amend 

Rule 5.87(f)(7). Current Rule 5.87(f)(7) 

states nothing in that paragraph is 

intended to prohibit a Floor Broker, an 

On-Floor DPM, or an On-Floor LMM 

from trading more than his or her 

percentage entitlement if the other 

ICMPs do not choose to trade the 

remaining portion of the order. The 

Exchange proposes to add that it is also 

not intended to prohibit these parties 

from trading more than his or her 

percentage entitlement if such trades are 

permissible under the proposed 

Interpretation .03 of Rule 8.21. This is 

consistent with the proposed rule 

change above, which would make it 

possible for the TPH organization of 

which the applicable party is a part to, 

as a whole, trade more than 40% 

participation entitlement). 

Finally, the Exchange proposes to 

amend Interpretation .06 to Rule 5.87, 

which currently provides that Rule 

5.87(f) supersedes the priority provision 

of Rule 5.86(d) in those situations where 

the Floor Broker representing an eligible 

order determines to take advantage of 

the crossing provisions of paragraph (f) 

of this Rule. The Exchange proposes 

adding language regarding an order 

being represented by the Floor Broker 

using the crossing provision, to clarify 

that paragraph (f) of Rule 5.87 provides 

the solicited person or order being 

represented by the Floor Broker using 

the crossing provision with priority over 

all other parties (other than certain 

Public Customer orders) for either 20% 

or 40% of the contracts remaining in the 

order, as determined by the Exchange, 

after those certain Public Customer 

orders have been satisfied. This is 

merely a clarifying change and has no 

impact on what orders may be eligible 

for the entitlement pursuant to Rule 

5.87(f). 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.19 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 20 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 21 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

the proposed rule change to add an 

exception to the multiple representation 

prohibition will 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. The purpose 

of this proposed change, similar to the 

purpose of the current exception to the 

multiple representation prohibition in 

Rule 8.21, Interpretation and Policy .02, 

is to ensure that an individual MarketMaker trading in-person on behalf of the 

TPH organization is not disadvantaged 

in participating in a solicited trade 

solely because the trade was initiated off 

the floor by an individual trading for the 

same account. This proposed exception 

expands the current exception to permit 

Market-Makers to participate in trades if 

they are for TPH organization accounts 

(as is current common practice) instead 

of joint accounts and if the solicited 

party is from his or her same TPH 

organization, regardless of the type of 

trading permit the solicited party is 

using (as opposed to the current 

exception that permits this only if the 


ddrumheller on DSK120RN23PROD with NOTICES1
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22Rule 8.21 is designed to ensure that a MarketMaker present in the trading crowd is not 

disproportionately represented. 

solicited party has a Market-Maker Floor 

Trading Permit, which is uncommon in 

current practice). 

Specifically, under the current rules, 

an individual Market-Maker trading inperson on the trading floor may 

participate on the same trade as a Floor 

Broker who holds a solicited order from 

the same TPH organization, but only if 

initiated by another individual MarketMaker. However, currently, there are no 

exceptions to the multiple 

representation prohibition for TPH 

organizations’ associated persons who 

are not registered as individual MarketMakers (and thus do not have a MarketMaker Floor Trading Permit) and place 

solicited orders for joint accounts with 

Floor Brokers. Therefore, an individual 

Market-Maker trading in-person on the 

trading floor currently may not 

participate on the same trade as a Floor 

Broker who holds a solicited order 

initiated by an associated person of the 

same TPH organization as the 

individual Market-Maker. 

As discussed above, since the 

enactment of these rules, changes have 

occurred in the trading environment. As 

a result of those changes, it is common 

practice that a TPH organization has, at 

any given time, designated numerous 

individuals to perform trading functions 

on behalf of the TPH organization, 

either on the floor or electronically, 

with respect to any Trading Permit 

which the organization holds. As a 

result, instead of participating in joint 

accounts, Market-Makers trade for the 

accounts of those TPH organizations. 

The proposed rule changes 

incorporate these advancements in the 

modern trading environment into the 

current exceptions to Rule 8.21 by 

expanding on the current exception 

procedures in current Interpretation and 

Policy .02 to permit an individual 

Market-Maker trading in-person may 

participate on a solicited trade that is 

initiated by an individual from the same 

TPH organization, regardless of whether 

the individual initiating the solicited 

trade is an individual Market-Maker. 

The proposed exception essentially 

permits Market-Makers trading in 

person on the floor on behalf of a TPH 

organization (as opposed to for a joint 

account) to participate on a trade if 

solicited interest was initiated by 

another Market-Maker from that TPH 

organization (for the same account). 

Like the current exception in 

Interpretation and Policy .02, the 

purpose of this exception is to ensure 

that Market-Makers on the floor who 

choose to be part of a larger TPH 

organization and trade for an account of 

that TPH organization (similar to the 

concept of a joint account) are not 

disadvantaged in participating in trades 

versus those Market-Makers that choose 

to employ individual accounts. It is 

common practice for off-floor liquidity 

providers, including Market-Makers 

with Electronic Access Permits, to be 

solicited to provide liquidity to trade 

against customer orders that are 

ultimately crossed on the Exchange’s 

trading floor. Therefore, given the 

changes to the market as described 

above, the Exchange believes the 

proposed rule change further removes 

impediments to and perfects the 

mechanism of a free and open market 

and a national market system, as the 

proposed changes ensure that an 

individual Market-Maker that trading 

in-person that chooses to be part of a 

larger TPH organization and trade for an 

account of that TPH organization 

(similar to the concept of a joint 

account) is not disadvantaged in 

participating in a solicited trade versus 

a Market-Maker that chooses to employ 

an individual account. 

The Exchange further believes the 

proposed rule change will not permit 

unfair discrimination between 

customers, issuers, brokers, or dealers, 

because it will eliminate a disparity that 

exists under current Rules. As noted 

above, because it is common for MarketMakers to trade on behalf of TPH 

organizations as opposed to trade as 

individual TPHs, and thus trade for TPH 

organization accounts as opposed to for 

joint accounts, there are few MarketMakers on the trading floor that can take 

advantage of the current exception to 

the multiple representation prohibition 

in current Rule 8.21, Interpretation and 

Policy .02. The Exchange believes this 

may disadvantage Market-Makers from 

participating in trades versus those that 

choose to employ individual accounts, 

because Market-Makers trading on 

behalf of TPH organizations (as most do) 

are not permitted to take advantage of 

the current exception if the solicited 

interested was initiated off the floor by 

an individual who does not hold a 

Market-Maker Floor Trading Permit, but 

rather another eligible trading permit 

offered by the Exchange (for example, 

acting as a Market-Maker with an 

Electronic Access Permit), thus 

removing a potential disparity that 

exists under current Rules. Therefore, 

these Market-Makers are losing trading 

opportunities because of the type of 

permit held by the solicited party. 

Additionally, the Exchange believes 

the proposed rule change is consistent 

with the requirement that the rules of an 

exchange not be designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers, 

as the Exchange believes the proposed 

rule change may reduce any inadvertent 

unfair discrimination to which current 

individual Market-Makers are subject. 

As discussed above, the Exchange 

believes many individual MarketMakers on the trading floor that trade 

for the account of the TPH organizations 

on behalf of which they trade may be at 

a disadvantage compared to individual 

Market-Makers that trade for an 

individual account. This is due to the 

fact that currently Market-Makers act as 

nominees of TPH organizations, trading 

for the accounts of those TPH 

organizations, and trade upstairs with 

EAPs rather than Market-Maker Floor 

Permits, as opposed to being and 

individual TPH as was the case 

historically. Under the proposed rule 

change, a Market-Maker acting as 

nominee of a TPH organization would 

have the opportunity to participate in 

trades for which members of their TPH 

organizations provide solicited 

liquidity, regardless of the type of 

trading permit those members have. 

Currently, individual Market-Makers 

have this opportunity only if that other 

member of the same TPH organization 

happens to have a Market-Maker Floor 

Trading Permit. As proposed, no ICMP 

would be prohibited from participating 

on a trade solely because he or she is 

from the same TPH organization as the 

individual that initiated the solicited 

order. The Exchange believes that the 

changes will create an opportunity for 

increased participation on such open 

outcry trades, which could potentially 

lead to increased execution 

opportunities. The Exchange believes 

that this in turn may lead to greater 

competition and price improvement for 

orders, thus creating a more robust open 

outcry market, which may ultimately 

benefit investors who choose to send 

orders to the Exchange. 

Further, the Exchange believes the 

proposed rule changes promote just and 

equitable principles of trade, as the 

amended rule preserves the intended 

prohibitions around multiple 

representation,22 while ensuring that 

Market-Makers who are employed by 

TPH organizations represented by 

multiple individuals (as is generally the 

case in today’s trading environment) 

trading on and off the floor under a 

variety of eligible trading permits are 

not unfairly disadvantaged from 

participating in trades. As noted above, 

there is a current exception to the 

multiple representation prohibition that 

permits a Market-Maker on the trading 

floor to participate on a trade for which 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 186 / Wednesday, September 27, 2023 / Notices 66531 

23See, e.g., Rule 5.32(a)(1)(B). 

24See, e.g., NYSE American Rule 934.1NY 

(Facilitation Cross Transactions). 

25 15 U.S.C. 78f(b)(1). 

another Market-Maker with a MarketMaker Floor Trading Permit from the 

same TPH organization was solicited. 

The proposed exception essentially just 

expands this exception to permit 

Market-Makers on the trading floor to 

participate in trades for which any other 

individual trading on behalf of the same 

TPH organization provided liquidity in 

the form of a solicited order, regardless 

of the type of permit such individual 

holds. Like the current exceptions, the 

proposed Rule 8.21, Interpretation .03 

requires an individual Market-Maker 

participating on a trade for which the 

solicited order was initiated by another 

individual from the same TPH 

organization to be trading in-person in 

a trading crowd and not through orders 

placed with a Floor Broker. 

Additionally, the proposed exception 

would not apply if the individual 

Market-Maker trading in-person 

initiated the solicited order. Finally, all 

requirements set forth in Rule 8.21 and 

its Interpretations and Policies, with the 

exception of the last sentence of 

Interpretation .02(g) (as discussed 

below), continue to apply with respect 

to multiple representation prohibitions 

and solicited orders. Thus, the proposed 

changes continue to preserve the intent 

of the multiple representation rule to 

ensure that a Market-Maker present in 

the trading crowd is not 

disproportionately represented, and just 

expands exceptions under the current 

rule to permit Market-Makers on the 

trading floor to participate in trades for 

which any other individual trading on 

behalf of the same TPH organization 

provided liquidity in the form of a 

solicited order, regardless of the type of 

permit such individual holds. 

Similarly, the Exchange believes the 

proposed changes to exclude the last 

sentence of Rule 8.21.02(g) from the 

proposed exception and to Rule 5.87(f) 

to revise the priority afforded to incrowd participants with respect to 

facilitated and solicited orders in open 

outcry trading, after the crossing 

participation entitlement and other 

applicable participation entitlements 

have been satisfied, are consistent with 

the Act and promote just and equitable 

principles of trade. In today’s hybrid 

trading environment, it may be difficult 

and unduly onerous for individuals on 

the trading floor to ascertain (at all or in 

a timely manner) which TPH 

organization has been solicited on an 

initiating trade, and thus, difficult, 

under current rules, to determine which 

ICMP(s) would have priority. Further, 

the Exchange believes the current rules 

may discourage a TPH organization 

from submitting solicited orders to trade 

against customer orders in open outcry, 

as the TPH that submitted a solicited 

order may ultimately end up trading 

against a lesser portion of the initiating 

order if there are a small number of 

ICMPs who want to trade against the 

order, as such ICMPs would have 

priority over any ICMP from the same 

TPH organization that submitted the 

solicited order. This may reduce 

execution opportunities or competition 

for customer orders. Under the proposed 

changes, priority to trade the remaining 

portion of the solicited order shall be 

apportioned equally among ICMPs who 

established the market; this would 

include ICMPs from all TPH 

organizations, including the one on 

behalf of which the solicited order was 

submitted. The Exchange notes that the 

proposed changes align with current 

floor behavior, since, as stated above, in 

today’s trading environment it is 

difficult to reasonably determine which 

ICMP(s) have priority. The Exchange 

further notes that priority is not always 

time determinative (e.g., pro rata),23 and 

believes the proposed rules will 

streamline the open outcry execution 

process for crossing transactions, while 

continuing to provide such solicited 

orders with meaningful execution and 

price improvement opportunities. 

Further, under the proposed rules, an 

individual Market-Maker would not be 

required to ascertain whether the 

solicited order was initiated on behalf of 

the same TPH organization, nor would 

the TPH organization firm be required to 

inform their Market-Makers trading in 

person if a solicited order had been 

initiated. The Exchange believes the 

proposed changes will reduce 

unnecessary complexity and confusion 

in its open outcry procedures, and 

simplify handling of solicited orders on 

the Exchange’s trading floor, to the 

benefit and protection of investors. 

Finally, the Exchange believes the 

proposed changes to clarify certain 

Rules will remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, will protect 

investors and the public interest. 

Specifically, by amending Rule 8.21(b) 

and Interpretation and Policies .02 to 

clarify the definition of ‘‘individual 

Market-Maker’’ and the applicability of 

the current exception procedures, the 

proposed rule change may mitigate any 

potential confusion for TPHs. Further, 

the Exchange believes the proposed 

change to Interpretation .06 to Rule 5.87 

to add language to clarify that paragraph 

(f) of Rule 5.87 provides the solicited 

person or order being represented by the 

Floor Broker using the crossing 

provision with priority over all other 

parties (other than certain Public 

Customer orders) for either 20% or 40% 

of the contracts remaining in the order, 

as determined by the Exchange, after 

those certain Public Customer orders 

have been satisfied may mitigate any 

potential confusion as a result of the 

proposed rule changes, which protects 

investors and perfects the mechanism of 

a free and open market. Such changes 

are not unfairly discriminatory as they 

are not instituting a new policy, but 

rather providing clarification as to a 

current rule, which provides for 

participation entitlement consistent 

with other exchanges.24

Additionally, the Exchange believes 

the proposed change to Rule 5.87(f) to 

state that nothing in the rule paragraph 

is intended to prohibit an Floor Broker, 

an On-Floor DPM, or an On-Floor LMM 

from trading more than his or her 

percentage entitlement if such trades are 

permissible under proposed 

Interpretation .03 of Rule 8.21 (as under 

proposed rule a TPH organization as a 

whole may trade more than 40% 

participation entitlement) provides 

further transparency into the potential 

allocations as related to solicited orders, 

which protects investors and perfects 

the mechanism of a free and open 

market by eliminating any potential 

confusion as a result of the proposed 

rule changes. 

The Exchange also believes the 

proposed changes to clarify certain 

Rules is consistent with Section 6(b)(1) 

of the Act,25 which provides that the 

Exchange be organized and have the 

capacity to be able to carry out the 

purposes of the Act and to enforce 

compliance by the Exchange’s Trading 

Permit Holders and persons associated 

with its Trading Permit Holders with 

the Act, the rules and regulations 

thereunder, and the rules of the 

Exchange. As noted above, the Exchange 

believes the proposed changes to Rule 

8.21(b) and Interpretation and Policies 

.02 to clarify the definition of 

‘‘individual Market-Maker’’ and the 

applicability of the current exception 

procedures, as well as the proposed 

change to Interpretation .06 to Rule 

5.87, may mitigate any potential 

confusion for TPHs and thus facilitate 

compliance with Exchange rules. 

Similarly, the proposed change to Rule 

5.87(f) provides further transparency 

into the potential allocations as related 

to solicited orders. The Exchange 

believes these changes and transparency 


ddrumheller on DSK120RN23PROD with NOTICES1
66532 Federal Register / Vol. 88, No. 186 / Wednesday, September 27, 2023 / Notices 

26 15 U.S.C. 78s(b)(3)(A). 

27 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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. 

28 17 CFR 240.19b–4(f)(6). 

29 17 CFR 240.19b–4(f)(6)(iii). 

30For 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). 

will protect investors and assist TPHs in 

complying with Exchange rules, as they 

provide more clarity and reduce 

complexity within the rules. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because it will apply in the same 

manner to all TPH organizations. The 

proposed exception to the multiple 

representation prohibition is similar to 

exceptions currently in place today. The 

Exchange believes the proposed rule 

change will put all individual MarketMakers on equal footing with respect to 

the ability to participate on crossing 

transactions. As discussed, above, the 

Exchange believes the proposed 

exception removes a potential disparity 

under current Rules that may 

disadvantage an individual MarketMaker trading in-person from 

participating in trades solely because 

the trade was initiated off the floor by 

an individual from his or her same TPH 

organization who holds a permit other 

than a Market-Maker Floor Trading 

Permit. Further, the proposed changes 

to the priority afforded to ICMPs with 

respect to facilitated and solicited 

orders in open outcry trading, after the 

crossing participation entitlement and 

other applicable participation 

entitlements have been satisfied, will 

apply equally to all ICMPs. 

The Exchange does not believe that 

the proposed change will impose an 

unnecessary or inappropriate burden on 

intermarket competition because it only 

applies to the execution of orders on the 

Exchange’s trading floor. As discussed 

above, the proposed rule change is 

intended to modernize and streamline 

the Exchange’s open outcry procedures 

regarding crossing transactions, which 

changes the Exchange believes may lead 

to greater competition and price 

improvement for orders, thus creating a 

more robust open outcry market. 

Finally, the proposed clarifying 

changes are not intended to have any 

impact on competition, but rather add 

transparency to the Rules and eliminate 

potential confusion of investors. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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) of the Act 26 and Rule 19b– 

4(f)(6) thereunder.27

A proposed rule change filed under 

Rule 19b–4(f)(6) 28 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 29 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 Exchange 

may implement the proposed change as 

soon as possible. The Exchange states 

that waiver of the operative delay will 

protect investors by ensuring that an 

individual Market-Maker trading inperson is not disadvantaged in 

participating in a solicited trade solely 

because the trade was initiated off the 

floor by an individual from his or her 

same TPH organization who does not 

hold a Market-Maker Floor Trading 

Permit, thus removing a potential 

disparity that exists under current 

Rules. With respect to the proposed 

changes to exclude the last sentence of 

Rule 8.21.02(g) from the proposed 

exception and to revise the priority 

described in Rule 5.87(f), the Exchange 

states that waiver of the operative delay 

will promptly reduce unnecessary 

complexity and confusion regarding 

open outcry procedures, and simplify 

handling of solicited orders on the 

trading floor. Additionally, the 

Exchange states that, with respect to 

proposed changes to clarify definitions 

and the applicability of current 

exception procedures, waiver of the 

operative delay will allow the Exchange 

to provide further transparency as soon 

as possible. 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.30

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 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

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– 

CBOE–2023–048 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–CBOE–2023–048. 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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 186 / Wednesday, September 27, 2023 / Notices 66533 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Equity Member’’ is a Member 

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

4With respect to the trading of equity securities, 

the term ‘‘NBB’’ shall mean the national best bid, 

the term ‘‘NBO’’ shall mean the national best offer, 

and the term ‘‘NBBO’’ shall mean the national best 

bid and offer. See Exchange Rule 1901. 

5See Fee Schedule, Section 1)b), Liquidity 

Indicator Codes AA, AB and AC. 

6See Fee Schedule, Section 1)c). 

7See Fee Schedule, Section 1)f). 

8The Exchange indicates rebates in parentheses 

in the Fee Schedule. See the General Notes Section 

of the Fee Schedule. 

9See Fee Schedule, Section 1)a). See also Fee 

Schedule, Section 1)b), Liquidity Indicator Codes 

AA, AB, and AC. 

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–CBOE–2023–048 and should be 

submitted on or before October 18, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20961 Filed 9–26–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98472; File No. SR– 

PEARL–2023–45] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX Pearl 

Equities Fee Schedule To Adopt the 

NBBO Setter Plus Program and 

Eliminate Certain Other Rebates 

September 21, 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 

September 11, 2023, MIAX PEARL, LLC 

(‘‘MIAX Pearl’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the fee schedule (the ‘‘Fee 

Schedule’’) applicable to MIAX Pearl 

Equities, an equities trading facility of 

the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-equities/pearl-equities/rule-filings, at 

MIAX Pearl’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

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 

Fee Schedule to: (i) adopt a new 

incentive program called the ‘‘NBBO 

Setter Plus Program’’ (referred to in this 

filing as the ‘‘NBBO Program’’) that, in 

general, provides enhanced rebates for 

Equity Members’ 3 added displayed 

liquidity (‘‘Added Displayed Volume’’) 

in securities priced at or above $1.00 per 

share in all Tapes based on increasing 

volume thresholds and increasing 

market quality levels (described below), 

as well as an additive rebate applied to 

orders that set the NBBO 4 upon entry; 

(ii) reduce the standard rebate for 

executions of orders in securities priced 

at or above $1.00 per share for Added 

Displayed Volume in all Tapes and 

make the corresponding changes to the 

Liquidity Indicator Codes and 

Associated Fees table 5; (iii) eliminate 

the Add Volume Tiers table 6 and 

associated rebates and make 

corresponding changes to rename 

Section 1)c) to now be titled ‘‘NBBO 

Setter Plus Program’’; (iv) eliminate the 

Market Quality Tiers table 7 and 

associated rebates; (v) renumber Section 

1)g), Step-Up Added Liquidity Rebate, 

to now be Section 1)f), Step-Up Added 

Liquidity Rebate; and (vi) amend the 

Definitions section to include a 

definition for the term ‘‘NBBO Set 

Volume’’ (described below). All of the 

proposed changes relate to the adoption 

of the proposed NBBO Program, which 

incorporates certain concepts from the 

current Add Volume Tiers and Market 

Quality Tiers programs. 

The Exchange originally filed this 

proposal on August 31, 2023 (SR– 

PEARL–2023–42). On September 11, 

2023, the Exchange withdrew SR– 

PEARL–2023–42 and refiled this 

proposal. 

Background of Current Rebate Programs 

Impacted by This Proposal 

Section 1)a) of the Fee Schedule sets 

forth the Exchange’s standard rebates 

and fees for adding, removing or routing 

orders (displayed and non-displayed) in 

all Tapes. The Exchange provides 

different rebates and fees depending on 

whether (i) the execution is for an order 

where the securities are priced at or 

above $1.00 per share, or (ii) the 

execution is for an order where the 

securities are priced below $1.00 per 

share. Relevant for the purposes of this 

proposal, the Exchange currently 

provides a standard rebate of ($0.0027) 8

per share for executions of orders in 

securities priced at or above $1.00 per 

share for Added Displayed Volume 

across all Tapes.9

Section 1)b) of the Fee Schedules 

provides a list of the liquidity indicator 

codes and associated rebates or fees that 

are applied to a transaction so that each 

Equity Member that enters an order is 

able to understand the fee or rebate that 

is applied to the execution. Each side of 

a trade is assigned a liquidity indicator 

code in order to identify the scenario 

under which the trade occurred. 

Section 1)c) of the Fee Schedule 

provides a volume-based tier structure, 

referred to as the Add Volume Tiers, in 


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