Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Notices 67841 

17 15 U.S.C. 78s(b)(3)(A)(ii). 

18 17 CFR 240.19b–4(f)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

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. 

Intra-Market Competition 

The Exchange believes its proposal to 

modify the volume criteria thresholds 

for Tiers 5 and 6 of the Market Maker 

origin will not impose any burden on 

intra-market competition because the 

Exchange believes that it will not place 

any category of Exchange market 

participant at a competitive 

disadvantage because it will apply to all 

Market Makers equally. The proposal to 

modify the volume criteria thresholds 

for Tiers 5 and 6 of the Market Maker 

origin is intended to improve market 

quality. The Exchange believes that its 

proposal will encourage Market Makers 

to improve market quality by making it 

easier for Market Makers to achieve 

higher tiers, resulting in higher rebates 

and lower fees, which should result in 

narrower bid-ask spreads and increased 

depth of liquidity. This in turn will 

attract additional order flow to the 

Exchange, increasing trading 

opportunities to the benefit of all market 

participants. Accordingly, the Exchange 

believes that the proposed changes will 

continue to attract order flow to the 

Exchange, thereby encouraging 

additional volume and liquidity to the 

benefit of all market participants. 

Inter-Market Competition 

The Exchange believes its proposal 

will not impose any burden on intermarket competition because, as 

described above, the Exchange notes 

that it operates in a highly competitive 

market in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

options exchanges. Because competitors 

are free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. The Exchange believes that the 

proposed rule changes reflect this 

competitive environment because they 

modify the Exchange’s fees in a manner 

that encourages market participants to 

continue to provide liquidity and to 

send order flow to the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,17 and Rule 

19b–4(f)(2) 18 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2023–46 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–PEARL–2023–46. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

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

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–PEARL–2023–46 and should be 

submitted on or before October 23, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21618 Filed 9–29–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98529; File No. SR– 

PEARL–2023–48] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 2614(f) of the MIAX Pearl Equities 

Rulebook To Allow Self-Trade 

Protection Between Users That Access 

the Exchange Through a Direct 

Connection and Sponsored Access 

September 26, 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 22, 2023, MIAX PEARL, LLC 

(‘‘MIAX Pearl’’ or the ‘‘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 self-regulatory 

organization. The Commission is 


lotter on DSK11XQN23PROD with NOTICES1
67842 Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Notices 

3The 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. 

4This proposed rule change is based on recent 

proposed rule changes by other national securities 

exchanges that were filed for immediate 

effectiveness pursuant to Section 19(b)(3)(A)(iii) of 

the Act, 15 U.S.C. 78s(b)(3)(A)(iii), and Rule 19b– 

4(f)(6), 17 CFR 240.19b–4(f)(6), thereunder. See 

Securities Exchange Act Release Nos. 98021 (July 

28, 2023), 88 FR 51386 (August 3, 2023) (SR– 

CboeEDGX–2023–049); 98020 (July 28, 2023), 88 FR 

51361 (August 3, 2023) (SR–CboeEDGA–2023–013); 

98019 (July 28, 2023), 88 FR 51379 (August 3, 2023) 

(SR–CboeBYX–2023–012); and 98022 (July 28, 

2023), 88 FR 51383 (August 3, 2023) (SR–CboeBZX– 

2023–054). 

5See Exchange Rule 210. 

6Exchange Rule 1901 defines the term ‘‘MIAX 

Pearl Equities Book’’ as ‘‘the electronic book of 

orders in equity securities maintained by the 

System.’’ 

7The term ‘‘Equity Member’’ is a Member 

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

8See Exchange Rule 2614(f). 

9The term ‘‘affiliate’’ of or person ‘‘affiliated 

with’’ another person means a person who, directly, 

or indirectly, controls, is controlled by, or is under 

common control with, such other person. See 

Exchange Rule 100. The term ‘‘person’’ refers to a 

natural person, corporation, partnership (general or 

limited), limited liability company, association, 

joint stock company, trust, trustee of a trust fund, 

or any organized group of persons whether 

incorporated or not and a government or agency or 

political subdivision thereof. Id. See also 17 CFR 

230.405. An affiliate of, or person affiliated with, 

a specified person, is a person that directly, or 

indirectly through one or more intermediaries, 

controls or is controlled by, or is under common 

control with, the person specified. 

10The term ‘‘System’’ is the automated trading 

system used by the Exchange for the trading of 

securities. See Exchange Rule 100. 

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 

Exchange Rule 2614(f) to permit 

individual firms with Users 3 that access 

the Exchange through a direct 

connection and also access the 

Exchange through Sponsored Access to 

enable Self-Trade Protection (‘‘STP’’) 

modifiers at the firm level on the 

Exchange’s equity trading platform 

(referred to herein as ‘‘MIAX Pearl 

Equities’’).4

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 

Exchange Rule 2614(f) to permit 

individual firms with Users that access 

the Exchange through a direct 

connection and also access the 

Exchange through Sponsored Access 5 to 

enable STP modifiers at the firm level 

on MIAX Pearl Equities, if they choose. 

The Exchange offers optional antiinternalization functionality to Users in 

the form of STP modifiers that enable a 

User to prevent two of its orders from 

executing against each other. The 

Exchange offers the following four (4) 

STP modifiers to Equity Members: 

Cancel Newest, Cancel Oldest, 

Decrement and Cancel, and Cancel 

Both. An order marked with the Cancel 

Newest modifier will not execute 

against a contra-side order marked with 

any STP modifier originating from the 

same Unique Identifier (as currently 

defined) and the order with the most 

recent time stamp marked with the 

Cancel Newest modifier will be 

cancelled. The contra-side order with 

the older timestamp marked with an 

STP modifier will remain on the MIAX 

Pearl Equities Book.6 An order marked 

with the Cancel Oldest modifier will not 

execute against a contra-side order 

marked with any STP modifier 

originating from the same Unique 

Identifier and the order with the older 

time stamp marked with the STP 

modifier will be cancelled. The contraside order with the most recent 

timestamp marked with the STP 

modifier will remain on the MIAX Pearl 

Equities Book. An order marked with 

the Decrement and Cancel modifier will 

not execute against contra-side interest 

marked with any STP modifier 

originating from the same Unique 

Identifier. If both orders are equivalent 

in size, both orders will be cancelled. If 

both orders are not equivalent in size, 

the equivalent size will be cancelled 

and the larger order will be 

decremented by the size of the smaller 

order, with the balance remaining on 

the MIAX Pearl Equities Book. Finally, 

an order marked with the Cancel Both 

modifier will not execute against contraside interest marked with any STP 

modifier originating from the same 

Unique Identifier and the entire size of 

both orders will be cancelled. 

Currently, Users can set the STP 

modifier to apply at the market 

participant identifier (‘‘MPID’’), 

Exchange Member 7 identifier, trading 

group identifier, or Equity Member 

Affiliate identifier level (any such 

existing identifier, a ‘‘Unique 

Identifier’’).8 The STP modifier on the 

order with the most recent time stamp 

controls the interaction between two 

orders marked with STP modifiers. STP 

functionality assists market participants 

in reducing trading costs from 

unwanted executions potentially 

resulting from the interaction of 

executable buy and sell trading interest 

from the same firm. 

The Exchange now proposes to amend 

Rule 2614(f) and enhance its existing 

STP functionality by introducing a fifth 

Unique Identifier, Multiple Access 

identifier, which will allow a User to 

prevent orders entered via its direct 

connection from interacting with the 

User’s orders entered via Sponsored 

Access. Currently, STP is only available 

to individual and affiliated 9 Users. 

However, there are certain situations 

(discussed infra) in which an individual 

firm may access the Exchange through 

different methods (i.e., through a direct 

connection and through Sponsored 

Access) and therefore desires to enable 

STP in order to prevent orders 

submitted through its direct connection 

from interacting with those orders 

submitted through Sponsored Access. 

The Multiple Access identifier is 

similar to the affiliate identifier that is 

already in place, as it will enable firms 

that currently enter orders on the 

Exchange under two different Unique 

Identifiers to assign the same Unique 

Identifier to orders entered via its direct 

connection and to orders entered via 

Sponsored Access. This will permit the 

firm to enable STP and prevent contra 

side orders from executing. While the 

affiliate identifier requires Users to 

prove that an affiliate relationship exists 

between the two Users, the proposed 

Multiple Access identifier will only 

require a User to demonstrate: (i) it 

maintains a Membership as an Equity 

Member on the Exchange through which 

it directly submits orders to the 

System; 10 and (ii) it also operates as a 

pponsored [sic] participant and submits 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Notices 67843 

11See also supra note 4. 

12A ‘‘wash sale’’ is generally defined as a trade 

involving no change in beneficial ownership that is 

intended to produce the false appearance of trading 

and is strictly prohibited under both the federal 

securities laws and FINRA rules. See, e.g., 15 U.S.C 

78i(a)(1); FINRA Rule 6140(b) (‘‘Other Trading 

Practices’’). 

13Self-trades are ‘‘transactions in a security 

resulting from the unintentional interaction of 

orders originating from the same firm that involve 

no change in beneficial ownership of the security.’’ 

FINRA requires members to have policies and 

procedures in place that are reasonably designed to 

review trading activity for, and prevent, a pattern 

or practice of self-trades resulting from orders 

originating from a single algorithm or trading desk, 

or related algorithms or trading desks. See FINRA 

Rule 5210, Supplementary Material .02. 

14The Exchange will require firms requesting to 

use the Multiple Access identifier to complete an 

affidavit stating: (i) it is currently an Equity Member 

of the Exchange that submits orders directly to the 

System, and (ii) it also submits orders to the System 

through a Sponsored Access arrangement. 

15See Exchange Rules 210 and 2602. 

orders to the System through Sponsored 

Access. The proposed addition of the 

Multiple Access identifier does not 

present any new or novel STP 

functionality, but rather would extend 

existing STP functionality to firms that 

already access the Exchange through 

multiple formats and therefore have 

different Unique Identifiers appended to 

their orders.11

There are situations where an 

individual firm would choose to submit 

orders to the Exchange through different 

mechanisms. For instance, a firm may 

employ different trading strategies 

across different trading desks and 

choose to send orders for one strategy to 

the Exchange through a direct 

connection while the other strategy is 

sent through Sponsored Access. The 

proposed functionality would serve as 

an additional tool that Users may enable 

in order to assist with compliance with 

the various securities laws relating to 

potentially manipulative trading activity 

such as wash sales 12 and self-trades.13

Additionally, the proposed functionality 

would provide firms an additional 

solution to manage order flow by 

preventing undesirable executions 

where the firm submits orders in 

multiple formats (i.e., direct connection 

or Sponsored Access). As is the case 

with the existing risk tools, Users, and 

not the Exchange, have full 

responsibility for ensuring that their 

orders comply with applicable 

securities rules, laws, and regulations. 

Furthermore, as is the case with the 

existing risk settings, the Exchange does 

not believe that the use of the proposed 

STP functionality can replace Usermanaged risk management solutions. 

The Exchange is proposing to allow 

firms that submit orders to the Exchange 

through both a direct connection and 

through Sponsored Access to utilize 

STP by utilizing the Multiple Access 

identifier.14 Specifically, the Exchange 

is proposing to allow individual firms 

who choose to access the System 

through both a direct connection and 

through Sponsored Access to use STP 

functionality in order to prevent 

executions from occurring between 

those separate Users that are associated 

with the direct connection and 

Sponsored Access. When a firm requests 

STP using the Multiple Access identifier 

and the Exchange confirms that the 

individual firm is both a Member that 

accesses the Exchange through a direct 

connection and maintains a sponsored 

participant relationship on the 

Exchange, the Exchange will assign an 

identical Multiple Access identifier to 

each User. This Multiple Access 

identifier will be used to prevent 

executions between contra side orders 

entered by the Users assigned the same 

Multiple Access identifier. The purpose 

of this proposed change is to extend 

STP functionality to separate Users 

originating from the same individual 

firm in order to prevent transactions 

between the firm’s orders submitted 

directly to the System and through 

Sponsored Access. 

The Exchange includes the below 

examples to demonstrate how STP will 

operate with the proposed Multiple 

Access identifier. For all examples 

below, User A represents Firm 1 

accessing the System through a direct 

connection. User B also represents Firm 

1 but where Firm 1 is accessing the 

System as a sponsored participant 

through a Sponsoring Member.15 User A 

and User B will use a Multiple Access 

identifier of ‘‘A’’ when requesting STP 

at the Multiple Access level, as both 

Users submit Firm 1’s orders to the 

System. User C is not related to Users 

A and B and uses a Multiple Access 

identifier of ‘‘C’’. 

Multiple Access Level STP 

Scenario 1: User A submits a buy 

order. User B submits a sell order. User 

C also submits a sell order. User A has 

enabled STP at the Multiple Access 

level using a Multiple Access identifier 

of A. User B has enabled STP at the 

Multiple Access level using a Multiple 

Access identifier of A. User C has not 

enabled STP. User A’s buy order is 

prevented from executing with User B’s 

sell order as each User has enabled STP 

at the Multiple Access level using a 

Multiple Access identifier of A. User A’s 

buy order will be permitted to execute 

with User C’s sell order because User C 

has not enabled STP, depending on 

which STP modifier has been chosen by 

User A. 

Scenario 2: User A submits a buy 

order. User B submits a sell order. User 

C also submits a sell order. User A has 

enabled STP at the Multiple Access 

level using a Multiple Access identifier 

of A. User B has not enabled STP. User 

C has enabled STP at the Multiple 

Access level using a Multiple Access 

identifier of C. User A’s order will be 

eligible to trade with both User B and 

User C. User A’s order is eligible to 

trade with User B because User B did 

not enable STP. In order for STP to 

prevent the matching of contra side 

orders, both the buy and sell order must 

contain an STP modifier. User A’s order 

is also eligible to trade with User C 

because even though User A and User 

C have both enabled STP at the Multiple 

Access level, User A and User C have 

different Multiple Access identifiers. 

Scenario 3: User A submits a buy 

order and a sell order. User B submits 

a buy order. User A has enabled STP at 

the Multiple Access level using a 

Multiple Access identifier of A. User B 

has enabled STP at the Multiple Access 

level using a Multiple Access identifier 

of A. User A’s buy order is not eligible 

to execute with User A’s sell order 

because User A has enabled STP at the 

Multiple Access level using a Multiple 

Access identifier of A. User A’s sell 

order is not eligible to execute with User 

B’s buy order because both User A and 

User B have enabled STP at the Multiple 

Access level using a Multiple Access 

identifier of A. 

Scenario 4: User A submits a buy 

order and a sell order. User B submits 

a sell order. User C submits a sell order. 

User A has enabled STP at the Multiple 

Access level using a Multiple Access 

identifier of A. User B has enabled STP 

at the Multiple Access level using a 

Multiple Access identifier of A. User C 

has enabled STP at the Multiple Access 

level using a Multiple Access identifier 

of C. User A’s buy order is not eligible 

to execute with User A’s sell order 

because User A has enabled STP at the 

Multiple Access level using a Multiple 

Access identifier of A. User A’s buy 

order is not eligible to execute with User 

B’s sell order because both User A and 

User B have enabled STP at the Multiple 

Access level using a Multiple Access 

identifier of A. User A’s buy order is 

eligible to execute with User C’s sell 

order because while User A and User C 

have enabled STP at the Multiple 

Access level, User A and User C have 

been assigned different Multiple Access 

identifiers. 

This proposed rule change is designed 

to provide additional flexibility to 

Equity Members in how they implement 


lotter on DSK11XQN23PROD with NOTICES1
67844 Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Notices 

16See Exchange Rule 2100. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

19 Id. 

20The Exchange reminds Users that while they 

may utilize STP to help prevent potential 

transactions such as wash sales or self-trades, Users, 

not the Exchange, are ultimately responsible for 

ensuring that their orders comply with applicable 

rules, laws, and regulations. 

21See supra note 4. 

self-trade prevention, and thereby better 

manage their order flow and prevent 

undesirable executions or the potential 

for ‘‘wash sales’’ that may occur as a 

result of the speed of trading in today’s 

marketplace. Based on informal 

discussions with Equity Members, the 

Exchange believes that the proposed 

amendments will be useful to Equity 

Members in implementing their own 

compliance controls. Furthermore, the 

additional STP functionality may assist 

Members in complying with certain 

rules and regulations of the Employee 

Retirement Income Security Act 

(‘‘ERISA’’) that preclude and/or limit 

managing broker-dealers of such 

accounts from trading as principal with 

orders generated for those accounts. 

The Exchange notes that, as with the 

current anti-internalization 

functionality offered by the Exchange, 

use of the proposed new Multiple 

Access identifier STP grouping will not 

alleviate, or otherwise exempt, Equity 

Members from their best execution 

obligations. As such, Equity Members 

and their Affiliates using STP will 

continue to be obligated to take 

appropriate steps to ensure customer 

orders which were prevented from 

execution due to anti-internalization 

ultimately receive the same price, or a 

better price, than they would have 

received had execution of the orders not 

been inhibited by anti-internalization. 

Further, as with current rule provisions, 

Market Makers and other Users may not 

use STP functionality to evade the firm 

quote obligation, as specified in 

Exchange Rule 2606(b), and the STP 

functionality must be used in a manner 

consistent with just and equitable 

principles of trade.16 For these reasons, 

the Exchange believes the proposed new 

Equity Member Affiliate level of STP 

grouping offers Equity Members 

enhanced order processing functionality 

that may prevent potentially 

undesirable executions without 

negatively impacting broker-dealer best 

execution obligations. 

Implementation 

The Exchange will issue a trading 

alert publicly announcing the 

implementation date of this proposed 

rule change to provide Equity Members 

with adequate time to prepare for the 

associated technological changes. The 

Exchange anticipates that the 

implementation date will be in the 

fourth quarter of 2023. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,17 in general, and furthers the 

objectives of Section 6(b)(5),18 in 

particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in 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) 19 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Specifically, the Exchange believes 

that the proposed rule change is 

consistent with the protection of 

investors and the public interest 

because allowing Users that access the 

Exchange through a direct connection 

and also access the Exchange through 

Sponsored Access to be part of the same 

STP group will provide Equity Members 

with additional flexibility with respect 

to how they implement self-trade 

protections provided by the Exchange 

that may better support their trading 

strategies and compliance controls. 

Equity Members that prefer the current 

anti-internalization groupings offered by 

the Exchange can continue to use them 

without any modification. 

In particular, the Exchange believes 

that the proposed Multiple Access level 

STP functionality promotes just and 

equitable principles of trade by allowing 

individual firms to better manage order 

flow and prevent undesirable trading 

activity such as wash sales or selftrades that may occur as a result of the 

velocity of trading in today’s high-speed 

marketplace. The proposed Multiple 

Access identifier and description of 

eligibility to utilize the proposed 

Multiple Access identifier does not 

introduce any new or novel 

functionality, as the proposed 

amendment does not seek to change the 

underlying STP functionality, but 

merely extends the current STP 

functionality to another trading 

relationship. For instance, a User may 

operate trading desk 1 that accesses the 

Exchange via the User’s direct 

connection, as well as trading desk 2 

that accesses the Exchange as a 

sponsored participant. While these 

desks may operate different trading 

strategies, a User may desire to prevent 

these desks from trading versus each 

other in the marketplace because the 

orders are originating from the same 

entity. Here, Users may desire STP 

functionality on a Multiple Access level 

that will help them avoid unintended 

executions to achieve compliance 20

with regulatory rules regarding wash 

sales and self-trades in a very similar 

manner to the way that the current STP 

functionality applies on the existing 

Unique Identifier level. In this regard, 

the proposed Multiple Access level STP 

functionality will permit individual 

firms associated with different Users for 

purposes of submitting orders to the 

Exchange in a different manner to 

prevent the execution of transactions by 

and between the Users. The Exchange 

also believes that the proposed rule 

change is fair and equitable and is not 

designed to permit unfair 

discrimination as use of the proposed 

STP functionality is available to all 

Users that meet the criteria and is 

optional, and its use is not a 

prerequisite for trading on the 

Exchange. 

Finally, the Exchange notes other 

equity exchanges recently amended 

their rules to allow similar groupings for 

their own anti-internalization 

functionality.21 Consequently, the 

Exchange does not believe that the 

proposed rule change raises any new or 

novel issues not already considered by 

the Commission. 

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. STP is an 

optional functionality offered by the 

Exchange and Users are free to decide 

whether to use STP in their decisionmaking process when submitting orders 

to the Exchange. 

The Exchange believes that the 

proposed Multiple Access identifier 

does not impose any burden on 

intramarket competition as it seeks to 

enhance an existing functionality 

available to all Users. The Exchange is 

not proposing to introduce any new or 

novel functionality, but rather is 

proposing to provide an extension of its 

existing STP functionality to individual 

firms who choose to access the System 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 189 / Monday, October 2, 2023 / Notices 67845 

22See id. 

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

24 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(f)(6) requires the Exchange to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 

25 Id. 

26 17 CFR 240.19b–4(f)(6)(iii). 

27See supra note 4. 

28For 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). 29 17 CFR 200.30–3(a)(12), (59). 

through both a direct connection and 

through Sponsored Access. 

Additionally, the proposed rule 

specifies which Users are eligible to use 

the Multiple Access identifier and will 

be available to any User who satisfies 

such criteria. STP will continue to be an 

optional functionality offered by the 

Exchange and the addition of Multiple 

Access level STP will not change how 

the current Unique Identifiers and STP 

functionality operate. 

The Exchange believes that the 

proposed Multiple Access identifier 

does not impose any undue burden on 

intermarket competition. STP is an 

optional functionality offered by the 

Exchange and Users are not required to 

use STP functionality when submitting 

orders to the Exchange. Further, the 

Exchange is not required to offer STP 

and is choosing to do so as a benefit for 

Users who wish to enable STP 

functionality. Moreover, the proposed 

change is not being submitted for 

competitive reasons, but rather to 

provide Users enhanced order 

processing functionality that may 

prevent undesirable executions by 

affiliated Users such as wash sales or 

self-trades. Nonetheless, the proposed 

rule change would also improve the 

Exchange’s ability to compete with 

other exchanges that recently amended 

their rules to allow Multiple Access 

identifier grouping for their own antiinternalization functionality.22

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

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

19b–4(f)(6) thereunder.24

A proposed rule change filed under 

Rule 19b–4(f)(6) 25 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 26 permits the 

Commission to designate a shorter time 

if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. Waiver of the 30-day operative 

delay will allow the Exchange to 

immediately offer individual firms with 

Users that access the Exchange through 

a direct connection and through 

Sponsored Access functionality to better 

manage order flow and prevent 

undesirable executions, to help ensure 

compliance with securities laws relating 

to potentially manipulative trading 

activity such as wash sales and selftrades. Further, the Commission notes 

that this proposed rule change would 

permit functionality on the Exchange 

currently available on other 

exchanges 27 and as such, does not raise 

any novel legal or regulatory issues. For 

these reasons, the Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest. 

Therefore, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.28

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2023–48 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–PEARL–2023–48. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

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

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–PEARL–2023–48 and should be 

submitted on or before October 23, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21620 Filed 9–29–23; 8:45 am] 

BILLING CODE 8011–01–P 


lotter on DSK11XQN23PROD with NOTICES1