Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68705 

36See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

37NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

38 15 U.S.C. 78s(b)(3)(A)(ii). 

39 17 CFR 240.19b–4(f)(2). 

40 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

power in the execution of option order 

flow. Indeed, participants can readily 

choose to send their orders to other 

exchange, and, additionally offexchange venues, if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 36 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’.37 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,38 and Rule 

19b–4(f)(2) 39 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2023–056 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–2023–056. 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–CBOE–2023–056 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21943 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98618; File No. SR– 

PEARL–2023–50] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change by MIAX PEARL, LLC To 

Amend the MIAX Pearl Equities Fee 

Schedule 

September 28, 2023. 

Pursuant to the provisions of 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 27, 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-options/pearl-options/rule-filings, at 

MIAX Pearl’s principal office, and at the 

Commission’s Public Reference Room. 


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

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

4Rebates are indicated by parentheses. See the 

General Notes Section of the Fee Schedule. 

5See Securities Exchange Act Release No. 95614 

(August 26, 2022), 87 FR 53813 (September 1, 2022) 

(SR–PEARL–2022–33). 

6See Fee Schedule, Section 1)b), Liquidity 

Indicator Codes and Associated Fees. 

7The term ‘‘Step-Up ADAV as a % of TCV’’ 

means ADAV as a percent of TCV in the relevant 

baseline month subtracted from the current month’s 

ADAV as a percent of TCV. See the Definitions 

Section of the Fee Schedule. The Exchange notes 

that the Step-Up Added Liquidity Rebate does not 

apply to executions of orders in securities priced 

below $1.00 per share or executions of orders that 

constitute added non-displayed liquidity. 

8The Exchange currently uses a baseline ADAV 

of 0.00% of TCV for firms that become Equity 

Members of the Exchange after May 2023 for the 

purpose of the Step-Up Added Liquidity Rebate 

calculation. See Securities Exchange Act Release 

No. 97716 (June 13, 2023), 88 FR 39887 (June 20, 

2023) (SR–PEARL–2023–25). 

9The Exchange excludes from its calculation of 

ADAV and ADV shares added or removed on any 

day that the Exchange’s system experiences a 

disruption that lasts for more than 60 minutes 

during regular trading hours, on any day with a 

scheduled early market close, and on the ‘‘Russell 

Reconstitution Day’’ (typically the last Friday in 

June). Routed shares are not included in the ADAV 

or ADV calculation. With prior notice to the 

Exchange, an Equity Member may aggregate ADAV 

or ADV with other Equity Members that control, are 

controlled by, or are under common control with 

such Equity Member (as evidenced on such Equity 

Member’s Form BD). See the Definitions Section of 

the Fee Schedule. 

10The Exchange excludes from its calculation of 

TCV volume on any given day that the Exchange’s 

system experiences a disruption that lasts for more 

than 60 minutes during Regular Trading Hours, on 

any day with a scheduled early market close, and 

on the ‘‘Russell Reconstitution Day’’ (typically the 

last Friday in June). See the Definitions Section of 

the Fee Schedule. 

11The Exchange will continue use a baseline 

ADAV of 0.00% of TCV for firms that become 

Equity Members of the Exchange after July 2023 for 

the purpose of the Step-Up Added Liquidity Rebate 

calculation. 

12The Exchange notes that at the end of the 

sunset period, the Step-Up Added Liquidity Rebate 

will no longer apply unless the Exchange files 

another 19b–4 Filing with the Commission to 

amend the criteria terms or update the baseline 

month to a more recent month. 

13See Securities Exchange Act Release No. 97462 

(May 9, 2023), 88 FR 31077 (May 15, 2023) (SR– 

MEMX–2023–08); see also MEMX LLC (‘‘MEMX’’) 

Fee Schedule, Liquidity Provision Tiers, Tier 4, 

available at https://info.memxtrading.com/feeschedule/ (last visited September 22, 2023). 

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 

Section 1)f) of the Fee Schedule to 

modify one aspect of the criteria that is 

required for Equity Members 3 to receive 

the Step-Up Added Liquidity Rebate 

(described below). 

Background 

The Exchange currently provides a 

standard rebate of ($0.0024) 4 per share 

for executions of orders in securities 

priced at or above $1.00 per share that 

add displayed liquidity to the Exchange. 

The Exchange also currently offers 

various volume-based tiers and 

incentives through which an Equity 

Member may receive an enhanced 

rebate for executions of orders that add 

displayed liquidity to the Exchange by 

achieving the specified criteria that 

corresponds to a particular tier/ 

incentive. 

In particular, the Exchange adopted a 

volume based pricing incentive, referred 

to as the ‘‘Step-Up Added Liquidity 

Rebate,’’ in which qualifying Equity 

Members receive an enhanced rebate of 

($0.0031) per share for executions of 

orders in securities priced at or above 

$1.00 per share that add displayed 

liquidity to the Exchange.5 The 

enhanced rebate provided by the StepUp Added Liquidity Rebate applies to 

Liquidity Indicator Codes AA (adds 

liquidity, displayed order, Tape A), AB 

(adds liquidity, displayed order, Tape B) 

and AC (adds liquidity, displayed order, 

Tape C).6

Currently, Equity Members qualify for 

the Step-Up Added Liquidity Rebate by 

achieving a ‘‘Step-Up ADAV as a % of 

TCV’’ 7 of at least 0.03% over the 

baseline month of May 2023.8 Average 

daily added volume (‘‘ADAV’’) means 

average daily added volume calculated 

as the number of shares added per day 

and average daily volume (‘‘ADV’’) 

means average daily volume calculated 

as the number of shares added or 

removed, combined, per day. ADAV and 

ADV are calculated on a monthly basis.9

Total consolidated volume (‘‘TCV’’) 

means total consolidated volume 

calculated as the volume in shares 

reported by all exchanges and reporting 

facilities to a consolidated transaction 

reporting plan for the month for which 

the fees apply.10 For example, prior to 

the effectiveness of this proposal, if an 

Equity Member had an ADAV as a 

percent of TCV of 0.01% in May 2023, 

then that Equity Member has to achieve 

an ADAV as a percent of TCV equal to 

or greater than 0.04% in any subsequent 

month in order to qualify for the StepUp Added Liquidity Rebate. 

Proposal 

The Exchange now proposes to amend 

Section 1)f) of the Fee Schedule to 

modify one aspect of the required 

criteria for Equity Members to receive 

the Step-Up Added Liquidity Rebate. In 

particular, the Exchange proposes to 

amend the baseline month from May 

2023 to now be July 2023. With the 

proposed change, Equity Members will 

qualify for the Step-Up Added Liquidity 

Rebate by achieving a Step-Up ADAV as 

a % of TCV of at least 0.03% over the 

baseline month of July 2023.11

Additionally, the Exchange proposes 

that the criteria to qualify for the StepUp Added Liquidity Rebate will expire 

no later than January 31, 2024 (referred 

to herein as the ‘‘sunset period’’).12 The 

Exchange will issue an alert to market 

participants should the Exchange 

determine that the Step-Up Added 

Liquidity Rebate will expire earlier than 

January 31, 2024 or if the Exchange 

determines to amend the criteria or rate 

applicable to the Step-Up Added 

Liquidity Rebate prior to the end of the 

sunset period. The Exchange notes that 

at least one other competing equities 

exchange provides a similar ‘‘sunset 

period’’ for one of its enhanced rebates 

subject to a baseline month comparison 

with a more recent month.13

The Exchange does not propose any 

other changes to the qualifying criteria 

for Equity Members to receive the StepUp Added Liquidity Rebate. The 

Exchange also does not propose to 

amend the amount of the enhanced 

rebate of ($0.0031) per share for Equity 

Members that qualify for the Step-Up 

Added Liquidity Rebate. 

The purpose of this proposed change 

is to update the baseline month to a 

more recent month for the calculation of 

the Step-Up Added Liquidity Rebate. 

The Exchange believes that with the 

updated baseline month, the Step-Up 

Added Liquidity Rebate will continue to 

provide an incentive for Equity 

Members to strive for higher ADAV on 

the Exchange (above their ADAV in the 

baseline month of July 2023) to receive 

the enhanced rebate for qualifying 

executions of orders in securities priced 

at or above $1.00 per share that add 

displayed liquidity to the Exchange. The 


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14See id. MEMX will likely have to make a 

similar filing as proposed by the Exchange in this 

filing in order to amend or otherwise update its 

baseline month and sunset period before October 

31, 2023. 

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

16 15 U.S.C. 78f(b)(4). 

17See the ‘‘Market Share’’ Section of the 

Exchange’s website, available at https://

www.miaxglobal.com/ (last visited September 26, 

2023). 

18See id. 

19See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37499 (June 29, 2005). 

Exchange believes that, with the 

proposed change to the baseline month, 

the Step-Up Added Liquidity Rebate 

will continue to encourage the 

submission of additional displayed 

added liquidity to the Exchange, thereby 

promoting price discovery and 

contributing to a deeper and more liquid 

market, which benefits all market 

participants and enhances the 

attractiveness of the Exchange as a 

trading venue. The Exchange notes that 

earlier this year, MEMX filed a proposal 

to use a more recent month (April 2023) 

as the baseline month for one of its 

enhanced Liquidity Provision Tiers 

(Tier 4) for MEMX’s members to receive 

an enhanced rebate, with a sunset 

period of October 31, 2023.14 The 

purpose of including the proposed 

sunset period in the Fee Schedule is to 

provide clarity to Equity Members that, 

unless the Exchange determines to 

amend or otherwise modify the Step-Up 

Added Liquidity Rebate, the Step-Up 

Added Liquidity Rebate will expire at 

the end of the sunset period. 

Implementation 

The proposed changes will be 

effective beginning October 1, 2023. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 15

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 16 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among its Equity Members and 

issuers and other persons using its 

facilities and is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange operates in a highly 

fragmented and competitive market in 

which market participants can readily 

direct their order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

sixteen registered equities exchanges, 

and there are a number of alternative 

trading systems and other off-exchange 

venues, to which market participants 

may direct their order flow. As of 

September 26, 2023, based on publicly 

available information, no single 

registered equities exchange currently 

has more than approximately 15–16% of 

the total market share of executed 

volume of equities trading for the month 

of September 2023.17 Thus, in such a 

low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow, 

and the Exchange represents 

approximately 1.72% of the overall 

market share as of September 26, 2023 

for the month of September 2023.18 The 

Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and also recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 19

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products, in response to new or 

different pricing structures being 

introduced into the market. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates, and market 

participants can readily trade on 

competing venues if they deem pricing 

levels at those other venues to be more 

favorable. The Exchange believes the 

proposal reflects a reasonable and 

competitive pricing structure designed 

to incentivize market participants to 

direct additional orders that add 

liquidity to the Exchange, which the 

Exchange believes would deepen 

liquidity and promote market quality on 

the Exchange to the benefit of all market 

participants. 

The Exchange notes that volumebased incentives and discounts (such as 

tiers) have been widely adopted by 

exchanges (including the Exchange), 

and believes they are reasonable, 

equitable and not unfairly 

discriminatory because they are 

available to all Equity Members on an 

equal basis, provide additional benefits 

or discounts that are reasonably related 

to the value of an exchange’s market 

quality associated with higher levels of 

market activity (such as higher levels of 

liquidity provision and/or growth 

patterns), and the introduction of higher 

volumes of orders into the price and 

volume discovery process. 

The Exchange believes its proposal to 

update the baseline month criteria for 

the Step-Up Added Liquidity Rebate is 

reasonable, equitably allocated and not 

unfairly discriminatory because volume 

on the Exchange has changed since the 

Exchange last updated the baseline 

month for the Step-Up Added Liquidity 

Rebate and utilizing a more recent 

month as the baseline should be more 

representative of Equity Members’ 

trading on the Exchange. The Exchange 

believes that with the updated baseline 

month, the Step-Up Added Liquidity 

Rebate will continue to provide an 

incentive for Equity Members to strive 

for higher ADAV on the Exchange 

(above their ADAV in the baseline 

month of July 2023) to receive the 

enhanced rebate for qualifying 

executions of orders in securities priced 

at or above $1.00 per share that add 

displayed liquidity to the Exchange. The 

Exchange believes that the proposal is 

reasonable because even with the 

updated baseline month, the Step-Up 

Added Liquidity Rebate will continue to 

encourage the submission of added 

displayed liquidity to the Exchange, 

thereby promoting price discovery and 

contributing to a deeper and more liquid 

market, which benefits all market 

participants and enhances the 

attractiveness of the Exchange as a 

trading venue. 

The Exchange believes that the StepUp Added Liquidity Rebate, as modified 

by the proposed change to the baseline 

month, is reasonable, equitable and not 

unfairly discriminatory as the Step-Up 

Added Liquidity Rebate will continue to 

be available to all Equity Members on an 

equal basis, and is reasonably designed 

to encourage Equity Members to 

maintain or increase their order flow in 

liquidity-adding volume. The Exchange 

believes this will continue to promote 

price discovery, enhance liquidity and 

market quality, and contribute to a more 

robust and well-balanced market 

ecosystem on the Exchange to the 

benefit of all Equity Members and 

market participants. The Exchange also 

notes that MEMX filed a proposal to use 

a more recent month (April 2023) as the 

baseline month for one of its enhanced 

Liquidity Provision Tiers (Tier 4) for 

MEMX’s members to receive an 

enhanced rebate, and anticipates MEMX 

making a similar update to its baseline 

month for its enhanced rebate sometime 


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20See supra notes 13–14. 

21See id. 

22See supra notes 13–14. 

23See supra note 17. 

24See id. 

within the next month (or removing the 

enhanced rebate altogether).20

The Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to include the sunset 

period in the Fee Schedule for the StepUp Added Liquidity Rebate because it 

will provide clarity to Equity Members 

that, unless the Exchange determines to 

amend or otherwise modify the Step-Up 

Added Liquidity Rebate, the Step-Up 

Added Liquidity Rebate will expire at 

the end of the sunset period. This will 

allow Equity Members to take into 

account that the enhanced rebate 

provided for by the Step-Up Added 

Liquidity Rebate may be discontinued at 

the end of sunset period unless the 

Exchange announces otherwise and files 

a revised proposal with the 

Commission. The Exchange further 

notes that it will issue an alert to market 

participants should the Exchange 

determine that the Step-Up Added 

Liquidity Rebate will expire earlier than 

January 31, 2024 or if the Exchange 

determines to amend the criteria or rate 

applicable to the Step-Up Added 

Liquidity Rebate prior to the end of the 

sunset period. At least one other 

competing equities exchange provided a 

similar sunset period in its fee schedule 

for one of its enhanced rebates subject 

to a baseline month comparison with a 

more recent month.21

The Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to use a baseline ADAV 

of 0.00% of TCV for firms that become 

Equity Members of the Exchange after 

July 2023 for the purpose of the Step-Up 

Added Liquidity Rebate calculation 

because it will provide an additional 

incentive for prospective firms to 

become Equity Members. The Exchange 

believes this will incentivize new 

Equity Members to trade on the 

Exchange, which will add to price 

discovery, enhance liquidity and market 

quality, and contribute to a more robust 

and well-balanced market ecosystem on 

the Exchange to the benefit of all Equity 

Members and market participants. The 

Exchange notes that the proposed StepUp Added Liquidity Rebate will not 

adversely impact any Equity Member’s 

ability to qualify for reduced fees or 

enhanced rebates offered under other 

pricing tiers/incentives on the 

Exchange. Should an Equity Member 

not meet the required criteria, the 

Equity Member will merely not receive 

the corresponding enhanced rebate. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposed change will not impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intramarket Competition 

The Exchange does not believe that 

the proposal will impose any burden on 

intramarket competition not necessary 

or appropriate in furtherance of the 

purposes of the Act. The Exchange 

believes the Step-Up Added Liquidity 

Rebate, as modified by this proposal, 

will continue to incentivize Equity 

Members to submit additional orders 

that add liquidity to the Exchange, 

thereby contributing to a deeper and 

more liquid market and promoting price 

discovery and market quality on the 

Exchange to the benefit of all market 

participants and enhancing the 

attractiveness of the Exchange as a 

trading venue, which the Exchange 

believes, in turn, would continue to 

encourage market participants to direct 

additional order flow to the Exchange. 

The Exchange also believes that using 

a baseline ADAV of 0.00% of TCV for 

firms that become Equity Members of 

the Exchange after July 2023 for the 

purpose of the Step-Up Added Liquidity 

Rebate calculation will incentivize new 

Equity Members to trade on the 

Exchange, which will add to price 

discovery, enhance liquidity and market 

quality, and contribute to a more robust 

and well-balanced market ecosystem on 

the Exchange to the benefit of all Equity 

Members and market participants. 

Greater liquidity benefits all Equity 

Members by providing more trading 

opportunities and encourages Equity 

Members to send additional orders to 

the Exchange, thereby contributing to 

robust levels of liquidity, which benefits 

all market participants. As described 

above, the opportunity to qualify for the 

proposed new Step-Up Added Liquidity 

Rebate, and thus receive the proposed 

rebate for qualifying executions of 

orders in securities priced at or above 

$1.00 per share that add displayed 

volume will continue to be available to 

all Equity Members that meet the 

associated volume requirement, and the 

Exchange believes the proposed update 

to the baseline month is reasonably 

related to the enhanced market quality 

that the Step-Up Added Liquidity 

Rebate is designed to promote. As such 

the Exchange does not believe the 

proposed changes would impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purpose of the Act. 

The Exchange believes its proposal to 

include the sunset period in the Fee 

Schedule for the Step-Up Added 

Liquidity Rebate will not impose any 

burden on intramarket competition not 

necessary or appropriate in furtherance 

of the purposes of the Act because it 

will provide clarity to Equity Members 

that, unless the Exchange determines to 

amend or otherwise modify the Step-Up 

Added Liquidity Rebate, the Step-Up 

Added Liquidity Rebate will be 

discontinued at the end of the sunset 

period. This will allow Equity Members 

to take into account that the enhanced 

rebate provided for by the Step-Up 

Added Liquidity Rebate may be 

discontinued at the end of the sunset 

period unless the Exchange announces 

otherwise. The Exchange further notes 

that it will issue an alert to market 

participants should the Exchange 

determine that the Step-Up Added 

Liquidity Rebate will expire earlier than 

January 31, 2024 or if the Exchange 

determines to amend the criteria or rate 

applicable to the Step-Up Added 

Liquidity Rebate prior to the end of the 

sunset period. At least one other 

competing equities exchange provided a 

similar sunset period in its fee schedule 

for one of its enhanced rebates subject 

to a baseline month comparison with a 

more recent month.22

Intermarket Competition 

The Exchange believes its proposal 

will benefit competition, and the 

Exchange notes that it operates in a 

highly competitive market. Equity 

Members have numerous alternative 

venues they may participate on and 

direct their order flow to, including 

fifteen other equities exchanges and 

numerous alternative trading systems 

and other off-exchange venues. As noted 

above, as of September 26, 2023, based 

on publicly available information, no 

single registered equities exchange 

currently has more than approximately 

15–16% of the total market share of 

executed volume of equities trading for 

the month of September 2023.23 Thus, 

in such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow, 

and the Exchange represents 

approximately 1.72% of the overall 

market share as of September 26, 2023 

for the month of September 2023.24

Moreover, the Exchange believes that 

the ever-shifting market share among 

the exchanges from month to month 

demonstrates that market participants 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68709 

25See supra note 13. 

26See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

27See NetCoalition v. SEC, 615 F.3d 525, 539 

(D.C. Cir. 2010) (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR–NYSE– 

2006–21)). 

28 15 U.S.C. 78s(b)(3)(A)(ii). 

29 17 CFR 240.19b–4(f)(2). 

30 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

can shift order flow in response to new 

or different pricing structures being 

introduced to the market. Accordingly, 

competitive forces constrain the 

Exchange’s transaction fees and rebates 

generally, including with respect to the 

criteria for Equity Members to achieve 

the Step-Up Added Liquidity Rebate, 

and market participants can readily 

choose to send their orders to other 

exchanges and off-exchange venues if 

they deem rebate criteria at those other 

venues to be more favorable. 

As described above, the proposed 

changes represent a competitive 

proposal through which the Exchange is 

seeking to continue to encourage 

additional order flow to the Exchange 

through a volume-based incentive that 

is comparable to the criteria for volumebased incentives adopted by at least one 

other competing exchange which also 

updated its baseline month to a more 

recent month for a specific enhanced 

rebate that adds liquidity to that 

market.25 Accordingly, the Exchange 

believes that its proposal would not 

burden, but rather promote, intermarket 

competition by enabling it to better 

compete with other exchanges that offer 

similar pricing incentives to market 

participants that achieve certain volume 

criteria and thresholds. 

Additionally, the Commission has 

repeatedly expressed its preference for 

competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 26 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the DC circuit 

stated: ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . As the SEC explained, ‘[i]n the U.S. 

national market system, buyers and 

sellers of securities, and the brokerdealers that act as their routing agents, 

have a wide range of choices of where 

to route orders for execution’; [and] ‘no 

exchange can afford to take its market 

share percentages for granted’ because 

‘no exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . .’’.27 Accordingly, the 

Exchange does not believe its proposed 

pricing changes impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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,28 and Rule 

19b–4(f)(2) 29 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2023–50 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–2023–50. 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–2023–50 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21951 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98625; File No. SR–IEX– 

2023–10] 

Self-Regulatory Organizations; 

Investors Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend IEX 

Rules 11.190(b)(7) and 11.190(g) 

September 28, 2023. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on 

September 27, 2023, the Investors 

Exchange LLC (‘‘IEX’’ or the 

‘‘Exchange’’) filed with the Securities 


lotter on DSK11XQN23PROD with NOTICES1