Federal Register / Vol. 88, No. 218 / Tuesday, November 14, 2023 / Notices 78077 

13For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

14 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

3A Midpoint Peg Order is a non-displayed Limit 

Order that is assigned a working price pegged to the 

midpoint of the PBBO. A Midpoint Peg Order 

receives a new timestamp each time its working 

price changes in response to changes in the 

midpoint of the PBBO. See Exchange Rule 

2614(a)(3). 

4With respect to the trading of equity securities, 

the term ‘‘the term ‘‘Protected NBB’’ or ‘‘PBB’’ shall 

mean the national best bid that is a Protected 

Quotation, the term ‘‘Protected NBO’’ or ‘‘PBO’’ 

shall mean the national best offer that is a Protected 

Quotation, and the term ‘‘Protected NBBO’’ or 

‘‘PBBO’’ shall mean the national best bid and offer 

that is a Protected Quotation. See Exchange Rule 

1901. 

5The term ‘‘Equity Member’’ is a Member 

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

designates the proposed rule change to 

be operative upon filing.13

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 will 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– 

NYSECHX–2023–20 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–NYSECHX–2023–20. 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–NYSECHX–2023–20 and should be 

submitted on or before December 5, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25011 Filed 11–13–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98873; File No. SR– 

PEARL–2023–60] 

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 

November 7, 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 October 

31, 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. 

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)e) of the Fee Schedule to 

amend the Midpoint Peg Order Adding 

Liquidity at Midpoint Volume Tiers 

table to offer a new enhanced rebate for 

executions of Midpoint Peg Orders 3 in 

securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO 4 and add liquidity to 

the Exchange in all Tapes. In response 

to the competitive environment, the 

Exchange offers tiered pricing, which 

provides Equity Members 5 with 

opportunities to qualify for higher 

rebates or lower fees when certain 

volume criteria and thresholds are met. 

Tiered pricing provides an incremental 

incentive for Equity Members to strive 

for higher tier levels, which provides 

increasingly higher benefits or discounts 

for satisfying increasingly more 

stringent criteria. 


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6Rebates are indicated by parentheses. See the 

General Notes section of the Fee Schedule. 

7See Fee Schedule, Sections (1)(a) and (1)(b), 

Liquidity Indicator Code ‘‘Ap’’ (adds liquidity and 

executes at the midpoint, non-displayed Midpoint 

Peg Order (all Tapes)). The Exchange notes that the 

standard rebate is not changing under this proposal. 

8See Fee schedule, Section (1)(e). 

9 ‘‘ADAV’’ means average daily added volume 

calculated as the number of shares added per day 

and ‘‘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. The 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 (‘‘Exchange 

System Disruption’’), 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. 

10See MEMX Equities Fee Schedule, available at 

https://info.memxtrading.com/equities-tradingresources/us-equities-fee-schedule/ (providing 

enhanced rebates ranging from ($0.0018) up to 

($0.0028) per share for members that achieve nondisplayed ADAV ranging from 1,000,000 shares to 

8,000,000 shares, which includes midpoint peg 

order executions); see also Nasdaq PSX Pricing 

Schedule, available at https://

www.nasdaqtrader.com/Trader.aspx?id=PSX_

Pricing (providing a standard rebate of $0.0018 per 

share for all firms that add non-displayed liquidity 

via an order with midpoint pegging and a rebate of 

$0.0025 per share for firms that add non-displayed 

liquidity via an order with midpoint pegging of at 

least 1 million shares ADV). 

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

12 15 U.S.C. 78f(b)(4). 

13 15 U.S.C. 78f(b)(5). 

Midpoint Peg Orders 

The Exchange currently provides a 

standard rebate of ($0.00205) 6 per share 

for executions of Midpoint Peg Orders 

in securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO and add liquidity to the 

Exchange in all Tapes.7

The Exchange also provides enhanced 

rebates through a tiered pricing 

structure for executions of Midpoint Peg 

Orders in securities priced at or above 

$1.00 per share that execute at the 

midpoint of the Protected NBBO and 

add liquidity to the Exchange in all 

Tapes based on an Equity Member 

achieving certain ‘‘Midpoint ADAV’’ 

thresholds (defined below) (the 

‘‘Midpoint Volume Tiers Program’’).8

Pursuant to the Midpoint Volume Tiers 

Program, Midpoint ADAV means the 

average daily added volume (‘‘ADAV’’) 

for the current month consisting of 

Midpoint Peg Orders in securities 

priced at or above $1.00 per share that 

execute at the midpoint of the Protected 

NBBO and add liquidity to the 

Exchange.9 Pursuant to Tier 1 of the 

Midpoint Volume Tiers Program, Equity 

Members may qualify for an enhanced 

rebate of ($0.0025) per share for 

executions of Midpoint Peg Orders in 

securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO and add liquidity to the 

Exchange by achieving a Midpoint 

ADAV equal to or greater than 500,000 

shares. Pursuant to Tier 2 of the 

Midpoint Volume Tiers Program, Equity 

Members may qualify for an enhanced 

rebate of ($0.0027) per share for 

executions of Midpoint Peg Orders in 

securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO and add liquidity to the 

Exchange by achieving a Midpoint 

ADAV equal to or greater than 1,000,000 

shares. 

Proposal 

The Exchange now proposes to amend 

the Midpoint Volume Tiers Program to 

add a new Tier 3 and associated 

increased rebate. In particular, the 

Exchange proposes that pursuant to Tier 

3 of the Midpoint Volume Tiers 

Program, Equity Members may now 

qualify for an enhanced rebate of 

($0.0029) per share for executions of 

Midpoint Peg Orders in securities 

priced at or above $1.00 per share that 

execute at the midpoint of the Protected 

NBBO and add liquidity to the 

Exchange by achieving a Midpoint 

ADAV equal to or greater than 1,500,000 

shares. 

The purpose of the proposed 

enhanced Tier 3 rebate for executions of 

Midpoint Peg Orders in securities 

priced at or above $1.00 per share that 

execute at the midpoint of the Protected 

NBBO and add liquidity to the 

Exchange is to encourage Equity 

Members that provide liquidity through 

non-displayed orders to strive for a 

higher Midpoint ADAV on the Exchange 

in order to qualify for the higher rebate, 

which should encourage increased order 

flow (particularly in the form of 

liquidity adding non-displayed 

Midpoint Peg Orders that execute at the 

midpoint of the Protected NBBO) to the 

Exchange, thereby contributing to a 

deeper and more liquid market to the 

benefit of all market participants. 

The Exchange believes that providing 

a higher enhanced rebate for executions 

of Midpoint Peg Orders in securities 

priced at or above $1.00 per share that 

execute at the midpoint of the Protected 

NBBO and add liquidity to the 

Exchange is a reasonable means to 

incentivize additional liquidity at the 

midpoint of the Protected NBBO, which 

in turn should increase the 

attractiveness of the Exchange as a 

destination venue as Equity Members 

seeking price improvement would be 

more motivated to direct their orders to 

the Exchange because they would have 

a heightened expectation of the 

availability of liquidity at the midpoint 

of the Protected NBBO. 

The Exchange notes that competing 

exchanges provide similar pricing 

structures and the proposed enhanced 

rebate is comparable to and higher than 

the rebate provided by at least two 

competing exchanges for executions of 

non-displayed orders in securities 

priced at or above $1.00 per share that 

are pegged to the midpoint of national 

best bid and offer.10

Implementation 

The Exchange proposes to implement 

the changes to the Fee Schedule 

pursuant to this proposal on November 

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 11

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 12 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. The Exchange also believes 

that the proposed rule change is 

consistent with the objectives of Section 

6(b)(5) 13 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, and 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, and, 

particularly, 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 

16 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. Based on publicly 


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14See the ‘‘Market Share’’ section of the 

Exchange’s website, available at https://

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

2023). 

15 Id. 

16See Securities Exchange Act Release No. 51808 

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

17See supra note 10. 

18The Exchange notes that Equity Members that 

do not qualify for one of the Midpoint Volume Tiers 

will continue to receive the standard rebate of 

($0.00205) per share for executions of Midpoint Peg 

Orders in securities priced at or above $1.00 per 

share that execute at the midpoint of the Protected 

NBBO and add liquidity to the Exchange in all 

Tapes. 

19See supra note 10. 

20See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 47396 (June 29, 2005). 

available information, as of October 26, 

2023, 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 

October 2023.14 Thus, in such a lowconcentrated and highly competitive 

market, no single equities exchange 

possesses significant pricing power in 

the execution of order flow, and the 

Exchange currently represents 

approximately 2.36% of the overall 

market share.15 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.’’ 16

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 their order flow to the Exchange, 

which the Exchange believes would 

enhance liquidity and market quality to 

the benefit of all Members and market 

participants. 

The Exchange believes that the 

proposed change to add a new enhanced 

rebate to the Midpoint Volume Tiers 

Program is reasonable because it will 

provide Equity Members with an 

additional incentive to achieve higher 

volume thresholds on the Exchange. 

The Exchange notes that volume-based 

incentives for midpoint peg order 

executions have been adopted by 

competing exchanges,17 and the 

Exchange believes its proposal is 

reasonable, equitable, and not unfairly 

discriminatory because it is open to all 

Equity Members on an equal basis and 

provides an additional benefit that is 

reasonably related to the value to of the 

Exchange’s market quality associated 

with higher levels of market activity, 

such as higher levels of liquidity 

provision and the introduction of higher 

volumes of orders into the price and 

volume discovery processes. The 

Exchange believes that the proposal is 

reasonable because it is designed to 

incentivize market participants to direct 

additional order flow to the Exchange, 

which should enhance the Exchange’s 

market quality and provide price 

improvement through the use of orders 

that are designed to execute at the 

midpoint of the Protected NBBO 

through the provision of enhanced 

rebates for executions of Midpoint Peg 

Orders in securities priced at or above 

$1.00 per share that execute at the 

midpoint of the Protected NBBO and 

add liquidity to the Exchange in all 

Tapes.18 The Exchange believes its 

proposal will promote price 

improvement and increased liquidity on 

the Exchange which will benefit all 

market participants. 

The Exchange believes the proposed 

enhanced Tier 3 rebate is equitable and 

not unfairly discriminatory because all 

Equity Members will continue to be 

eligible to qualify for the enhanced 

rebates provided in the Midpoint 

Volume Tiers Program, including the 

new enhanced Tier 3 rebate, and have 

the opportunity to receive the 

corresponding enhanced rebate if such 

criteria is achieved (as described above, 

based on Midpoint ADAV). 

The Exchange further believes that the 

proposed criteria for the Tier 3 rebate in 

the Midpoint Volume Tiers Program 

(Midpoint ADAV equal to or greater 

than 1,500,000 shares) is reasonable 

because the proposed criteria is 

incrementally more difficult to achieve 

than that of the Tier 2 rebate; thus, 

proposed Tier 3 offers an appropriately 

higher rebate commensurate with the 

corresponding higher Midpoint ADAV 

requirement. Therefore, the Exchange 

believes the proposed changes to the 

Midpoint Volume Tiers Program is 

consistent with an equitable allocation 

of fees and rebates, as the more stringent 

criteria correlates with the 

corresponding tier’s higher rebate. 

Additionally, the Exchange believes that 

the proposed rebate is reasonable as 

such rebate is comparable to, and higher 

than, the rebates for executions of 

liquidity-adding non-displayed orders 

provided by at least two other 

exchanges under similar volume-based 

tiers.19

For the reasons discussed above, the 

Exchange submits that the proposal 

satisfies the requirements of Sections 

6(b)(4) and 6(b)(5) of the Act in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among its Equity Members and other 

persons using its facilities and is not 

designed to unfairly discriminate 

between customers, issuers, brokers, or 

dealers. As described more fully below 

in the Exchange’s statement regarding 

the burden on competition, the 

Exchange believes that its transaction 

pricing is subject to significant 

competitive forces, and that the 

proposed fees and rebates described 

herein are appropriate to address such 

forces. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed changes will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange 

believes the proposed change will 

encourage Equity Members to maintain 

or increase their order flow to the 

Exchange, thereby contributing to a 

deeper and more liquid market to the 

benefit of all market participants and 

enhancing the attractiveness of the 

Exchange as a trading venue. As a 

result, the Exchange believes the 

proposal would enhance its 

competitiveness as a market that attracts 

actionable orders, thereby making it a 

more desirable destination venue for its 

customers. For these reasons, the 

Exchange believes that the proposal 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 20

Intramarket Competition 

The Exchange believes that the 

proposal would incentivize Equity 

Members to maintain or increase their 

order flow, thereby contributing to a 


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21See supra note 14. 22See supra note 10. 

23See Securities Exchange Act Release No. 51808 

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

24NetCoalition 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)). 

25 15 U.S.C. 78s(b)(3)(A)(ii). 

26 17 CFR 240.19b–4(f)(2). 

deeper and more liquid market to the 

benefit of all market participants and 

enhance the attractiveness of the 

Exchange as a trading venue, and to 

provide price improvement through the 

use of orders that are designed to 

execute at the midpoint of the Protected 

NBBO, which the Exchange believes, in 

turn, would continue to encourage 

participants to direct order flow to the 

Exchange. Greater liquidity benefits all 

Equity Members by providing more 

trading opportunities and encourages 

Equity Members to send orders to the 

Exchange, thereby contributing to robust 

levels of liquidity, which benefits all 

market participants. The opportunity to 

qualify for enhanced, incremental 

rebates under the Midpoint Volume 

Tiers Program is available to all Equity 

Members that meet the associated 

Midpoint ADAV requirements in any 

month. The Exchange believes the 

requirements in the Midpoint Volume 

Tiers Program are reasonably related to 

the enhanced market quality that the 

Midpoint Volume Tiers Program is 

designed to promote. Similarly, the 

proposed enhanced Tier 3 rebate for 

executions of Midpoint Peg Orders in 

securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO and add liquidity to the 

Exchange would apply equally to all 

Equity Members. As such, the Exchange 

believes the proposed changes would 

not impose any burden on intramarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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, for the month of October 2023, 

no single registered equities exchange 

currently has more than 15–16% of the 

total market share of executed volume of 

equities trading.21 Thus, in such a lowconcentrated and highly competitive 

market, no single equities exchange 

possesses significant pricing power in 

the execution of order flow. Moreover, 

the Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

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, and market participants can 

readily choose to send their orders to 

other exchanges and off-exchange 

venues if they deem fee levels at those 

other venues to be more favorable. 

As described above, the proposal is 

designed to enhance market quality on 

the Exchange and to encourage more 

Equity Members to maintain or increase 

their order flow, thereby contributing to 

a deeper and more liquid market to the 

benefit of all market participants and 

enhancing the attractiveness of the 

Exchange as a trading venue, and to 

encourage Equity Members to provide 

price improvement through the use of 

orders that are designed to execute at 

the midpoint of the Protected NBBO. In 

turn, the Exchange believes that the 

proposed enhanced Tier 3 rebate for 

executions of Midpoint Peg Orders in 

securities priced at or above $1.00 per 

share that execute at the midpoint of the 

Protected NBBO and add liquidity to the 

Exchange would encourage the 

submission of additional order flow to 

the Exchange, particularly in the form of 

Midpoint Peg Orders executed at the 

midpoint of Protected NBBO, thereby 

promoting market depth, enhanced 

execution opportunities, price 

improvement, and price discovery to the 

benefit of all Equity Members and 

market participants. 

As described above the Exchange’s 

proposal is a competitive proposal 

designed to encourage additional order 

flow to the Exchange through a 

combination of volume based 

incentives, which have been widely 

adopted by exchanges, and standard 

pricing that is comparable to, and/or 

competitive with, pricing for similar 

executions in place at other 

exchanges.22

Accordingly, the Exchange believes 

its proposal would not burden, but 

rather promote, intermarket competition 

by enabling it to better compete with 

other exchanges that offer similar 

standard pricing for Added Midpoint 

Volume to market participants that 

achieves 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.’’ 23 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: ‘‘[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 possess a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

. . .’’.24 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,25 and Rule 

19b–4(f)(2) 26 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 


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27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98489 

(Sept. 22, 2023), 88 FR 66913 (Sept. 28, 2023) (SR– 

NASDAQ–2023–036) (‘‘Notice’’). 

4 In Amendment No. 1, the Exchange makes nonsubstantive clarifying changes and provides 

additional justification for the proposal. 

Amendment No. 1 to the proposed rule change is 

available at https://www.sec.gov/comments/srnasdaq-2023-036/srnasdaq2023036-283339- 

691882.pdf. 

5The ‘‘Nasdaq Halt Cross’’ is the process for 

determining the price at which Eligible Interest 

shall be executed at the open of trading for a halted 

security and for executing that Eligible Interest. See 

Rule 4753(a)(4). ‘‘Eligible Interest’’ shall mean any 

quotation or any order that has been entered into 

the system and designated with a time-in-force that 

would allow the order to be in force at the time of 

the Halt Cross. See Nasdaq Rule 4753(a)(5). 

6Rule 5550(a)(2) specifies that a Company that 

has its Primary Equity Security listed on the Capital 

Market must have a minimum bid price of at least 

$1 per share. See also Rule 5450(a)(1) (Global and 

Global Select Markets). Companies are afforded a 

grace period pursuant to Rule 5810(c)(3)(A) to 

regain compliance. 

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–2023–60 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–2023–60. 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–2023–60 and should be 

submitted on or before December 5, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–25007 Filed 11–13–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98878; File No. SR– 

NASDAQ–2023–036] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of 

Proposed Rule Change, as Modified by 

Amendment No. 1, Relating to Nasdaq 

Rules 4120 and 4753 

November 7, 2023. 

I. Introduction 

On September 12, 2023, The Nasdaq 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend Rule 4120 (Limit Up-Limit Down 

and Trading Halts) and Rule 4753 

(Nasdaq Halt Cross) to set forth specific 

requirements for halting and resuming 

trading in a security that is subject to a 

reverse stock split. The proposed rule 

change was published for comment in 

the Federal Register on September 28, 

2023.3

On October 27, 2023, the Exchange 

filed Amendment No. 1 to the proposed 

rule change, which replaced and 

superseded the proposed rule change as 

originally filed.4 The Commission has 

received no comments on the proposal. 

The Commission is publishing this 

notice to solicit comments on 

Amendment No. 1 from interested 

persons, and is approving the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis. 

II. Self-Regulatory Organization’s 

Description of the Proposal, as 

Modified by Amendment No. 1 

In its filing with the Commission, the 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In conjunction with the increase in 

overall reverse stock splits in recent 

years, Nasdaq proposes to amend Rule 

4120 and Rule 4753 to set forth specific 

requirements for halting trading in a 

security that is subject to a reverse stock 

split and resuming trading using the 

Nasdaq Halt Cross.5 Current Rule 4120 

does not specifically list rule reverse 

stock splits in the enumerated 

circumstances in which Nasdaq may 

halt trading in a security. The proposed 

amendments will be specific to the 

automatic initiation, pre-market trading 

and opening of a Nasdaq-listed security 

undergoing a reverse stock split. 

Background 

Nasdaq has observed that the current 

market environment has led to an 

increase in reverse stock split activity. 

In 2022, Nasdaq processed 196 reverse 

stock splits, compared to 35 in 2021 and 

98 in 2020. Just in the first quarter of 

2023, Nasdaq processed 78 reverse stock 

splits, and projects significantly more 

throughout 2023. Reverse stock splits 

are often effected by smaller companies 

that do not have broad media or 

research coverage. In most cases, the 

companies are listed on the Capital 

Market tier and are conducting reverse 

stock splits to achieve compliance with 

Nasdaq’s $1 minimum bid price 

requirement.6

Nasdaq believes that the increase in 

companies effecting reverse stock splits 

warrants amendments to the trading halt 

rules to allow for Nasdaq to help reduce 

the potential for errors resulting in a 

material effect on the market resulting 

from market participants’ processing of 

the reverse stock split, including 

incorrect adjustment or entry of orders. 

Nasdaq currently processes reverse 


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