Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 81125 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Market Maker’’ means a Member 

registered with the Exchange for the purpose of 

making markets in options contracts traded on the 

Exchange and that is vested with the rights and 

responsibilities specified in Chapter VI of Exchange 

Rules. See the Definitions section of the Fee 

Schedule and Exchange Rule 100. 

4The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of Exchange Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See the Definitions section of the Fee 

Schedule and Exchange Rule 100. 

5The term ‘‘Excluded Contracts’’ means any 

contracts routed to an away market for execution. 

See the Definitions section of the Fee Schedule. 

6The term ‘‘TCV’’ means total consolidated 

volume calculated as the total national volume in 

those classes listed on MIAX Pearl for the month 

for which the fees apply, excluding consolidated 

volume executed during the period time in which 

the Exchange experiences an ‘‘Exchange System 

Disruption’’ (solely in the option classes of the 

affected Matching Engine (as defined below)). The 

term ‘‘Exchange System Disruption,’’ which is 

defined in the Definitions section of the Fee 

Schedule, means an outage of a Matching Engine or 

collective Matching Engines for a period of two 

consecutive hours or more, during trading hours. 

The term ‘‘Matching Engine,’’ which is also defined 

in the Definitions section of the Fee Schedule, is a 

part of the MIAX Pearl electronic system that 

processes options orders and trades on a symbolby-symbol basis. Some Matching Engines will 

process option classes with multiple root symbols, 

and other Matching Engines may be dedicated to 

one single option root symbol (for example, options 

on SPY may be processed by one single Matching 

Engine that is dedicated only to SPY). A particular 

root symbol may only be assigned to a single 

designated Matching Engine. A particular root 

symbol may not be assigned to multiple Matching 

Engines. The Exchange believes that it is reasonable 

and appropriate to select two consecutive hours as 

the amount of time necessary to constitute an 

Exchange System Disruption, as two hours equates 

Continued 

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– 

ISE–2023–27 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–ISE–2023–27. 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–ISE–2023–27 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25665 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98956; File No. SR– 

PEARL–2023–63] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX Pearl 

Options Fee Schedule 

November 15, 2023. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on 

November 8, 2023, MIAX PEARL, LLC 

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

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Pearl Options 

Exchange Fee Schedule (the ‘‘Fee 

Schedule’’). 

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 purpose of the proposed rule 

change is to amend Section 1)a) of the 

Fee Schedule, Exchange Rebates/Fees— 

Add/Remove Tiered Rebates/Fees, for 

the MIAX Pearl Market Maker 3 origin 

to: (1) amend and clarify the cross-asset 

volume based requirement contained in 

Tier 2 and related footnote ‘‘#’’ 

following the Marker Maker origin table; 

and (2) adopt an alternative volume 

criteria for the Tier 2 rebates and fees for 

Market Makers with an additional 

explanatory note. The Exchange 

originally filed this proposal on October 

31, 2023 (SR–PEARL–2023–61). On 

November 8, 2023, the Exchange 

withdrew SR–PEARL–2023–61 and 

refiled this proposal. 

Background 

The Exchange currently assesses 

transaction rebates and fees to all 

market participants which are based 

upon the total monthly volume 

executed by the Member 4 on MIAX 

Pearl in the relevant, respective origin 

type (not including Excluded 

Contracts) 5 (as the numerator) 

expressed as a percentage of (divided 

by) TCV 6 (as the denominator). In 


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81126 Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 

to approximately 1.4% of available trading time per 

month. The Exchange notes that the term 

‘‘Exchange System Disruption’’ and its meaning 

have no applicability outside of the Fee Schedule, 

as it is used solely for purposes of calculating 

volume for the threshold tiers in the Fee Schedule. 

See the Definitions section of the Fee Schedule. 

7The term ‘‘Affiliate’’ means (i) an affiliate of a 

Member of at least 75% common ownership 

between the firms as reflected on each firm’s Form 

BD, Schedule A, or (ii) the Appointed Market Maker 

of an Appointed EEM (or, conversely, the 

Appointed EEM of an Appointed Market Maker). 

An ‘‘Appointed Market Maker’’ is a MIAX Pearl 

Market Maker (who does not otherwise have a 

corporate affiliation based upon common 

ownership with an EEM) that has been appointed 

by an EEM and an ‘‘Appointed EEM’’ is an EEM 

(who does not otherwise have a corporate affiliation 

based upon common ownership with a MIAX Pearl 

Market Maker) that has been appointed by a MIAX 

Pearl Market Maker, pursuant to the following 

process. A MIAX Pearl Market Maker appoints an 

EEM and an EEM appoints a MIAX Pearl Market 

Maker, for the purposes of the Fee Schedule, by 

each completing and sending an executed Volume 

Aggregation Request Form by email to 

membership@miaxoptions.com no later than 2 

business days prior to the first business day of the 

month in which the designation is to become 

effective. Transmittal of a validly completed and 

executed form to the Exchange along with the 

Exchange’s acknowledgement of the effective 

designation to each of the Market Maker and EEM 

will be viewed as acceptance of the appointment. 

The Exchange will only recognize one designation 

per Member. A Member may make a designation 

not more than once every 12 months (from the date 

of its most recent designation), which designation 

shall remain in effect unless or until the Exchange 

receives written notice submitted 2 business days 

prior to the first business day of the month from 

either Member indicating that the appointment has 

been terminated. Designations will become 

operative on the first business day of the effective 

month and may not be terminated prior to the end 

of the month. Execution data and reports will be 

provided to both parties. See the Definitions section 

of the Fee Schedule. 

8The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

9The term ‘‘ABBO’’ means the best bid(s) or 

offer(s) disseminated by other Eligible Exchanges 

(defined in Exchange Rule 1400(g)) and calculated 

by the Exchange based on market information 

received by the Exchange from OPRA. See the 

Definitions section of the Fee Schedule and 

Exchange Rule 100. 

10See Securities Exchange Act Release No. 88992 

(June 2, 2020), 85 FR 35142 (June 8, 2020) (SR– 

PEARL–2020–06). 11See Fee Schedule, Section 1)a), explanatory 

paragraph below the tables and footnotes. See also 

Securities Exchange Act Release Nos. 84592 

(November 14, 2018), 83 FR 58646 (November 20, 

2018) (SR–PEARL–2018–23); 90906 (January 21, 

2021), 86 FR 5296 (January 19, 2021) (SR–PEARL– 

2020–38). 12The term ‘‘MIAX Pearl Equities’’ shall mean 

MIAX Pearl Equities, a facility of MIAX PEARL, 

LLC. See Exchange Rule 1901. 13See Securities Exchange Act Release No. 98472 

(September 21, 2023), 88 FR 66533 (September 27, 

2023) (SR–PEARL–2023–45) (eliminating the ‘‘Add 

Volume Tiers’’ table and associated rebates due to 

the adoption of the NBBO Setter Plus Program, 

which incorporated similar aspects and rebate 

amounts as the Add Volume Tiers). 

14See id. (describing the Add Volume Tiers, 

requirements and associated rebate amounts and 

how the Add Volume Tiers were incorporated into 

the NBBO Setter Plus Program). 

15See MIAX Pearl Equities Fee Schedule, Section 

1)e), Midpoint Peg Order Adding Liquidity at 

Midpoint Volume Tiers. 

16See Exchange Rule 2614(a)(3). 

17With respect to the trading of equity securities, 

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. 

addition, the per contract transaction 

rebates and fees are applied 

retroactively to all eligible volume for 

that origin type once the respective 

threshold tier (‘‘Tier’’) has been reached 

by the Member. The Exchange 

aggregates the volume of Members and 

their Affiliates.7 Members that place 

resting liquidity, i.e., orders resting on 

the book of the MIAX Pearl System,8 are 

paid the specified ‘‘maker’’ rebate (each 

a ‘‘Maker’’), and Members that execute 

against resting liquidity are assessed the 

specified ‘‘taker’’ fee (each a ‘‘Taker’’). 

For opening transactions and ABBO 9

uncrossing transactions, per contract 

transaction rebates and fees are waived 

for all market participants. Finally, 

Members are assessed lower transaction 

fees and receive lower rebates for order 

executions in standard option classes in 

the Penny Interval Program 10 (‘‘Penny 

Classes’’) than for order executions in 

standard option classes which are not in 

the Penny Interval Program (‘‘NonPenny Classes’’), where Members are 

assessed higher transaction fees and 

receive higher rebates. 

Volume Calculations for Market Maker 

Origin Tier 2 

Currently, the Exchange provides 

three methods in which a Market Maker 

may qualify for the fees and rebates 

associated with Tier 2 of the Market 

Maker origin. A Market Maker needs 

only to satisfy one of the methods in 

order to receive the fees and rebates 

associated with Tier 2. 

Pursuant to the first method, Market 

Makers will qualify for the Maker 

rebates and Taker fees in Tier 2 of the 

Market Maker origin table if the Market 

Maker executes total monthly volume, 

not including Excluded Contracts, in all 

classes above 0.20% to 0.50% of TCV. 

The second method is based upon the 

total monthly volume executed by a 

Market Maker collectively in SPY/QQQ/ 

IWM options on the Exchange, 

expressed as a percentage of total 

consolidated national volume in SPY/ 

QQQ/IWM options.11 Pursuant to this 

alternative volume criteria, a Market 

Maker will qualify for the Maker rebates 

and Taker fees in Tier 2 if the Market 

Maker’s total executed monthly volume, 

not including Excluded Contracts, in 

SPY/QQQ/IWM options on MIAX Pearl 

is above 0.55% of total consolidated 

national monthly volume in SPY/QQQ/ 

IWM options. For this calculation, 

volume that is from adding liquidity 

(Maker) and taking liquidity (Taker) in 

SPY/QQQ/IWM options is counted 

towards the alternative volume criteria, 

and the 0.55% threshold does not have 

to be reached individually in each of the 

three symbols. 

The Exchange notes that MIAX Pearl 

Equities 12 implemented a fee change 

effective September 1, 2023, which, 

among other things, eliminated the 

‘‘Add Volume Tiers’’ table and 

associated rebates on MIAX Pearl 

Equities.13 Pursuant to this proposal, the 

Exchange seeks to amend the third 

method for the volume calculation for 

Tier 2 of the Market Maker origin in 

light of the elimination of the Add 

Volume Tiers on MIAX Pearl Equities, 

as described in more detail below. For 

the sake of clarity, the Exchange will 

describe in the paragraph immediately 

below the third volume calculation 

method as currently stated in the Fee 

Schedule; the proposed changes to the 

third volume calculation method will be 

described further below to account for 

the September 1, 2023 fee changes on 

MIAX Pearl Equities that eliminated the 

Add Volume Tiers table and associated 

rebates. 

As currently provided in the Fee 

Schedule (prior to this proposal and the 

original proposal), the third method is 

calculated using cross-asset volume 

requirements that require Market 

Makers to satisfy the requirements of 

Tier 2 of the Add Volume Tiers table in 

the MIAX Pearl Equities fee schedule,14

and also the requirements of Tier 2 of 

the Midpoint Peg Order Adding 

Liquidity at the Midpoint Volume Tiers 

table (referred to herein as the 

‘‘Midpoint Volume Tiers’’) in the MIAX 

Pearl Equities fee schedule.15 A 

Midpoint Peg Order 16 on MIAX Pearl 

Equities is a non-displayed limit order 

that is assigned a working price pegged 

to the midpoint of the PBBO.17

Amendment to Cross-Asset Volume 

Based Requirement 

The Exchange proposes to amend the 

Add/Remove Tiered Rebates/Fees table 

set forth in Section 1)a) of the Fee 

Schedule for the Market Maker origin to 

amend the cross-asset volume based 

requirement contained in Tier 2 and 

related footnote ‘‘#’’ following the 

Marker Maker origin table. As described 

above, prior to implementation of the 

NBBO Setter Plus Program (‘‘NBBO 

Program’’) on MIAX Pearl Equities, 

Market Makers were able to qualify for 


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18See supra note 13. 

19See id. (noting that under volume calculation 

Method 1 of the NBBO Program, tiered rebates are 

based on an Equity Member’s average daily added 

volume (‘‘ADAV’’) as a percentage of TCV, which 

is the same method that MIAX Pearl Equities used 

to calculate the volume requirements for the Add 

Volume Tiers table). 

20The Exchange propose to make the same 

change to footnote ‘‘#’’ following the Market Maker 

origin table in Section 1)a) of the Fee Schedule. 

21The term ‘‘Equity Member’’ means a Member 

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

22With respect to MIAX Pearl Equities, the term 

‘‘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. See the Definitions section of 

the MIAX Pearl Equities Fee Schedule. 

23With respect to MIAX Pearl Equities, total 

consolidated volume, or ‘‘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. See 

the Definitions section of the MIAX Pearl Equities 

Fee Schedule. 

24The term ‘‘NBBO Set Volume’’ means the 

ADAV in all securities of an Equity Member that 

sets the NBB or NBO on MIAX Pearl Equities. See 

the Definitions section of the MIAX Pearl Equities 

Fee Schedule. 

25See also Securities Exchange Act Release No. 

98472 (September 21, 2023), 88 FR 66533 

(September 27, 2023) (SR–PEARL–2023–45) 

(describing the three alternative volume calculation 

methods for an Equity Member to achieve Tier 2 of 

the NBBO Program). Equity Members may qualify 

for Tier 2 of the Midpoint Volume Tiers table by 

achieving an 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 PBBO and add liquidity to 

MIAX Pearl Equities in an amount equal to or 

greater than 1,000,000 shares. See MIAX Pearl 

Equities Fee Schedule, Section 1)e). 

26See NYSE Arca Options Fee Schedule, Market 

Maker Penny and SPY Posting Credit Tiers, Super 

Tier II, available at https://www.nyse.com/ 

Continued 

the Maker rebates and Taker fees in Tier 

2 of the Market Maker origin if the 

Market Maker satisfied the requirements 

of Tier 2 of the Add Volume Tiers table 

and Tier 2 of the Midpoint Volume 

Tiers table in the MIAX Pearl Equities 

fee schedule.18

Beginning September 1, 2023, MIAX 

Pearl Equities incorporated aspects and 

rebate amounts of the Add Volume Tiers 

with the implementation of the NBBO 

Program and eliminated the Add 

Volume Tiers table from the MIAX Pearl 

Equities fee schedule.19 In light of the 

elimination of the Add Volume Tiers 

table in the MIAX Pearl Equities fee 

schedule, the Exchange proposes to 

amend the cross-asset volume based 

requirement contained in Tier 2 of the 

Market Maker origin table and related 

footnote ‘‘#’’ following the Marker 

Maker origin table. 

In particular, the Exchange proposes 

to replace the words ‘‘Add Volume 

Tiers’’ in Tier 2 of the Market Maker 

origin table with the words ‘‘NBBO 

Setter Plus Program.’’ 20 Under the Add 

Volume Tiers table, MIAX Pearl Equities 

provided enhanced rebates to Equity 

Members 21 for executions of orders in 

securities priced at or above $1.00 per 

share that added displayed liquidity 

(‘‘Added Displayed Volume’’) to MIAX 

Pearl Equities that met specified volume 

thresholds. As it pertains to this 

proposal regarding Tier 2 of the Market 

Maker origin, an Equity Member was 

able to qualify for MIAX Pearl Equities’ 

Add Volume Tiers, Tier 2, by achieving 

an ADAV 22 of at least 0.10% of total 

consolidated volume.23

With the implementation of the NBBO 

Program, MIAX Pearl Equities adopted a 

tiered-rebate structure where Equity 

Members are able to achieve enhanced 

rebates for executions of orders in 

securities priced at or above $1.00 per 

share that add displayed liquidity 

pursuant to one of three different 

methods for calculating volume 

thresholds. The three volume-based 

methods to determine the Equity 

Member’s tier for purposes of the NBBO 

Program are calculated in parallel in 

each month, and each Equity Member 

receives the highest tier achieved from 

any of the three methods each month. 

As it pertains to this proposal, volume 

calculation Method 1 of the NBBO 

Program incorporates the volume 

calculation method of the Add Volume 

Tiers table, which utilizes an Equity 

Member’s ADAV as a percentage of TCV 

to determine the applicable tier. In 

particular, an Equity Member qualifies 

for Tier 2 of the NBBO Program by 

achieving an ADAV of at least 0.08% 

and less than 0.25% of TCV. Under 

volume calculation Method 2 of the 

NBBO Program, MIAX Pearl Equities 

calculates the tier achieved based on an 

Equity Member’s ‘‘NBBO Set 

Volume’’ 24 as a percentage of TCV. In 

particular, an Equity Member qualifies 

for the Tier 2 of the NBBO Program by 

achieving an NBBO Set Volume of at 

least 0.02% and less than 0.03% of TCV. 

Under volume calculation Method 3 of 

the NBBO Program, MIAX Pearl Equities 

calculates the tier achieved based on an 

Equity Member’s ADV as a percentage of 

TCV. In particular, an Equity Member 

qualifies for Tier 2 of the NBBO Program 

by achieving an ADV of at least 0.20% 

and less than 0.60% of TCV. 

With the proposed change to replace 

the words ‘‘Add Volume Tiers’’ in Tier 

2 of the Market Maker origin table with 

the words ‘‘NBBO Setter Plus Program,’’ 

Market Makers will be able to qualify for 

the Maker rebates and Taker fees in Tier 

2 of the Market Maker origin table if the 

Market Maker satisfies the requirements 

of Tier 2 of both the NBBO Program and 

Tier 2 of the Midpoint Volume Tiers 

table in the MIAX Pearl Equities fee 

schedule.25

The purpose of this change is to 

provide consistency and clarity in the 

Fee Schedule as the Add Volume Tiers 

table has been eliminated in the MIAX 

Pearl Equities fee schedule. The 

Exchange believes that this change 

provides more opportunities for market 

participants to satisfy this cross-asset 

volume requirement because there are 

three volume calculation methods 

(described above) available for an Equity 

Member to achieve Tier 2 of the NBBO 

Program, as opposed to the Add Volume 

Tiers table, which only provided one 

volume calculation method. 

Adopt Alternative Volume Criteria in 

Tier 2 of the Market Maker Origin 

The Exchange also proposes to amend 

the Add/Remove Tiered Rebates/Fees 

table set forth in Section 1)a) of the Fee 

Schedule for the Market Maker origin to 

adopt a fourth method by which a 

Market Maker may qualify for the fees 

and rebates in Tier 2 of the Market 

Maker origin table. In particular, the 

Exchange proposes that a Market Maker 

will qualify for the Maker rebates and 

Taker fees in Tier 2 if the Market 

Maker’s total executed monthly volume, 

not including Excluded Contracts, in 

SPY/QQQ/IWM options on MIAX Pearl 

is above 0.30% of SPY/QQQ/IWM TCV 

when adding liquidity. The Exchange 

proposes to amend the explanatory 

paragraph below the origin tables in 

Section 1)a) of the Fee Schedule to add 

a sentence for the new alternative 

volume criteria. Specifically, in Tier 2 

for MIAX Pearl Market Makers, the 

proposed alternative volume criteria 

(above 0.30% in SPY/QQQ/IWM when 

adding liquidity) will be calculated 

based on the total monthly volume that 

added liquidity executed by the Market 

Maker collectivity in SPY, QQQ, and 

IWM options on MIAX Pearl in the 

relevant origin type, not including 

Excluded Contracts (as the numerator), 

expressed as a percentage of (divided 

by) SPY/QQQ/IWM TCV (as the 

denominator). 

The purpose of this proposed change 

is for business and competitive reasons. 

The Exchange notes that at least one 

other competing exchange has a similar 

alternative volume calculation method 

to achieve a higher rebate that is based 

on a member’s combined posted interest 

in SPY, QQQ, IWM options expressed as 

a percentage of industry-wide average 

daily volume in SPY/QQQ/IWM 

options.26


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publicdocs/nyse/markets/arca-options/NYSE_Arca_

Options_Fee_Schedule.pdf (providing additional 

($0.03) credit per contract to electronic executions 

of market maker posted interest in Penny Issues 

provided an OTP Holder or OTP Firm achieves (i) 

at least 0.55% of total combined IWM, QQQ, and 

SPY industry ADV from Market Maker posted 

interest in IWM, QQQ, and SPY, and (ii) ETP 

Holder and Market Maker posted volume in Tape 

B Adding ADV that is equal to at least 1.50% of US 

Tape B CADV executed on NYSE Arca Equity 

Market for the billing month). 

27 15 U.S.C. 78f(b). 

28 15 U.S.C. 78f(b)(4). 

29 15 U.S.C. 78f(b)(1) and (b)(5). 

30See Securities Exchange Act Release No. 51808 

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

31See the ‘‘Market Share’’ section of the 

Exchange’s website, available at https://

www.miaxglobal.com/ (last visited October 30, 

2023). 

32See id. 

33See Securities Exchange Act Release No. 85304 

(March 13, 2019), 84 FR 10144 (March 19, 2019) 

(SR–PEARL–2019–07). 

With the proposed change, the four 

different volume criteria available for 

Tier 2 of the Market Maker origin are 

based upon either: (1) the total monthly 

volume executed by the Market Maker 

in all options classes on MIAX Pearl, 

not including Excluded Contracts, (as 

the numerator), expressed as a 

percentage of (divided by) TCV (as the 

denominator); or (2) the total monthly 

volume executed by the MIAX Pearl 

Market Maker collectively in SPY/QQQ/ 

IWM options on MIAX Pearl, not 

including Excluded Contracts, (as the 

numerator), expressed as a percentage of 

(divided by) SPY/QQQ/IWM TCV (as 

the denominator); or (3) the Market 

Maker is in Tier 2 of the NBBO Program 

on MIAX Pearl Equities and is also in 

Tier 2 of the Midpoint Volume Tiers 

program on MIAX Pearl Equities; or (4) 

the added liquidity by the MIAX Pearl 

Market Maker collectively in SPY/QQQ/ 

IWM options on MIAX Pearl, not 

including Excluded Contracts, (as the 

numerator), expressed as a percentage of 

(divided by) SPY/QQQ/IWM TCV (as 

the denominator). Once any one of the 

aforementioned four volume criteria 

thresholds in Tier 2 of the Market Maker 

origin is reached by the Market Maker, 

the Tier 2 per contract rebates and fees 

apply to all volume in all options 

classes executed by that MIAX Pearl 

Market Maker. 

Implementation 

The proposed changes are 

immediately effective. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 27

in general, and furthers the objectives of 

Section 6(b)(4) of the Act,28 in that it is 

an equitable allocation of reasonable 

dues, fees and other charges among 

Exchange Members and issuers and 

other persons using its facilities, and 

6(b)(5) of the Act,29 in that 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 facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The Commission has repeatedly 

expressed its 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.’’ 30

There are currently 17 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, as of October 30, 2023, no 

single exchange has more than 

approximately 12–13% of the multiplylisted equity options market share for 

the month of October 2023.31 Therefore, 

no exchange possesses significant 

pricing power. More specifically, as of 

October 30, 2023, the Exchange had a 

market share of approximately 6.13% of 

executed volume of multiply-listed 

equity options for the month of October 

2023.32

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can discontinue or reduce use of certain 

categories of products and services, 

terminate an existing membership or 

determine to not become a new member, 

and/or shift order flow, in response to 

transaction fee changes. For example, on 

February 28, 2019, the Exchange filed 

with the Commission a proposal to 

increase Taker fees in certain Tiers for 

options transactions in certain Penny 

Classes for Priority Customers and 

decrease Maker rebates in certain Tiers 

for options transactions in Penny 

Classes for Priority Customers (which 

fee was to be effective March 1, 2019).33

The Exchange experienced a decrease in 

total market share for the month of 

March 2019, after the proposal went 

into effect. Accordingly, the Exchange 

believes that its March 1, 2019, fee 

change, to increase certain transaction 

fees and decrease certain transaction 

rebates, may have contributed to the 

decrease in MIAX Pearl’s market share 

and, as such, the Exchange believes 

competitive forces constrain the 

Exchange’s, and other options 

exchanges, ability to set transaction fees 

and market participants can shift order 

flow based on fee changes instituted by 

the exchanges. 

The Exchange believes that its 

proposal represents an equitable 

allocation of fees and is not unfairly 

discriminatory because it applies 

uniformly to all Market Makers, in that 

all Market Makers have the opportunity 

to compete for and achieve the proposed 

new alternative volume criteria of Tier 

2, and the Tier 2 fees and rebates will 

apply uniformly to all Market Makers 

that achieve Tier 2. While the Exchange 

has no way of knowing whether this 

proposed rule change would 

definitively result in any particular 

Market Maker achieving the proposed 

alternative volume criteria, the 

proposed alternative volume criteria is 

available for any Market Maker. To the 

extent a Member participates on the 

Exchange but not on MIAX Pearl 

Equities, the Exchange believes that the 

proposal is still reasonable, equitably 

allocated and not unfairly 

discriminatory with respect to such 

Member based on the overall benefit to 

the Exchange resulting from the success 

of its equities platform. Particularly, the 

Exchange believes that additional such 

success allows the Exchange to continue 

to provide and potentially expand its 

existing incentive programs to the 

benefit of all participants on the 

Exchange, whether they participate on 

MIAX Pearl Equities or not. 

Additionally, a Market Maker that is not 

a Member of MIAX Pearl Equities may 

still satisfy the current primary volume 

criteria or the two other alternative 

volume criteria (including the newly 

proposed alternative volume criteria) 

that are not based on meeting certain 

volume thresholds on MIAX Pearl 

Equities, to be eligible for Tier 2 fees 

and rebates for the Market Maker origin. 

Additionally, the Exchange believes 

its proposal represents a reasonable 

attempt to continue to incentivize 

market participants to increase the 

number and variety of orders sent to the 

Exchange for execution. Specifically, 

the Exchange believes its proposal to 

amend the cross-asset volume 

requirements to require Market Makers 

to achieve Tier 2 of the NBBO Program 

and Midpoint Volume Tiers table on 

MIAX Pearl Equities will continue to 


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Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 81129 

34See NYSE Arca Options Fee Schedule, Market 

Maker Penny and SPY Posting Credit Tiers, Super 

Tier II, available at https://www.nyse.com/ 

publicdocs/nyse/markets/arca-options/NYSE_Arca_

Options_Fee_Schedule.pdf (providing a credit of 

$0.42 when a Firm has at least 0.15% of TCADV 

from Market Maker posted interest in all issues, 

plus ETP Holder and Market Maker posted volume 

in Tape B Securities (‘‘Tape B Adding ADV’’) that 

is equal to at least 1.40% of US Tape B consolidated 

average daily volume (‘‘CADV’’) for the billing 

month executed on NYSE Arca Equity Market). 

35See supra note 31. 

36See id. 

37 15 U.S.C. 78s(b)(3)(A)(ii). 

38 17 CFR 240.19b–4(f)(2). 

incentivize participation in greater 

volume from cross-asset activity, which 

would improve the overall quality of the 

Exchange’s marketplace to the benefit of 

all market participants, both on the 

options and equities platforms of MIAX 

Pearl. The Exchange notes that such 

cross-asset volume requirements is not 

new or novel and at least one other 

competing exchanges offers a similar 

method to achieve higher rebates on its 

options market.34

The Exchange believes its proposal to 

replace the Add Volume Tiers, Tier 2 

requirement with the new requirement 

to achieve Tier 2 in the NBBO Program 

as an alternative method to achieve Tier 

2 in the Market Maker origin table is 

reasonable because it provides more 

opportunities for market participants to 

satisfy this cross-asset volume 

requirement since there are three 

volume calculation methods (described 

above) available for an Equity Member 

to achieve Tier 2 of the NBBO Program, 

as opposed to the Add Volume Tiers 

table, which only provided one volume 

calculation method. Further, volume 

calculation Method 1 under the NBBO 

Program is nearly identical to the Add 

Volume Tier requirement prior to it 

being eliminated. An Equity Member 

was able to qualify for Add Volume Tier 

2 by achieving an ADAV of at least 

0.10% of TCV. An Equity Member 

qualifies for Tier 2 of the NBBO Program 

by achieving an ADAV of at least 0.08% 

and less than 0.25% of TCV. 

Accordingly, the Exchange believes this 

proposed change is reasonable because 

it is provides additional opportunities to 

Equity Members to achieve Tier 2 of the 

NBBO Program through three volume 

calculation methods, including one 

volume calculation method that is the 

similar in calculation and required 

threshold as Add Volume Tier 2 prior to 

its elimination. 

The Exchange also believes that its 

new proposed qualifications for the Tier 

2 alternative volume criteria for MIAX 

Pearl Market Makers is equitable and 

not unfairly discriminatory because the 

Exchange will uniformly assess the 

rebates and fees for any Market Makers 

qualifying for Tier 2. Finally, 

encouraging Market Makers to add 

greater liquidity benefits all market 

participants, both on the options and 

equities platforms of MIAX Pearl, in the 

quality of order interaction. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intra-Market Competition 

The Exchange does not believe that its 

proposal will impose any burden on 

intra-market competition as the 

Exchange believes that its proposal will 

not place any market participant at a 

competitive disadvantage as Market 

Makers may satisfy any of the volume 

criteria requirements to be eligible for 

the Tier 2 fees and rebates for the 

Market Maker origin. Further, for 

Market Makers that are Members of only 

the options trading facility of MIAX 

Pearl, and not the equities trading 

facility, those Market Makers may 

achieve the rebates and fees associated 

with Tier 2 of the Market Maker origin 

table by executing volume that does not 

require them to be MIAX Pearl Equity 

Members via the alternative methods 

described above. The Exchange believes 

that the proposed changes should 

continue to encourage the provision of 

liquidity in options that enhances the 

quality of the Exchange’s market and 

increases the number of trading 

opportunities on the Exchange for all 

participants who will be able to 

compete for such opportunities. 

Additionally, as discussed, the 

proposed changes are ultimately aimed 

at attracting greater order flow to the 

Exchange, which benefits all market 

participants by providing more trading 

opportunities. 

Inter-Market Competition 

The Exchange does not believe that its 

proposal will impose any burden on 

inter-market competition and 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. 

There are currently 17 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has more 

than approximately 12–13% of the 

market share of executed volume of 

multiply-listed equity and ETF options 

trades as of October 30, 2023, for the 

month of October 2023.35 Therefore, no 

exchange possesses significant pricing 

power in the execution of multiplylisted equity and ETF options order 

flow. More specifically, as of October 

30, 2023, the Exchange had a market 

share of approximately 6.13% of 

executed volume of multiply-listed 

equity and ETF options for the month of 

October 2023.36 In such an 

environment, the Exchange must 

continually adjust its fees and tiers to 

remain competitive with other options 

exchanges. Because competitors are free 

to modify their own fees and tiers 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 and Tiers 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,37 and Rule 

19b–4(f)(2) 38 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. 


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81130 Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 

39 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. 98621 

(September 28, 2023), 88 FR 68896 (‘‘Notice’’). 

4See Rule 4.13(e). 

5See Notice, supra note 3 at 68897. 

6See id. 

7See id. 

8See id. 

9See id. 

10For a more detailed description of the proposed 

Tuesday or Thursday expirations, see Notice, supra 

note 3. 

11 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

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–2023–63 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–2023–63. 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–2023–63 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25669 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98957; File No. SR–CBOE– 

2023–054] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Order Approving a 

Proposed Rule Change To Amend Rule 

4.13 To Expand the Nonstandard 

Expirations Program To Include P.M.- 

Settled Options on Broad-Based 

Indexes That Expire on Tuesday or 

Thursday 

November 15, 2023. 

I. Introduction 

On September 28, 2023, Cboe 

Exchange, Inc. (‘‘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 4.13(e), which 

governs its Nonstandard Expirations 

Program (‘‘Program’’), to permit p.m.- 

settled options on any broad-based 

index eligible for standard options 

trading that expire on Tuesday or 

Thursday. The proposed rule change 

published for comment in the Federal 

Register on October 4, 2023.3 The 

Commission did not receive any 

comment letters and is approving the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to amend 

Rule 4.13(e), which governs its Program, 

to permit p.m.-settled options on any 

broad-based index eligible for standard 

options trading that expire on Tuesday 

or Thursday. Currently under the 

Program, the Exchange is permitted to 

list p.m.-settled options on any broadbased index eligible for standard trading 

that expire on: (1) any Monday, 

Wednesday, or Friday (other than the 

third Friday-of-the-month or days that 

coincide with an end-of-month 

expiration and, with respect to options 

on the S&P 500 Index (‘‘SPX options’’) 

and the Mini-S&P 500 Index (‘‘XSP 

options’’) any Tuesday or Thursday 

(‘‘Weekly Expirations’’) and (2) the last 

trading day of the month (‘‘End of 

Month Expirations’’ or ‘‘EOMs’’).4 The 

proposal expands the availability of 

Tuesday and Thursday Weekly 

Expirations to all broad-based indexes 

eligible for standard options trading.5

The Program for Weekly Expirations 

will apply to any broad-based index 

option with Tuesday and Thursday 

expirations in the same manner as it 

currently applies to all other p.m.- 

settled broad-based index options with 

Monday, Wednesday, and Friday 

expirations and to SPX and XSP options 

with Tuesday and Thursday 

expirations.6 Specifically, as set forth in 

Rule 4.13(e), Weekly Expirations, 

including the proposed Tuesday and 

Thursday expirations, are subject to all 

provisions of Rule 4.13 and treated the 

same as options on the same underlying 

index that expire on the third Friday of 

the expiration month; provided, 

however, that Weekly Expirations are 

p.m.-settled, and new series in Weekly 

Expirations may be added up to and 

including on the expiration date for an 

expiring Weekly Expiration.7

The maximum number of expirations 

that may be listed for each Weekly 

Expiration (i.e., a Monday expiration, 

Tuesday expiration, Wednesday 

expiration, Thursday expiration, or 

Friday expiration, as applicable) in a 

given class is the same as the maximum 

number of expirations permitted in Rule 

4.13(a)(2) for standard options on the 

same broad-based index.8 Weekly 

Expirations need not be for consecutive 

Monday, Tuesday, Wednesday, 

Thursday, or Friday expirations as 

applicable; however, the expiration date 

of a nonconsecutive expiration may not 

be beyond what would be considered 

the last expiration date if the maximum 

number of expirations were listed 

consecutively.9 Weekly Expirations that 

are first listed in a given class may 

expire up to four weeks from the actual 

listing date.10 In addition, like all 

Weekly Expirations, pursuant to Rule 

4.13(e)(3), transactions in expiring 

broad-based index options with 

Tuesday and Thursday expirations may 

be effected on the Exchange between the 

hours of 9:30 a.m. and 4:00 p.m. eastern 

time on their last trading day. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.11 In 


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