Federal Register / Vol. 88, No. 236 / Monday, December 11, 2023 / Notices 85941 

21 17 CFR 240.19b–4(f)(2). 

22 15 U.S.C. 78s(b)(2)(B). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The proposed fee change is based on a recent 

proposal by Nasdaq Phlx LLC (‘‘Phlx’’) to adopt fees 

for purge ports. See Securities Exchange Act 

Release No. 97825 (June 30, 2023), 88 FR 43405 

(July 7, 2023) (SR–Phlx–2023–28). 

4The term ‘‘Market Makers’’ refers to Lead Market 

Makers (‘‘LMMs’’), Primary Lead Market Makers 

(‘‘PLMMs’’), and Registered Market Makers 

(‘‘RMMs’’) collectively. See Exchange Rule 100. 

5The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

6See Securities Exchange Act Release No. 98734 

(October 12, 2023), 88 FR 71894 (October 18, 2023) 

(SR–EMERALD–2023–26). 

7See Cboe BXZ Exchange, Inc. (‘‘BZX’’) Options 

Fee Schedule, Options Logical Port Fees, Purge 

Ports ($750 per purge port per month); Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’) Options Fee Schedule, 

Continued 

subparagraph (f)(2) of Rule 19b–4 21

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under section 19(b)(2)(B) 22 of the Act 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– 

NYSEAMER–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–NYSEAMER–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–NYSEAMER–2023–63 and should 

be submitted on or before January 2, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27065 Filed 12–8–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99089; File No. SR– 

EMERALD–2023–29] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule for Purge Ports 

December 5, 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 November 

22, 2023, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the 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 proposes to amend the 

MIAX Emerald Options Exchange Fee 

Schedule (the ‘‘Fee Schedule’’) to 

amend fees for Purge Ports.3

The text of the proposed rule change 

is available on the Exchange’s website at 

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

us-options/emerald-options/rule-filings, 

at MIAX’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 is proposing to amend 

the fees for Purge Ports, which is a 

function enabling Market Makers 4 to 

cancel all open quotes or a subset of 

open quotes through a single cancel 

message. The Exchange currently 

provides Market Makers the option to 

purchase Purge Ports to assist in their 

quoting activity. Purge Ports provide 

Market Makers with the ability to send 

purge messages to the Exchange 

System.5 Purge Ports are not capable of 

sending or receiving any other type of 

messages or information. The use of 

Purge Ports is completely optional and 

no rule or regulation requires that a 

Market Maker utilize them. 

The Exchange initially filed the 

proposal on September 29, 2023 

(EMERALD–2023–26) (the ‘‘Initial 

Proposal’’).6 On November 22, 2023, the 

Exchange withdrew the Initial Proposal 

and replaced it with this filing. 

Unlike other options exchanges that 

charge fees for Purge Ports on a per port 

basis,7 the Exchange assesses a flat fee 


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Options Logical Port Fees, Purge Ports ($750 per 

purge port per month); Cboe Exchange, Inc. 

(‘‘Cboe’’) Fee Schedule ($850 per purge port per 

month). See also Nasdaq GEMX, Options 7, Pricing 

Schedule, Section 6.C.(3). Nasdaq GEMX, LLC 

(‘‘Nasdaq GEMX’’) assesses its members $1,250 per 

SQF Purge Port per month, subject to a monthly cap 

of $17,500 for SQF Purge Ports and SQF Ports, 

applicable to market makers. See also Securities 

Exchange Act Release No. 97825 (June 30, 2023), 88 

FR 43405 (July 7, 2023) (SR–Phlx–2023–28). 

8A Matching Engine is a part of the Exchange’s 

electronic system that processes options quotes and 

trades on a symbol-by-symbol basis. Some matching 

engines will process option classes with multiple 

root symbols, and other matching engines will be 

dedicated to one single option root symbol (for 

example, options on SPY will 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. 

9See supra note 7. 

10The Exchange notes that each Matching Engine 

corresponds to a specified group of symbols. 

Certain Market Makers choose to only quote in 

certain symbols while other Market Makers choose 

to quote the entire market. 

11The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

12Members seeking to become registered as a 

Market Maker must comply with the applicable 

requirements of Chapter VI of the Exchange’s Rules. 

13See Exchange Rule 519C(a) and (b). 

14Current Exchange port functionality supports 

cancelation rates that exceed one thousand 

messages per second and the Exchange’s research 

indicates that certain market participants rely on 

such functionality and at times utilize such 

cancelation rates. 

15See Exchange Rule 519C (c). 

16See Exchange Rule 532. 

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

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

of $1,500 per month, regardless of the 

number of Purge Ports utilized by a 

Market Maker. Currently, a Market 

Maker may request and be allocated two 

(2) Purge Ports per Matching Engine 8 to 

which it connects and not all Market 

Makers connect to all of the Exchange’s 

Matching Engines. 

The Exchange now proposes to amend 

the fee for Purge Ports to align more 

closely with other exchanges who 

charge on a per port basis by providing 

two (2) Purge Ports per Matching Engine 

for a monthly flat fee of $600 per month 

per Matching Engine. The only 

difference with a per port structure is 

that Market Makers receive two (2) 

Purge Ports per Matching Engine for the 

same proposed monthly fee, rather than 

being charged a separate fee for each 

Purge Port. The Exchange proposes to 

charge the proposed fee for Purge Ports 

per Matching Engine, instead on a per 

Purge Port basis, due to its System 

architecture which provides two (2) 

Purge Ports per Matching Engine for 

redundancy purposes. In addition, the 

proposed fee is lower than the 

comparable fee charged by competing 

exchanges that also charge on a per port 

basis, notwithstanding that the 

Exchange is providing up to two (2) 

Purge Ports for that same lower fee.9

Similar to a per port charge, Market 

Makers are able to select the Matching 

Engines that they want to connect to,10

based on the business needs of each 

Market Maker, and pay the applicable 

fee based on the number of Matching 

Engines and ports utilized. The 

Exchange believes that the proposed fee 

provides Market Makers with flexibility 

to control their Purge Port costs based 

on the number of Matching Engines 

each Marker Maker elects to connect to 

based on each Market Maker’s business 

needs. 

* * * * * 

A logical port represents a port 

established by the Exchange within the 

Exchange’s System for trading and 

billing purposes. Each logical port 

grants a Member 11 the ability to 

accomplish a specific function, such as 

order entry, order cancellation, access to 

execution reports, and other 

administrative information. 

Purge Ports are designed to assist 

Market Makers 12 in the management of, 

and risk control over, their quotes, 

particularly if the firm is dealing with 

a large number of securities. For 

example, if a Market Maker detects 

market indications that may influence 

the execution potential of their quotes, 

the Market Maker may use Purge Ports 

to reduce uncertainty and to manage 

risk by purging all quotes in a number 

of securities. This allows Market Makers 

to seamlessly avoid unintended 

executions, while continuing to evaluate 

the market, their positions, and their 

risk levels. Purge Ports are used by 

Market Makers that conduct business 

activity that exposes them to a large 

amount of risk across a number of 

securities. Purge Ports enable Market 

Makers to cancel all open quotes, or a 

subset of open quotes through a single 

cancel message. The Exchange notes 

that Purge Ports increase efficiency of 

already existing functionality enabling 

the cancellation of quotes. 

The Exchange operates highly 

performant systems with significant 

throughput and determinism which 

allows participants to enter, update and 

cancel quotes at high rates. Market 

Makers may currently cancel individual 

quotes through the existing 

functionality, such as through the use of 

a mass cancel message by which a 

Market Maker may request that the 

Exchange remove all or a subset of its 

quotations and block all or a subset of 

its new inbound quotations.13 Other 

than Purge Ports being a dedicated line 

for cancelling quotations, Purge Ports 

operate in the same manner as a mass 

cancel message being sent over a 

different type of port. For example, like 

Purge Ports, mass cancellations sent 

over a logical port may be done at either 

the firm or MPID level. As a result, 

Market Makers can currently cancel 

quotes in rapid succession across their 

existing logical ports 14 or through a 

single cancel message, all open quotes 

or a subset of open quotes. 

Similarly, Market Makers may also 

use cancel-on-disconnect control when 

they experience a disruption in 

connection to the Exchange to 

automatically cancel all quotes, as 

configured or instructed by the Member 

or Market Maker.15 In addition, the 

Exchange already provides similar 

ability to mass cancel quotes through 

the Exchange’s risk controls, which are 

offered at no charge and enables Market 

Makers to establish pre-determined 

levels of risk exposure, and can be used 

to cancel all open quotes.16

Accordingly, the Exchange believes that 

the Purge Ports provide an efficient 

option as an alternative to already 

available services and enhance the 

Market Maker’s ability to manage their 

risk. 

The Exchange believes that market 

participants benefit from a dedicated 

purge mechanism for specific Market 

Makers and to the market as a whole. 

Market Makers will have the benefit of 

efficient risk management and purge 

tools. The market will benefit from 

potential increased quoting and 

liquidity as Market Makers may use 

Purge Ports to manage their risk more 

robustly. Only Market Makers that 

request Purge Ports would be subject to 

the proposed fees, and other Market 

Makers can continue to operate in 

exactly the same manner as they do 

today without dedicated Purge Ports, 

but with the additional purging 

capabilities described above. 

Implementation Date 

The proposed fees are immediately 

effective. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

section 6(b) of the Act,17 in general, and 

furthers the objectives of section 6(b)(5) 

of the Act,18 in particular, in that it is 

not designed to permit unfair 

discrimination among customers, 

brokers, or dealers. The Exchange also 

believes that its proposed fee is 

consistent with section 6(b)(4) of the 


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19 15 U.S.C. 78f(b)(4). 

20See supra note 3. 

21See Securities Exchange Act Release Nos. 

98770 (October 18, 2023), 88 FR 73065 (October 24, 

2023) (SR–BX–2023–026); and 98768 (October 18, 

2023), 88 FR 73056 (October 24, 2023) (SR– 

NASDAQ–2023–041). While the Exchange included 

a cos-based justification in a related filing to amend 

fees for connectivity, it does not believe a costbased justification is require here because Purge 

Ports are optional functionality and no cost-based 

justification was provided by Phlx or any of its 

affiliates in their same filings to adopt fees for purge 

ports. Nor does the Commission Staff’s own fee 

guidance include such a requirement. See Staff 

Guidance on SRO Rule Filings Relating to Fees 

(May 21, 2019), available at https://www.sec.gov/ 

tm/staff-guidance-sro-rule-filings-fees. 

22See supra notes 3 and 7. See also Securities 

Exchange Act Release No. 77613 (April 13, 2016), 

81 FR 23023 (April 19, 2016). See also Securities 

Exchange Act Release Nos. 79956 (February 3, 

2017), 82 FR 10102 (February 9, 2017) (SR– 

BatsBZX–2017–05); 79957 (February 3, 2017), 82 FR 

10070 (February 9, 2017) (SR–BatsEDGX–2017–07); 

83201 (May 9, 2018), 83 FR 22546 (May 15, 2018) 

(SR–C2–2018–006). 

23See Exchange Rule 604. See also generally 

Chapter VI of the Exchange’s Rules. 

24 Id. 

25See supra notes 3 and 7. 

26See supra note 7. 

27Current Exchange port functionality supports 

cancelation rates that exceed one thousand 

messages per second and the Exchange’s research 

indicates that certain Participants rely on such 

functionality and at times utilize such cancelation 

rates. 

28See Exchange Rule 532. 

Act 19 because it represents an equitable 

allocation of reasonable dues, fees and 

other charges among market 

participants. 

The Exchange supports the proposed 

fee change with the below justification 

because a similar justification was used 

in a recent 2023 proposal filed with the 

Commission by another national 

securities exchange, Phlx, to adopt fees 

for purge ports, which the Commission 

deemed acceptable by not suspending 

that filing during the applicable 60-day 

review period.20 In fact, the same 

justification Phlx utilized was also used 

in similar recent proposals to adopt fees 

for purge ports by two of Phlx’s 

affiliated exchanges.21 Therefore, the 

Exchange utilized the below 

justification based on this recent 

Commission precedent from 

approximately one month ago. 

The Exchange believes that the 

proposed rule change would promote 

just and equitable principles of trade 

and remove impediments to and perfect 

the mechanism of a free and open 

market because offering Market Makers 

optional service and flexible fee 

structures which promotes choice, 

flexibility, efficiency, and competition. 

The Exchange believes Purge Ports 

enhance Market Makers’ ability to 

manage quotes, which would, in turn, 

improve their risk controls to the benefit 

of all market participants. The Exchange 

believes that Purge Ports foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities because 

designating Purge Ports for purge 

messages may encourage better use of 

such ports. This may, concurrent with 

the ports that carry quotes and other 

information necessary for market 

making activities, enable more efficient, 

as well as fair and reasonable, use of 

Market Makers’ resources. Similar 

connectivity and functionality is offered 

by options exchanges, including the 

Exchange’s own affiliated options 

exchanges, and other equities 

exchanges.22 The Exchange believes that 

proper risk management, including the 

ability to efficiently cancel multiple 

quotes quickly when necessary, is 

similarly valuable to firms that trade in 

the equities market, including Market 

Makers that have heightened quoting 

obligations that are not applicable to 

other market participants. 

Purge Ports do not relieve Market 

Makers of their quoting obligations or 

firm quote obligations under Regulation 

NMS Rule 602.23 Specifically, any 

interest that is executable against a 

Member’s or Market Maker’s quotes that 

is received by the Exchange prior to the 

time of the removal of quotes request 

will automatically execute. Market 

Makers that purge their quotes will not 

be relieved of the obligation to provide 

continuous two- sided quotes on a daily 

basis, nor will it prohibit the Exchange 

from taking disciplinary action against a 

Market Maker for failing to meet their 

continuous quoting obligation each 

trading day.24

The Exchange is not the only 

exchange to offer this functionality and 

to charge associated fees.25 The 

Exchange believes the proposed fee for 

Purge Ports is reasonable because it is 

lower than the fees currently charged by 

other exchanges for similar port 

functionality. For example, BZX and 

EDGX charge a fee of $750 per purge 

port per month, Cboe charges $850 per 

purge port per month, Nasdaq GEMX 

assesses its members $1,250 per SQF 

Purge Port per month, subject to a 

monthly cap of $17,500 for SQF Purge 

Ports and SQF Ports.26

The Exchange believes it is reasonable 

to charge $600 per month for Purge 

Ports as proposed because such ports 

were specially developed to allow 

Market Makers to send a single message 

to cancel multiple quotes, thereby 

assisting firms in effectively managing 

risk. The Exchange also believes that a 

Member that chooses to utilize Purge 

Ports may, in the future, reduce their 

need for additional ports by 

consolidating cancel messages to their 

dedicated Purge Port and thus freeing 

up some capacity of the existing logical 

ports and, therefore, allowing for 

increased message traffic without 

paying for additional logical ports. 

Purge Ports provide the ability to cancel 

multiple quotes with a single message 

over a dedicated port, and, therefore, 

may create efficiencies for firms and 

provide a more efficient solution for 

them based on their risk management 

needs. In addition, Purge Port requests 

may cancel quotes submitted over 

numerous ports and contain added 

functionality to purge only a subset of 

these quotes. Effective risk management 

is important both for individual market 

participants that choose to utilize risk 

features provided by the Exchange, as 

well as for the market in general. As a 

result, the Exchange believes that it is 

appropriate to charge fees for such 

functionality as doing so aids in the 

maintenance of a fair and orderly 

market. 

The Exchange also believes that its 

ability to set fees for Purge Ports is 

subject to significant substitution-based 

forces because Market Makers are able 

to rely on currently available services 

both free and those they receive when 

using existing trading protocols. If the 

value of the efficiency introduced 

through the Purge Port functionality is 

not worth the proposed fees, Market 

Makers will simply continue to rely on 

the existing functionality and not pay 

for Purge Ports. In that regard, Market 

Makers may currently cancel individual 

quotes through the existing 

functionality, such as through the use of 

a mass cancel message by which a 

Market Maker may request that the 

Exchange remove all or a subset of its 

quotations and block all or a subset of 

its new inbound quotations. Already 

Market Makers can also cancel quotes 

individually and by utilizing Exchange 

protocols that allow them to develop 

proprietary systems that can send cancel 

messages at a high rate.27 In addition, 

the Exchange already provides similar 

ability to mass cancel quotes through 

the Exchange’s risk controls, which are 

offered at no charge that enables Market 

Makers to establish pre-determined 

levels of risk exposure, and can be used 

to cancel all open quotes.28

Further, like Purge Ports, Members 

may also cancel all or a subset of its 

orders in the System, by firm name or 

by MPID, over their existing ports, or by 


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29See Exchange Rule 519C(a). 

30See Exchange Rule 519C(c). 

31See letter from Thomas M. Merritt, Deputy 

General Counsel, Virtu Financial, Inc. (‘‘Virtu’’), to 

Vanessa Countryman, Secretary, Commission, dated 

November 8, 2023. 

requesting the Exchange staff to effect 

such cancellations.29

Similarly, Market Makers may use 

cancel-on-disconnect control when they 

experience a disruption in their 

connection to the Exchange and 

immediately cancel all pending quotes 

in the Exchange’s System.30 Finally, this 

existing purging functionality will allow 

Market Makers to achieve essentially the 

same outcome in canceling quotes as 

they would by utilizing the Purge Ports. 

Accordingly, the Exchange believes that 

the proposed Purge Port fee is 

reasonable because it is related to the 

efficiency of Purge Ports and to other 

means and services already available 

which are either free or already a part 

of a fee assessed to the Market Maker for 

existing connectivity. Accordingly, 

because Purge Ports provide additional 

optional functionality, excessive fees 

would simply serve to reduce or 

eliminate demand for this optional 

product. 

The Exchange also believes that 

offering Purge Ports at the Matching 

Engine level promotes risk management 

across the industry, and thereby 

facilitates investor protection. Some 

market participants, in particular the 

larger firms, could and do build similar 

risk functionality (as described above) 

in their trading systems that permit the 

flexible cancellation of quotes entered 

on the Exchange at a high rate. Offering 

Matching Engine level protections 

ensures that such functionality is 

widely available to all firms, including 

smaller firms that may otherwise not be 

willing to incur the costs and 

development work necessary to support 

their own customized mass cancel 

functionality. 

As noted above, the Exchange is not 

the only exchange to offer dedicated 

Purge Ports, and the proposed rate is 

lower than that charged by other 

exchanges for similar functionality. The 

Exchange also believes that moving to a 

per Matching Engine fee is reasonable 

due to the Exchange’s architecture that 

provides it the ability to provide two (2) 

Purge Ports per Matching Engine for a 

fee that would still be lower than 

competing exchanges that charge on a 

per port basis. Generally speaking, 

restricting the Exchange’s ability to 

charge fees for these services 

discourages innovation and 

competition. Specifically in this case, 

the Exchange’s inability to offer similar 

services to those offered by other 

exchanges, and charge reasonable and 

equitable fees for such services, would 

put the Exchange at a significant 

competitive disadvantage and, therefore, 

serve to restrict competition in the 

market—especially when other 

exchanges assess comparable fees higher 

than those proposed by the Exchange. 

The Exchange believes that the 

proposed Purge Port fees are equitable 

because the proposed Purge Ports are 

completely voluntary as they relate 

solely to optional risk management 

functionality. 

The Exchange also believes that the 

proposed amendments to its Fee 

Schedule are not unfairly 

discriminatory because they will apply 

uniformly to all Market Makers that 

choose to use the optional Purge Ports. 

Purge Ports are completely voluntary 

and, as they relate solely to optional risk 

management functionality, no Market 

Maker is required or under any 

regulatory obligation to utilize them. All 

Market Makers that voluntarily select 

this service option will be charged the 

same amount for the same services. All 

Market Makers have the option to select 

any connectivity option, and there is no 

differentiation among Market Makers 

with regard to the fees charged for the 

services offered by the Exchange. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Purge Ports 

are completely voluntary and are 

available to all Market Makers on an 

equal basis at the same cost. While the 

Exchange believes that Purge Ports 

provide a valuable service, Market 

Makers can choose to purchase, or not 

purchase, these ports based on their 

own determination of the value and 

their business needs. No Market Maker 

is required or under any regulatory 

obligation to utilize Purge Ports. 

Accordingly, the Exchange believes that 

Purge Ports offer appropriate risk 

management functionality to firms that 

trade on the Exchange without imposing 

an unnecessary or inappropriate burden 

on competition. 

Furthermore, the Exchange operates 

in a highly competitive environment, 

and its ability to price the Purge Ports 

is constrained by competition among 

exchanges that offer similar 

functionality. As discussed, there are 

currently a number of similar offers 

available to market participants for 

higher fees at other exchanges. 

Proposing fees that are excessively 

higher than established fees for similar 

functionality would simply serve to 

reduce demand for the Purge Ports, 

which as discussed, market participants 

are under no obligation to utilize. It 

could also cause firms to shift trading to 

other exchanges that offer similar 

functionality at a lower cost, adversely 

impacting the overall trading on the 

Exchange and reducing market share. In 

this competitive environment, potential 

purchasers are free to choose which, if 

any, similar product to purchase to 

satisfy their need for risk management. 

As a result, the Exchange believes this 

proposed rule change permits fair 

competition among national securities 

exchanges. 

The Exchange also does not believe 

the proposal would cause any 

unnecessary or inappropriate burden on 

intermarket competition as other 

exchanges are free to introduce their 

own purge port functionality and lower 

their prices to better compete with the 

Exchange’s offering. The Exchange does 

not believe the proposed rule change 

would cause any unnecessary or 

inappropriate burden on intramarket 

competition. Particularly, the proposal 

would apply uniformly to any market 

participant, in that it does not 

differentiate between Market Makers. 

The proposal would allow any 

interested Market Makers to purchase 

Purge Port functionality based on their 

business needs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange received one comment 

letter on the proposal.31 This comment 

letter was submitted not only on this 

proposal, but also the proposals by the 

Exchange and its affiliates to amend fees 

for 10Gb ULL connectivity and certain 

ports. Overall, the Exchange believes 

that the issues raised by the commenter 

are not germane to this proposal because 

they apply primarily to the other fee 

filings. Also, the commenter’s raised 

concerns with the current environment 

surrounding exchange non-transaction 

fee proposals that should be addressed 

by the Commission through rule 

making, or Congress, more holistically 

and not through an individual exchange 

fee filings. However, the commenter 

does raise one issue that concerns this 

proposal whereby it asserts that the 

Exchange’s comparison to fees charged 

by other exchanges for similar ports is 

irrelevant and unpersuasive. The core of 

the issue raised is regarding the cost to 

connect to one exchange compared to 

the cost to connect to others. A thorough 


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Federal Register / Vol. 88, No. 236 / Monday, December 11, 2023 / Notices 85945 

32 15 U.S.C. 78s(b)(3)(A)(ii). 

33 17 CFR 240.19b–4(f)(2). 34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission approved Nasdaq Rule 5711 in 

Securities Exchange Act Release No. 66648 (March 

23, 2012), 77 FR 19428 (March 30, 2012) (SR– 

NASDAQ–2012–013). 

response to this comment would require 

the Exchange to obtain competitively 

sensitive information about other 

exchange architecture and how their 

members connect. The Exchange is not 

privy to this information. Further, the 

commenter compares the Exchange’s 

proposed rate to other exchanges that 

offer purge port functionality across all 

matching engines for a single fee, but 

fails to provide the same comparison to 

other exchanges that charge for purge 

functionality like proposed here. The 

Exchange does not have insight into the 

technical architecture of other 

exchanges so it is difficult to ascertain 

the number of purge ports a firm would 

need to connect to another exchanges 

entire market. Therefore, the Exchange 

is limited to comparing its proposed fee 

to other exchanges’ purge port fees as 

listed in their fee schedules. 

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,32 and Rule 

19b–4(f)(2) 33 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– 

EMERALD–2023–29 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–EMERALD–2023–29. 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–EMERALD–2023–29 and should be 

submitted on or before January 2, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27067 Filed 12–8–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99081; File No. SR– 

NASDAQ–2023–045] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

List and Trade Shares of the iShares 

Ethereum Trust Under Nasdaq Rule 

5711(d) (Commodity-Based Trust 

Shares) 

December 5, 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 November 

21, 2023, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to a proposed 

rule change to list and trade shares of 

the iShares Ethereum Trust (the 

‘‘Trust’’) under Nasdaq Rule 5711(d) 

(‘‘Commodity-Based Trust Shares’’). The 

shares of the Trust are referred to herein 

as the ‘‘Shares.’’ 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, 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 list and 

trade the Shares under Nasdaq Rule 

5711(d),3 which governs the listing and 

trading of Commodity-Based Trust 

Shares on the Exchange. iShares 

Delaware Trust Sponsor LLC, a 

Delaware limited liability company and 

an indirect subsidiary of BlackRock, Inc. 

(‘‘BlackRock’’), is the sponsor of the 

Trust (the ‘‘Sponsor’’). The Shares will 


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