84214 Federal Register / Vol. 89, No. 203 / Monday, October 21, 2024 / Notices 

7 Id. 

8 Id. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A ‘‘Priority Customer’’ is a person or entity that 

is not a broker/dealer in securities, and does not 

place more than 390 orders in listed options per day 

on average during a calendar month for its own 

beneficial account(s), as defined in Nasdaq ISE 

Options 1, Section 1(a)(37). 

4 ‘‘Non-Select Symbols’’ are options overlying all 

symbols excluding Select Symbols. ‘‘Select 

Symbols’’ are options overlying all symbols listed 

on the Exchange that are in the Penny Interval 

Program. 

5 In addition, for Priority Customer orders adding 

liquidity in Non-Select Symbols, there is no fee or 

rebate provided when trading against Priority 

Customer complex orders that leg into the regular 

order book. See Options 7, Section 3, note 18. 

6A ‘‘Crossing Order’’ is an order executed in the 

Exchange’s Facilitation Mechanism, Solicited Order 

Mechanism, Price Improvement Mechanism (PIM) 

or submitted as a Qualified Contingent Cross order. 

For purposes of this Pricing Schedule, orders 

executed in the Block Order Mechanism are also 

considered Crossing Orders. 

7 ‘‘Responses to Crossing Order’’ is any contraside interest submitted after the commencement of 

an auction in the Exchange’s Facilitation 

Mechanism, Solicited Order Mechanism, Block 

Order Mechanism or PIM. 

8 ‘‘Customer Total Consolidated Volume’’ means 

the total national volume cleared at The Options 

Clearing Corporation in the Customer range in 

equity and ETF options in that month. 

9See Options 7, Section 3, note 15. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4) and (5). 

the self-regulatory organization 

consents.7

The 45th day after publication of the 

Notice of Filing is October 18, 2024. To 

provide the Commission with sufficient 

time to consider the Proposed Rule 

Change, the Commission finds that it is 

appropriate to designate a longer period 

within which to act on the Proposed 

Rule Change and therefore is extending 

this 45-day time period. 

Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the 

Exchange Act,8 designates December 2, 

2024, as the date by which the 

Commission shall either approve, 

disapprove, or institute proceedings to 

determine whether to disapprove 

proposed rule change SR–NSCC–2024– 

006. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–24203 Filed 10–18–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101349; File No. SR–ISE– 

2024–48] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Exchange’s Pricing Schedule at 

Options 7, Section 3 

October 15, 2024. 

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 

1, 2024, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 

Exchange’s Pricing Schedule at Options 

7, Section 3. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/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 purpose of the proposed rule 

change is to amend the Exchange’s 

Pricing Schedule in Options 7, Section 

3. 

Today, as set forth in Options 7, 

Section 3, the Exchange assesses all 

market participants (except Priority 

Customers) 3 a uniform regular order 

maker fee of $0.70 per contract for NonSelect Symbol 4 executions that add 

liquidity on the Exchange. Priority 

Customers are assessed a $1.00 per 

contract regular order maker rebate in 

Non-Select Symbols.5 Additionally, the 

Exchange also currently offers Members 

an additional rebate of $0.14 per 

contract if they execute more than 

0.10% of Regular Order Non-Select 

Symbol Priority Customer volume 

(excluding Crossing Orders 6 and 

Responses to Crossing Orders) 7

calculated as a percentage of Customer 

Total Consolidated Volume 8 per day in 

a given month (‘‘Note 15 Incentive’’).9

The Note 15 Incentive is designed to 

encourage Members to transact in 

greater regular Non-Select Symbol 

Priority Customer volume on the 

Exchange to receive rebates up to $1.14 

per contract (i.e., the $1.00 base maker 

rebate plus the additional $0.14 Note 15 

Incentive). 

The Exchange now proposes to amend 

the Note 15 Incentive by increasing the 

additional $0.14 rebate to $0.18 per 

contract. The additional rebate 

qualifications are not changing under 

this proposal. Accordingly, Members 

would be eligible to receive higher 

rebates of up to $1.18 per contract (i.e., 

the base $1.00 maker rebate plus the 

proposed additional $0.18 Note 15 

Incentive) under this proposal when 

sending the same amount of regular 

Non-Select Symbol Priority Customer 

volume as they do today. Ultimately, the 

Exchange believes that the proposed 

changes will attract more Priority 

Customer Non-Select Symbol order flow 

to ISE because Members may be 

incentivized to send such order flow to 

ISE to receive the increased rebate. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,10 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,11 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its Pricing Schedule are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 


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Federal Register / Vol. 89, No. 203 / Monday, October 21, 2024 / Notices 84215 

12NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

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

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

13Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 14 15 U.S.C. 78s(b)(3)(A)(ii). 

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 broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

. . . .’’ 12

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, while 

adopting a series of steps to improve the 

current market model, 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.’’ 13

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of eighteen 

options exchanges to which market 

participants may direct their order flow. 

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. As such, the proposal 

represents a reasonable attempt by the 

Exchange to increase its liquidity and 

market share relative to its competitors. 

The Exchange believes that the 

proposed changes to the Note 15 

Incentive are reasonable for the reasons 

that follow. As discussed above, the 

Exchange is increasing the additional 

$0.14 rebate to $0.18 per contract 

without amending the additional rebate 

volume qualifications discussed above. 

Accordingly, Members would be eligible 

to receive higher rebates of up to $1.18 

per contract (i.e., the base $1.00 maker 

rebate plus the proposed additional 

$0.18 Note 15 Incentive) under this 

proposal when sending the same 

amount of regular Non-Select Symbol 

Priority Customer volume as they do 

today. As discussed above, the 

Exchange believes that the proposed 

changes will attract more Priority 

Customer Non-Select Symbol order flow 

to ISE because Members may be 

incentivized to send such order flow to 

ISE to receive the increased rebate. 

Increased Priority Customer order flow 

in Non-Select Symbols would create 

additional liquidity to the benefit of all 

market participants and investors that 

trade on the Exchange. 

The Exchange further believes that 

increasing the Note 15 Incentive from 

$0.14 to $0.18 per contract is equitable 

and not unfairly discriminatory because 

the proposed change will apply 

uniformly to all similarly situated 

market participants. The Exchange 

believes that it is equitable and not 

unfairly discriminatory to offer the Note 

15 Incentive to only Priority Customers 

because Priority Customer liquidity 

benefits all market participants by 

providing more trading opportunities, 

which attracts Market Makers. An 

increase in the activity of these market 

participants in turn facilitates tighter 

spreads, which may cause an additional 

corresponding increase in order flow 

from other market participants. 

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. 

The Exchange does not believe that 

the proposed changes to the Note 15 

Incentive to increase the additional 

$0.14 rebate to $0.18 per contract will 

impose an undue burden on intramarket competition as the proposal will 

apply uniformly to all Priority 

Customers. While the proposed Note 15 

incentive will only apply to Priority 

Customers, Priority Customer liquidity 

benefits all market participants by 

providing more trading opportunities, 

which attracts Market Makers. An 

increase in the activity of these market 

participants in turn facilitates tighter 

spreads, which may cause an additional 

corresponding increase in order flow 

from other market participants. 

In terms of inter-market competition, 

the Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges. Because competitors are free 

to modify their own fees in response, 

and because market participants may 

readily adjust their order routing 

practices, the Exchange believes that the 

degree to which fee changes in this 

market may impose any burden on 

competition is extremely limited. In 

sum, if the changes proposed herein are 

unattractive to market participants, it is 

likely that the Exchange will lose 

market share as a result. Accordingly, 

the Exchange does not believe that the 

proposed changes will impair the ability 

of members or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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.14 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: (i) 

necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) 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– 

ISE–2024–48 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 


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84216 Federal Register / Vol. 89, No. 203 / Monday, October 21, 2024 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

4See Interpretations and Policies .02(b) to MEMX 

LLC (‘‘MEMX’’) Rule 11.10. 

5 17 CFR 240.15c3–5. 

6See Division of Trading and Markets, Responses 

to Frequently Asked Questions Concerning Risk 

Management Controls for Brokers or Dealers with 

Market Access, available at https://www.sec.gov/ 

divisions/marketreg/faq-15c-5-risk-managementcontrols-bd.htm. 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–ISE–2024–48. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

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

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–ISE–2024–48 and should be 

submitted on or before November 12, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–24209 Filed 10–18–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101341; File No. SR– 

PEARL–2024–48] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 2618(a)(7)(A) To Allow Equity 

Members To Cancel a Subset of Orders 

Over an Order Entry Port 

October 15, 2024. 

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 

8, 2024, MIAX PEARL, LLC (‘‘MIAX 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 proposes to amend 

Exchange Rule 2618(a)(7)(A) to allow 

Equity Members 3 to cancel a subset of 

orders over an order entry port on the 

Exchange’s equity trading platform 

(referred to herein as ‘‘MIAX Pearl 

Equities’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

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

us-equities/pearl-equities/rule-filings, at 

MIAX Pearl’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange currently offers risk 

functionality that permits Equity 

Members to cancel orders over their 

order entry port or over a dedicated 

Purge Port. The Exchange offers risk 

functionality that allows Equity 

Members to block new orders 

submitted, to cancel all open orders, or 

both block new orders and cancel all 

open orders under Exchange Rule 

2618(a)(7)(A). The Exchange notes that 

order entry ports may be used to enter 

orders, modify existing orders, and 

cancel existing orders. The Exchange 

separately offers Purge Ports, which are 

dedicated ports that permits an Equity 

Member to simultaneously cancel all or 

a subset of its orders through a single 

cancel message. 

Unlike Purge Ports, Exchange Rule 

2618(a)(7)(A) does not provide that 

Equity Members may cancel a subset of 

orders over an order entry port. Due to 

Equity Member requests, the Exchange 

now proposes to amend Exchange Rule 

2618(a)(7)(A) to allow Equity Members 

to cancel a subset of orders over an 

order entry port. An order cancelation 

request sent over an order entry port, 

including the proposal to cancel a 

subset of orders, is and would be 

handled along with other messages sent 

over that same order entry port, such as 

new orders and order modification 

requests. On a Purge Port, a request to 

cancel a subset of orders is also handled 

only with other cancelation messages 

sent over that same Purge Port. The 

Exchange notes that similar 

functionality is also offered on at least 

on [sic] other national securities 

exchange.4

* * * * * 

The Exchange does not guarantee that 

the proposed cancelation functionality 

is sufficiently comprehensive to meet all 

of an Equity Member’s risk management 

needs. Pursuant to Rule 15c3–5 under 

the Act,5 a broker-dealer with market 

access must perform appropriate due 

diligence to assure that controls are 

reasonably designed to be effective, and 

otherwise consistent with the rule.6 Use 

of the Exchange’s risk controls included 


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