91460 Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 

30See supra note 26. 

31See Securities Exchange Act Release No. 51808 

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

32See NetCoalition v. SEC, 615 F.3d 525, 539 

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

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

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

2006–21)). 

33 15 U.S.C. 78s(b)(3)(A)(ii). 

34 17 CFR 240.19b–4(f)(2). 

35 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the month of September 2024.30 Thus, 

in such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

Moreover, the Exchange believes that 

the ever-shifting market share among 

the exchanges from month to month 

demonstrates that market participants 

can shift order flow in response to new 

or different pricing structures being 

introduced to the market. Accordingly, 

competitive forces constrain the 

Exchange’s transaction fees and rebates 

generally, including with respect to 

executions of orders in securities priced 

at or above $1.00 per share for Added 

Displayed Volume, and market 

participants can readily choose to send 

their orders to other exchanges and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. 

Additionally, the Commission has 

repeatedly expressed its preference for 

competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and self-regulatory 

organization (‘‘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.’’ 31 The fact that this 

market is competitive has also long been 

recognized by the courts. In 

NetCoalition v. Securities and Exchange 

Commission, the DC circuit stated: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

routing agents, have a wide range of 

choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possess a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

. . .’’.32 Accordingly, the Exchange does 

not believe its proposed pricing changes 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,33 and Rule 

19b–4(f)(2) 34 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2024–50 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–PEARL–2024–50. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

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

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–PEARL–2024–50 and should be 

submitted on or before December 10, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–26870 Filed 11–18–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101605; File No. SR– 

PEARL–2024–49] 

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 13, 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 

31, 2024, MIAX PEARL, LLC (‘‘MIAX 

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

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 91461 

3The term ‘‘Priority Customer’’ means a person 

or entity that (i) is not a broker or dealer in 

securities, and (ii) does not place more than 390 

orders in listed options per day on average during 

a calendar month for its own beneficial accounts(s). 

The number of orders shall be counted in 

accordance with Interpretation and Policy .01 of 

Exchange Rule 100. See the Definitions section of 

the Fee Schedule and Exchange Rule 100, including 

Interpretation and Policy .01. 

4The 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. 

5The 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. 

6The term ‘‘Excluded Contracts’’ means any 

contracts routed to an away market for execution. 

See the Definitions section of the Fee Schedule. 

7The 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)). See 

the Definitions section of the Fee Schedule. The 

term ‘‘Exchange System Disruption’’ means an 

outage of a Matching Engine or collective Matching 

Engines for a period of two consecutive hours or 

more, during trading hours. Id. A ‘‘Matching 

Engine’’ is a part of the MIAX Pearl electronic 

system that processes options orders and trades on 

a symbol-by-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. Id. 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 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. 8The 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. 

9The term ‘‘Book’’ means the electronic book of 

buy and sell orders and quotes maintained by the 

System. See Exchange Rule 100. 

10The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

11The 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. 

12See Securities Exchange Act Release No. 88992 

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

PEARL–2020–06). 

13The term ‘‘Priority Customer Order’’ means an 

order for the account of a Priority Customer. See 

Exchange Rule 100. 

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 Fee 

Schedule (‘‘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 Exchange proposes to amend 

Section 1)a) of the Fee Schedule, 

Exchange Rebates/Fees—Add/Remove 

Tiered Rebates/Fees, to: (1) amend the 

Priority Customer 3 origin to reduce 

certain Maker rebates in Penny Classes 

(defined below); and (2) remove the 

‘‘Step-Up Maker Rebate’’ (described 

below) for the MIAX Pearl Market 

Maker 4 origin in Non-Penny Classes. 

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 5 on MIAX 

Pearl in the relevant, respective origin 

type (not including Excluded 

Contracts) 6 (as the numerator) 

expressed as a percentage of (divided 

by) TCV 7 (as the denominator). In 

addition, the per contract transaction 

rebates and fees are applied 

retroactively to all eligible volume for 

that origin type once the respective 

threshold tier has been reached by the 

Member. The Exchange aggregates the 

volume of Members and their 

Affiliates.8 Members that place resting 

liquidity, i.e., orders resting on the 

Book 9 of the MIAX Pearl System,10 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 11

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 12 (‘‘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. 

Proposal To Amend the Priority 

Customer Origin in the Exchange 

Rebates/Fees—Add/Remove Tier 

Rebates/Fees Table at Section 1)a) of the 

Fee Schedule To Decrease Certain 

Maker Rebates in Penny Classes 

First, the Exchange proposes to 

amend the Priority Customer origin in 

the Exchange Rebates/Fees—Add/ 

Remove Tier Rebates/Fees table at 

Section 1)a) of the Fee Schedule to 

decrease the Maker rebates in tiers 1 and 

2 for Priority Customer Orders 13 in 

Penny Classes that trade against all 

origins. Currently, the Priority Customer 

origin in the Exchange Rebates/Fees— 

Add/Remove Tier Rebates/Fees table at 


ddrumheller on DSK120RN23PROD with NOTICES1
91462 Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 

14Rebates are denoted in parentheses in the Fee 

Schedule. 

15See Securities Exchange Act Release No. 

101122 (September 20, 2024), 89 FR 78920 

(September 26, 2024) (SR–PEARL–2024–44). 

16See e.g., NYSE Arca, Inc (‘‘NYSE Arca’’) 

Options Fee Schedule, Transaction Fees, Customer 

Penny Posting Credit Tiers, available at https://

www.nyse.com/publicdocs/nyse/markets/arcaoptions/NYSE_Arca_Options_Fee_Schedule.pdf 

(last visited October 28, 2024) (providing base 

credit $0.25 applied to electronic executions of 

customer posted interest in penny classes); and 

Nasdaq GEMX, LLC (‘‘GEMX’’) Options Fee 

Schedule, Section 3. Regular Order Fees and 

Rebates, available at https://

listingcenter.nasdaq.com/rulebook/gemx/rules/ 

GEMX%20Options%207 (last visited October 28, 

2024) (providing a standard maker rebate of $0.25 

in tier 1 for Priority Customer orders in penny 

classes). 

17A Market Maker need only to satisfy one of the 

following two alternative volume criteria in order 

to receive the rebates or fees associated with tier 2 

of the Market Maker origin: (i) the total monthly 

volume executed by the Market Maker collectively 

in SPY/QQQ/IWM options on MIAX Pearl, not 

including Excluded Contracts, is above 0.55% of 

SPY/QQQ/IWM TCV; or (ii) the Market Maker adds 

liquidity collectively in SPY/QQQ/IWM options on 

MIAX Pearl, not including Excluded Contracts, 

above 0.30% of SPY/QQQ/IWM TCV. See Fee 

Schedule, Section 1)a), Market Maker origin. The 

term ‘‘SPY/QQQ/IWM TCV’’ means total 

consolidated volume in SPY, QQQ, and IWM 

calculated as the total national volume in SPY, 

QQQ, and IWM for the month for which the fees 

apply, excluding consolidated volume executed 

during the period of time in which the Exchange 

experiences an Exchange System Disruption (solely 

in SPY, QQQ, or IWM options). See the Definitions 

section of the Fee Schedule. 

18Market Makers satisfy the alternative volume 

criteria of tier 3 by adding liquidity in SPY options 

on MIAX Pearl, not including Excluded Contracts, 

above 1.10% of SPY TCV. The term ‘‘SPY TCV’’ 

means total consolidated volume in SPY calculated 

as the total national volume in SPY for the month 

for which the fees apply, excluding consolidated 

volume executed during the period of time in 

which the Exchange experiences an Exchange 

System Disruption (solely in SPY options). See the 

Definitions section of the Fee Schedule. Further, 

Market Makers qualify for: (i) Maker rebates of 

($0.44) per contract in SPY, QQQ and IWM options 

for their Market Maker origin when trading against 

origins other than Priority Customer, and (ii) Maker 

rebates of ($0.42) per contract in SPY, QQQ and 

IWM options for their Market Maker origin when 

trading against Priority Customer origins, if the 

Market Maker satisfies the alternative volume 

criteria of tier 3, described above, of at least 1.10% 

in SPY when adding liquidity. See Fee Schedule, 

Section 1)a), note ‘‘♦’’. 

19Market Makers satisfy the alternative volume 

criteria of tier 4 if the Market Maker’s executions 

solely in SPY options on MIAX Pearl, not including 

Excluded Contracts, is above 2.50% of SPY TCV. 

20The Exchange uses a baseline for added 

liquidity in Non-Penny Classes of 0.00% of TCV for 

market participants that become Market Makers of 

the Exchange after July 2024 for the purpose of the 

Step-Up Maker Rebate calculation. 

21The Exchange notes that at the end of the 

sunset period, the Step-Up Maker Rebate will no 

longer apply unless the Exchange files a rule filing 

pursuant to Rule 19b–4 of the Exchange Act with 

the Commission to amend the criteria terms or 

update the baseline month to a more recent month. 

Section 1)a) of the Fee Schedule 

provides certain volume criteria 

thresholds for all tiers that are based 

upon the total monthly volume 

executed in all option classes by a 

Priority Customer on MIAX Pearl as a 

percentage of TCV. Pursuant to the 

Priority Customer origin in the 

Exchange Rebates/Fees—Add/Remove 

Tier Rebates/Fees table at Section 1)a) of 

the Fee Schedule, Priority Customers 

qualify for the following Maker rebates 

when Priority Customer orders in Penny 

Classes trade against all origins: (i) 

($0.31) 14 per contract in tiers 1 and 2 if 

the Priority Customer executes above 

0.00% to at least 0.40% of TCV; (ii) 

($0.45) per contract in tier 3 if the 

Priority Customer executes above 0.40% 

to at least 0.85% of TCV; (iii) ($0.49) per 

contract in tier 4 if the Priority 

Customer executes above 0.85% to at 

least 1.25% of TCV; and (iv) ($0.52) per 

contract in tiers 5 and 6 if the Priority 

Customer executes above 1.25% of TCV. 

The Exchange now proposes to amend 

the Priority Customer origin in the 

Exchange Rebates/Fees—Add/Remove 

Tier Rebates/Fees table at Section 1)a) of 

the Fee Schedule to decrease the Maker 

rebates in tiers 1 and 2 from ($0.31) to 

($0.25) per contract for Priority 

Customer Orders in Penny Classes that 

trade against all origins. The Exchange 

does not propose to amend any of the 

volume threshold criteria or the Maker 

rebates or Taker fees in any other tier for 

Priority Customer Orders. 

The purpose of this proposed change 

is for business and competitive reasons. 

The Exchange previously amended the 

Priority Customer origin in the 

Exchange Rebates/Fees—Add/Remove 

Tier Rebates/Fees table at Section 1)a) of 

the Fee Schedule to increase the Maker 

rebates in tiers 1 and 2 from ($0.25) to 

($0.31) per contract for Priority 

Customer Orders in Penny Classes that 

trade against all origins in order to 

encourage Members to submit more 

Priority Customer Orders, which the 

Exchange believed may lead to 

increased liquidity on the Exchange.15

The Exchange recently conducted an 

internal review and analysis of fees and 

rebates and determined that the 

Exchange has not experienced the 

desired increased liquidity and now 

proposes to reduce the Maker rebates in 

tiers 1 and 2 from ($0.31) to ($0.25) per 

contract for Priority Customer Orders in 

Penny Classes that trade against all 

origins. Even with the proposed change, 

the Exchange believes the Maker rebates 

in tiers 1 and 2 for Priority Customer 

Orders in Penny classes will remain 

highly competitive such that they 

should enable the Exchange to continue 

to attract Priority Customer order flow 

and maintain market share. The 

Exchange notes that the Maker rebate of 

($0.25) per contract in tiers 1 and 2 for 

Priority Customer Orders in Penny 

Classes are equal to the rebates offered 

by at least two competing options 

exchanges for their customer orders.16

Proposal To Remove the Step-Up 

Maker Rebate for Market Maker Orders 

in Non-Penny Classes 

Next, the Exchange proposes to 

amend the Market Maker origin in the 

Exchange Rebates/Fees—Add/Remove 

Tier Rebates/Fees table at Section 1)a) of 

the Fee Schedule to remove the ‘‘StepUp Maker Rebate,’’ which is provided in 

footnote ‘‘(i)’’ following the table of 

transaction rebates and fees for the 

Market Maker origin in Section 1)a) of 

the Fee Schedule. Currently, pursuant to 

the Market Maker origin in the 

Exchange Rebates/Fees—Add/Remove 

Tier Rebates/Fees table at Section 1)a) of 

the Fee Schedule, Market Makers 

qualify for the following Maker rebates 

when Market Maker orders in NonPenny Classes trade against all origins: 

(i) ($0.30) per contract in tier 1 if the 

Market Maker executes above 0.00% to 

at least 0.20% of TCV; (ii) ($0.30) per 

contract in tier 2 if the Market Maker 

executes above 0.20% to at least 0.50% 

of TCV, or satisfies one of the two 

alternative volume criteria of tier 2; 17

(iii) ($0.60) per contract in tier 3 if the 

Market Maker executes above 0.50% to 

at least 0.85% of TCV, or satisfies the 

alternative volume criteria of tier 3; 18

(iv) ($0.65) per contract in tier 4 if the 

Market Maker executes above 0.85% to 

at least 1.25% of TCV, or satisfies the 

alternative volume criteria of tier 4; 19

(v) ($0.70) per contract in tier 5 if the 

Market Maker executes above 1.25% to 

at least 1.40% of TCV; and (vi) ($0.85) 

per contract in tier 6 if the Market 

Maker executes above 1.40% of TCV. 

Footnote ‘‘(i)’’ provides that a Market 

Maker may qualify for a Step-Up Maker 

Rebate of ($0.86) per contract for Market 

Maker orders for Non-Penny Classes, 

instead of the otherwise applicable 

standard tiered Maker rebate described 

above for tiers 1 through 6. In order to 

receive the Step-Up Maker Rebate, a 

Market Maker must have an increase in 

the percentage of their added liquidity 

in Non-Penny Classes, represented as a 

percentage of TCV, of at least 0.12% as 

compared to the Market Maker’s July 

2024 20 added liquidity in Non-Penny 

Classes. The Step-Up Maker Rebate is 

currently set to expire no later than 

January 31, 2025.21 The Exchange now 

proposes to remove footnote ‘‘(i)’’ and 

the corresponding Step-Up Maker 

Rebate. The Exchange does not propose 

to amend any of the volume threshold 

criteria or the Maker rebates or Taker 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 91463 

22See supra note 15. 

23See GEMX Options 7 Pricing Schedule, Section 

3, Regular Order Fees and Rebates, available at 

https://listingcenter.nasdaq.com/rulebook/gemx/ 

rules/GEMX%20Options%207 (last visited October 

28, 2024) (providing tiered rebates ranging from 

$0.40 to $0.75 per contract for market makers that 

add liquidity in non-penny classes); see also Cboe 

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

Transaction Fees, Standard Rates table, available at 

https://www.cboe.com/us/options/membership/fee_

schedule/bzx/ (last visited October 28, 2024) 

(providing tiered rebates ranging from $0.40 to 

$0.88 per contract for market makers that add 

liquidity in non-penny classes). 

24 15 U.S.C. 78f(b). 

25 15 U.S.C. 78f(b)(4). 

26 15 U.S.C. 78f(b)(5). 

27See Securities Exchange Act Release No. 51808 

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

28See the ‘‘Market Share’’ section of the 

Exchange’s website, available at https://

www.miaxglobal.com/ (last visited October 28, 

2024). 

29See id. 

30See supra note 15. 

31See supra note 16. 

32See supra note 15. 

33See supra note 23. 

fees in any tier for Market Makers orders 

in Non-Penny Classes. 

The purpose of this change is for 

business and competitive reasons. The 

Exchange initially established the StepUp Maker Rebate in order to encourage 

Market Makers to add more liquidity in 

Non-Penny Classes, thereby promoting 

price discovery and contributing to a 

deeper and more liquid market.22 The 

Exchange recently conducted an 

internal review and analysis of fees and 

rebates and determined that the 

Exchange has not experienced the 

desired increase in liquidity in NonPenny Classes and now proposes to 

remove the Step-Up Maker Rebate. The 

Exchange believes that the tiered Maker 

rebates for Market Makers orders in 

Non-Penny Classes remain highly 

competitive such that they should 

enable the Exchange to continue to 

attract Market Maker order flow and 

maintain market share. The Exchange 

notes that the tiered Maker rebates for 

Market Makers order in Non-Penny 

Classes fall within the range of similar 

rebates offered by competing options 

exchanges for transactions by market 

makers in Non-Penny Classes.23

Implementation 

The proposed changes are effective 

beginning November 1, 2024. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend the Fee Schedule is 

consistent with Section 6(b) of the Act 24

in general, and furthers the objectives of 

Section 6(b)(4) of the Act,25 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,26 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.’’ 27

There are currently 18 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange had more 

than approximately 14–15% of the 

multiply-listed equity options market 

share for the month of September 

2024.28 Therefore, no exchange 

possesses significant pricing power. 

More specifically, the Exchange had a 

market share of approximately 3.37% of 

executed volume of multiply-listed 

equity options for the month of 

September 2024.29

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. 

Proposal To Amend the Priority 

Customer Origin in the Exchange 

Rebates/Fees—Add/Remove Tier 

Rebates/Fees Table at Section 1)a) of the 

Fee Schedule To Decrease Certain 

Maker Rebates in Penny Classes 

The Exchange believes its proposal to 

amend the Priority Customer origin to 

decrease the Maker rebates in tiers 1 and 

2 from ($0.31) to ($0.25) per contract for 

Priority Customer orders in Penny 

Classes that trade against all origins is 

reasonable, equitable and not unfairly 

discriminatory. The Exchange 

previously increased the Maker rebates 

in tiers 1 and 2 from ($0.25) to ($0.31) 

per contract for Priority Customer orders 

in Penny Classes that trade against all 

origins in order to encourage Members 

to submit more Priority Customer 

orders.30 The Exchange recently 

conducted an internal review and 

analysis of fees and rebates and 

determined that the Exchange has not 

experienced the desired increased 

liquidity and believes it is reasonable to 

reduce the enhanced Maker rebates in 

tiers 1 and 2 from ($0.31) to ($0.25) per 

contract for Priority Customer orders in 

Penny Classes. With the proposed 

decrease, the Exchange’s Maker rebate 

of ($0.25) per contract in tiers 1 and 2 

for Priority Customer orders in Penny 

classes are equal to the rebates offered 

by at least two other competing options 

exchanges for their customer orders.31

Accordingly, the Exchange believes that 

the proposed change should enable the 

Exchange to continue to attract Priority 

Customer order flow and maintain 

market share. The Exchange believes the 

proposed Maker rebate in tiers 1 and 2 

for Priority Customer orders in Penny 

Classes is equitable and not unfairly 

discriminatory because it will apply 

equally to all market participants who 

provide Priority Customer orders in 

Penny Classes. 

Proposal To Remove the Step-Up Maker 

Rebate for Market Maker Orders in NonPenny Classes 

The Exchange believes its proposal to 

remove the Step-Up Maker Rebate is 

reasonable, equitably allocated and not 

unfairly discriminatory. The Exchange 

initially established Step-Up Maker 

Rebate in order to encourage Market 

Makers to add more liquidity in NonPenny Classes, thereby promoting price 

discovery and contributing to a deeper 

and more liquid market.32 The 

Exchange recently conducted an 

internal review and analysis of fees and 

rebates and determined that the 

Exchange has not experienced the 

desired increased liquidity and believes 

it is reasonable to remove the Step-Up 

Maker Rebate. The Exchange’s tiered 

Maker rebates for Market Makers order 

in Non-Penny Classes fall within the 

range of similar rebates offered by 

competing options exchanges for 

transactions by market makers in NonPenny Classes,33 and therefore, the 

Exchange believes that the Exchange’s 

tiered Maker rebates for Market Makers 

orders in Non-Penny Classes remain 

highly competitive such that they 

should enable the Exchange to continue 

to attract Market Makers order flow and 

maintain market share. The Exchange 


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91464 Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 

34See supra note 15. 

35See supra note 16. 

36See supra note 15. 

37See supra note 23. 

38See supra note 28. 

39See id. 

40 15 U.S.C. 78s(b)(3)(A)(ii). 

41 17 CFR 240.19b–4(f)(2). 

also believes its proposal to remove the 

Step-Up Maker Rebate is equitable and 

not unfairly discriminatory because the 

tiered Maker rebates for Market Makers 

orders in Non-Penny Classes will 

continue to apply to all Market Makers. 

The Exchange further believes that the 

removal of the Step-Up Maker Rebate 

will reduce complexity within the Fee 

Schedule and provide greater clarity to 

all Members. Less complexity and 

greater clarity in the Fee Schedule helps 

promote just and equitable principles of 

trade and removes impediments to and 

perfects the mechanisms of a free and 

open market and a national market 

system. 

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 

any of the proposed changes will 

impose any burden on intra-market 

competition. 

Proposal To Amend the Priority 

Customer Origin in the Exchange 

Rebates/Fees—Add/Remove Tier 

Rebates/Fees Table at Section 1)a) of the 

Fee Schedule To Decrease Certain 

Maker Rebates in Penny Classes 

The Exchange believes its proposal to 

amend the Priority Customer origin to 

decrease the Maker rebates in tiers 1 and 

2 from ($0.31) to ($0.25) per contract for 

Priority Customer orders in Penny 

Classes that trade against all origins will 

not impose any burden on intra-market 

competition. The Exchange previously 

increased the Maker rebates in tiers 1 

and 2 from ($0.25) to ($0.31) per 

contract for Priority Customer orders in 

Penny Classes that trade against all 

origins in order to encourage Members 

to submit more Priority Customer 

orders.34 The Exchange recently 

conducted an internal review and 

analysis of fees and rebates and 

determined that the Exchange has not 

experienced the desired increased 

liquidity and it believes reducing the 

Maker rebates in tiers 1 and 2 from 

($0.31) to ($0.25) per contract for 

Priority Customer orders in Penny 

Classes will not impose any burden on 

competition. The Exchange notes that 

even with the proposed change, the 

Exchange’s Maker rebate of ($0.25) per 

contract for tiers 1 and 2 for Priority 

Customer orders in Penny classes are 

equal to the rebates offered by at least 

two other competing options exchanges 

for their customer orders in their base 

tiers.35

Proposal To Remove the Step-Up Maker 

Rebate for Market Maker Orders in NonPenny Classes 

The Exchange believes its proposal to 

establish the Step-Up Maker Rebate will 

not impose any burden on intra-market 

competition. The Exchange initially 

established Step-Up Maker Rebate in 

order to encourage Market Makers to 

add more liquidity in Non-Penny 

Classes, thereby promoting price 

discovery and contributing to a deeper 

and more liquid market, which benefits 

all market participants and enhances the 

attractiveness of the Exchange as a 

trading venue.36 The Exchange recently 

conducted an internal review and 

analysis of fees and rebates and 

determined that the Exchange has not 

experienced the desired increased 

liquidity and believes that removing the 

Step-Up Maker Rebate will not impose 

any burden on competition. The 

Exchange’s tiered Maker rebates for 

Market Maker orders in Non-Penny 

Classes fall within the range of similar 

rebates offered by competing options 

exchanges for transactions by market 

makers in Non-Penny Classes,37 and 

therefore, the Exchange believes that the 

Exchange’s tiered Maker rebates for 

Market Makers orders in Non-Penny 

Classes remain highly competitive such 

that they should enable the Exchange to 

continue to attract Market Makers order 

flow and maintain market share. 

Inter-Market Competition 

The Exchange does not believe that 

the proposed changes 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 18 

registered options exchanges competing 

for order flow. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

had more than approximately 14–15% 

of the multiply-listed equity options 

market share for the month of 

September 2024.38 Therefore, no 

exchange possesses significant pricing 

power. More specifically, the Exchange 

had a market share of approximately 

3.37% of executed volume of multiplylisted equity options for the month of 

September 2024.39

In such an environment, the Exchange 

must continually adjust its rebates 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 tiers and rebates 

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,40 and Rule 

19b–4(f)(2) 41 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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 223 / Tuesday, November 19, 2024 / Notices 91465 

42 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. 100798 

(August 27, 2024), 89 FR 68660 (August 21, 2024) 

(SR–CboeBYX–2024–030). 

4The Missed Liquidity Report only includes trade 

events which are triggered by an order that removed 

liquidity on entry and will exclude trade events 

resulting from: elected stop orders, orders routed 

and executed at away venues, and peg order 

movements, and auctions. 

5 Includes individual order cancellations, mass 

cancels, and purge orders messages that are sent via 

Financial Information Exchange (‘‘FIX’’) protocol or 

Binary Order Entry (BOE) protocol by a subscriber. 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2024–49 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–2024–49. 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–2024–49 and should be 

submitted on or before December 10, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–26873 Filed 11–18–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101614; File No. SR– 

CboeBYX–2024–041] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt Fees 

for Its New Offering of Market Data 

Reports 

November 13, 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 November 

1, 2024, Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) 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 

Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) proposes to 

adopt fees for its new offering of market 

data reports. The text of the proposed 

rule change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (https://markets.cboe.com/us/ 

equities/regulation/rule_filings/BYX/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule to adopt fees for Cboe 

Timestamping Service reports, effective 

November 1, 2024. The Exchange 

recently adopted a new data product 

known as the Cboe Timestamping 

Service.3 The Cboe Timestamping 

Service provides timestamp information 

for orders and cancels for market 

participants. More specifically, the Cboe 

Timestamping Service reports provide 

various timestamps relating to the 

message lifecycle throughout the 

exchange system. The first report—the 

Missed Liquidity Report—covers order 

messages of the Member only and the 

second report—Cancels Report—covers 

cancel messages of the Member only. 

The reports are optional products that 

are available to all Members and 

Members may opt to choose both 

reports, one report, or neither report. 

The Cancels Report provides response 

time details for orders that rest on the 

book where the Member attempted to 

cancel that resting order or any other 

resting order but was unable to do so as 

the resting order was executed before 

the system processed the cancel 

message. The Cancels Report assists the 

Member in determining by how much 

time that order missed being canceled 

instead of executing. 

The Missed Liquidity Report provides 

time details for executions of orders that 

rest on the book where the Member 

attempted to execute against that resting 

order within an Exchange-determined 

amount of time (not to exceed 1 

millisecond) after receipt of the first 

attempt to execute against the resting 

order and within an Exchangedetermined amount of time (not to 

exceed 100 microseconds) before receipt 

of the first attempt to execute against the 

resting order. 

Both the Missed Liquidity Report and 

Cancels Report include the following 

data elements for orders 4 and cancel 

messages,5 respectively: (1) Member 


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