```

[Federal Register Volume 89, Number 223 (Tuesday, November 19, 2024)]
[Notices]
[Pages 91455-91460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26870]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101611; File No. SR-PEARL-2024-50]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX 
Pearl Equities Fee Schedule

November 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 91456]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the fee schedule (the 
``Fee Schedule'') applicable to MIAX Pearl Equities, an equities 
trading facility of the Exchange.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-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 proposes to amend the Fee Schedule to decrease the 
rebates for executions of orders in securities priced at or above $1.00 
per share that add displayed liquidity (``Added Displayed Volume'') to 
the Exchange across all Tapes.
Background
    Currently, the Exchange offers a standard rebate of ($0.0022) \3\ 
per share for executions of orders in securities priced at or above 
$1.00 per share for Added Displayed Volume across all Tapes.\4\ The 
Exchange also offers enhanced rebates pursuant to the NBBO Setter Plus 
Program (referred to in this filing as the ``NBBO Program'') \5\ for 
Equity Members \6\ that add displayed liquidity in securities priced at 
or above $1.00 per share in all Tapes based on increasing volume 
thresholds and increasing market quality levels (described below). The 
NBBO Program was implemented beginning September 1, 2023 and 
subsequently amended several times.\7\
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    \3\ Rebates are indicated by parentheses. See the General Notes 
section of the Fee Schedule.
    \4\ See Fee Schedule, Section 1)a); see also Fee Schedule, 
Section 1)b), Liquidity Indicator Codes ``AA'', ``AB'', and ``AC''.
    \5\ See, generally, Fee Schedule, Section 1)c).
    \6\ The term ``Equity Member'' is a Member authorized by the 
Exchange to transact business on MIAX Pearl Equities. See Exchange 
Rule 1901.
    \7\ See, e.g., Securities Exchange Act Release Nos. 98472 
(September 21, 2023), 88 FR 66533 (September 27, 2023) (SR-PEARL-
2023-45); 99318 (January 11, 2024), 89 FR 3488 (January 18, 2024) 
(SR-PEARL-2023-73); 99695 (March 8, 2024), 89 FR 18694 (March, 14, 
2024) (SR-PEARL-2024-11).
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    Pursuant to the NBBO Setter Plus Table in Section 1)c) of the Fee 
Schedule, the NBBO Program provides six volume tiers enhanced by three 
market quality levels to provide increasing rebates in this segment. 
The six volume tiers are achievable by greater volume from the best of 
four alternative methods. The three market quality levels are 
achievable by greater NBBO participation in a minimum number of 
specific securities (described below).
    MIAX Pearl Equities first determines the applicable NBBO Program 
tier based on four different volume calculation methods. The four 
volume-based methods to determine the Equity Member's tier for purposes 
of the NBBO Program are calculated in parallel in each month, and each 
Equity Member receives the highest tier achieved from any of the four 
methods each month. All four volume calculation methods are based on an 
Equity Member's respective ADAV,\8\ NBBO Set Volume, or ADV, each as a 
percent of industry TCV \9\ as the denominator.
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    \8\ ``ADAV'' means average daily added volume calculated as the 
number of shares added per day and ``ADV'' means average daily 
volume calculated as the number of shares added or removed, 
combined, per day. ADAV and ADV are calculated on a monthly basis. 
``NBBO Set Volume'' means the ADAV in all securities of an Equity 
Member that sets the NBB or NBO on MIAX Pearl Equities. See the 
Definitions section of the Fee Schedule. The Exchange excludes from 
its calculation of ADAV, ADV, and TCV, and for the purpose of 
determining qualification for the rebates described in all Levels of 
the Market Quality Tier columns in the NBBO Setter Plus Program: (1) 
any trading day that the Exchange's system experiences a disruption 
that lasts for more than 60 minutes during regular trading hours; 
(2) any day with a scheduled early market close; (3) the ``Russell 
Reconstitution Day'' (typically the last Friday in June); (4) any 
day that the MSCI Equities Indexes are rebalanced (i.e., on a 
quarterly basis); and (5) any day that the S&P 400, S&P 500, and S&P 
600 Indexes are rebalanced (i.e., on a quarterly basis). See the 
General Notes section of the Fee Schedule.
    \9\ ``TCV'' means total consolidated volume calculated as the 
volume in shares reported by all exchanges and reporting facilities 
to a consolidated transaction reporting plan for the month for which 
the fees apply. See the Definitions section of the Fee Schedule.
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    Under volume calculation Method 1, the Exchange provides tiered 
rebates based on an Equity Member's ADAV as a percentage of TCV. An 
Equity Member qualifies for the base rebates in Tier 1 for executions 
of orders in securities priced at or above $1.00 per share for Added 
Displayed Volume across all Tapes by achieving an ADAV of at least 
0.00% and less than 0.035% of TCV. An Equity Member qualifies for the 
enhanced rebates in Tier 2 for executions of orders in securities 
priced at or above $1.00 per share for Added Displayed Volume across 
all Tapes by achieving an ADAV of at least 0.035% and less than 0.05% 
of TCV. An Equity Member qualifies for the enhanced rebates in Tier 3 
for executions of orders in securities priced at or above $1.00 per 
share for Added Displayed Volume across all Tapes by achieving an ADAV 
of at least 0.05% and less than 0.08% of TCV. An Equity Member 
qualifies for the enhanced rebates in Tier 4 for executions of orders 
in securities priced at or above $1.00 per share for Added Displayed 
Volume across all Tapes by achieving an ADAV of at least 0.08% and less 
than 0.20% of TCV. An Equity Member qualifies for the enhanced rebates 
in Tier 5 for executions of orders in securities priced at or above 
$1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.20% and less than 0.40% of TCV. 
Finally, an Equity Member qualifies for the enhanced rebates in Tier 6 
for executions of orders in securities priced at or above $1.00 per 
share for Added Displayed Volume across all Tapes by achieving an ADAV 
of at least 0.40% of TCV.
    Under volume calculation Method 2, the Exchange provides tiered 
rebates based on an Equity Member's NBBO Set Volume as a percentage of 
TCV. Under volume calculation Method 2, an Equity Member qualifies for 
the base rebates in Tier 1 for executions of orders in securities 
priced at or above $1.00 per share for Added Displayed Volume across 
all Tapes by achieving an NBBO Set Volume of at least 0.00% and less 
than 0.01% of TCV. An Equity Member qualifies for the enhanced rebates 
in Tier 2 for executions of orders in securities priced at or above 
$1.00 per share for Added Displayed Volume across all Tapes by 
achieving an NBBO Set Volume of at least 0.01% and less than 0.015% of 
TCV. An Equity Member qualifies for the enhanced rebates in Tier 3 for 
executions of orders in securities priced at or above $1.00 per share 
for Added Displayed Volume across all Tapes by achieving an NBBO Set 
Volume of at least 0.015% and less than 0.02% of TCV. An Equity Member 
qualifies for the enhanced rebates in Tier 4 for executions of orders 
in securities priced at or above $1.00 per share for Added Displayed 
Volume across all Tapes by achieving an NBBO

[[Page 91457]]

Set Volume of at least 0.02% and less than 0.03% of TCV. An Equity 
Member qualifies for the enhanced rebates in Tier 5 for executions of 
orders in securities priced at or above $1.00 per share for Added 
Displayed Volume across all Tapes by achieving an NBBO Set Volume of at 
least 0.03% and less than 0.08% of TCV. Finally, an Equity Member 
qualifies for the enhanced rebates in Tier 6 for executions of orders 
in securities priced at or above $1.00 per share for Added Displayed 
Volume across all Tapes by achieving an NBBO Set Volume of at least 
0.08% of TCV.
    Under volume calculation Method 3, the Exchange provides tiered 
rebates based on an Equity Member's ADV as a percentage of TCV. An 
Equity Member qualifies for the base rebates in Tier 1 for executions 
of orders in securities priced at or above $1.00 per share for Added 
Displayed Volume across all Tapes by achieving an ADV of at least 0.00% 
and less than 0.15% of TCV. An Equity Member qualifies for the enhanced 
rebates in Tier 2 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADV of at least 0.15% and less than 0.18% of TCV. An 
Equity Member qualifies for the enhanced rebates in Tier 3 for 
executions of orders in securities priced at or above $1.00 per share 
for Added Displayed Volume across all Tapes by achieving an ADV of at 
least 0.18% and less than 0.20% of TCV. An Equity Member qualifies for 
the enhanced rebates in Tier 4 for executions of orders in securities 
priced at or above $1.00 per share for Added Displayed Volume across 
all Tapes by achieving an ADV of at least 0.20% and less than 0.60% of 
TCV. An Equity Member qualifies for the enhanced rebates in Tier 5 for 
executions of orders in securities priced at or above $1.00 per share 
for Added Displayed Volume across all Tapes by achieving an ADV of at 
least 0.60% and less than 1.00% of TCV. Finally, an Equity Member 
qualifies for the enhanced rebates in Tier 6 for executions of orders 
in securities priced at or above $1.00 per share for Added Displayed 
Volume across all Tapes by achieving an ADV of at least 1.00% of TCV.
    Under volume calculation Method 4, the Exchange provides tiered 
rebates based on an Equity Member's ADAV as a percentage of TCV, 
excluding executions of orders in securities priced below $1.00 per 
share across all Tapes from the calculation of both the numerator 
(ADAV) and denominator (TCV). An Equity Member qualifies for the base 
rebates in Tier 1 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.00% and less than 0.035% of TCV, 
exclusive of executions of orders in securities priced below $1.00 per 
share across all Tapes. An Equity Member qualifies for the enhanced 
rebates in Tier 2 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.035% and less than 0.05% of TCV, 
exclusive of executions of orders in securities priced below $1.00 per 
share across all Tapes. An Equity Member qualifies for the enhanced 
rebates in Tier 3 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.05% and less than 0.08% of TCV, 
exclusive of executions of orders in securities priced below $1.00 per 
share across all Tapes. An Equity Member qualifies for the enhanced 
rebates in Tier 4 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.08% and less than 0.20% of TCV, 
exclusive of executions of orders in securities priced below $1.00 per 
share across all Tapes. An Equity Member qualifies for the enhanced 
rebates in Tier 5 for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes by 
achieving an ADAV of at least 0.20% and less than 0.40% of TCV, 
exclusive of executions of orders in securities priced below $1.00 per 
share across all Tapes. Finally, an Equity Member qualifies for the 
enhanced rebates in Tier 6 for executions of orders in securities 
priced at or above $1.00 per share for Added Displayed Volume across 
all Tapes by achieving an ADAV of at least 0.40% of TCV, exclusive of 
executions of orders in securities priced below $1.00 per share across 
all Tapes.
    After the volume calculation is performed to determine highest tier 
achieved by the Equity Member, the applicable rebate is calculated 
based on two different measurements based on the Equity Member's 
participation at the NBBO on the Exchange in certain securities 
(referenced below).
    The Exchange provides one column of base rebates (referred to in 
the NBBO Program table as ``Level A'') and two columns of enhanced 
rebates (referred to in the NBBO Program table as ``Level B'' and 
``Level C''),\10\ depending on the Equity Member's Percent Time at NBBO 
\11\ on MIAX Pearl Equities in a certain amount of specified securities 
(``Market Quality Securities'' or ``MQ Securities'').\12\ The NBBO 
Setter Plus Table specifies the percentage of time that the Equity 
Member must be at the NBB or NBO on MIAX Pearl Equities in at least 200 
symbols out of the full list of 1,000 MQ Securities (which symbols may 
vary from time to time based on market conditions). The list of MQ 
Securities is generally based on the top multi-listed 1,000 symbols by 
ADV across all U.S. securities exchanges. The list of MQ Securities is 
updated monthly by the Exchange and published on the Exchange's 
website.\13\
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    \10\ The Exchange excludes from its calculation of ADAV, ADV, 
and TCV, and for the purpose of determining qualification for the 
rebates described in all Levels of the Market Quality Tier columns 
in the NBBO Setter Plus Program: (1) any trading day that the 
Exchange's system experiences a disruption that lasts for more than 
60 minutes during regular trading hours; (2) any day with a 
scheduled early market close; (3) the ``Russell Reconstitution Day'' 
(typically the last Friday in June); (4) any day that the MSCI 
Equities Indexes are rebalanced (i.e., on a quarterly basis); and 
(5) any day that the S&P 400, S&P 500, and S&P 600 Indexes are 
rebalanced (i.e., on a quarterly basis). See the General Notes 
section of the Fee Schedule.
    \11\ ``Percent Time at NBBO'' means the aggregate of the 
percentage of time during regular trading hours where a Member has a 
displayed order of at least one round lot at the national best bid 
(``NBB'') or national best offer (``NBO''). See the Definitions 
section of the Fee Schedule.
    \12\ ``Market Quality Securities'' or ``MQ Securities'' shall 
mean a list of securities designated as such, that are used for the 
purposes of qualifying for the rebates described in Level B and 
Level C of the Market Quality Tier columns in the NBBO Setter Plus 
Program. The universe of these securities will be determined by the 
Exchange and published on the Exchange's website. See id.
    \13\ See e.g., MIAX Pearl Equities Exchange--Market Quality 
Securities (MQ Securities) List, effective October 1 through October 
31, 2024, available at https://www.miaxglobal.com/markets/us-equities/pearl-equities/fees (last visited October 30, 2024).
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    The base rebates (``Level A'') are as follows: ($0.00220) per share 
in Tier 1; ($0.00290) per share in Tier 2; ($0.00300) per share in Tier 
3; ($0.00310) per share in Tier 4; ($0.00335) per share in Tier 5; and 
($0.00340) per share in Tier 6. Under Level B, the Exchange provides 
enhanced rebates for executions of orders in securities priced at or 
above $1.00 per share for Added Displayed Volume across all Tapes if 
the Equity Member's Percent Time at NBBO is at least 25% and less than 
50% in at least 200 MQ Securities per trading day during the month. The 
Level B rebates are as follows: ($0.00225) per share in Tier 1; 
($0.00295) per share in Tier 2; ($0.00305) per share in Tier 3; 
($0.00315) per share in Tier 4; ($0.00340) per share in Tier 5; and 
($0.00345) per share in Tier 6. Under Level C, the Exchange provides 
enhanced rebates for executions of

[[Page 91458]]

orders in securities priced at or above $1.00 per share for Added 
Displayed Volume across all Tapes if the Equity Member's Percent Time 
at NBBO is at least 50% in at least 200 MQ Securities per trading day 
during the month. The Level C rebates are as follows: ($0.00230) per 
share in Tier 1; ($0.00300) per share in Tier 2; ($0.00310) per share 
in Tier 3; ($0.00320) per share in Tier 4; ($0.00345) per share in Tier 
5; \14\ and ($0.00350) per share in Tier 6.
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    \14\ Equity Members may also qualify for the Tier 5, Level C 
enhanced rebate via an alternative method by satisfying the 
following three requirements in the relevant month: (1) Midpoint 
ADAV of at least 2,500,000 shares; (2) Displayed ADAV of at least 
10,000,000 shares; and (3) Percent Time at the NBB or NBO of at 
least 50% in 200 or more symbols from the list of MQ Securities. See 
Fee Schedule, Section 1)c), Notes to NBBO Setter Plus Table, note 3. 
Midpoint ADAV means the ADAV for the current month consisting of 
Midpoint Peg Orders in securities priced at or above $1.00 per share 
that execute at the midpoint of the Protected NBBO and add liquidity 
to the Exchange. A Midpoint Peg Order is a non-displayed Limit Order 
that is assigned a working price pegged to the midpoint of the PBBO. 
A Midpoint Peg Order receives a new timestamp each time its working 
price changes in response to changes in the midpoint of the PBBO. 
See Exchange Rule 2614(a)(3). With respect to the trading of equity 
securities, the term ``the term ``Protected NBB'' or ``PBB'' shall 
mean the national best bid that is a Protected Quotation, the term 
``Protected NBO'' or ``PBO'' shall mean the national best offer that 
is a Protected Quotation, and the term ``Protected NBBO'' or 
``PBBO'' shall mean the national best bid and offer that is a 
Protected Quotation. See Exchange Rule 1901.
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    The Exchange offers an NBBO Setter Additive Rebate,\15\ which is an 
additive rebate of ($0.0004) per share for executions of orders in 
securities priced at or above $1.00 per share that set the NBB or NBO 
\16\ upon entry on MIAX Pearl Equities with a minimum size of a round 
lot.\17\ The Exchange also offers an NBBO First Joiner Rebate, which is 
an additive rebate of ($0.0002) per share for executions of orders in 
securities priced at or above $1.00 per share that bring MIAX Pearl 
Equities to the established NBB or NBO with a minimum size of a round 
lot.\18\
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    \15\ See Fee Schedule, Section 1)c), NBBO Setter Additive 
Rebate.
    \16\ With respect to the trading of equity securities, the term 
``NBB'' shall mean the national best bid, the term ``NBO'' shall 
mean the national best offer, and the term ``NBBO'' shall mean the 
national best bid and offer. See Exchange Rule 1901.
    \17\ See Fee Schedule, Section 1)c).
    \18\ See Fee Schedule, Section 1)c), NBBO First Joiner Additive 
Rebate.
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Proposal
    The Exchange proposes to reduce the standard rebate for executions 
of orders in securities priced at or above $1.00 per share for Added 
Displayed Volume across all Tapes. Currently, the Exchange provides a 
standard rebate of ($0.0022) per share for executions of orders in 
securities priced at or above $1.00 per share for Added Displayed 
Volume across all Tapes. The Exchange now proposes to reduce the 
standard rebate for executions of Added Displayed Volume in securities 
priced at or above $1.00 per share from ($0.0022) to ($0.0021) per 
share for all Tapes.\19\ Accordingly, the Exchange proposes to amend 
Section 1)a), Standard Rates, to reflect this proposed change and amend 
Section 1)b), Liquidity Indicator Codes and Associated Fees, to reflect 
the corresponding changes to the applicable Liquidity Indicator Codes, 
AA, AB and AC.
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    \19\ See Fee Schedule, Section 1)a), Standard Rates, for the 
standard pricing for executions of Added Displayed Volume, among 
other rates.
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    Next, the Exchange proposes to amend the NBBO Setter Plus Table in 
Section 1)c) of the Fee Schedule to decrease the rebates for all tiers 
by ($0.0001) per share for all rebate levels of the NBBO Program. With 
the proposed changes, the Level A rebates will be as follows: 
($0.00210) per share in Tier 1; ($0.00280) per share in Tier 2; 
($0.00290) per share in Tier 3; ($0.00300) per share in Tier 4; 
($0.00325) per share in Tier 5; and ($0.00330) per share in Tier 6. The 
Level B rebates will be as follows: ($0.00215) per share in Tier 1; 
($0.00285) per share in Tier 2; ($0.00295) per share in Tier 3; 
($0.00305) per share in Tier 4; ($0.00330) per share in Tier 5; and 
($0.00335) per share in Tier 6. The Level C rebates will be as follows: 
($0.00220) per share in Tier 1; ($0.00290) per share in Tier 2; 
($0.00300) per share in Tier 3; ($0.00310) per share in Tier 4; 
($0.00335) per share in Tier 5; and ($0.00340) per share in Tier 6.
    The Exchange does not propose to amend any of volume calculation 
methods used to determine the Equity Member's tier for purposes of the 
NBBO Program, which will continue to be calculated in parallel in each 
month, and each Equity Member will continue to receive the highest tier 
achieved from any of the four methods each month.\20\ The Exchange also 
does not propose to amend the different measurements to calculate an 
Equity Member's participation at the NBBO on the Exchange in Market 
Quality Securities under the NBBO Program.
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    \20\ The Exchange does not propose to amend the alternative 
volume calculation method for Equity Members to quality for the Tier 
5, Level C enhanced rebate, as proposed to be reduced.
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    The purpose of reducing the standard rebate for executions of Added 
Displayed Volume is for business and competitive reasons in light of 
recent volume growth on the Exchange. The Exchange notes that despite 
the modest reduction proposed herein, the proposed standard rebate for 
executions of Added Displayed Volume (i.e., ($0.0021) per share) 
remains higher than, and competitive with, the standard rebates 
provided by other exchanges for executions of orders in securities 
priced at or above $1.00 per share that add displayed liquidity to 
those exchanges.\21\
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    \21\ See e.g., MEMX LLC Equities Fee Schedule, Transaction fees 
(last visited October 22, 2024), available at https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/ (providing standard rebate of ($0.0015) per share for 
executions of orders in securities priced at or above $1.00 per 
share across all tapes); see also Cboe BZX Equities Fee Schedule, 
available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/ (providing a standard rebate of ($0.0016) per 
share for adding displayed liquidity in securities priced at or 
above $1.00 per share).
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    The purpose of reducing the enhanced rebates for executions of 
Added Displayed Volume for all tiers and market quality levels of the 
NBBO Program is for business and competitive reasons in light of recent 
volume growth on the Exchange. The Exchange notes that, even with the 
proposed decrease in the NBBO Program rebates, the base rebates and 
enhanced rebates of the NBBO Program remain competitive with, or higher 
than, the rebates provided by other exchanges for executions of orders 
in securities priced at or above $1.00 per share that add displayed 
liquidity to those exchanges.\22\
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    \22\ See Cboe BZX Equities Fee Schedule, Add/Remove Volume Tiers 
section, available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/ (providing an enhanced rebates ranging from 
($0.0020) to ($0.0032) per share for executions of added displayed 
volume in securities priced at or above $1.00 per share, so long as 
the member meets certain volume requirements, including, for tier 4, 
minimum NBBO Time and NBBO Size requirements from a list of 
specified securities and minimum requirement of ADAV as a percentage 
of TCV); see also Cboe EDGX Equities Fee Schedule, Add/Remove Volume 
Tiers section, available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/ (providing an enhanced rebates ranging 
from ($0.0020) to ($0.0034) per share for executions of added 
displayed volume in securities priced at or above $1.00 per share, 
so long as the member meets certain volume requirements).
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Implementation
    The proposed changes are effective beginning November 1, 2024.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \23\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \24\ in

[[Page 91459]]

particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its Equity Members and 
issuers and other persons using its facilities. Additionally, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \25\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers or dealers.
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    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(4).
    \25\ 15 U.S.C. 78f(b)(5).
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    The Exchange operates in a highly fragmented and competitive market 
in which market participants can readily direct their order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of sixteen registered equities exchanges, and 
there are a number of alternative trading systems and other off-
exchange venues, to which market participants may direct their order 
flow. Based on publicly available information, no single registered 
equities exchange had more than approximately 15-16% of the total 
market share of executed volume of equities trading for the month of 
September 2024.\26\ Thus, in such a low-concentrated and highly 
competitive market, no single equities exchange possesses significant 
pricing power in the execution of order flow, and the Exchange 
represented approximately 1.71% of the overall market share for the 
month of September 2024. The Commission and the courts have repeatedly 
expressed their preference for competition over regulatory intervention 
in determining prices, products, and services in the securities 
markets. In Regulation NMS, the Commission highlighted the importance 
of market forces in determining prices and SRO revenues and also 
recognized that current regulation of the market system ``has been 
remarkably successful in promoting market competition in its broader 
forms that are most important to investors and listed companies.'' \27\
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    \26\ See the ``Market Share'' section of the Exchange's website, 
available at https://www.miaxglobal.com/ (last visited October 25, 
2024).
    \27\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37499 (June 29, 2005).
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    The Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
shift order flow or discontinue or reduce use of certain categories of 
products, in response to new or different pricing structures being 
introduced into the market. Accordingly, competitive forces constrain 
the Exchange's transaction fees and rebates, and market participants 
can readily trade on competing venues if they deem pricing levels at 
those other venues to be more favorable. The Exchange believes the 
proposal reflects a reasonable and competitive pricing structure 
designed to incentivize market participants to direct their order flow 
to the Exchange, which the Exchange believes would enhance liquidity 
and market quality in both a broad manner and in a targeted manner with 
respect to the NBBO Program, in particular, and Added Displayed Volume 
in securities priced at or above $1.00 per share, in general.
    The Exchange believes its proposal to reduce the rebates for 
executions of orders in securities priced at or above $1.00 per share 
for Added Displayed Volume across all Tapes is reasonable because the 
Exchange's standard rebate and enhanced rebates will remain competitive 
with, or higher than, the rebates provided by other exchanges for 
executions of orders in securities priced at or above $1.00 per share 
that add displayed liquidity to those exchanges.\28\ The Exchange 
believes that the enhanced rebates under the NBBO Program, as modified 
by this proposal, continue to be equitable and not unfairly 
discriminatory because the NBBO Program is open to all Equity Members 
on an equal basis and provides enhanced rebates that are reasonably 
related to the value of the Exchange's market quality associated with 
greater order flow by Equity Members that set the NBB or NBO, and the 
introduction of higher volumes of orders into the price and volume 
discovery process. The Exchange believes the proposal is equitable and 
not unfairly discriminatory because the Exchange's pricing structure, 
as modified by this proposal, continues to be designed to incentivize 
the entry of aggressively priced displayed liquidity that may create 
tighter spreads, thereby promoting price discovery and market quality 
on the Exchange to the benefit of all Equity Members and public 
investors.
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    \28\ See supra notes 21 and 22.
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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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange does not believe that the proposal will impose any 
burden on intra-market competition not necessary or appropriate in 
furtherance of the purposes of the Act.
    The Exchange believes that its proposal to reduce the standard and 
enhanced rebates provided for in the NBBO Program, for executions of 
orders in securities priced at or above $1.00 per share for Added 
Displayed Volume will not impose any burden on intramarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because these changes are for business and competitive reasons 
in light of recent volume growth on the Exchange. The Exchange notes 
that despite the modest reduction proposed herein of ($0.0001) per 
share for executions of orders in securities priced at or above $1.00 
per share for Added Displayed Volume, the Exchange's standard and 
enhanced rebates remain competitive with, or higher than, the standard 
and enhanced rebates provided by other exchanges for executions of 
orders in securities priced at or above $1.00 per share for Added 
Displayed Volume on those exchanges.\29\
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    \29\ See supra notes 21 and 22.
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    The Exchange believes that, even with the proposed decrease to the 
standard and enhanced Added Displayed Volume rebates, the Exchange's 
rebate structure for such orders will continue to incentivize market 
participants to direct order flow to the Exchange, thereby contributing 
to a deeper and more liquid market to the benefit of all market 
participants and enhancing the attractiveness of the Exchange as a 
trading venue. The Exchange believes that this, in turn, will continue 
to encourage market participants to direct additional orders in 
securities priced at or above $1.00 per share to the Exchange. Greater 
liquidity benefits all Equity Members by providing more trading 
opportunities and encourages Equity Members to send orders to the 
Exchange, thereby contributing to robust levels of liquidity, which 
benefits all market participants.
Intermarket Competition
    The Exchange believes the proposed changes will benefit 
competition, and the Exchange notes that it operates in a highly 
competitive market. Equity Members have numerous alternative venues 
they may participate on and direct their order flow to, including 
sixteen equities exchanges and numerous alternative trading systems and 
other off-exchange venues. As noted above, no single registered 
equities exchange currently had more than 15-16% of the total market 
share of executed volume of equities trading for

[[Page 91460]]

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.
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    \30\ See supra note 26.
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    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 off-exchange 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.
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    \31\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \32\ See 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)).
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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.
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    \33\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \34\ 17 CFR 240.19b-4(f)(2).
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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 [email protected]. 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\
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    \35\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-26870 Filed 11-18-24; 8:45 am]
BILLING CODE 8011-01-P
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