10856 Federal Register / Vol. 87, No. 38 / Friday, February 25, 2022 / Notices 

128 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 

grants the Commission flexibility to determine what 

type of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by an 

SRO. See Securities Acts Amendments of 1975, 

Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

129 15 U.S.C. 78s(b)(3)(C). 

130 17 CFR 200.30–3(a)(12), (57) and (58). 

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

2 17 CFR 240.19b–4. 

provided by the Exchange, and any 

additional independent analysis by the 

Commission. 

V. Commission’s Solicitation of 

Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above as well 

as any other relevant concerns. In 

particular, the Commission invites the 

written views of interested persons 

concerning whether the proposal is 

consistent with Sections 6(b)(4), 6(b)(5), 

and 6(b)(8), or any other provision of the 

Act, or the rules and regulations 

thereunder. The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposal, in addition to 

any other comments they may wish to 

submit about the proposed rule change. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.128

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by March 18, 2022. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by April 1, 2022. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR– 

PEARL–2022–05 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–2022–05. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–PEARL–2022–05 and 

should be submitted on or before March 

18, 2022. Rebuttal comments should be 

submitted by April 1, 2022. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,129 that 

File Numbers SR–PEARL–2022–05 be, 

and hereby is, temporarily suspended. 

In addition, the Commission is 

instituting proceedings to determine 

whether the proposed rule change 

should be approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.130

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03965 Filed 2–24–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94284; File No. SR– 

EMERALD–2022–07] 

Self-Regulatory Organizations; MIAX 

EMERALD, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fee 

Schedule 

February 18, 2022. 

Pursuant to the provisions of 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 February 9, 2022, MIAX Emerald, 

LLC (‘‘MIAX Emerald’’ 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. 

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 Emerald Fee Schedule 

(the ‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Section 1)a)i) of the Fee Schedule to: (i) 

Modify the application of the per 


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3See Exchange Rule 518(a)(5) for the definition of 

Complex Order. 

4See SR–EMERALD–2022–03. 

5 ‘‘Member’’ means an individual or organization 

approved to exercise the trading rights associated 

with a Trading Permit. Members are deemed 

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

Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

6 ‘‘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 account(s). See Exchange Rule 

100, including Interpretation and Policy .01. 

7 ‘‘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 Emerald 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 Emerald Market Maker) 

that has been appointed by a MIAX Emerald Market 

Maker, pursuant to the following process. A MIAX 

Emerald Market Maker appoints an EEM and an 

EEM appoints a MIAX Emerald 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 MIAX Emerald Fee Schedule. 

8 ‘‘Excluded Contracts’’ means any contracts 

routed to an away market for execution. See the 

Definitions Section of the Fee Schedule. 

9The term ‘‘Exchange System Disruption’’ means 

an outage of a Matching Engine or collective 

Matching Engines for a period of two consecutive 

hour or more, during trading hours. See the 

Definitions Section of the Fee Schedule. 

10A ‘‘Matching Engine’’ is a part of the MIAX 

Emerald electronic system that processes options 

orders and trades on a symbol-by-symbol basis. See 

the Definitions Section of the Fee Schedule. 

11For a Priority Customer complex order taking 

liquidity in both a Penny class and non-Penny class 

against Origins other than Priority Customer, the 

Priority Customer order will receive a rebate based 

on the Tier achieved. 

12See Securities Exchange Act Release No. 88993 

(June 2, 2020), 85 FR 35145 (June 8, 2020) (SR– 

EMERALD–2020–05) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Amend Exchange Rule 510, Minimum Price 

Variations and Minimum Trading Increments, To 

Conform the Rule to Section 3.1 of the Plan for the 

Purpose of Developing and Implementing 

Procedures Designed To Facilitate the Listing and 

Trading of Standardized Options) (the ‘‘Penny 

Program’’). 13The ‘‘Strategy Book’’ is the Exchange’s 

electronic book of complex orders and complex 

quotes. See Exchange Rule 518(a)(17). 

contract surcharge assessed for Complex 

Order 3 transactions (the ‘‘Complex 

surcharge’’); and (ii) increase the 

Complex surcharge for Complex Order 

transactions in Penny and non-Penny 

Classes (defined below). The Exchange 

originally filed this proposal on January 

31, 2022 (the ‘‘First Proposed Rule 

Change’’).4 On February 9, 2022, the 

Exchange withdrew the First Proposed 

Rule Change and submitted this filing 

for immediate effectiveness. 

Background 

The Exchange currently assesses 

transaction rebates and fees to all 

market participants, which are based 

upon a threshold tier structure (‘‘Tier’’). 

Tiers are determined on a monthly basis 

and are based on three alternative 

calculation methods, as defined in 

Section 1)a)ii) of the Fee Schedule. The 

calculation method that results in the 

highest Tier achieved by the Member 5

shall apply to all Origin types by the 

Member, except the Priority Customer 6

Origin type. For the Priority Customer 

Origin calculation, the Tier applied for 

a Member and its Affiliates’ 7 is solely 

determined by calculation Method 3, as 

defined in Section 1)a)ii) of the Fee 

Schedule, titled ‘‘Total Priority 

Customer, Maker sides volume, based 

on % of CTCV (‘Method 3’).’’ The 

monthly volume thresholds for each of 

the methods, associated with each Tier, 

are calculated as the total monthly 

volume executed by the Member in all 

options classes on MIAX Emerald in the 

relevant Origins and/or applicable 

liquidity, not including Excluded 

Contracts,8 (as the numerator) expressed 

as a percentage of (divided by) Customer 

Total Consolidated Volume (‘‘CTCV’’) 

(as the denominator). CTCV is 

calculated as the total national volume 

cleared at The Options Clearing 

Corporation (‘‘OCC’’) in the Customer 

range in those classes listed on MIAX 

Emerald for the month for which fees 

apply, excluding volume cleared at the 

OCC in the Customer range executed 

during the period of time in which the 

Exchange experiences an ‘‘Exchange 

System Disruption’’ 9 (solely in the 

option classes of the affected Matching 

Engine).10 In addition, the per contract 

transaction rebates and fees shall be 

applied retroactively to all eligible 

volume once the Tier has been reached 

by the Member. Members that place 

resting liquidity, i.e., orders on the 

MIAX Emerald System, will be assessed 

the specified ‘‘maker’’ rebate or fee 

(each a ‘‘Maker’’) and Members that 

execute against resting liquidity will be 

assessed the specified ‘‘taker’’ fee or 

rebate (each a ‘‘Taker’’).11 Members are 

also assessed lower transaction fees and 

smaller 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 Program (‘‘non-Penny Classes’’), 

for which Members will be assessed a 

higher transaction fees and larger 

rebates. 

Proposal To Modify the Application of, 

and Increase, the Complex Surcharge 

The Exchange proposes to amend 

Section 1)a)i) of the Fee Schedule to: (i) 

Modify the application of the Complex 

surcharge; and (ii) increase the Complex 

surcharge for Complex Order 

transactions in Penny and non-Penny 

Classes. Currently, the Exchange 

assesses a fee of $0.86 or $0.88 per 

contract for all Origins other than 

Priority Customer for Complex Orders 

that remove liquidity from the 

Exchange’s Strategy Book 13 in nonPenny Classes, depending on the Origin 

and Tier achieved. The Exchange also 

assesses a Complex surcharge of $0.05 

per contract for all Origins other than 

Priority Customer for Complex Orders 

that remove liquidity from the Strategy 

Book in non-Penny Classes, which is 

denoted by footnote ‘‘∼’’ following the 

tables in Section 1)a)i) of the Fee 

Schedule. Currently, the Exchange does 

not assess a Complex surcharge for 

Complex Orders that remove liquidity 

from the Strategy Book in Penny Classes 

for any Origin. 

The Exchange proposes to modify the 

application of the Complex surcharge in 

several ways. First, the Exchange 

proposes that the Complex surcharge 

will now apply to both Penny and nonPenny Classes, which the Exchange will 

denote in both the Penny and nonPenny Class tables of transaction fees 

and rebates in Section 1)a)i) of the Fee 

Schedule (described further below). 

Prior to the First Proposed Rule Change, 

the Complex surcharge applied only to 

non-Penny Classes. Second, the 

Exchange proposes that the Complex 

surcharge will now apply to both 

liquidity adding (Maker) and liquidity 

removing (Taker) Complex Orders for all 

Origins, except the Priority Customer 

Origin. Prior to the First Proposed Rule 

Change, the Complex surcharge applied 

only to liquidity removing (Taker) 

Complex Orders. Third, the Exchange 

proposes that the Complex surcharge 

will apply to Complex Orders submitted 

as a Response or unrelated quote or 


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14See Exchange Rule 518(d) (describing the 

Complex Order Auction process). The Exchange 

notes that the Complex surcharge will not apply to 

Complex Orders submitted as part of a cPRIME 

auction. A Complex PRIME or ‘‘cPRIME’’ Order is 

a complex order (as defined in Rule 518(a)(5)) that 

is submitted for participation in a cPRIME Auction. 

Trading of cPRIME Orders is governed by Rule 

515A, Interpretation and Policy .12. See Exchange 

Rule 518(b)(7). ‘‘cPRIME’’ is the process by which 

a Member may electronically submit a ‘‘cPRIME 

Order’’ (as defined in Exchange Rule 518(b)(7)) it 

represents as agent (a ‘‘cPRIME Agency Order’’) 

against principal or solicited interest for execution 

(a ‘‘cPRIME Auction’’), subject to the requirements 

in Exchange Rule 515A, Interpretation and Policy 

.12(a). See, generally, Exchange Rule 515A. 

15See Exchange Rule 521(j). 16See Exchange Rule 518(d). 17See supra note 14. 18See MIAX Fee Schedule, Sections 1)a)i)–ii) 

(assessing a $0.12 per contract surcharge for trading 

against a Priority Customer Complex Order for 

Penny and Non-Penny classes). 19See MIAX Fee Schedule, Section 1)a)ii). 20This is similar to how the Complex surcharge 

is represented in the tables of transaction fees and 

rebates in the MIAX Fee Schedule. See supra note 

18. 

21This is substantially similar language regarding 

the application of the Complex surcharge that is 

represented by text below the tables of transaction 

fees and rebates in the MIAX Fee Schedule. See 

MIAX Fee Schedule, Section 1)a)ii), at page 4. 

22See NYSE American Options Fee Schedule, 

Section I.A., footnote 5, page 9 (assessing $0.12 per 

contract surcharge to any Electronic Non-Customer 

Complex Order that executes against a Customer 

Complex Order, regardless of whether the execution 

occurs in a Complex Order Auction); BOX Options 

Exchange Fee Schedule, Section III.A. Complex 

Order Transaction Fees (noting that a $0.12 per 

contract Complex Surcharge will be applied to any 

electronic non-Public Customer Complex Order that 

executes against an electronic Public Customer 

Complex Order, including for Penny Interval Class 

taker fees with a base fee amount of $0.50 per 

contract). 

23See supra note 18. 

24See Securities Exchange Act Release No. 85393 

(March 21, 2019), 84 FR 11599 (March 27, 2019) 

(SR–EMERALD–2019–15). 

25See supra notes 18 and 22. 

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

27 15 U.S.C. 78f(b)(4). 

28 15 U.S.C. 78f(b)(1) and (b)(5). 

order in a Complex Order Auction.14

Prior to the First Proposed Rule Change, 

the Complex surcharge applied only to 

liquidity removing Complex Orders that 

were not part of a Complex Order 

Auction. Fourth, the Exchange proposes 

that the Complex surcharge will apply 

to Complex Orders that are contra to the 

Priority Customer Origin only. Prior to 

the First Proposed Rule Change, the 

Complex surcharge applied to Complex 

Orders that were contra to any Origin. 

Fifth, the Exchange proposes to increase 

the Complex surcharge from $0.05 per 

contract to $0.12 per contract. The 

Exchange notes that the Complex 

surcharge will continue to not apply to 

transactions that are Linkage Trades.15

Additionally, the Exchange notes that 

the Complex surcharge will not apply to 

transactions that are paired trades, such 

as transactions in cPRIME, which the 

Exchange proposes to explicitly exclude 

from the Complex surcharge (denoted in 

a footnote described below). 

Accordingly, with all of the proposed 

changes, the proposed Complex 

surcharge of $0.12 per contract will 

apply to Complex Orders for all Origins 

except Priority Customer that add 

(Maker) or remove (Taker) liquidity in 

Penny and non-Penny Classes when 

trading against a Priority Customer on 

the Strategy Book. The Complex 

surcharge would continue to not apply 

to the Priority Customer Origin. The 

Complex surcharge would also apply to 

all Origins except Priority Customer 

when trading against a Priority 

Customer as a Response or unrelated 

quote or order in a Complex Order 

Auction,16 other than a cPRIME 

auction.17 The Exchange notes that the 

proposed application and amount of the 

Complex surcharge subject to this filing 

is the same application and amount of 

the Complex surcharge that is currently 

assessed by the Exchange’s affiliate, 

Miami International Securities 

Exchange, LLC (‘‘MIAX’’).18 For 

example, assuming a Firm Origin 

Complex Order taking liquidity against 

(contra) a Priority Customer Origin 

Complex Order resting liquidity in a 

Penny Class, MIAX will charge a 

standard fee of $0.47 and a Complex 

surcharge of $0.12.19 Similarly, under 

the proposed fee application and 

proposed Complex surcharge rate 

increase, MIAX Emerald would now 

charge a standard (taker) fee of $0.50 

and a Complex surcharge of $0.12. 

To represent all the proposed 

changes, the Exchange proposes to add 

a new column to each table for Penny 

and non-Penny Classes in Section 1)a)i) 

of the Fee Schedule, under the 

‘‘Complex’’ heading. The Exchange 

proposes that each new column would 

be titled ‘‘Per Contract Surcharge for 

Trading Against a Priority Customer 

Complex Order.’’ 20 In the new column 

for each table, the Exchange proposes to 

insert the proposed increased Complex 

surcharge amount of $0.12 per contract 

for all Origins, except Priority Customer, 

which would be $0.00 per contract for 

all Tiers. The Exchange also proposes to 

move footnote ‘‘∼’’ from the ‘‘Taker’’ 

column in the non-Penny Classes table 

and insert it at the end of each of the 

newly proposed column headings for 

the Complex surcharge, described 

above. Further, the Exchange proposes 

to delete the text of footnote ‘‘∼’’ in its 

entirety and insert the following new 

text for that footnote following the 

tables in Section 1)a)i) of the Fee 

Schedule: ‘‘The per contract surcharge 

for trading against a Priority Customer 

Complex Order for Penny and NonPenny Classes applies to all Origins 

except Priority Customer when trading 

against a Priority Customer: (i) On the 

Strategy Book; or (ii) as a Response or 

unrelated quote or order in a complex 

order auction other than a cPRIME 

Auction.’’ 21

As described above, the Exchange 

proposes to increase the Complex 

surcharge from $0.05 per contract to 

$0.12 per contract. The Exchange notes 

that the proposed Complex surcharge 

rate of $0.12 per contract is the same 

amount charged by at least two 

competing options exchanges with base 

fee amounts for complex orders of $0.50 

per contract in Penny Classes plus a 

$0.12 per contract complex surcharge, 

which has similar application 

methods.22 Further, the proposed 

application and increased amount of the 

Complex surcharge is the same 

application and amount of the Complex 

surcharge that is currently assessed by 

the Exchange’s affiliate, MIAX.23

The purpose of the proposed changes 

to the Complex surcharge are for 

business and competitive reasons. In 

order to attract order flow, the Exchange 

initially set its Complex surcharge rate 

so that it was similar to, or lower, than 

other options exchanges that operate 

comparable maker/taker pricing 

models.24 The Exchange now believes 

that it is appropriate to adjust this rate 

and application so that it is more in line 

with other exchanges, but will remain 

highly competitive such that it should 

enable the Exchange to continue to 

attract order flow and maintain market 

share.25

Implementation 

The proposed changes are 

immediately effective. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 26

in general, and furthers the objectives of 

Section 6(b)(4) of the Act,27 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,28 in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, promote just and 

equitable principles of trade, foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 


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29See Securities Exchange Act Release No. 51808 

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

30See ‘‘The Market at a Glance,’’ (last visited 

January 26, 2022), available at https://

www.miaxoptions.com/. 

31See id. 

32See Securities Exchange Act Release No. 85304 

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

(SR–PEARL–2019–07). 

33See supra notes 18 and 22. 

34 15 U.S.C. 78f(b)(4). 

35See supra notes 18 and 22. 

36See id. 

37 15 U.S.C. 78f(b)(1) and (b)(5). 

38See supra note 22. 

general, 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.’’ 29

There are currently 16 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has a 

market share of more than 

approximately 12–13% of the equity 

options market.30 Therefore, no 

exchange possesses significant pricing 

power. More specifically, as of January 

26, 2022, the Exchange had a market 

share of approximately 3.96% of 

executed volume of multiply-listed 

equity and exchange traded fund 

(‘‘ETF’’) options for the month of 

January 2022.31

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can discontinue or reduce use of certain 

categories of products and services, 

terminate an existing membership or 

determine to not become a new member, 

and/or shift order flow, in response to 

transaction fee changes. For example, on 

February 28, 2019, the Exchange’s 

affiliate, MIAX PEARL, LLC (‘‘MIAX 

Pearl’’) filed with the Commission a 

proposal to increase Taker fees in 

certain Tiers for options transactions in 

certain Penny classes for Priority 

Customers and decrease Maker rebates 

in certain Tiers for options transactions 

in Penny classes for Priority Customers 

(which fee was to be effective March 1, 

2019).32 MIAX Pearl experienced a 

decrease in total market share for the 

month of March 2019, after the proposal 

went into effect. Accordingly, the 

Exchange believes that the MIAX Pearl 

March 1, 2019 fee change, to increase 

certain transaction fees and decrease 

certain transaction rebates, may have 

contributed to the decrease in MIAX 

Pearl’s market share and, as such, the 

Exchange believes competitive forces 

constrain the Exchange’s, and other 

options exchanges, ability to set 

transaction fees and market participants 

can shift order flow based on fee 

changes instituted by the exchanges. 

The Exchange believes its proposal is 

reasonable, equitable and not unfairly 

discriminatory because all similarly 

situated market participants in the same 

Origin type (except Priority Customers) 

will now be subject to the Complex 

surcharge. The Exchange believes it is 

equitable and not unfairly 

discriminatory to increase the Complex 

surcharge for business and competitive 

business reasons. The Exchange initially 

set its Complex surcharge rate similar 

to, or lower than, the complex 

surcharges assessed by other options 

exchanges that operate comparable 

maker/taker pricing models. The 

Exchange now believes that it is 

appropriate to increase the Complex 

surcharge so that it is in line with other 

exchanges, and will still remain highly 

competitive such that it should enable 

the Exchange to continue to attract order 

flow and maintain market share.33 The 

Exchange believes that the amount of 

Complex surcharge, as proposed, will 

continue to encourage market 

participants to send Complex Orders to 

the Exchange. 

The Exchange believes the proposal to 

increase the Complex surcharge and 

broaden its application is consistent 

with Section 6(b)(4) of the Act 34

because it applies equally to all market 

participants (Market Makers, Non-MIAX 

Market Makers, Firm Proprietary/ 

Broker-Dealers, except Priority 

Customers) that would be charged such 

Complex surcharge. Assessing the 

Complex surcharge to Market Makers 

and other professional market 

participants (except Priority Customers), 

in a broader application, similar to that 

of other exchanges, is reasonable and 

not unfairly discriminatory because it 

will provide Market Makers and other 

professional market participants with 

equal surcharges when trading against a 

Priority Customer Complex Order. As 

stated above, the proposed Complex 

surcharge is the same amount as the 

surcharges assessed by NYSE American 

Options, BOX Options, and the 

Exchange’s affiliate, MIAX.35 The 

Exchange notes that, although the 

increase of the Complex surcharge 

represents a slight fee increase, the 

Exchange believes that this increase is 

fair and equitable because it is in line 

with the amount of surcharges assessed 

on other options exchanges when 

trading against Priority Customer 

Complex Orders.36

The Exchange believes its proposal to 

apply the Complex surcharge to all 

Origins, except Priority Customer, is 

reasonable, equitably allocated and not 

unfairly discriminatory because it will 

continue to encourage Priority Customer 

Complex Order flow. The Exchange 

believes increased Priority Customer 

Complex Order flow benefits all market 

participants by providing more trading 

opportunities and tighter spreads. The 

Exchange also believes that increased 

Priority Customer Complex Order flow 

may attract Market Makers and other 

liquidity providers, thus, facilitating 

price improvement in the Complex 

Order Auction process, signaling 

additional corresponding increase in 

Complex Order flow from other market 

participants, and, as a result, increasing 

liquidity on the Exchange. 

The Exchange believes its proposal to 

broaden the application of the Complex 

surcharge is also consistent with Section 

6(b)(5) of the Act 37 because it perfects 

the mechanisms of a free and open 

market and a national market system by 

aligning the broader application of the 

Complex surcharge to that of other 

options exchanges,38 which will help to 

create consistency and uniformity in the 

marketplace. 

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 believes that the 

proposed changes to the Complex 

surcharge should continue to encourage 

the provision of liquidity that enhances 

the quality of the Exchange’s Complex 

Order market and increases the number 

of trading opportunities on the 

Exchange for all participants who will 

be able to compete for such 

opportunities. The proposed rule 

changes should enable the Exchange to 

continue to attract and compete for 

order flow with other exchanges. The 

Exchange also believes that its proposal 

to apply the Complex surcharge to all 

Origins except Priority Customer will 

not impose any burden on competition 

not necessary or appropriate because the 


lotter on DSK11XQN23PROD with NOTICES1
10860 Federal Register / Vol. 87, No. 38 / Friday, February 25, 2022 / Notices 

39See supra note 30. 

40See id. 

41 15 U.S.C. 78s(b)(3)(A)(ii). 42 17 CFR 240.19b–4(f)(2). 

43 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Exchange believes increased Priority 

Customer Complex Order flow benefits 

all market participants by providing 

more trading opportunities and tighter 

spreads. The Exchange also believes that 

increased Priority Customer Complex 

Order flow may attract Market Makers 

and other liquidity providers, thus, 

facilitating price improvement in the 

Complex Order Auction process, 

signaling additional corresponding 

increase in Complex Order flow from 

other market participants, and, as a 

result, increasing liquidity on the 

Exchange. 

Inter-Market Competition 

The Exchange 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. There 

are currently 16 registered options 

exchanges competing for order flow. 

Based on publicly-available 

information, and excluding index-based 

options, no single exchange has a 

market share of more than 

approximately 12–13% of the equity 

options market.39 Therefore, no 

exchange possesses significant pricing 

power. More specifically, as of January 

26, 2022, the Exchange had a market 

share of approximately 3.96% of 

executed volume of multiply-listed 

equity and ETF options for the month of 

January 2022.40 Therefore, no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. In such an 

environment, the Exchange must 

continually adjust its transaction and 

non-transaction fees to remain 

competitive with other exchanges and to 

attract order flow. The Exchange 

believes that the proposed rule changes 

reflect this competitive environment 

because it modifies the Exchange’s fees 

for Complex Order transactions in a 

manner that will allow the Exchange to 

remain competitive. 

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,41 and Rule 

19b–4(f)(2) 42 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

EMERALD–2022–07 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–EMERALD–2022–07. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–EMERALD–2022–07, and 

should be submitted on or before March 

18, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03963 Filed 2–24–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94286; File No. SR– 

PEARL–2022–04] 

Self-Regulatory Organizations; MIAX 

PEARL LLC; Notice of Filing of a 

Proposed Rule Change To Amend the 

MIAX PEARL Options Fee Schedule To 

Increase the Monthly Fees for MIAX 

Express Network Full Service Port; 

Suspension of and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove the Proposed 

Rule Change 

February 18, 2022. 

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 February 

15, 2022, MIAX PEARL, LLC (‘‘MIAX 

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

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons and is, pursuant 

to Section 19(b)(3)(C) of the Act, hereby: 

(i) Temporarily suspending the rule 

change; and (ii) instituting proceedings 

to determine whether to approve or 

disapprove the proposed rule change. 

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 (the ‘‘Fee Schedule’’) to 

amend the fees for the Exchange’s MIAX 


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