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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Notices]
[Pages 105163-105165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30781]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101977; File No. SR-PEARL-2024-58]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Make Certain 
Clarifying Changes Related to New Time-In-Force Instructions on MIAX 
Pearl Equities

December 19, 2024
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on December 10, 2024, MIAX PEARL, LLC (``MIAX Pearl'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to make clarifying changes related to new 
Time-In-Force (``TIF'') instructions that were adopted as part of a 
recent proposal to expand the trading hours of its equity trading 
platform (referred to herein as ``MIAX Pearl Equities'').
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings, at MIAX Pearl's principal office, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to make clarifying changes related to new TIF 
instructions that were adopted as part of a recent proposal to expand 
the trading hours of MIAX Pearl Equities. The Exchange recently 
submitted a proposed rule change to expand its hours of operations by 
adopting both an Early and Late Trading Session.\4\ Pursuant to that 
proposal,\5\ the Early Trading Session would operate from 4:00 a.m. 
until 9:30 a.m. Eastern Time. Then the existing Regular Trading Hours 
\6\ would follow, which currently operates from 9:30 a.m. until 4:00 
p.m. Eastern Time. Within Regular Trading Hours, the Exchange also 
operates the existing Regular Trading Session,\7\ which operates from 
the completion of the Exchange's Opening Process described in Exchange 
Rule 2615 until 4:00 p.m. Eastern Time. The Late Trading Session would 
follow and operate from 4:00 p.m. until 8:00 p.m. Eastern Time.
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    \4\ See Securities Exchange Act Release No. 101358 (October 16, 
2024), 89 FR 84406 (October 22, 2024) (SR-PEARL-2024-47) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Adopt Both an Early and Late Trading Session on its Equity Trading 
Platform).
    \5\ Id.
    \6\ See Exchange Rule 1901.
    \7\ Id.
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    The Exchange currently offers two TIF instructions, Immediate-Or-
Cancel (``IOC'') and Regular Hours Only (``RHO''), the operation of 
each are described under Exchange Rule 2614(b)(1) and (2), 
respectively. In its proposal to add the Early and Late Trading 
Sessions, among other things, the Exchange amended its rules to adopt 
the following four additional TIF instructions: Day, Fill-Or-Kill 
(``FOK''), Good-`til Time (``GTT''), and Good-`til Extended Day 
(``GTX''). In sum, the Day TIF is an instruction that may be attached 
to an order stating that an order to buy or sell which, if not 
executed, expires at the end of Regular Trading Hours. The FOK TIF is 
an instruction that may be attached to an order stating that the order 
is to be executed in its entirety as soon as it is received and, if not 
so executed, cancelled. The GTT TIF is an instruction that may be 
attached to an order specifying the time of day at which the order 
expires. Lastly, the GTX TIF is an instruction that may be attached to 
an order to buy or sell which, if not executed, will be cancelled by 
the close of the Late Trading Session.
    Like RHO, the TIF instructions of Day, GTT, and GTX all allow 
Equity Members \8\ to instruct the Exchange to post their order to the 
MIAX Pearl Equities Book if not executed upon entry. Also, like IOC, 
the TIF instruction of FOK provides that an order be executed upon 
entry and not posted to the MIAX Pearl Equities Book. Therefore, as 
part of its proposal to add the Early and Late Trading Session, the 
Exchange amended provisions within its rules to account for the TIF 
instructions where appropriate, such as adding the TIF instructions of 
Day, GTT, and GTX following references to RHO, or FOK following 
references to IOC.\9\
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    \8\ The term ``Equity Member'' is a Member authorized by the 
Exchange to transact business on MIAX Pearl Equities. See Exchange 
Rule 1901.
    \9\ See supra note 3.
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    The Exchange now proposes to make other clarifying changes to its 
rules to account for the new TIF instructions that it inadvertently did 
not include in its earlier proposed rule change. As described below, 
each of these changes would ensure the Exchange's rules provide for the 
consistent treatment of like TIF instructions, provide additional 
clarity, and are consistent with the rules of other national securities 
exchanges. The Exchange does not propose to make any other changes to 
its rules or to amend functionality. Each of these changes are as 
follows:
     Exchange Rule 2614(a)(1)(ii) currently provides that a 
Limit Order may include a TIF of IOC or RHO. In the filing to adopt the 
Early and Late Trading Sessions and additional TIF instructions, 
Exchange Rule 2614(a)(1)(ii) was amended to also provide that a Limit 
Order may include a TIF of FOK, Day, GTT, or GTX.\10\ The Exchange now 
proposes to amend Exchange Rule 2614(a)(1)(vi) to account for the new 
additional TIF instructions by providing that ``[d]uring a Short Sale

[[Page 105164]]

Period, as defined in Exchange Rule 2614(g)(3)(i), the System will 
immediately cancel any portion of an incoming Limit Order designated as 
ISO and short that includes a time-in-force instruction RHO, Day, GTT, 
or GTX that cannot be executed or displayed at its limit price at the 
time of entry pursuant to Rule 201 of Regulation SHO.''
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    \10\ Id.
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     In sum, Exchange Rule 2614(c)(7) provides that Minimum 
Execution Quantity (``MEQ'') is an order instruction that may be 
attached to a non-displayed order requiring the System to execute the 
order only to the extent that a minimum quantity can be satisfied. 
Exchange Rule 2614(c)(7)(B) describes the operation of orders with an 
MEQ instruction when resting on the MIAX Pearl Equities Book. The 
Exchange now proposes to amend Exchange Rule 2614(c)(7)(ii) to account 
for the new additional TIF instructions and provide that ``[w]here 
there is insufficient size to satisfy an incoming order's minimum 
quantity condition, that incoming order with a Minimum Execution 
Quantity instruction with a time-in-force of RHO, Day, GTT, or GTX will 
not trade and will be posted on the MIAX Pearl Equities Book.''
     Exchange Rule 2614(e) provides for the cancelation and 
replacement of an existing order. The Exchange now proposes to amend 
Exchange Rule 2614(e)(1) to include the new additional TIF instruction 
of FOK and provide that ``[o]rders may only be cancelled or replaced if 
the order has a time-in-force term other than IOC or FOK and if the 
order has not yet been executed.''
     Exchange Rule 2615(e) describes how the Exchange re-opens 
a security following a halt and provides, in sum, that the re-opening 
process would operate in the same manners as the Exchange's Opening 
Process set forth under Exchange Rule 2615(a)--(c), with certain 
exceptions. One exception is provided for under Exchange Rule 
2615(e)(1) which states that orders with a TIF instruction of IOC would 
be cancelled or rejected, as applicable. The Exchange proposes to amend 
Exchange Rule 2615(e)(1) to include the TIF instruction of FOK and 
provide that ``ISOs and orders that include a time-in-force of IOC or 
FOK be cancelled or rejected, as applicable.''
     Exchange Rule 2622 discusses the Exchange's mechanisms to 
comply with the Limit Up-Limit Down Plan.
    [cir] First, Exchange Rule 2622(h)(2)(i)5.a. provides that Market 
Orders and orders designated IOC will only be executed at or within the 
Price Bands. This provision would be amended to also provide that 
orders designated as FOK will only be executed at or within the Price 
Bands.
    [cir] Second, Exchange Rule 2622(h)(3)(B) provides that during any 
Operational Halt, the System will accept all orders, except orders 
designated as ISO and orders that include a TIF instruction of IOC, for 
queuing and participation in the Re-Opening Process pursuant to Rule 
2615(e). This provision would be amended to also provide that orders 
that include a TIF instruction of FOK will not be accepted for queuing 
and participation in the Re-Opening Process pursuant to Rule 2615(e).
Implementation
    Due to the technological changes associated with this proposed 
change, the Exchange will issue a trading alert publicly announcing the 
implementation date of the proposed enhancements to its risk controls 
set forth herein. The Exchange anticipates that the implementation date 
will be in the first or second quarter of 2025.\11\
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    \11\ See, e.g., MIAX Pearl Equities--Roll Out of Extended Hours 
Trading & Update to Mandatory FOI and MEO Upgrade Deadline, dated 
November 13, 2024, available at https://www.miaxglobal.com/alert/2024/11/13/miax-pearl-equities-roll-out-extended-hours-trading-update-mandatory-foi.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\12\ in general, and furthers the objectives of Section 
6(b)(5),\13\ in particular, because 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 regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. Specifically, the Exchange 
believes the proposed amendments will remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
because they would provide for the consistent treatment of like TIF 
instructions and are consistent with the rules of other national 
securities exchanges.\14\ The proposed rule change is also consistent 
with changes the Exchange proposed in its earlier filing to adopt the 
Early and Late Trading Sessions where it amended certain Exchange Rules 
to account for the additional TIF instructions.\15\ The Exchange does 
not propose any new changes to functionality, but rather to provide 
additional clarity within the rule text, make the Exchange's rules 
easier to understand, and accurately reflect Exchange functionality. 
The proposed rule changes would, therefore, help prevent any potential 
investor confusion and thus protect investors and the public interest, 
as well as remove impediments to and perfect the mechanism of a free 
and open market and a national market system. The Exchange also 
believes that the proposed rule change is non-discriminatory as it 
would apply to all Equity Members uniformly and all Equity Members 
would be treated equally.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See, e.g., NYSE Arca, Inc. (``NYSE Arca'') Rule 
7.31(i)(3)(C); and Cboe EDGA Exchange, Inc. (``Cboe EDGA'') and Cboe 
EDGX Exchange, Inc. (``Cboe EDGX'') Rules 11.8(c)(6). Like NYSE 
Arca, Exchange Rule Exchange Rule 2614(c)(7)(ii) lists all TIF 
instructions that if offers that allow for an order to be posted to 
the order book. While Cboe EDGA and Cboe EDGX offer the same TIF 
instructions that are listed in this proposal, Exchange Rule 
Exchange Rule 2614(a)(1)(vi) lists the TIF instruction while the 
Cboe EDGA and Cboe EDGX Rules lack this additional specificity.
    \15\ See supra note 3.
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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. The Exchange believes its 
proposal will not impose any burden on inter-market competition because 
the proposal simply seeks to provide for the consistent treatment of 
like TIF instructions, provide market participants additional clarity 
within the Exchange's Rules, and provide consistency with the rules of 
other national securities exchanges.\16\ The proposal is not designed 
to enhance the Exchange's competitive standing, but rather ensure its 
rules accurately reflect functionality. The proposal also does not seek 
to amend any functionality proposed in the Exchange's previous proposal 
to adopt the Early and Late Trading Sessions.\17\ The Exchange believes 
its proposal will not impose any burden on intra-market competition 
because all orders coupled with the above listed TIF instructions would 
be treated equally under the proposed amendments.
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    \16\ See supra note 13.
    \17\ See supra note 3.

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[[Page 105165]]

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

    Because the foregoing proposed rule change does not:
    (i) significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 
19b-4(f)(6) thereunder.\18\
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    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    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 [email protected]. Please include 
file number SR-PEARL-2024-58 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-2024-58. 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-2024-58 and should be 
submitted on or before January 16, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30781 Filed 12-23-24; 8:45 am]
BILLING CODE 8011-01-P
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