40092 Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 

35See Securities Exchange Act Release No. 91614 

(April 20, 2021), 86 FR 22082 (April 26, 2021) (SR– 

Phlx–2021–10). 36For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 37 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 See Exchange Rule 1901. 

recently approved Phlx’s substantially 

similar proposal to list and trade 

Monday QQQ Expirations and 

Wednesday QQQ Expirations.35 The 

Exchange has stated that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest as it would encourage fair 

competition among exchanges by 

allowing the Exchange to compete 

effectively with Phlx by having the 

ability to list and trade the same 

Monday and Wednesday QQQ 

Expirations that Phlx is able to list and 

trade. For these reasons, the 

Commission believes that the proposed 

rule change presents no novel issues 

and that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest, and 

will allow the Exchange to remain 

competitive with other exchanges. 

Accordingly, the Commission hereby 

waives the operative delay and 

designates the proposed rule change 

operative upon filing.36

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 

change 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– 

NYSEAMER–2021–33 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–NYSEAMER–2021–33. 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–NYSEAMER–2021–33, and 

should be submitted on or before 

August 16, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15819 Filed 7–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92452; File No. SR– 

PEARL–2021–34] 

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 

July 20, 2021. 

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 July 12, 

2021, MIAX PEARL, LLC (‘‘MIAX Pearl’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the fee schedule applicable for 

MIAX Pearl Equities, an equities trading 

facility of the Exchange (the ‘‘Fee 

Schedule’’) 3 to update the Standard 

Rates table and the Liquidity Indicator 

Codes and Associated Fees table. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/pearl 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 purpose of the proposed rule 

change is to amend the Exchange’s Fee 

Schedule to (i) make conforming 

changes to the rates of certain liquidity 

indicator codes that remove liquidity in 

the Liquidity Indicator Codes and 

Associated Fees table; (ii) amend the 

Standard Rates table to increase the 

rebate for Non-Displayed Orders that 

Add Liquidity from $0.0022 to $0.0025; 

and (iii) adopt four Retail Order 

liquidity indicator codes and associated 

fees and rebates for each. 


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4 See Securities Exchange Act Release No. 91496 

(April 7, 2021), 86 FR 19303 (April 13, 2021) (SR– 

PEARL–2021–10) (‘‘Fee Filing No. 1’’). 

5 See id. 

6 The Exchange notes that, unlike orders that add 

liquidity, whether an order that removes liquidity 

is either Displayed or Non-Displayed does not 

impact the applicable rate. The Exchange proposes 

to provide separate liquidity indicator codes based 

on whether the order that removes liquidity was 

Displayed or Non-Displayed as a convenience to 

Equity Members. 

7 See Securities Exchange Act Release No. 91497 

(April 7, 2021), 86 FR 19290 (April 13, 2021) (SR– 

PEARL–2021–15) (‘‘Fee Filing No. 2’’). The fee for 

orders that remove liquidity in Tapes A, B, and C 

securities priced below $1.00 were not changed. 

8 See Trader Alert, MIAX Pearl Equities—2nd 

Reminder: Mandatory Specification Updates (May 

27, 2021) available at https://

www.miaxoptions.com/alerts/2021/05/27/miaxpearl-equities-2nd-reminder-mandatory-interfacespecification-updates. 

9 The rates to remove liquidity in Tapes A, B, and 

C securities priced below $1.00 remained 

unchanged. Therefore, liquidity indicator codes RA, 

RB, RC, Ra, Rb, and Rc reflect the correct rate. 

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

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

The Exchange initially filed this 

proposal on July 1, 2021 (SR–PEARL– 

2021–29) and withdrew such filing on 

July 12, 2021. The Exchange proposes to 

implement the fee change effective July 

12, 2021. 

Conforming Changes to Liquidity 

Indicator Codes That Remove Liquidity 

On March 25, 2021, the Exchange 

filed its proposal to add liquidity 

indicator codes to its Fee Schedule.4

Due to the technological changes 

associated with the proposed liquidity 

indicator codes, the Exchange noted that 

it would issue a trading alert publicly 

announcing the implementation date 

when the liquidity indicator codes 

would be available and that the 

Exchange anticipated the 

implementation date to be in either the 

second or third quarter of 2021.5 In Fee 

Filing No. 1 the Exchange added new 

Section (1)(b) to the Fee Schedule, titled 

‘‘Liquidity Indicator Codes and 

Associated Fees,’’ showing the liquidity 

indicator codes, the description of each, 

and the then current applicable fee or 

rebate. Specifically, in that filing the 

following liquidity indicator codes were 

described as follows: 

• Liquidity indicator code RA would 

be applied to a Displayed order 6 that 

removes liquidity in Tape A securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code RA would be subject to the 

existing fee of $0.0028 per share in 

securities priced at or above $1.00 and 

0.05% of the transaction’s dollar value 

in securities priced below $1.00. 

• Liquidity indicator code RB would 

be applied to a Displayed order that 

removes liquidity in Tape B securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code RB would be subject to the existing 

fee of $0.0027 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

• Liquidity indicator code RC would 

be applied to a Displayed order that 

removes liquidity in Tape C securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code RC would be subject to the existing 

fee of $0.0028 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

• Liquidity indicator code Ra would 

be applied to a Non-Displayed order 

that removes liquidity in Tape A 

securities. The Liquidity Indicator Code 

and Associated Fees table would specify 

that orders that yield liquidity indicator 

code Ra would be subject to the existing 

fee of $0.0028 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

• Liquidity indicator code Rb would 

be applied to a Non-Displayed order 

that removes liquidity in Tape B 

securities. The Liquidity Indicator Code 

and Associated Fees table would specify 

that orders that yield liquidity indicator 

code Rb would be subject to the existing 

fee of $0.0027 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

• Liquidity indicator code Rc would 

be applied to a Non-Displayed order 

that removes liquidity in Tape C 

securities. The Liquidity Indicator Code 

and Associated Fees table would specify 

that orders that yield liquidity indicator 

code Rc would be subject to the existing 

fee of $0.0028 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

Subsequently, on March 31, 2021, the 

Exchange filed its proposal to 

universally decrease the fee to remove 

liquidity in Tapes A, B, and C securities 

priced at or above $1.00 to $0.0025 per 

share.7 However, as the liquidity 

indicator codes had not yet been 

implemented on the Exchange, the 

Liquidity Indicator Codes and 

Associated Fees table was not updated 

accordingly. On May 27, 2021, the 

Exchange issued a Trader Alert 

indicating that new supporting 

documentation for Liquidity Indicator 

Codes was available and that the new 

codes were targeted for use in 

production on July 1, 2021.8

The Exchange now proposes to amend 

the Liquidity Indicator Codes and 

Associated Fees table for codes RA, RB, 

RC, Ra, Rb and Rc to reflect the take rate 

change associated with Fee Filing No. 2, 

which established the current fee of 

$0.0025 per share for orders in Tapes A, 

B, and C securities that remove liquidity 

in securities priced at or above $1.00.9

The purpose of this change is to update 

the Liquidity Indicator Code and 

Associated Fees table to reflect the rate 

that is currently in effect and to provide 

greater clarity to Equity Members 10 as to 

which fee may ultimately be applied to 

their execution as the use of liquidity 

indicator codes was implemented on the 

Exchange on July 1, 2021. 

Amend the Standard Rate Rebate for 

Non-Displayed Orders That Add 

Liquidity 

The Exchange proposes to amend the 

Standard Rates table and the Liquidity 

Indicator Codes and Associated Fees 

table to increase the rebate provided for 

Non-Displayed Orders that Add 

Liquidity from $0.0022 to $0.0025 per 

share in securities priced at or above 

$1.00. 

• Liquidity indicator code Aa would 

be applied to a Non-Displayed Order 

that adds liquidity in Tape A securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code Aa would receive a rebate of 

$0.0025 per share in securities priced at 

or above $1.00 and 0.05% of the 

transaction’s dollar value in securities 

priced below $1.00. 

• Liquidity indicator code Ab would 

be applied to a Non-Displayed Order 

that adds liquidity in Tape B securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code Ab would receive a rebate of 

$0.0025 per share in securities priced at 

or above $1.00 and 0.05% of the 

transaction’s dollar value in securities 

priced below $1.00. 

• Liquidity indicator code Ac would 

be applied to a Non-Displayed Order 

that adds liquidity in Tape C securities. 

The Liquidity Indicator Code and 

Associated Fees table would specify that 

orders that yield liquidity indicator 

code Ac would receive a rebate of 

$0.0025 per share in securities priced at 

or above $1.00 and 0.05% of the 

transaction’s dollar value in securities 

priced below $1.00. 

The purpose for this proposed change 

is for business and competitive reasons. 


jbell on DSKJLSW7X2PROD with NOTICES
40094 Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 

11 The use of liquidity indicator codes is not 

novel and liquidity indicator codes are currently 

utilized by other equity exchanges. For example, 

see the fee schedules of the Investors Exchange LLC 

(‘‘IEX’’) available at https://iextrading.com/trading/ 

fees/; and MEMX LLC (‘‘MEMX’’) available at 

https://info.memxtrading.com/fee-schedule/. 

12 A ‘‘Retail Order’’ is an agency or riskless 

principal order that meets the criteria of FINRA 

Rule 5320.03 that originates from a natural person 

and is submitted to the Exchange by a Retail 

Member Organization, provided that no change is 

made to the terms of the order with respect to price 

or side of market and the order does not originate 

from a trading algorithm or any other computerized 

methodology. See Exchange Rule 2626(a)(2). 

13 See the MEMX LLC, (‘‘MEMX’’) Fee Schedule, 

effective June 1, 2021, on its public website 

available at https://info.memxtrading.com/feeschedule/ which establishes a rebate rate of $0.0037 

for Retail Orders that add liquidity in Tape A 

securities priced at or above $1.00. 

14 See Securities Exchange Act Release No. 91497 

(April 7, 2021), 86 FR 19290 (April 13, 2021) (SR– 

PEARL–2021–15). 

15 See id. 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(4). 

18 15 U.S.C. 78f(b)(5). 

19 Market share percentage calculated as of June 

24, 2021. The Exchange receives and processes data 

made available through consolidated data feeds. 

The Exchange believes that increasing 

the rebate for Adding Liquidity NonDisplayed Orders from $0.0022 to 

$0.0025 per share for securities priced at 

or above $1.00 will encourage market 

participants to enter Non-Displayed 

Orders that add liquidity, thereby 

increasing liquidity and execution 

opportunities on the Exchange. 

New Retail Order Liquidity Codes 

Additionally, the Exchange proposes 

to adopt four Retail Order liquidity 

indicator codes; AR, Ar, RR, and Rr, to 

the Liquidity Indicator Codes and 

Associated Fees table as described 

below. The purpose of this change is for 

business and competitive reasons. The 

Exchange notes that the use of liquidity 

indicator codes is not unique to the 

Exchange and are currently utilized and 

described in the fee schedules of other 

equity exchanges.11 The Exchange 

believes that adoption of these liquidity 

indicator codes and associated fees and 

rebates will further incentivize Equity 

Members to submit these types of orders 

to the Exchange, which will result in 

greater liquidity on the Exchange, 

thereby increasing execution 

opportunities on the Exchange. 

• Liquidity indicator code AR would 

be applied to a Displayed Retail Order 12

that adds liquidity in Tape A, B, and C 

securities. The Liquidity Indicator Code 

and Associated Fees table would specify 

that orders that yield liquidity indicator 

code AR would receive a rebate of 

$0.0037 per share in securities priced at 

or above $1.00 and 0.05% of the 

transaction’s dollar value in securities 

priced below $1.00. 

The Exchange notes that the proposed 

rebate is comparable to, and competitive 

with, the rebate provided by at least one 

other exchange for Retail Orders in 

securities priced at or above $1.00 per 

share that add liquidity.13

• Liquidity indicator code Ar would 

be applied to a Non-Displayed Retail 

Order that adds liquidity in Tape A, B, 

and C securities. The Liquidity Indicator 

Code and Associated Fees table would 

specify that orders that yield liquidity 

indicator code Ar would receive a rebate 

of $0.0025 per share in securities priced 

at or above $1.00 and 0.05% of the 

transaction’s dollar value in securities 

priced below $1.00. 

The rate of $0.0025 is consistent with 

the proposed rate change to the 

Standard Rates table for Adding 

Liquidity Non-Displayed Orders as 

contained in this proposal. 

• Liquidity indicator code RR would 

be applied to a Displayed Retail Order 

that removes liquidity in Tape A, B, and 

C securities. The Liquidity Indicator 

Code and Associated Fees table would 

specify that orders that yield liquidity 

indicator code RR would be subject to 

the fee of $0.0025 per share in securities 

priced at or above $1.00 and 0.05% of 

the transaction’s dollar value in 

securities priced below $1.00. 

The rate of $0.0025 is the current fee 

in effect for orders that remove 

liquidity.14

• Liquidity indicator code Rr would 

be applied to a Non-Displayed Retail 

Order that removes liquidity in Tape A, 

B, and C securities. The Liquidity 

Indicator Code and Associated Fees 

table would specify that orders that 

yield liquidity indicator code Rr would 

be subject to the fee of $0.0025 per share 

in securities priced at or above $1.00 

and 0.05% of the transaction’s dollar 

value in securities priced below $1.00. 

The rate of $0.0025 is the current fee 

in effect for orders that remove 

liquidity.15 The Exchange also proposes 

to add the above Retail Order liquidity 

indicator codes to the Standard Rates 

table. Specifically, liquidity indicator 

code AR would be added to the 

‘‘Adding Liquidity Displayed Order’’ 

column and liquidity indicator code Ar 

would be added to the ‘‘Adding 

Liquidity Non-Displayed Order’’ 

column. Liquidity indicator codes RR 

and Rr would be added to the 

‘‘Removing Liquidity’’ column of the 

Standard Rates table. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 16

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 17 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among its Equity Members and 

issuers and other persons using its 

facilities. The Exchange also believes 

that the proposed rule change is 

consistent with the objectives of Section 

6(b)(5) 18 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, and 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, and, 

particularly, is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

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 currently 

has more than approximately 16% of 

the total market share of executed 

volume of equities trading.19 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 currently represents 

less than 1% of the overall market share. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees and rebates generally, including 

with respect to Removing Liquidity and 

Retail Orders that Add and Remove 

Liquidity. The Exchange believes the 

proposed rule change to be a reasonable 

and competitive pricing structure 

designed to incentivize market 

participants to add aggressively priced 

Retail Orders and direct their order flow 

to the Exchange, which the Exchange 

believes would promote price discovery 

and price formation, provide more 

trading opportunities and tighter 

spreads, and deepen liquidity, thereby 

enhancing market quality to the benefit 

of all Equity Members and investors. 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 40095 

20 The use of liquidity indicator codes is not 

novel and liquidity indicator codes are currently 

utilized by other equity exchanges. For example, 

see the fee schedules of the Investors Exchange LLC 

(‘‘IEX’’) available at https://iextrading.com/trading/ 

fees/; and MEMX LLC (‘‘MEMX’’) available at 

https://info.memxtrading.com/fee-schedule/. 

21 See the MEMX LLC, (‘‘MEMX’’) Fee Schedule, 

effective June 1, 2021, on its public website 

available at https://info.memxtrading.com/feeschedule/ which establishes a rebate rate of $0.0020 

for non-displayed volume that adds liquidity in 

Tape A securities priced at or above $1.00; and a 

rebate of $0.0025 for non-displayed Midpoint Peg 

Orders that add liquidity in Tape A securities 

priced at or above $1.00. 

22 See supra note 11. 

23 See supra note 13. 

24 See the MEMX LLC, (‘‘MEMX’’) Fee Schedule, 

effective June 1, 2021, on its public website 

available at https://info.memxtrading.com/feeschedule/ which establishes a fee of $0.00265 for 

orders that remove volume from the exchange. 

25 See supra note 11. 

26 See supra note 7. 

27 See supra note 11. 

The Exchange notes that the use of 

liquidity indicator codes is not unique 

to the Exchange and are currently 

utilized and described in the fee 

schedules of other equity exchanges.20

Further, the Exchange also believes its 

proposal is not unfairly discriminatory 

because the proposed changes will 

apply equally to all Equity Members. 

Conforming Changes to Liquidity 

Indicator Codes That Remove Liquidity 

As set forth above, the Exchange filed 

Fee Filing No. 1 to adopt liquidity 

indicator codes and included the thencurrent rates. Subsequently, in Fee 

Filing No. 2, the Exchange reduced the 

fee for orders in Tapes A, B, and C 

securities that remove liquidity in 

securities priced at or above $1.00 to 

$0.0025 per share. Liquidity indicator 

codes RA, RB, RC, Ra, Rb, and Rc are 

appended to orders that remove 

liquidity. The Exchange believes its 

proposal to update the Liquidity 

Indicator Codes and Associated Fees 

table to reflect the current rate of 

$0.0025 per share for securities priced at 

or above $1.00 with liquidity indicator 

codes RA, RB, RC, Ra, Rb, or Rc is 

equitable and reasonable because it 

updates the liquidity indicator code 

table to reflect the established rate that 

is currently in effect and will apply 

equally to all Equity Members of the 

Exchange. 

Amend the Standard Rate Rebate for 

Non-Displayed Orders That Add 

Liquidity 

The Exchange’s proposal to increase 

the rebate provided for orders that add 

liquidity in securities priced at or above 

$1.00 from $0.0022 to $0.0025 per share 

is reasonable and equitably allocated 

among all Equity Members of the 

Exchange. Liquidity indicator codes Aa, 

Ab, and Ac are appended to orders that 

add liquidity. The Exchange believes 

that the proposed increase to $0.0025 

per share is reasonable in that it 

represent [sic] a modest increase 

($0.003) [sic] from the current rebate for 

such executions ($0.0022 per share). 

The Exchange believes that this change 

is a reasonable means by which to 

incentivize Equity Members to submit 

Non-Displayed Orders that add liquidity 

to the benefit of all market participants. 

The Exchange believes its proposal is 

equitable and not unfairly 

discriminatory as it will apply to all 

Equity Members equally. Additionally, 

the Exchange believes its proposed 

change is reasonable as it is competitive 

and in line with rebates offered for 

similar orders on at least one other 

exchange.21

New Retail Order Liquidity Codes 

The Exchange’s proposal to adopt four 

new Retail Order liquidity indicator 

codes is reasonable and not unfairly 

discriminatory as it will apply to all 

Equity Members equally. The Exchange 

notes that the use of liquidity indicator 

codes is not novel and that liquidity 

indicator codes are used by other equity 

exchanges.22

The Exchange’s [sic] believes its 

proposal to establish a rebate of $0.0037 

for a Retail Displayed Order that adds 

liquidity for securities priced at or 

above $1.00 is reasonable as it is 

competitive and in line with the rebate 

offered for similar Retail Orders on at 

least one other exchange.23

The Exchange’s proposal to establish 

a rebate of $0.0025 for orders with a 

liquidity indicator code of Ar, Retail 

Non-Displayed Orders that add 

liquidity, is reasonable as this rate is 

consistent with the proposed rate 

change contained herein for Liquidity 

Adding Non-Displayed Orders. The 

Exchange believes its proposed change 

is reasonable as it is competitive and in 

line with rebates offered for similar 

orders on at least one other exchange.24

The Exchange believes its proposal to 

adopt liquidity indicator codes for 

Retail Displayed Orders that remove 

liquidity (RR) and for Retail NonDisplayed Orders that remove liquidity 

(Rr) is reasonable and not unfairly 

discriminatory as the use of liquidity 

indicator codes is used on other equity 

exchanges.25

The Exchange believes its proposal to 

establish a fee of $0.0025 for Retail 

Displayed Orders that remove liquidity 

(RR) and for Retail Non-Displayed 

Orders that remove liquidity (Rr) is 

reasonable and not unfairly 

discriminatory as it applies equally to 

all Equity Members of the Exchange. 

Additionally, the rate of $0.0025 for 

orders that remove liquidity in 

securities priced at or above $1.00 was 

established by the Exchange in a 

previous filing 26 and adopting a fee in 

the same amount for similar orders is 

reasonable and not unfairly 

discriminatory and promotes 

consistency and uniformity in the 

Exchange’s Fee Schedule. 

The Exchange believes its proposal 

provides for the equitable allocation of 

reasonable dues and fees and is not 

unfairly discriminatory. For the reasons 

discussed above, the Exchange submits 

that the proposal satisfies the 

requirements of Sections 6(b)(4) and 

6(b)(5) of the Act in that it provides for 

the equitable allocation of reasonable 

dues, fees and other charges among its 

Members and other persons using its 

facilities and is not designed to unfairly 

discriminate between customers, 

issuers, brokers, or dealers. As described 

more fully below in the Exchange’s 

statement regarding the burden on 

competition, the Exchange believes that 

its transaction pricing is subject to 

significant competitive forces, and that 

the proposed fees and rebates described 

herein are appropriate to address such 

forces. 

The Exchange believes the Liquidity 

Indicator Codes and Associated Fees 

table will make the Fee Schedule clearer 

and eliminate the potential for 

confusion in regard to fees charged and 

rebates earned, thereby removing 

impediments to, and perfecting the 

mechanism of a free and open market 

and a national market system, and, in 

general, protecting investors and the 

public interest. Further, as noted above, 

this practice is consistent with the 

pricing practices of other exchanges.27

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange 

believes the proposed change would 

encourage the submission of additional 

order flow to the Exchange, thereby 

promoting market depth, enhanced 

execution opportunities, as well as price 

discovery and transparency for all 

Equity Members. Furthermore, the 

Exchange believes that the proposed 

changes would allow the Exchange to 

continue to compete with other routing 

and execution venues by providing 

competitive pricing for transactions in 

Adding Liquidity Non-Displayed Orders 


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40096 Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 

28 See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 47396 (June 29, 2005). 

29 See supra note 11. 

30 See supra notes 21, 23, and 24. 

31 See Securities Exchange Act Release No. 51808 

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

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

Cir. 2010) (quoting Securities Exchange Act Release 

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

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

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

34 17 CFR 240.19b–4(f)(2). 

and also Retail Orders, thereby making 

it a desirable destination. As a result, 

the Exchange believes that the proposed 

change furthers the goal in adopting 

Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 28

Intramarket Competition 

The Exchange believes that the 

proposed changes would incentivize 

market participants to direct order flow 

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 Equity Members. The 

proposed fees and rebates for Retail 

Orders and the proposed rebate for 

Adding Liquidity Non-Displayed Orders 

would be available to all similarly 

situated market participants, and, as 

such, the proposed change would not 

impose a disparate burden on 

competition among market participants 

on the Exchange. 

The Exchange does not believe its 

adoption of new liquidity indicator 

codes for Retail Orders will impose any 

burden on intramarket competition. The 

use of liquidity indicator codes is not 

new or novel as liquidity indicator 

codes are used on other equity 

exchanges.29 Additionally, the use of 

liquidity indicator codes is applied 

equally to all Equity Members and 

provides additional specificity to the fee 

schedule so that Equity Members may 

connect an execution to the applicable 

fee or rebate. 

As such, the Exchange believes the 

proposed changes would not impose 

any burden on intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Intermarket Competition 

The Exchange believes its proposal 

will benefit competition as the 

Exchange operates in a highly 

competitive market. Equity Members 

have numerous alternative venues that 

they may participate on and direct their 

order flow to, including fifteen other 

equities exchanges and numerous 

alternative trading systems and other 

off-exchange venues. As noted above, no 

single registered equities exchange 

currently has more than 16% of the total 

market share of executed volume of 

equities trading. Thus, in such a lowconcentrated and highly competitive 

market, no single equities exchange 

possesses significant pricing power in 

the execution of order flow. Moreover, 

the Exchange believes that the evershifting 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 

Retail Orders and Adding Liquidity 

Non-Displayed Orders, as market 

participants can readily choose to send 

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

at those other venues to be more 

favorable. As described above, the 

proposed changes are competitive 

proposals through which the Exchange 

is seeking to encourage certain order 

flow to the Exchange and to promote 

market quality through pricing 

incentives that are similar in structure 

and purpose to pricing programs at 

other Exchanges.30 Accordingly, the 

Exchange believes the proposal would 

not burden, but rather promote, 

intermarket competition by enabling it 

to better compete with other exchanges 

that offer similar incentives to market 

participants that enhance market 

quality. 

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 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 D.C. 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 brokerdealers that act as their routing agents, 

have a wide range of choices of where 

to route orders for execution’; [and] ‘no 

exchange can afford to take its market 

share percentages for granted’ because 

‘no exchange possess a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

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

not believe its proposed pricing changes 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

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

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

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

PEARL–2021–34 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–2021–34. This file 

number should be included on the 

subject line if email is used. To help the 


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35 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes July 1, 2021 (SR–CboeEDGX–2021–031). 

On July 13, 2021 the Exchange withdrew that filing 

and submitted this proposal. 

4See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (June 23, 2021), 

available at https://markets.cboe.com/us/equities/ 

market_statistics/. 

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–2021–34, and 

should be submitted on or before 

August 16, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15814 Filed 7–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92445; File No. SR– 

CboeEDGX–2021–033] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

July 20, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 13, 

2021, Cboe EDGX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘EDGX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’ or ‘‘EDGX 

Equities’’) proposes to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

options/regulation/rule_filings/edgx/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule applicable to its equities 

trading platform (‘‘EDGX Equities’’) to 

(1) modify the standard rate for 

securities priced at or above $1.00 that 

remove liquidity, (2) remove certain fee 

codes in connection with 

internalization, (3) adopt a new tier 

under each of the Growth Tiers, the 

Non-Displayed Step-Up Volume Tier, 

and the Remove Volume Tiers, and, as 

a result, define the term ‘‘Step-Up 

ADAV’’, and (4) eliminate a Remove 

Volume Tier and a Retail Volume Tier.3

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct 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 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues 

that do not have similar self-regulatory 

responsibilities under the Exchange Act, 

to which market participants may direct 

their order flow. Based on publicly 

available information,4 no single 

registered equities exchange has more 

than 16% of the market share. Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

The Exchange in particular operates a 

‘‘Maker-Taker’’ model whereby it pays 

rebates to members that add liquidity 

and assesses fees to those that remove 

liquidity. The Exchange’s Fee Schedule 

sets forth the standard rebates and rates 

applied per share for orders that provide 

and remove liquidity, respectively. 

Currently, for orders in securities priced 

at or above $1.00, the Exchange 

provides a standard rebate of $0.00160 

per share for orders that add liquidity 

and assesses a fee of $0.00280 per share 

for orders that remove liquidity. For 

orders in securities priced below $1.00, 

the Exchange provides a standard rebate 

of $0.00009 per share for orders that add 

liquidity and assesses a fee of 0.30% of 

total dollar value for orders that remove 

liquidity. Additionally, in response to 

the competitive environment, the 

Exchange also offers tiered pricing 

which provides Members opportunities 

to qualify for higher rebates or reduced 

fees where certain volume criteria and 

thresholds are met. Tiered pricing 

provides an incremental incentive for 

Members to strive for higher tier levels, 

which provides increasingly higher 

benefits or discounts for satisfying 

increasingly more stringent criteria. 

Standard Rate: Securities at or Above 

$1.00 That Remove Liquidity 

As stated above, the Exchange 

currently assesses a standard rate of 

$0.00280 per share for orders that 

remove liquidity in securities priced at 

$1.00 or more. The Exchange proposes 

to amend the standard rate for orders 

that remove liquidity in securities 

priced at $1.00 or more from a fee of 

$0.00280 per share to $0.00285 per 

share and reflects this change in the Fee 

Codes and Associated Fee where 

applicable (i.e., corresponding to 


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