49360 Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 ‘‘MEO Interface’’ or ‘‘MEO’’ means a binary 

order interface for certain order types as set forth 

in Rule 516 into the MIAX Pearl System. See 

Notice, infra note 5, at 37347 n.3. 

4 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

5See Securities Exchange Act Release No. 92365 

(July 9, 2021), 86 FR 37347 (‘‘Notice’’). 

6 15 U.S.C. 78s(b)(3)(C). 

7See Notice, supra note 5, at 37347. 

continued listing condition, that each 

business day, before the opening of 

trading in the regular market session, an 

investment company make publicly 

available on its website the composition 

of any Custom Basket transacted on the 

previous business day, except a Custom 

Basket that differs from the applicable 

Proxy Basket only with respect to cash, 

also furthers the goals of transparency 

and full and fair disclosure, to the 

benefit of investors and the public 

interest. 

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 purpose of the Act. The Exchange 

believes the proposed rule change, by 

permitting the use of Custom Baskets, is 

consistent with a fund’s exemptive 

relief, would introduce additional 

competition among various ETF 

products to the benefit of investors. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: (A) By 

order approve or disapprove such 

proposed rule change, or (B) institute 

proceedings to determine whether the 

proposed rule change should be 

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– 

NASDAQ–2021–065 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–NASDAQ–2021–065. 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–NASDAQ–2021–065 and 

should be submitted on or before 

September 23, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–18943 Filed 9–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92798; File No. SR– 

PEARL–2021–33] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove 

Proposed Rule Changes To Amend the 

MIAX Pearl Options Fee Schedule To 

Increase the Monthly Fees for MIAX 

Express Network Full Service Ports 

August 27, 2021. 

I. Introduction 

On July 1, 2021, MIAX PEARL, LLC 

(‘‘MIAX Pearl’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange Act’’ 

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

a proposed rule change (File Number 

SR–PEARL–2021–33) to amend the 

MIAX Pearl Options Fee Schedule (‘‘Fee 

Schedule’’) to increase monthly fees for 

the Exchange’s MIAX Express Network 

Full Service MEO Ports.3 The proposed 

rule change was immediately effective 

upon filing with the Commission 

pursuant to Section 19(b)(3)(A) of the 

Act.4 The proposed rule change was 

published for comment in the Federal 

Register on July 15, 2021.5 The 

Commission has received no comment 

letters on the proposed rule change. 

Under Section 19(b)(3)(C) of the Act,6

the Commission is hereby: (i) 

Temporarily suspending File Number 

SR–PEARL–2021–33; and (ii) instituting 

proceedings to determine whether to 

approve or disapprove File Number SR– 

PEARL–2021–33. 

II. Description of the Proposed Rule 

Change 

MIAX Pearl proposes to increase the 

monthly fees for Full Service MEO 

Ports, which fee increases became 

effective July 1, 2021.7 The Exchange 

states that Full Service MEO Ports are 

used for by options Members to submit 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 49361 

8See Notice, supra note 5, at 37349. 

9See Notice, supra note 5, at 37348 n. 5–6. ‘‘Full 

Service MEO Port—Bulk’’ means an MEO port that 

supports all MEO input message types and binary 

bulk order entry ‘‘Full Service MEO Port—Single’’ 

means an MEO port that supports all MEO input 

message types and binary order entry on a single 

order-by-order basis, but not bulk orders. 

10See Notice, supra note 5, at 37348. The 

Exchange states that it currently has twelve 

matching engines, which means that for a single 

monthly fee, a Member may receive up to twentyfour Full Service MEO Ports for that single fee. Id. 

11 ‘‘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). See Notice, 

supra note 5, at 37348 n.11. 

12 ‘‘Excluded Contracts’’ means any contracts 

routed to an away market for execution. See Notice, 

supra note 5, at 37348 n.12. 

13 ‘‘TCV’’ means total consolidated volume 

calculated as the total national volume in those 

classes listed on MIAX Pearl for the month for 

which the fees apply, excluding consolidated 

volume executed during the period of time in 

which the Exchange experiences an Exchange 

System Disruption (solely in the option classes of 

the affected Matching Engine). See Notice, supra 

note 5, at 37348 n.13. 

14 15 U.S.C. 78s(b)(3)(C). 

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

16See id. at 37350. The Exchange adds that the 

Exchange had combined market share of 5.31% in 

June 2021 and it is aware of no evidence that this 

provides the Exchange with anti-competitive 

pricing power. 

17See id. at 37354. 

18See Notice, supra note 5, at 37454–55. 

19See Notice, supra note 5, at 37349. 

20See Notice, supra note 5, at 37350. The 

Exchange also states that no expense amount is 

allocated twice and the expenses only cover the 

MIAX Pearl options market. Id. at 37354. Expenses 

associated with the MIAX Pearl equities market are 

accounted for separately and are not within the 

scope of this filing. See id. at 37384. 

21See Notice, supra note 5, at 37350. 

22See Notice, supra note 5, at 37351. 

quotes and orders and allow for a higher 

throughput rates than other ports 

offered by the Exchange, such as FIX 

ports.8

Full Service MEO Ports are of two 

types: Bulk and Single.9 An options 

Member using Full Service MEO Ports 

may be allocated up to two (2) Full 

Service MEO Ports for each Matching 

Engine to which it connects (two Bulk, 

two Single, or one of each), and the 

monthly fee for Full Service MEO Port 

use will be determined by volume, 

according to tiered schedules.10 More 

specifically, the Exchange assesses 

Members Full Service MEO Port fees 

based upon the monthly total volume 

executed by a Member and its 

Affiliates 11 on the Exchange across all 

origin types, not including Excluded 

Contracts,12 as compared to the Total 

Consolidated Volume (‘‘TCV’’),13 in all 

MIAX Pearl-listed options, with 

separate schedules for Bulk and Single. 

The Exchange proposes to increase 

fees for all Full Service MEO Port as 

follows: 

For Full Service MEO Ports—Bulk, if 

the Member’s relevant monthly volume 

falls within the parameters of: 

• Tier 1 (up to 0.30% TCV): The 

monthly fee would increase from $3,000 

to $5,000; 

• Tier 2 (above 0.30%, up to 0.60% 

TCV): The monthly fee would increase 

from $4,500 to $7,500; and 

• Tier 3 (above 0.60% TCV): The 

monthly fee would increase from $5,000 

to $10,000. 

For Full Service MEO Ports—Single, 

if the Member’s relevant monthly 

volume falls within the parameters of: 

• Tier 1 (up to 0.30% TCV): The 

monthly fee would increase from $2,000 

to $2,500; 

• Tier 2 (above 0.30%, up to 0.60% 

TCV): The monthly fee would increase 

from $3,375 to $3,500; and 

• Tier 3 (above 0.60% TCV): The 

monthly fee would increase from $3,750 

to $4,500. 

III. Suspension of the Proposed Rule 

Change 

Pursuant to Section 19(b)(3)(C) of the 

Act,14 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

Section 19(b)(1) of the Act,15 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) 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. As discussed below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary and appropriate to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

In support of the proposed fee 

increases, the Exchange argues 

principally that the fees for Full Service 

MEO Ports are constrained by 

competitive forces, and that this is 

supported by their revenue and cost 

analysis. In particular, the Exchange 

states that there are 16 options markets 

that are ‘‘highly competitive’’ and that 

reliance on competitive markets is an 

appropriate means to ensure equitable 

and reasonable prices.16 In further 

support of its argument that competitive 

forces constrain its proposed Full 

Service MEO Port fee increases, the 

Exchange states that there is no 

regulatory requirement that any market 

participant connect to the Exchange or 

that any market participant connect at 

any specific connection speed.17 The 

Exchange further states no options 

market participant is required by rule, 

regulation, or competitive forces to be a 

Member of the Exchange, which the 

Exchange believes is illustrated by the 

fact that it is unaware of any one 

options exchange whose membership 

includes every registered brokerdealer.18

The Exchange also states that the 

proposed fees are designed to recover a 

portion of the costs associated with 

directly accessing the Exchange and that 

the proposed increases are reasonable 

and appropriate to allow the Exchange 

to offset expenses the Exchange has and 

will incur in relation to providing the 

Full Service MEO Ports.19 The Exchange 

provides an analysis of its revenues, 

costs, and profitability associated with 

these fees, which it references as 

‘‘Proposed Access Fees.’’ The Exchange 

states that this analysis reflects an 

extensive cost review in which the 

Exchange analyzed every expense item 

in the Exchange’s general expense 

ledger to determine whether each such 

expense relates to the Proposed Access 

Fees, and, if such expense did so relate, 

what portion (or percentage) of such 

expense actually supports the access 

services.20 The Exchange states that this 

analysis shows fee increase will not 

result in excessive pricing or supracompetitive profits when compared to 

the Exchange’s annual expense 

associated with providing the MEO 

Ports versus the annual revenue for the 

MEO Ports.21

The Exchange states that for 2021, the 

total annual expense for providing the 

access services associated with the 

Proposed Access Fees for the Exchange 

is projected to be approximately 

$897,084.22 The $897,084 in projected 

total annual expense is comprised of the 

following, all of which the Exchange 

states are directly related to the access 

services associated with the Proposed 

Access Fees: (1) Third-party expense, 

relating to fees paid by the Exchange to 

third-parties for certain products and 

services; and (2) internal expense, 

relating to the internal costs of the 

Exchange to provide the services 

associated with the Proposed Access 

Fees. The Exchange states that the 

$897,084 in projected total annual 

expense is directly related to the access 

services associated with the Proposed 

Access Fees, and not any other product 

or service offered by the Exchange. 

The Exchange states that the total 

third-party expense, relating to fees paid 

by the Exchange to third-parties for 


lotter on DSK11XQN23PROD with NOTICES1
49362 Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 

23See Notice, supra note 5, at 37351–52. 

24See Notice, supra note 5, at 37352–53. 

25The Exchange states that the total projected 

expense of $2,864,716 for depreciation and 

amortization differs from the projected expense of 

depreciation and amortization projected by the 

Exchange in a different filing (SR–PEARL–2021–32) 

because the Exchange factors in the depreciation of 

its own internally developed software when 

assessing costs for Full Service MEO Ports, resulting 

in a higher depreciation expense number in this 

filing. See Notice, supra note 5, at 37353, n.30. 

26See Notice, supra note 5, at 37353. 

27See Notice, supra note 5, at 37354. The 

Exchange states that Nasdaq ISE, LLC’s operating 

profit margin for 2019 was 83% and Nasdaq PHLX 

LLC’s operating profit margin for 2019 was 67%. 

28See Notice, supra note 5, at 37349. See also 

Notice, supra note 5, at 37348 n.9. 

29See Notice, supra note 5, at 37354. 

30See MIAX Fee Schedule, Section (5)(d)(ii); 

MIAX Emerald Fee Schedule, Section (5)(d)(ii). 

31See Notice, supra note 5, at 37349. 

32See id. at 37354. 

33See Notice, supra note 5, at 37355. 

34For a more detailed description of the 

Exchange’s justifications for the proposed rule 

change, see Notice, supra note 5, at 37349–55. 

35See 17 CFR 240.19b–4 (Item 3 entitled ‘‘SelfRegulatory Organization’s Statement of the Purpose 

of, and Statutory Basis for, the Proposed Rule 

Change’’). 

36 Id. 

37 15 U.S.C. 78f(b)(4). 

38 15 U.S.C. 78f(b)(5). 

39 15 U.S.C. 78f(b)(8). 

certain products and services for the 

Exchange to be able to provide the 

access services associated with the 

Proposed Access Fees is projected to be 

$40,166 for 2021.23 The Exchange 

represents that it determined whether 

third-party expenses related to the 

access services associated with the 

Proposed Access Fees, and, if such 

expense did so relate, determined what 

portion (or percentage) of such expense 

represents the cost to the Exchange to 

provide access services associated with 

the Proposed Access Fees. This includes 

allocating a portion of fees paid to: (1) 

Equinix, for data center services 

(approximately 1.80% of the Exchange’s 

total applicable Equinix expense); (2) 

Zayo Group Holdings, Inc. for network 

services (approximately 0.90%); (3) 

Secure Financial Transaction 

Infrastructure and various other services 

providers (approximately 0.90%); and 

(4) various other hardware and software 

providers (approximately 0.90%). 

In addition, the Exchange states that 

the total internal expense, relating to the 

internal costs of the Exchange to 

provide the access services associated 

with the Proposed Access Fees, is 

projected to be $856,918 for 2021.24 The 

Exchange represents that: (1) The 

Exchange’s employee compensation and 

benefits expense relating to providing 

the access services associated with the 

Proposed Access Fees is projected to be 

$783,513, which is a portion of the 

Exchange’s total projected expense of 

$9,163,894 for employee compensation 

and benefits (approximately 8.55%); (2) 

the Exchange’s depreciation and 

amortization expense relating to 

providing the access services associated 

with the Proposed Access Fees is 

projected to be $64,456, which is a 

portion of the Exchange’s total projected 

expense of $2,864,716 for depreciation 

and amortization (approximately 

2.25%); 25 and (3) the Exchange’s 

occupancy expense relating to providing 

the access services associated with the 

Proposed Access Fees is projected to be 

$8,949, which is a portion of the 

Exchange’s total projected expense of 

$497,180 for occupancy (approximately 

1.80%). 

The Exchange states that this cost and 

revenue analysis shows that the 

proposed rule change will not result in 

excessive pricing or supra-competitive 

profit.26 The Exchange projects that, on 

a fully-annualized basis, the Proposed 

Access Fees will have an expense of 

$897,084 per annum and a projected 

revenue of $1,467,000 per year, 

resulting in a projected profit margin of 

39% ($1,467,000 in projected revenue 

minus $897,084 in projected expense = 

$578,916 profit per year). The Exchange 

states that this estimated profit margin 

for Full Service MEO Port fees is well 

below the operating profit margins of 

other competing exchanges based on 

financial statements filed by them in 

2019 Form 1 amendments.27 The 

Exchange also states that its proposed 

increased Full Service MEO Port fees 

are in line with, or cheaper than, the 

similar port fees or similar membership 

fees charged by other options 

exchanges.28

The Exchange further states that its 

proposed fees are reasonable, equitably 

allocated and not unfairly 

discriminatory because the Exchange, 

and its affiliates Miami International 

Securities Exchange, LLC (‘‘MIAX’’) and 

MIAX Emerald, LLC (‘‘MIAX Emerald’’), 

are still recouping the initial 

expenditures from building out their 

systems while ‘‘legacy’’ exchanges have 

already paid for and built their 

systems.29 The Exchange also notes that 

its affiliates, MIAX and MIAX Emerald, 

also charge fees for their high 

throughput, low latency MEI Ports in a 

similar fashion as the Exchange charges 

for its MEO Ports.30 Furthermore, the 

Exchange notes that it has historically 

undercharged for Full Service MEO 

Ports as compared to other options 

exchanges and the proposed monthly 

fee increases for Full Service MEO Ports 

would bring the Exchange’s fees more in 

line with that of other options 

exchanges, while maintaining a 

competitive fee structure for Full 

Service MEO Ports.31

The Exchange states that the proposed 

fees are equitably allocated, not unfairly 

discriminatory, and do not impose an 

unnecessary or inappropriate burden on 

competition because the Proposed 

Access Fees do not favor certain 

categories of market participants,32 the 

allocation of the Proposed Access Fees 

reflects the network resources 

consumed by the various size of the 

market participants, with the lowest 

bandwidth consuming members paying 

the least, and the highest bandwidth 

consuming paying the most; 33 and 

options market participants are not 

forced to connect to (and purchase MEO 

Ports from) all options exchanges.34

When exchanges file their proposed 

rule changes with the Commission, 

including fee filings like the Exchange’s 

present proposal, they are required to 

provide a statement supporting the 

proposal’s basis under the Act and the 

rules and regulations thereunder 

applicable to the exchange.35 The 

instructions to Form 19b–4, on which 

exchanges file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements.’’ 36

Section 6 of the Act, including 

Sections 6(b)(4), (5), and (8), require the 

rules of an exchange to (1) provide for 

the equitable allocation of reasonable 

fees among members, issuers, and other 

persons using the exchange’s 

facilities; 37 (2) perfect the mechanism of 

a free and open market and a national 

market system, protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers; 38 and (3) not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.39

In temporarily suspending the 

Exchange’s fee change, the Commission 

intends to further consider whether the 

proposal to increase fees for the 

Exchange’s Full Service MEO Ports is 

consistent with the statutory 

requirements applicable to a national 

securities exchange under the Act. In 

particular, the Commission will 

consider whether the proposed rule 

change satisfies the standards under the 

Act and the rules thereunder requiring, 

among other things, that an exchange’s 

rules provide for the equitable 

allocation of reasonable fees among 

members, issuers, and other persons 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 49363 

40See 15 U.S.C. 78f(b)(4), (5), and (8), 

respectively. 

41For purposes of temporarily suspending the 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

42 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

Section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under Section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 

43 15 U.S.C. 78s(b)(2)(B). 

44 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the 

Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchange consents to the longer period. See 

id. 

45 15 U.S.C. 78f(b)(4). 

46 15 U.S.C. 78f(b)(5). 

47 15 U.S.C. 78f(b)(8). 

48 17 CFR 201.700(b)(3). 

49See id. 

50See id. 

51See 15 U.S.C. 78f(b)(4), (5), and (8). 

52 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). 

using its facilities; not permit unfair 

discrimination between customers, 

issuers, brokers or dealers; and do not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.40

Therefore, the Commission finds that 

it is appropriate in the public interest, 

for the protection of investors, and 

otherwise in furtherance of the purposes 

of the Act, to temporarily suspend the 

proposed rule change.41

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to Sections 19(b)(3)(C) 42 and 19(b)(2)(B) 

of the Act 43 to determine whether the 

proposed rule change should be 

approved or disapproved. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, the Commission 

seeks and encourages interested persons 

to provide additional comment on the 

proposed rule change to inform the 

Commission’s analysis of whether to 

approve or disapprove the proposed 

rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,44 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration: 

• Whether the Exchange has 

demonstrated how the proposal is 

consistent with Section 6(b)(4) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘provide 

for the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities;’’ 45

• Whether the Exchange has 

demonstrated how the proposal is 

consistent with Section 6(b)(5) of the 

Act, which requires, among other 

things, that the rules of a national 

securities exchange be ‘‘designed to 

perfect the operation of a free and open 

market and a national market system’’ 

and ‘‘protect investors and the public 

interest,’’ and not be ‘‘designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers;’’ 46 and 

• Whether the Exchange has 

demonstrated how the proposal is 

consistent with Section 6(b)(8) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of [the Act].’’ 47

As discussed in Section III above, the 

Exchange makes various arguments in 

support of the proposal. The 

Commission believes that there are 

questions as to whether the Exchange 

has provided sufficient information to 

demonstrate that the proposal to 

increase Full Service MEO Port fees is 

consistent with the Act and the rules 

thereunder. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 48 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,49 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.50

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised herein, including as to 

whether the proposal is consistent with 

the Act, specifically, with its 

requirements that the rules of a national 

securities exchange provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, issuers, and other persons 

using its facilities; are designed to 

perfect the operation of a free and open 

market and a national market system, 

and to protect investors and the public 

interest; are not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers; 

and do not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act; 51 as well as any 

other provision of the Act, or the rules 

and regulations thereunder. 

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. Such 

comments should be submitted by 

September 23, 2021. Rebuttal comments 

should be submitted by October 7, 2021. 

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.52

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. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the proposed rule 

change, including whether the proposal 

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 No. SR– 

PEARL–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–PEARL–2021–33. This file 

number should be included on the 


lotter on DSK11XQN23PROD with NOTICES1
49364 Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 

53 15 U.S.C. 78s(b)(3)(C). 

54 17 CFR 200.30–3(a)(57) and (58). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

4See Securities Exchange Act Release Nos. 92359 

(July 9, 2021), 86 FR 37393 (SR–MIAX–2021–28); 

and 92358 (July 9, 2021), 86 FR 37361 (SR– 

EMERALD–2021–21) (each, a ‘‘Notice’’). For ease of 

reference, page citations are to the Notice for SR– 

MIAX–2021–28, unless otherwise indicated. 

5 15 U.S.C. 78s(b)(3)(C). 

6The proposed fee changes became effective on 

July 1, 2021. See Notice, supra note 4, at 37394. 

7The ‘‘Strategy Book’’ is each Exchange’s 

electronic book of complex orders and complex 

quotes. See MIAX and MIAX Emerald Rule 

518(a)(17). 

8The Exchanges state that cToM is a distinct 

market data product from ToM. They also state that 

ToM subscribers are not required to subscribe to 

cToM, and that cToM subscribers are not required 

to subscribe to ToM. See Notice, supra note 4, at 

37394. 

9A ‘‘Distributor’’ of the Exchanges’ data is any 

entity that receives a feed or file of data either 

directly from the Exchanges or indirectly through 

another entity and then distributes it either 

internally (within that entity) or externally (outside 

that entity). See MIAX and MIAX Emerald Fee 

Schedule, Section 6(a). All members or nonmembers that determine to receive any market data 

feed from the Exchanges must first execute, among 

other things, the MIAX Exchange Group Exchange 

Data Agreement (‘‘Exchange Data Agreement’’). See 

Notice, supra note 4, at 37395. Pursuant to the 

Exchange Data Agreement, ‘‘Internal Distributors’’ 

are restricted to the ‘‘internal use’’ of any market 

data they receive, meaning they may only distribute 

the Exchanges’ market data to their officers and 

employees and their affiliates. See id. 

10 ‘‘External Distributors’’ may distribute the 

Exchanges’ market data to persons who are not their 

officers, employees, or affiliates, and may charge 

their own fees for the distribution of such market 

data. See Notice, supra note 4, at 37395. 

11See id. at 37394. The Exchanges also propose 

to make a related change to remove ‘‘(as 

applicable)’’ from the explanatory paragraph in 

Section 6(a) of each Exchanges’ fee schedule, as the 

Exchanges will now charge fees for both the ToM 

and cToM data feeds. See id. at 37394 n.10. 

12New Distributors will be assessed a pro-rata 

percentage of the fees described above, which is the 

percentage of the number of trading days remaining 

in the affected calendar month as of the date on 

which they have been credentialed to use cToM, 

divided by the total number of trading days in the 

affected calendar month. See id. at 37394. 

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–2021–33 and 

should be submitted on or before 

September 23, 2021. Rebuttal comments 

should be submitted by October 7, 2021. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,53 that File 

Number SR–PEARL–2021–33 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.54

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–18949 Filed 9–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92789; File Nos. SR–MIAX– 

2021–28, SR–EMERALD–2021–21] 

Self-Regulatory Organizations; Miami 

International Securities Exchange, LLC 

and MIAX Emerald, LLC; Suspension 

of and Order Instituting Proceedings 

To Determine Whether To Approve or 

Disapprove Proposed Rule Changes 

To Establish Fees for the Exchanges’ 

cToM Market Data Products 

August 27, 2021. 

I. Introduction 

On June 30, 2021, Miami International 

Securities Exchange, LLC (‘‘MIAX’’) and 

MIAX Emerald, LLC (‘‘MIAX Emerald’’) 

(each, an ‘‘Exchange,’’ and collectively, 

the ‘‘Exchanges’’) each filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

establish fees for, respectively, the 

MIAX Complex Top of Market (‘‘cToM’’) 

and the MIAX Emerald cToM market 

data products. The proposed rule 

changes were immediately effective 

upon filing with the Commission 

pursuant to Section 19(b)(3)(A) of the 

Act.3 The proposed rule changes were 

published for comment in the Federal 

Register on July 15, 2021.4 Pursuant to 

Section 19(b)(3)(C) of the Act,5 the 

Commission is hereby: (1) Temporarily 

suspending the proposed rule changes; 

and (2) instituting proceedings to 

determine whether to approve or 

disapprove the proposed rule changes. 

II. Description of the Proposed Rule 

Changes 

The Exchanges propose to establish 

fees for their cToM market data 

products.6 According to the Exchanges, 

the cToM feed provides subscribers 

with the same information as the 

Exchanges’ respective simple order 

market Top of Market (‘‘ToM’’) feeds, 

but for each Exchange’s Strategy Book 7

(i.e., best bid and offer for a complex 

strategy, with aggregate size, based on 

displayable order and quoting interest 

in the complex strategy on each 

Exchange), plus additional information 

specific to complex orders (i.e., 

identification of the complex strategies 

currently trading on each Exchange, 

complex strategy last sale information, 

and the status of securities underlying 

the complex strategy).8

The Exchanges each propose to assess 

Internal Distributors 9 $1,250 per month 

and External Distributors 10 $1,750 per 

month for the cToM data feed.11 The 

Exchanges each will assess cToM fees 

on Internal and External Distributors in 

each month the Distributor is 

credentialed to use cToM, and will 

reduce such fees for new Distributors for 

the first month during which they 

subscribe to cToM based on the number 

of trading days that have been held 

during the month prior to the date on 

which that subscriber has been 

credentialed to use cToM.12


lotter on DSK11XQN23PROD with NOTICES1