Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 22987 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Trading Permit’’ means a permit 

issued by the Exchange that confers the ability to 

transact on the Exchange. See Exchange Rule 100. 

4The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of Exchange Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See Exchange Rule 100 and the 

Definitions Section of the Fee Schedule. 

5See Securities Exchange Act Release No. 92366 

(July 9, 2021), 86 FR 37379 (SR–PEARL–2021–32). 

6See id. 

7See Letter from Richard J. McDonald, 

Susquehanna International Group, LLC (‘‘SIG’’), to 

Vanessa Countryman, Secretary, Commission, dated 

September 28, 2021 (‘‘SIG Letter’’). 

8See Securities Exchange Act Release No. 92797 

(August 27, 2021), 86 FR 49399 (September 2, 

2021). 

9See Securities Exchange Act Release No. 93555 

(November 10, 2021), 86 FR 64254 (November 17, 

2021) (SR–PEARL–2021–54). 

10See id. 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will 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– 

C2–2022–009 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–C2–2022–009. 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–C2–2022–009 and should 

be submitted on or before May 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08166 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94696; File No. SR– 

PEARL–2022–09] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX 

PEARL Options Fee Schedule To 

Remove Certain Credits and Increase 

Trading Permit Fees 

April 12, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 30, 

2022, MIAX PEARL, LLC (‘‘MIAX Pearl’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III, below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX PEARL Fee Schedule 

(the ‘‘Fee Schedule’’) to remove certain 

credits and amend the monthly Trading 

Permit 3 fees for Members.4

The text of the proposed rule change 

is available on the Exchange’s website at 

https://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 Exchange proposes to amend the 

Fee Schedule to remove certain credits 

and amend the monthly Trading Permit 

fees for Members. The Exchange notes 

that its Trading Permit fees are 

comparable to membership or other 

access type fees charged by other 

exchanges. 

The Exchange initially filed this 

proposal on July 1, 2021 with the 

proposed fee changes being immediately 

effective (‘‘First Proposed Rule 

Change’’).5 The First Proposed Rule 

Change was published for comment in 

the Federal Register on July 15, 2021.6

The Commission received one comment 

letter on the First Proposed Rule 

Change 7 and subsequently suspended 

the First Proposed Rule Change on 

August 27, 2021.8 The Exchange 

withdrew the First Proposed Rule 

Change on October 12, 2021 and resubmitted the proposal on October 29, 

2021, with the proposed fee changes 

being effective beginning November 1, 

2021 (‘‘Second Proposed Rule 

Change’’).9 The Second Proposed Rule 

Change addressed points raised in the 

SIG Letter and was published for 

comment in the Federal Register on 

November 17, 2021.10 The Commission 

received no comment letters on the 

Second Proposed Rule Change. The 


khammond on DSKJM1Z7X2PROD with NOTICES
22988 Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 

11Securities Exchange Act Release No. 93895 

(January 4, 2022), 87 FR 1217 (January 10, 2022) 

(SR–PEARL–2021–59). 

12 Id. 

13Securities Exchange Act Release No. 94287 

(February 18, 2022), 87 FR 10837 (February 25, 

2022) (SR–PEARL–2022–05). 

14See Letter from Richard J. McDonald, SIG, to 

Vanessa Countryman, Secretary, Commission, dated 

March 15, 2022 (‘‘SIG Letter 2’’). 

15See Securities Exchange Act Release No. 93927 

(January 7, 2022), 87 FR 2191 (January 13, 2022) 

(SR–MEMX–2021–19) (proposal to adopt monthly 

membership fees). 

16See Securities Exchange Act Release No. 82867 

(March 13, 2018), 83 FR 12044 (March 19, 2018) 

(SR–PEARL–2018–07). 

17The term ‘‘Priority Customer’’ means a person 

or entity that (i) is not a broker or dealer in 

securities, and (ii) does not place more than 390 

orders in listed options per day on average during 

a calendar month for its own beneficial accounts(s). 

The number of orders shall be counted in 

accordance with Interpretation and Policy .01 of 

Exchange Rule 100. See the Definitions Section of 

the Fee Schedule and Exchange Rule 100, including 

Interpretation and Policy .01. 

18The term ‘‘FIX Interface’’ means the Financial 

Information Exchange interface for certain order 

types as set forth in Exchange Rule 516. See the 

Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

19The term ‘‘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 

the Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

20 ‘‘Affiliate’’ means (i) an affiliate of a Member 

of at least 75% common ownership between the 

firms as reflected on each firm’s Form BD, Schedule 

A, or (ii) the Appointed Market Maker of an 

Appointed EEM (or, conversely, the Appointed 

EEM of an Appointed Market Maker). An 

‘‘Appointed Market Maker’’ is a MIAX Pearl Market 

Maker (who does not otherwise have a corporate 

affiliation based upon common ownership with an 

EEM) that has been appointed by an EEM and an 

‘‘Appointed EEM’’ is an EEM (who does not 

otherwise have a corporate affiliation based upon 

common ownership with a MIAX Pearl Market 

Maker) that has been appointed by a MIAX Pearl 

Market Maker, pursuant to the following process. A 

MIAX Pearl Market Maker appoints an EEM and an 

EEM appoints a MIAX Pearl Market Maker, for the 

purposes of the Fee Schedule, by each completing 

and sending an executed Volume Aggregation 

Request Form by email to membership@

miaxoptions.com no later than 2 business days 

prior to the first business day of the month in which 

the designation is to become effective. Transmittal 

of a validly completed and executed form to the 

Exchange along with the Exchange’s 

acknowledgement of the effective designation to 

each of the Market Maker and EEM will be viewed 

as acceptance of the appointment. The Exchange 

will only recognize one designation per Member. A 

Member may make a designation not more than 

once every 12 months (from the date of its most 

recent designation), which designation shall remain 

in effect unless or until the Exchange receives 

written notice submitted 2 business days prior to 

the first business day of the month from either 

Member indicating that the appointment has been 

terminated. Designations will become operative on 

the first business day of the effective month and 

may not be terminated prior to the end of the 

month. Execution data and reports will be provided 

to both parties. See the Definitions Section of the 

Fee Schedule. 

21 ‘‘Excluded Contracts’’ means any contracts 

routed to an away market for execution. See the 

Definitions Section of the Fee Schedule. 

22 ‘‘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 the Definitions 

Section of the Fee Schedule. 

Exchange withdrew the Second 

Proposed Rule Change on December 20, 

2021 and submitted a revised proposal 

for immediate effectiveness (‘‘Third 

Proposed Rule Change’’).11 The Third 

Proposed Rule Change was published 

for comment in the Federal Register on 

January 10, 2022.12 The Commission 

received no comment letters on the 

Third Proposed Rule Change. The 

Exchange withdrew the Third Proposed 

Rule Change on February 15, 2022 and 

submitted a revised proposal for 

immediate effectiveness, which was 

suspended on February 18, 2022 

(‘‘Fourth Proposed Rule Change’’).13

The Commission received one comment 

letter on the Fourth Proposed Rule 

Change.14 The Exchange withdrew the 

Fourth Proposed Rule Change on March 

30, 2022 and submits this revised 

proposal for immediate effectiveness 

(‘‘Fifth Proposed Rule Change’’). This 

Fifth Proposed Rule Change provides a 

revised justification for the proposed 

fees, which is in line with the 

justification provided by another 

exchange in a similar filing to adopt fees 

for Members to be active on that 

exchange.15

Removal of the ‘‘Monthly Volume 

Credit’’ 

The Exchange proposes to amend the 

Definitions section of the Fee Schedule 

to delete the definition and remove the 

credits applicable to the Monthly 

Volume Credit for Members. The 

Exchange established the Monthly 

Volume Credit in 2018 16 to encourage 

Members to send increased Priority 

Customer 17 order flow to the Exchange, 

which the Exchange applied to the 

assessment of certain non-transaction 

fees for that Member. The Exchange 

applies a different Monthly Volume 

Credit depending on whether the 

Member connects to the Exchange via 

the FIX Interface 18 or MEO Interface.19

Currently, the Exchange assesses the 

Monthly Volume Credit to each Member 

that has executed Priority Customer 

volume along with that of its affiliates,20

not including Excluded Contracts,21 of 

at least 0.30% of MIAX Pearl-listed 

Total Consolidated Volume (‘‘TCV’’),22

as set forth in the following table: 

Type of member connection 

Monthly 

volume 

credit 

Member that connects via the FIX 

Interface .................................... $250 

Member that connects via the 

MEO Interface ........................... 1,000 

If a Member connects via both the 

MEO Interface and FIX Interface and 

qualifies for the Monthly Volume Credit 

based upon its Priority Customer 

volume, the greater Monthly Volume 

Credit shall apply to such Member. 

Prior to the First Proposed Rule Change, 

the Monthly Volume Credit was a 

single, once-per-month credit towards 

the aggregate monthly total of nontransaction fees assessable to a Member. 

Beginning with the First Proposed 

Rule Change, the Exchange’s proposals 

included an amendment to the 

Definitions section of the Fee Schedule 

to delete the definition and remove the 

Monthly Volume Credit. The Exchange 

established the Monthly Volume Credit 

when it first launched operations to 

attract order flow by lowering the initial 

fixed cost for Members. The Monthly 

Volume Credit has achieved its purpose 

and the Exchange believes it is 

appropriate to remove this credit. The 

Exchange believes that the Exchange’s 

existing Priority Customer rebates and 

fees will continue to allow the Exchange 

to remain highly competitive and 

continue to attract order flow and 

maintain market share. 

Removal of the Trading Permit Fee 

Credit 

The Exchange proposes to amend 

Section 3)b) of the Fee Schedule to 

remove the Trading Permit fee credit 

that is denoted in footnote ‘‘*’’ below 

the Trading Permit fee table. Prior to the 

First Proposed Rule Change, the Trading 

Permit fee credit was applicable to 

Members that connect via both the MEO 

and FIX Interfaces. Members who 

connect via both the MEO and FIX 

Interfaces are assessed the rates for both 

types of Trading Permits, but these 

Members received a $100 monthly 

credit towards the Trading Permit fees 

applicable to the MEO Interface prior to 

the First Proposed Rule Change. The 

Exchange proposes to remove the 

Trading Permit fee credit and delete 

footnote ‘‘*’’ from Section 3)b) of the 

Fee Schedule. 

The Exchange established the Trading 

Permit fee credit when it first launched 

operations to attract order flow and 

increase membership by lowering the 

costs for Members that connect via both 

the MEO Interface and FIX Interface. 

The Trading Permit fee credit has 

achieved its purpose and the Exchange 


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23The term ‘‘Electronic Exchange Member’’ or 

‘‘EEM’’ means the holder of a Trading Permit who 

is a Member representing as agent Public Customer 

Orders or Non-Customer Orders on the Exchange 

and those non-Market Maker Members conducting 

proprietary trading. Electronic Exchange Members 

are deemed ‘‘members’’ under the Exchange Act. 

See the Definitions Section of the Fee Schedule. 

24The term ‘‘Market Maker’’ or ‘‘MM’’ means a 

Member registered with the Exchange for the 

purpose of making markets in options contracts 

traded on the Exchange and that is vested with the 

rights and responsibilities specified in Chapter VI 

of these Rules. See the Definitions Section of the 

Fee Schedule. 

25See the Definitions Section of the Fee Schedule 

for the monthly volume thresholds associated with 

each Tier. 

26The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

27See supra note 16. 

28See the MIAX Fee Schedule, Section 3)b) and 

MIAX Emerald Fee Schedule, Section 3)b), 

available at https://www.miaxoptions.com/fees (last 

visited March 9, 2022). 

now believes that it is appropriate to 

remove this credit in light of the current 

operating conditions and membership 

population on the Exchange. 

Amendment of Trading Permit Fees 

The Exchange proposes to amend the 

Fee Schedule to amend the fees for 

Trading Permits. The Exchange issues 

Trading Permits to Members who are 

either Electronic Exchange Members 23

(‘‘EEMs’’) or Market Makers.24 The 

Exchange assesses Trading Permit fees 

based upon the monthly total volume 

executed by the Member and its 

Affiliates on the Exchange across all 

origin types, not including Excluded 

Contracts, as compared to the total TCV 

in all MIAX Pearl-listed options. The 

Exchange adopted a tier-based fee 

structure based upon the volume-based 

tiers detailed in the definition of ‘‘NonTransaction Fees Volume-Based 

Tiers’’ 25 in the Definitions section of the 

Fee Schedule. The Exchange also 

assesses Trading Permit fees based upon 

the type of interface used by the 

Member to connect to the Exchange— 

the FIX Interface and/or the MEO 

Interface. 

Current Trading Permit Fees. 

Currently, each Member who connects 

to the System 26 via the FIX Interface is 

assessed the following monthly Trading 

Permit fees: 

(i) If its volume falls within the 

parameters of Tier 1 of the NonTransaction Fees Volume-Based Tiers, 

or volume up to 0.30%, $250; 

(ii) if its volume falls within the 

parameters of Tier 2 of the NonTransaction Fees Volume-Based Tiers, 

or volume above 0.30% up to 0.60%, 

$350; and 

(iii) if its volume falls with the 

parameters of Tier 3 of the NonTransaction Fees Volume-Based Tiers, 

or volume above 0.60%, $450. 

Each Member who connects to the 

System via the MEO Interface is 

assessed the following monthly Trading 

Permit fees: 

(i) If its volume falls within the 

parameters of Tier 1 of the NonTransaction Fees Volume-Based Tiers, 

or volume up to 0.30%, $300; 

(ii) if its volume falls within the 

parameters of Tier 2 of the NonTransaction Fees Volume-Based Tiers, 

or volume above 0.30% up to 0.60%, 

$400; and 

(iii) if its volume falls with the 

parameters of Tier 3 of the NonTransaction Fees Volume-Based Tiers, 

or volume above 0.60%, $500. 

Proposed Trading Permit Fees. The 

Exchange proposes to amend its Trading 

Permit fees as follows. Each Member 

who connects to the System via the FIX 

Interface will be assessed the following 

monthly Trading Permit fees: 

(i) If its volume falls within the 

parameters of Tier 1 of the NonTransaction Fees Volume-Based Tiers, 

$500; 

(ii) if its volume falls within the 

parameters of Tier 2 of the NonTransaction Fees Volume-Based Tiers, 

$1,000; and 

(iii) if its volume falls with the 

parameters of Tier 3 of the NonTransaction Fees Volume-Based Tiers, 

$1,500. 

Each Member who connects to the 

System via the MEO Interface will be 

assessed the following monthly Trading 

Permit fees: 

(i) If its volume falls within the 

parameters of Tier 1 of the NonTransaction Fees Volume-Based Tiers, 

$2,500; 

(ii) if its volume falls within the 

parameters of Tier 2 of the NonTransaction Fees Volume-Based Tiers, 

$4,000; and 

(iii) if its volume falls with the 

parameters of Tier 3 of the NonTransaction Fees Volume-Based Tiers, 

$6,000. 

Members who use the MEO Interface 

may also connect to the System through 

the FIX Interface as well, and vice versa. 

The Exchange notes that the Trading 

Permit fees for Members who connect 

through the MEO Interface are higher 

than the Trading Permit fees for 

Members who connect through the FIX 

Interface, since the FIX Interface utilizes 

less capacity and resources of the 

Exchange. The MEO Interface offers 

lower latency and higher throughput, 

which utilizes greater capacity and 

resources of the Exchange. The FIX 

Interface offers lower bandwidth 

requirements and an industry-wide 

uniform message format. Both EEMs and 

Market Makers may connect to the 

Exchange using either interface. 

Trading Permits, like membership 

fees, grant access and allow Members to 

be active on the Exchange, thus 

providing the ability to submit orders 

and trade on the Exchange, in the 

manner defined in the relevant Trading 

Permit. Without a Trading Permit, or 

‘‘membership’’ on other exchanges, a 

Member cannot directly trade on the 

Exchange. Therefore, a Trading Permit 

is a means to directly access the 

Exchange (which offers meaningful 

value), and the Exchange proposes to 

increase its monthly fees since it had 

not done so since the fees were first 

adopted in 2018.27 The Exchange notes 

that the its affiliates, Miami 

International Securities Exchange, LLC 

(‘‘MIAX’’) and MIAX Emerald, LLC 

(‘‘MIAX Emerald’’), charge a similar, 

fixed trading permit fee in a similar 

range of trading permit fees to certain 

users, and a similar, varying trading 

permit fee in a similar range of trading 

permit fees to other users, based upon 

the number of assignments of option 

classes or the percentage of volume in 

option classes.28

As illustrated by the table below, the 

Exchange notes that the proposed fees 

for the Exchange’s Trading Permits are 

in line with, or cheaper than, the similar 

trading permit and membership fees 

charged by other options exchanges. 

The below table also illustrates how the 

Exchange has historically undercharged 

for access via Trading Permits as 

compared to other options exchanges. 

The Exchange believes other exchanges’ 

membership and trading permit fees are 

useful examples of alternative 

approaches to providing and charging 

for access and provides the below table 

for comparison purposes only to show 

how the Exchange’s proposed fees 

compare to fees currently charged by 

other options exchanges for similar 

access. 


khammond on DSKJM1Z7X2PROD with NOTICES
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29See ‘‘Trading Licenses,’’ NYSE Price List 2021 

(last updated December 1, 2021), available at: 

https://www.nyse.com/publicdocs/nyse/markets/ 

nyse/NYSE_Price_List.pdf. 

30See NYSE Arca Options Fees and Charges, OTP 

Trading Participant Rights, p.1, available at https:// 

www.nyse.com/publicdocs/nyse/markets/arcaoptions/NYSE_Arca_Options_Fee_Schedule.pdf 

(last visited March 9, 2022). 

31See NYSE American Options Fee Schedule, 

Section III, Monthly Trading Permit, Rights, Floor 

Access and Premium Product Fees, p. 23–24, 

available at https://www.nyse.com/publicdocs/ 

nyse/markets/american-options/NYSE_American_

Options_Fee_Schedule.pdf (last visited March 9, 

2022). 

32See Nasdaq PHLX Options 7 Pricing Schedule, 

Section 8. Membership Fees, available at https://

listingcenter.nasdaq.com/rulebook/phlx/rules/ 

Phlx%20Options%207 (last visited March 9, 2022). 

33See Nasdaq ISE Options 7 Pricing Schedule, 

Section 8.A. Access Services, available at https:// 

listingcenter.nasdaq.com/rulebook/ise/rules/ 

ISE%20Options%207 (last visited March 9, 2022). 

34See ‘‘NASDAQ Membership Fees,’’ Nasdaq 

Price List, available at: http://nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2#membership. 

See also Securities Exchange Act Release No. 34– 

81133 (July 12, 2017), 82 FR 32904 (July 18, 2017) 

(SR–NASDAQ–2017–065) (discussing the 

reasonableness of Nasdaq’s fees). 

35See Cboe Fee Schedule, Electronic Trading 

Permit Fees, available at https://cdn.cboe.com/ 

resources/membership/Cboe_FeeSchedule.pdf (last 

visited March 9, 2022). 

36See Cboe C2 Fee Schedule, Access Fees, 

available at https://www.cboe.com/us/options/ 

membership/fee_schedule/ctwo/ (last visited March 

9, 2022). 

37See ‘‘Membership Fees’’ and ‘‘Market 

Participant Identifier (‘MPID’) Fees’’ sections of the 

Cboe BZX Fee Schedule, available at https://

www.cboe.com/us/equities/membership/fee_

schedule/bzx/. 

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

39 15 U.S.C. 78f(b)(4) and (5). 

Exchange Monthly membership/trading permit fee 

MIAX Pearl Options (as proposed) ..................... Trading Permit access via FIX Interface: 

Tier 1: $500. 

Tier 2: $1,000. 

Tier 3: $1,500. 

Trading Permit access via MEO Interface: 

Tier 1: $2,500. 

Tier 2: $4,000. 

Tier 3: $6,000. 

New York Stock Exchange LLC (‘‘NYSE’’) 29 ..... Annual trading license fee for member organizations ranges from approximately $25,000 to 

$50,000 based on the type of member organization and number of trading licenses. 

NYSE Arca, Inc. (‘‘NYSE Arca’’) 30 ..................... Options Trading Permits: 

$6,000 for up to 175 option issues. 

Additional $5,000 for up to 350 option issues. 

Additional $4,000 for up to 1,000 option issues. 

Additional $3,000 for all option issues. 

Additional $1,000 for the 5th OTP and each OTP thereafter. 

NYSE American, LLC (‘‘NYSE American’’) 31 ..... ATP Trading Permits: 

$8,000 for up to 60 plus the bottom 45% of option issues. 

Additional $6,000 for up to 150 plus the bottom 45% of option issues. 

Additional $5,000 for up to 500 plus the bottom 45% of option issues. 

Additional $4,000 for up to 1,100 plus the bottom 45% of option issues. 

Additional $3,000 for all option issues. 

Additional $2,000 for 6th to 9th ATPs (plus additional fee for premium products). 

Nasdaq PHLX LLC (‘‘Nasdaq PHLX’’) 32 ............ Streaming Quote Trader permit fees: 

Tier 1 (up to 200 option classes): $0.00. 

Tier 2 (up to 400 option classes): $2,200. 

Tier 3 (up to 600 option classes): $3,200. 

Tier 4 (up to 800 option classes): $4,200. 

Tier 5 (up to 1,000 option classes): $5,200 

Tier 6 (up to 1,200 option classes): $6,200. 

Tier 7 (all option classes): $7,200. 

Remote Market Maker Organization permit fees: 

Tier 1 (less than 100 option classes): $5,500. 

Tier 2 (more than 100 and less than 999 option classes): $8,000. 

Tier 3 (1,000 or more option classes): $11,000. 

Nasdaq ISE LLC (‘‘Nasdaq ISE’’) 33 ................... Access Fees: 

Primary Market Maker: $5,000 per membership. 

Competitive Market Maker: $2,500 per membership. 

Nasdaq Stock Market LLC (‘‘Nasdaq’’) 34 ........... Annual membership fee is $3,000 plus a monthly $1,250 trading rights fee (together with the 

annual membership fee, totaling $18,000 per year). 

Cboe Exchange, Inc. (‘‘Cboe’’) 35 ........................ Electronic Trading Permit Fees: 

Market Maker: $5,000. 

Electronic Access Permit: $3,000. 

Clearing TPH Permit: $2,000. 

Cboe C2 Exchange, Inc. (‘‘Cboe C2’’) 36 ............ Access Permit Fees for Market Makers: $5,000. 

Electronic Access Permits: $1,000. 

Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’) 37 ....... Annual membership fee of $2,500 plus an additional fee of $350 per month for each additional 

MPID a member maintains other than their first (i.e., an annual fee of $4,200 per additional 

MPID). 

Implementation 

The proposed fee changes are 

effective April 1, 2022. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 38

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 39 in 

particular, in that it is an equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

issuers and other persons using its 

facilities. The Exchange also believes 

the proposal furthers the objectives of 

Section 6(b)(5) of the Act in that it is 

designed to promote just and equitable 


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40See supra notes 29–37. 

41See MIAX Pearl Options Exchange Member 

Directory, available at https://

www.miaxoptions.com/exchange-members/pearl. 

42See NYSE American Options Membership 

Directory, available at https://www.nyse.com/ 

markets/american-options/membership (last visited 

March 9, 2022); NYSE Arca Options Membership 

Directory, available at https://www.nyse.com/ 

markets/arca-options/membership (last visited 

March 9, 2022); Cboe Members and Sponsored 

Participants, Form 1 Amendment dated February 

17, 2022, Exhibit M, available at https://

www.sec.gov/Archives/edgar/vprr/2200/ 

22000797.pdf (last visited March 9, 2022). 

43See Securities Exchange Act Release No. 34– 

50700 (November 22, 2004), 69 FR 71255, 71267– 

68 (December 8, 2004) (File No. S7–40–04). 

44 15 U.S.C. 78f(b)(4) and (5). 

principles of trade, 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 is not designed to 

permit unfair discrimination between 

customers, issuers, brokers and dealers. 

Removal of Monthly Volume Credit and 

Trading Permit Fee Credit 

The Exchange believes its proposal to 

remove the Monthly Volume Credit is 

reasonable, equitable and not unfairly 

discriminatory because all market 

participants will no longer be offered 

the ability to achieve the extra credits 

associated with the Monthly Volume 

Credit for submitting Priority Customer 

volume to the Exchange and access to 

the Exchange is offered on terms that are 

not unfairly discriminatory. The 

Exchange believes it is equitable and not 

unfairly discriminatory to remove the 

Monthly Volume Credit from the Fee 

Schedule for business and competitive 

reasons because, in order to attract order 

flow when the Exchange first launched 

operations, the Exchange established the 

Monthly Volume Credit to lower the 

initial fixed cost for Members. The 

Exchange now believes that it is 

appropriate to remove this credit in 

light of the current operating conditions 

and the current type and amount of 

Priority Customer volume executed on 

the Exchange. The Exchange believes 

that the Exchange’s Priority Customer 

rebates and fees will still allow the 

Exchange to remain highly competitive 

such that the Exchange should continue 

to attract order flow and maintain 

market share. 

The Exchange believes its proposal to 

remove the Trading Permit fee credit for 

Members that connect via both the MEO 

Interface and FIX Interface is 

reasonable, equitable and not unfairly 

discriminatory because all market 

participants will no longer be offered 

the ability to receive the credit and 

access to the Exchange is offered on 

terms that are not unfairly 

discriminatory. The Exchange believes 

it is equitable and not unfairly 

discriminatory to remove the Trading 

Permit fee credit for business and 

competitive reasons because, in order to 

attract order flow and membership after 

the Exchange first launched operations, 

the Exchange established the Trading 

Permit fee credit to lower the costs for 

Members that connect via both the MEO 

Interface and FIX Interface. The 

Exchange now believes that it is 

appropriate to remove this credit in 

light of the current operating conditions 

and membership on the Exchange. 

Trading Permit Fee Increase 

The Exchange believes that there is 

value in being a Member of the 

Exchange, retaining that Membership as 

the Exchange’s market share has grown, 

and that the proposed Trading Permit 

fees are reasonable because they are in 

the range of similar types of 

membership fees charged by other 

exchanges with similar market share. 

The proposed monthly Trading Permit 

fees are lower than or comparable to the 

membership and trading permit fees 

imposed by several other national 

securities exchanges that charge such 

fees.40

The Exchange believes that the 

proposed monthly Trading Permit fees 

are not unfairly discriminatory because 

they would be assessed equally across 

all Members or firms that seek to 

become Members. The Exchange 

believes that the proposed monthly 

Trading Permit fees are not unfairly 

discriminatory because no broker-dealer 

is required to become a member of the 

Exchange. Instead, many market 

participants awaited the Exchange 

growing to a certain percentage of 

market share before they would join as 

a Member of the Exchange. In addition, 

many market participants still have not 

joined the Exchange despite the 

Exchange’s growth in recent years to 

consistently be approximately 4–5% of 

the overall equity options market share. 

To illustrate, the Exchange currently has 

41 Members.41 However, based on 

publicly available information regarding 

a sample of the Exchange’s competitors, 

NYSE American Options has 75 

members, NYSE Arca Options has 71 

members, and Cboe has 233 members.42

Accordingly, the vigorous competition 

among national securities exchanges 

provides many alternatives for firms to 

voluntarily decide whether membership 

to the Exchange is appropriate and 

worthwhile, and no broker-dealer is 

required to become a member of the 

Exchange. Specifically, neither the 

trade-through requirements under 

Regulation NMS nor broker-dealers’ best 

execution obligations require a brokerdealer to become a member of every 

exchange. 

The Exchange acknowledges that 

competitive forces may require certain 

broker-dealers to be members of all 

equity options exchanges. However, the 

Exchange believes that the proposed 

fees are reasonable, equitably allocated 

and not unfairly discriminatory, even 

for a broker-dealer that deems it 

necessary to join the Exchange for 

business purposes, as those business 

reasons should presumably result in 

revenue capable of covering the 

proposed fees. 

The Exchange further believes that the 

proposed fees would be an equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other persons using its 

facilities, and are not unfairly 

discriminatory. As the Commission 

noted in its Concept Release Concerning 

Self-Regulation, the Commission to date 

has not issued detailed rules specifying 

proper funding levels of self-regulatory 

organization (‘‘SRO’’) regulatory 

programs, or how costs should be 

allocated among the various SRO 

constituencies. Rather, the Commission 

has examined the SROs to determine 

whether they are complying with their 

statutory responsibilities. This approach 

was developed in response to the 

diverse characteristics and roles of the 

various SROs and the markets they 

operate. The mechanics of SRO funding, 

including the amount of revenue that is 

spent on regulation and how that 

amount is allocated among various 

regulatory operations, is related to the 

type of market that an SRO is operating. 

Thus, each SRO and its financial 

structure is, to a certain extent, unique. 

While this uniqueness can result in 

different levels of SRO funding across 

markets, it also is a reflection of one of 

the primary underpinnings of the 

National Market System. Specifically, 

by fostering an environment in which 

diverse markets with diverse business 

models compete within a unified 

National Market System, investors and 

market participants benefit.43

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 44 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 


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45 15 U.S.C. 78f(8). 

46See supra note 40. 

47See ‘‘The market at a glance,’’ available at 

https://www.miaxoptions.com/ (last visited 

December 20, 2021). 

48See supra note 7. 

49See supra note 14. 

50See Staff Guidance on SRO Rule Filings 

Relating to Fees (May 21, 2019), at https://

www.sec.gov/tm/staff-guidance-sro-rule-filings-fees 

(the ‘‘Guidance’’). 

51See supra note 15. 

52 15 U.S.C. 78s(b)(3)(A)(ii). 

53 17 CFR 240.19b–4(f)(2). 

dealers. Effective regulation is central to 

the proper functioning of the securities 

markets. Recognizing the importance of 

such efforts, Congress decided to require 

national securities exchanges to register 

with the Commission as self-regulatory 

organizations to carry out the purposes 

of the Act. The Exchange therefore 

believes that it is critical to ensure that 

regulation is appropriately funded. The 

monthly Trading Permit fees are 

expected to provide a source of funding 

towards the Exchange’s costs related to 

onboarding Members and providing 

ongoing support. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,45 the Exchange believes that the 

proposed rule change would not impose 

any burden on intermarket or 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intra-Market Competition 

The Exchange believes the removal of 

the Monthly Volume Credit and Trading 

Permit fee credit will not place certain 

market participants at a relative 

disadvantage to other market 

participants because, in order to attract 

order flow when the Exchange first 

launched operations, the Exchange 

established these credits to lower the 

initial fixed cost for Members. The 

Exchange now believes that it is 

appropriate to remove this credit in 

light of the current operating conditions, 

including the Exchange’s overall 

membership and the current type and 

amount of volume executed on the 

Exchange. The Exchange believes that 

the Exchange’s rebates and fees will still 

allow the Exchange to remain highly 

competitive such that the Exchange 

should continue to attract order flow 

and maintain market share. The 

Exchange’s proposed Trading Permit 

fees will be lower than or similar to the 

cost of membership and trading permits 

on other exchanges,46 and therefore, 

may stimulate intramarket competition 

by attracting additional firms to become 

Members on the Exchange or at least 

should not deter interested participants 

from joining the Exchange. In addition, 

membership and trading permit fees are 

subject to competition from other 

exchanges. Accordingly, if the changes 

proposed herein are unattractive to 

market participants, it is likely the 

Exchange will see a decline in 

membership as a result. 

Inter-Market Competition 

The Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

15 competing options venues if they 

deem fee levels at a particular venue to 

be excessive. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

has more than approximately 16% 

market share. Therefore, no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity 

and ETF options order flow. Over the 

course of 2021, the Exchange’s market 

share has fluctuated between 

approximately 3–6% of the U.S. equity 

options industry.47 The Exchange is not 

aware of any evidence that a market 

share of approximately 3–6% provides 

the Exchange with anti-competitive 

pricing power. The Exchange believes 

that the ever-shifting market share 

among exchanges from month to month 

demonstrates that market participants 

can discontinue or reduce use of certain 

categories of products, or shift order 

flow, in response to fee changes. In such 

an environment, the Exchange must 

continually adjust its fees to remain 

competitive with other exchanges and to 

attract order flow to the Exchange. 

The proposed fee change will not 

impact intermarket competition because 

it will apply to all Members equally. 

The Exchange operates in a highly 

competitive market in which market 

participants can determine whether or 

not to join the Exchange based on the 

value received compared to the cost of 

joining and maintaining membership on 

the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

As described above, the Exchange 

received one comment letter on the First 

Proposed Rule Change.48 The Exchange 

responded to the comment letter in the 

Second Proposed Rule Change. No 

comment letters were received in 

response to the Second or Third 

Proposed Rule Changes. The Exchange 

received one comment letter on the 

Fourth Proposed Rule Change,49 which 

the Exchange responds to in this filing. 

The First, Second, Third and Fourth 

Proposed Rule Changes all provided 

cost-based justifications to support the 

proposed fee changes. In this Fifth 

Proposed Rule Change, the Exchange 

determined to utilize a competition 

based approach to support the proposed 

fee changes. Because the SIG Letters are 

primarily focused on the Exchange’s 

prior cost justifications in the First, 

Second, Third and Fourth Proposed 

Rule Changes, the Exchange believes the 

SIG’s assertions are no longer germane 

to the current filing as the Exchange no 

longer utilizes a cost justification to 

support the proposed fees. 

Pursuant to the Guidance, Staff may 

consider whether a proposed fee is 

constrained by significant competitive 

forces in assessing the reasonableness of 

the proposed fee.50 This is in line with 

a recent filing by MEMX LLC 

(‘‘MEMX’’), in which MEMX argued its 

proposed monthly membership fee was 

reasonable because it was constrained 

by competitive forces.51 MEMX’s 

monthly membership fee filing received 

no comment letters and remains in 

effect today, past the Commission’s 60- 

day suspension deadline. The 

Exchange’s trading permit fees are the 

equivalent of MEMX’s ‘‘membership 

fee,’’ BOX’s ‘‘participant fee’’ and 

‘‘market maker trading permit fee,’’ and 

other exchanges’ ‘‘access’’ fees: They are 

all fees to solely provide access and 

allow activity to the specific 

marketplace. These are all monthly fees 

assessed to members for trading on each 

particular exchange. The Exchange now 

argues that its proposed fees are 

constrained by competition in the same 

way MEMX’s membership fees are 

constrained by competition. 

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,52 and Rule 

19b–4(f)(2) 53 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 


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Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 22993 

54 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 94292 

(February 22, 2022), 87 FR 11102 (‘‘Notice’’). 

Comments received regarding the proposal are 

available on the Commission’s website at: https:// 

www.sec.gov/comments/sr-cboe-2022-005/ 

srcboe2022005.htm. 

4 In Amendment No. 1, the Exchange also 

proposes to include the following market quality 

data for SPXW (as defined below) and standard SPX 

options, over sample periods determined by the 

Exchange and the Commission, as part of its Annual 

Report (as defined below) going forward: Timeweighted relative quoted spreads; relative effective 

spreads; and time-weighted bid and offer sizes. 

Amendment No. 1 is available on the Commission’s 

website at: https://www.sec.gov/comments/sr-cboe2022-005/srcboe2022005.htm. 

5See Securities Exchange Act Release No. 62911 

(September 14, 2010), 75 FR 57539 (September 21, 

2010) (‘‘Pilot Approval Order’’). See also Securities 

Exchange Act Release No. 76909 (January 14, 2016), 

81 FR 3512 (January 21, 2016) (permitting P.M.- 

settled options on broad-based indexes that expire 

on any Wednesday); and Securities Exchange Act 

Release No. 78531 (August 10, 2016), 81 FR 54643 

(August 16, 2016) (permitting P.M.-settled options 

on broad-based indexes that expire on any 

Monday). The Pilot is currently set to expire on 

May 2, 2022. See Securities Exchange Act Release 

No. 93459 (October 28, 2021), 86 FR 60663 

(November 3, 2021). 

6Cboe Options Rule 4.13(e). 

7See Notice, supra note 3, 87 FR 11102. 

8 If the Exchange lists EOMs and Weekly 

Expirations as applicable in a given class, the 

Exchange will list an EOM instead of a Weekly 

Expiration that expires on the same day in the given 

class. See Cboe Options Rule 4.13(e)(1). 

9See Notice, supra note 3, 87 FR 11102. 

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 rule-comments@

sec.gov. Please include File Number SR– 

PEARL–2022–09 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–PEARL–2022–09. 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 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–PEARL–2022–09 and 

should be submitted on or before May 

9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.54

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08172 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94682; File No. SR–CBOE– 

2022–005] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Expand the 

Nonstandard Expirations Pilot 

Program To Include P.M.-Settled S&P 

500 Index Options That Expire on 

Tuesday or Thursday 

April 12, 2022. 

I. Introduction 

On February 8, 2022, Cboe Exchange, 

Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’) 

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 expand its Nonstandard 

Expirations Pilot Program to permit 

P.M.-settled S&P 500 Index (‘‘SPX’’) 

options that expire on Tuesday or 

Thursday. The proposed rule change 

was published for comment in the 

Federal Register on February 28, 2022.3

On April 6, 2022, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.4 The Commission is publishing 

this notice to solicit comment on 

Amendment No. 1 and is approving the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposal, as 

Modified by Amendment No. 1 

Cboe Options proposes to expand its 

existing Nonstandard Expirations Pilot 

(‘‘Pilot’’).5 Under the terms of the 

current Pilot, the Exchange is permitted 

to list P.M.-settled options on broadbased indexes that expire on: (1) Any 

Monday, Wednesday, or Friday 

(‘‘Weekly Expirations’’ or ‘‘EOWs’’) and 

(2) the last trading day of the month 

(‘‘End of Month Expirations’’ or 

‘‘EOMs’’).6 Under the proposal, the 

Exchange will expand the Pilot to 

permit P.M.-settled SPX Weekly 

(‘‘SPXW’’) options that expire on 

Tuesday or Thursday (‘‘Tuesday and 

Thursday SPXW Expirations’’) as 

permissible Weekly Expirations under 

the Pilot, in addition to the SPXW 

options with Monday, Wednesday, and 

Friday expirations that the Exchange 

may currently list pursuant to Rule 

4.13(e)(1). The Exchange states that the 

Pilot for Weekly Expirations will apply 

to Tuesday and Thursday SPXW 

Expirations in the same manner as it 

currently applies to P.M.-settled broadbased index options with Monday, 

Wednesday, and Friday expirations.7

A. Tuesday and Thursday SPXW 

Expirations 

The Exchange’s proposed rule change 

will allow it to open for trading SPXW 

options with Tuesday and Thursday 

expirations to expire on any Tuesday or 

Thursday of the month, other than days 

that coincide with an EOM expiration.8

The maximum number of expirations 

that may be listed for each type of 

Weekly Expiration (including the 

proposed Tuesday and Thursday SPXW 

Expirations) in a given class is the same 

as the maximum number of expirations 

permitted in Rule 4.13(a)(2) for standard 

options on the same broad-based index 

(12 for SPX options).9 Further, under 

current Cboe Options Rule 4.13(e)(1), 


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