48140 Federal Register / Vol. 82, No. 198 / Monday, October 16, 2017 / Notices 

34 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘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). See Exchange 

Rule 100, including Interpretations and Policies .01. 

4 ‘‘Member’’ means an individual or organization 

that is registered with the Exchange pursuant to 

Chapter II of the 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 the 

Definitions Section of the Fee Schedule and 

Exchange Rule 100. 

5 ‘‘Excluded Contracts’’ means any contracts 

routed to an away market for execution. See the 

Definitions Section of the Fee Schedule. 

6 ‘‘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 time [sic] in 

which the Exchange experiences an ‘‘Exchange 

System Disruption’’ (solely in the option classes of 

the affected Matching Engine (as defined below)). 

The term Exchange System Disruption, which is 

defined in the Definitions section of the Fee 

Schedule, means an outage of a Matching Engine or 

collective Matching Engines for a period of two 

consecutive hours or more, during trading hours. 

The term Matching Engine, which is also defined 

in the Definitions section of the Fee Schedule, is a 

part of the MIAX PEARL electronic system that 

processes options orders and trades on a symbolby-symbol basis. Some Matching Engines will 

process option classes with multiple root symbols, 

and other Matching Engines may be dedicated to 

one single option root symbol (for example, options 

on SPY may be processed by one single Matching 

Engine that is dedicated only to SPY). A particular 

root symbol may only be assigned to a single 

designated Matching Engine. A particular root 

symbol may not be assigned to multiple Matching 

Engines. The Exchange believes that it is reasonable 

and appropriate to select two consecutive hours as 

the amount of time necessary to constitute an 

Exchange System Disruption, as two hours equates 

to approximately 1.4% of available trading time per 

month. The Exchange notes that the term 

‘‘Exchange System Disruption’’ and its meaning 

have no applicability outside of the Fee Schedule, 

as it is used solely for purposes of calculating 

volume for the threshold tiers in the Fee Schedule. 

See the Definitions Section of the Fee Schedule. 

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

at least 75% common ownership between the firms 

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

or (ii) the Appointed Market Maker of an Appointed 

EEM (or, conversely, the Appointed EEM of an 

Appointed Market Maker). An ‘‘Appointed Market 

Maker’’ is a MIAX 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 process described in the Fee 

Schedule. See the Definitions Section of the Fee 

Schedule. 

8The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (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 Web site 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 MSRB. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MSRB– 

2017–07 and should be submitted on or 

before November 6, 2017. 

For the Commission, pursuant to delegated 

authority.34

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22262 Filed 10–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81844; File No. SR– 

PEARL–2017–34] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX 

PEARL Fee Schedule 

October 10, 2017. 

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 

September 29, 2017, 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’’). 

The text of the proposed rule change 

is available on the Exchange’s Web site 

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 Exchange proposes to amend the 

Add/Remove Tiered Rebates/Fees set 

forth in Section 1(a) of the Fee Schedule 

to increase the ‘‘Taker’’ fee in all Tiers 

assessable to all orders submitted by a 

Member for the account of a Priority 

Customer.3 The Exchange also proposes 

to make a number of non-substantive 

changes to its routing fee table set forth 

Section 1(b) of the Fee Schedule to 

reflect recent corporate name changes to 

some of the options exchanges listed in 

the table. 

Taker Fee Changes 

The Exchange currently assesses 

tiered transaction rebates and fees to all 

market participants which are based 

upon the total monthly volume 

executed by the Member 4 on MIAX 

PEARL in the relevant, respective origin 

type (not including Excluded 

Contracts) 5 expressed as a percentage of 

TCV.6 In addition, the per contract 

transaction rebates and fees are applied 

retroactively to all eligible volume for 

that origin type once the respective 

threshold tier (‘‘Tier’’) has been reached 

by the Member. The Exchange 

aggregates the volume of Members and 

their Affiliates.7 Members that place 

resting liquidity, i.e., orders resting on 

the book of the MIAX PEARL System,8

are paid the specified ‘‘maker’’ rebate 

(each a ‘‘Maker’’), and Members that 

execute against resting liquidity are 


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9See Securities Exchange Act Release Nos. 79778 

(January 12, 2017), 82 FR 6662 (January 19, 2017) 

(SR–PEARL–2016–01); 80758 (May 24, 2017), 82 FR 

25022 (May 31, 2017) (SR–PEARL–2017–24). 

10 ‘‘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). See Exchange 

Rule 100, including Interpretations and Policies .01. 

11See Securities Exchange Act Release Nos. 

80915 (June 13, 2017), 82 FR 27912 (June 19, 2017) 

(SR–PEARL–2017–29); 80914 (June 13, 2017), 82 FR 

27910 (June 19, 2017) (SR–PEARL–2017–30). 

12See BATS BZX Fee Schedule at: https://

www.bats.com/us/options/membership/fee_

schedule/bzx/. 

13See NOM Fee Schedule at: https://

www.nasdaqtrader.com/ 

Micro.aspx?id=OptionsPricing. 

14See NYSE Arca Options Fee Schedule at: 

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

arca-options/NYSE_Arca_Options_Fee_

Schedule.pdf. 

15See Nasdaq ISE Fee Schedule at: https://

www.ise.com/fees. 

16See supra footnote 13. 

assessed the specified ‘‘taker’’ fee (each 

a ‘‘Taker’’). For opening transactions 

and ABBO uncrossing transactions, per 

contract transaction rebates and fees are 

waived for all market participants. 

Finally, Members are assessed lower 

transaction fees and receive lower 

rebates for order executions in standard 

option classes in the Penny Pilot 

Program 9 (‘‘Penny classes’’) than for 

order executions in standard option 

classes which are not in the Penny Pilot 

Program (‘‘Non-Penny classes’’), where 

Members are assessed higher transaction 

fees and receive higher rebates. 

Transaction rebates and fees 

applicable to orders submitted by a 

Member for the account of a Priority 

Customer 10 are currently assessed 

according to the following table: 

Origin Tier Volume criteria 

(%) 

Per contract rebates/fees for 

penny classes 

Per contract rebates/fees for 

non-penny classes 

Maker Taker * Maker Taker * 

Priority Customer ................ 1 0.00–0.05 ........................... ($0.25) $0.38 ($0.85) $0.87 

2 Above 0.05–0.35 ................ (0.40) 0.38 (1.05) 0.86 

3 Above 0.35–0.50 ................ (0.50) 0.38 (1.05) 0.85 

4 Above 0.50–0.75 ................ (0.53) 0.38 (1.05) 0.84 

5 Above 0.75 ......................... (0.54) 0.38 (1.05) 0.84 

* For all Penny classes other than SPY. For SPY, the Priority Customer Taker Fee shall be $0.35 per contract. 

The Exchange now proposes, with 

respect to orders submitted by a 

Member for the account of a Priority 

Customer, to: (i) Increase the Taker fee 

for all Penny classes (other than SPY, 

QQQ, IWM, and VXX) in all Tiers to 

$0.42 per contract; (ii) increase the 

Taker fee for SPY in all Tiers to $0.38 

per contract; and (iii) increase the Taker 

fee for QQQ, IWM, and VXX in all Tiers 

to $0.40 per contract. The Exchange 

notes that QQQ, IWM, and VXX are not 

currently carved out from the Taker fee 

that applies to all Penny classes (other 

than SPY) in the Tiers. With this 

proposed change, QQQ, IWM, and VXX 

will become carved out alongside SPY 

from the Taker fee that applies to all 

Penny classes in the Tiers, and the 

Taker fee for transactions in those 

classes will be set forth in a sentence 

beneath the Priority Customer table in 

the Add/Remove Tiered Rebates/Fees 

(by way of an asterisk to the Taker fee) 

to state that the Taker fee in the table 

applies ‘‘For all Penny Classes other 

than SPY, QQQ, IWM, and VXX. For 

SPY, the Priority Customer Taker Fee 

shall be $0.38 per contract. For QQQ, 

IWM, and VXX, the Priority Customer 

Taker Fee shall be $0.40 per contract.’’ 

Accordingly, as amended, transaction 

rebates and fees applicable to orders 

submitted by a Member for the account 

of a Priority Customer will be assessed 

according to the following table: 

Origin Tier Volume criteria 

(%) 

Per contract rebates/fees for 

penny classes 

Per contract rebates/fees for 

non-penny classes 

Maker Taker * Maker Taker * 

Priority Customer ................ 1 0.00–0.05 ........................... ($0.25) $0.42 ($0.85) $0.87 

2 Above 0.05–0.35 ................ (0.40) 0.42 (1.05) 0.86 

3 Above 0.35–0.50 ................ (0.50) 0.42 (1.05) 0.85 

4 Above 0.50–0.75 ................ (0.53) 0.42 (1.05) 0.84 

5 Above 0.75 ......................... (0.54) 0.42 (1.05) 0.84 

* For all Penny Classes other than SPY, QQQ, IWM, and VXX. For SPY, the Priority Customer Taker Fee shall be $0.38 per contract. For 

QQQ, IWM, and VXX, the Priority Customer Taker Fee shall be $0.40 per contract. 

The purpose of increasing the Taker 

fees for Priority Customer orders is for 

business and competitive reasons. As a 

new exchange, in order to attract order 

flow, the Exchange recently set its Taker 

fees for Priority Customer orders so that 

they were significantly lower than other 

options exchanges that operate 

comparable maker/taker pricing 

models.11 The Exchange now believes 

that it is appropriate to slightly increase 

those Taker fees so that they are not as 

steeply lower versus such other 

exchanges, but will still remain highly 

competitive such that they should 

enable the Exchange to continue to 

attract order flow and grow market 

share. The Exchange notes that, even as 

amended, its Taker fees for Priority 

Customers are still lower than most 

other options exchanges operating 

competing models. For example, with 

respect to taker fees for Priority 

Customer orders in Penny classes, BATS 

BZX Options 12 and Nasdaq Options 

Market 13 each assess a fee of $0.50 per 

contract; NYSE Arca Options 14 assesses 

a fee of $0.49 per contract; and Nasdaq 

ISE 15 assesses a fee of $0.44 per contract 

(other than SPY, QQQ, IWM, and VXX 

classes). With respect to taker fees for 

Priority Customer orders in SPY, 

NOM 16 assesses a fee of $0.48 per 

contract. 

The purpose of separately carving out 

QQQ, IWM, and VXX from the Taker fee 

that applies to all Penny classes in the 

Tiers is to tailor transaction fees 

specifically for these select products. 


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17See, for example, Nasdaq ISE Fee Schedule, 

which has separate pricing for SPY, as well as QQQ, 

IWM, and VXX, at: https://www.ise.com/fees; see 

also CBOE Fee Schedule at: http://www.cboe.com/ 

framed/pdfframed?content=/publish/feeschedule/ 

CBOEFeeSchedule.pdf§ion=SEC_

RESOURCES&title=CBOE%20Fee%20Schedule; see 

also NOM Fee Schedule at: https://

www.nasdaqtrader.com/ 

Micro.aspx?id=OptionsPricing. 

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

19 15 U.S.C. 78f(b)(4). 

20 15 U.S.C. 78f(b)(1) and (b)(5). 

21See supra note 11. 

22See supra footnotes 11–15. 

23See supra note 17. 

The concept of carving out separate 

pricing for select products is not novel, 

and is currently employed by a number 

of other options exchanges.17

Non-Substantive Changes 

As a result of recent exchange 

consolidation and corporate rebranding, some options exchanges have 

changed their names. The names of all 

options exchanges are set forth in the 

Exchange’s routing fee table set forth 

Section (1)(b) of the Fee Schedule, 

which sets forth the fees for customer 

orders that are routed to those options 

exchanges for execution. Accordingly, 

the Exchange proposes to update its 

routing fee table set forth in Section 

(1)(b) of the Fee Schedule to reflect 

those recent exchange name changes. 

No other changes are proposed to the 

routing fee table. Accordingly, as 

amended, the routing fee table shall be 

as follows: 

(b) Fees and Rebates for Customer 

Orders Routed to Another Options 

Exchange 

MIAX PEARL will assess a Routing 

Fee to market participants on all orders 

routed to and executed on an away 

market as set forth in the table below. 

Description Fees 

Routed, Priority Customer, Penny Pilot, to: NYSE American, BOX, CBOE, Bats EDGX Options, Nasdaq MRX, MIAX OPTIONS, 

Nasdaq PHLX (except SPY), Nasdaq BX Options .................................................................................................................................. $0.15 

Routed, Priority Customer, Penny Pilot, to: NYSE Arca Options, Bats BZX Options, C2, Nasdaq GEMX, Nasdaq ISE, NOM, Nasdaq 

PHLX (SPY only) ..................................................................................................................................................................................... 0.65 

Routed, Priority Customer, Non-Penny Pilot, to: NYSE American, BOX, CBOE, Bats EDGX Options, Nasdaq ISE, Nasdaq MRX, 

MIAX OPTIONS, Nasdaq PHLX, Nasdaq BX Options ............................................................................................................................ 0.15 

Routed, Priority Customer, Non-Penny Pilot, to: NYSE Arca Options, Bats BZX Options, C2, Nasdaq GEMX, NOM ............................ 0.97 

Routed, Public Customer that is not a Priority Customer, Penny Pilot, to: NYSE American, NYSE Arca Options, BATS, BOX, CBOE, 

C2, Bats EDGX Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX OPTIONS, NOM, Nasdaq PHLX, Nasdaq BX Options 0.65 

Routed, Public Customer that is not a Priority Customer, Non-Penny Pilot, to: NYSE American ............................................................. 0.65 

Routed, Public Customer that is not a Priority Customer, Non-Penny Pilot, to: NYSE Arca Options, Bats BZX Options, C2, Nasdaq 

GEMX, Nasdaq MRX, Nasdaq BX Options ............................................................................................................................................. 1.20 

Routed (Public Customer that is not a Priority Customer), Non-Penny Pilot, to: BOX, CBOE, Bats EDGX Options, Nasdaq ISE, MIAX 

OPTIONS, NOM, Nasdaq PHLX ............................................................................................................................................................. 0.97 

The proposed rule changes are 

scheduled to become operative October 

1, 2017. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 18

in general, and furthers the objectives of 

Section 6(b)(4) of the Act,19 in that it is 

an equitable allocation of reasonable 

dues, fees and other charges among 

Exchange members and issuers and 

other persons using its facilities, and 

6(b)(5) of the Act,20 in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The proposed Taker fee increases 

applicable to orders submitted by a 

Member for the account of a Priority 

Customer are reasonable, equitable and 

not unfairly discriminatory because all 

Priority Customer option orders are 

subject to the same Taker fees and 

access to the Exchange is offered on 

terms that are not unfairly 

discriminatory. The Exchange initially 

set its Taker fees at the various levels 

based upon business determinations 

and an analysis of current Taker fees 

and volume levels at other exchanges. 

For competitive and business reasons, 

the Exchange recently set its Taker fees 

for Priority Customer orders so that they 

were significantly lower than other 

options exchanges that operate 

comparable maker/taker pricing 

models.21 The Exchange now believes 

that it is appropriate to slightly increase 

those Taker fees so that they are not as 

steeply lower versus such other 

exchanges, but will still remain highly 

competitive such that they should 

enable the Exchange to continue to 

attract order flow and grow market 

share. The Exchange notes that, even as 

amended, its Taker fees for Priority 

Customers are still lower than most 

other options exchanges operating 

competing models.22 The Exchange 

believes for these reasons that offering 

slightly increased Taker fees for Priority 

Customer transactions in all Tiers is 

equitable, reasonable and not unfairly 

discriminatory, and thus consistent with 

the Act. 

The Exchange believes that its 

proposal to offer lower Taker fees 

assessable to transactions solely in SPY, 

QQQ, IWM, and VXX options is 

consistent with other options markets 

that also assess different transaction fees 

for select option classes (including SPY, 

QQQ, IWM, and VXX) as compared to 

other option classes. The Exchange 

believes that establishing different 

pricing for select products for Priority 

Customers is reasonable, equitable, and 

not unfairly discriminatory because 

these select products are generally more 

liquid than other option classes. 

Additionally, other competing options 

exchanges differentiate pricing in a 

similar manner.23

Further, the Exchange believes that it 

is equitable and not unfairly 

discriminatory to assess lower fees to 

Priority Customer orders than to nonPriority Customer orders. A Priority 

Customer is by definition not a broker 

or dealer in securities, and does not 

place more than 390 orders in listed 

options per day on average during a 

calendar month for its own beneficial 

account(s). This limitation does not 

apply to participants on the Exchange 

whose behavior is substantially similar 

to that of market professionals, 

including non-Priority Customers, 

MIAX PEARL Market Makers, Firms, 

and Broker-Dealers, who will generally 

submit a higher number of orders (many 


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24See supra note 22. 

25 15 U.S.C. 78s(b)(3)(A)(ii). 

26 17 CFR 240.19b–4(f)(2). 

of which do not result in executions) 

than Priority Customers. 

Furthermore, the proposed slight 

increases to the Taker fees for Priority 

Customer transactions in all Tiers 

promotes just and equitable principles 

of trade, fosters cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and protects investors and the public 

interest, because even with the such 

slight increases, the Exchange’s 

proposed Taker fees for Priority 

Customer orders still remain highly 

competitive with other options 

exchanges offering comparable pricing 

models, as they should enable the 

Exchange to continue to attract order 

flow and grow market share.24 The 

Exchange believes that the amount of 

such fees, as proposed to be increased, 

will continue to encourage Members to 

send more Priority Customer orders to 

the Exchange even if it is an order 

which takes liquidity since they will be 

assessed a lower Taker fee in each Tier 

than most competing exchanges. To the 

extent that Priority Customer order flow 

is increased by the proposal, market 

participants will increasingly compete 

for the opportunity to trade on the 

Exchange, including sending more 

orders which will have the potential to 

be assessed lower fees and higher 

rebates than most competing options 

exchanges. The resulting increased 

volume and liquidity will benefit all 

Exchange participants by providing 

more trading opportunities and tighter 

spreads. 

The Exchange believes the proposed 

changes to update its routing fee table 

set forth in Section 1(b) of the Fee 

Schedule to reflect recent exchange 

name changes promote just and 

equitable principles of trade and remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed rule change makes nonsubstantive technical corrections and 

updates the Exchange’s Fee Schedule. 

None of the name changes alter the 

application of any fees or rebates on the 

Fee Schedule. As such, the proposed 

amendments would foster cooperation 

and coordination with persons engaged 

in facilitating transactions in securities 

and would remove impediments to and 

perfect the mechanism of a free and 

open market and a national exchange 

system. In particular, the Exchange 

believes that the proposed changes will 

provide greater clarity to Members and 

the public regarding the Exchange’s 

Rules. It is in the public interest for 

rules to be accurate and concise so as to 

eliminate the potential for confusion. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

MIAX PEARL does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed Taker fee increases are 

intended to keep the Exchange’s fees 

highly competitive with those of other 

exchanges, and to encourage liquidity 

and should enable the Exchange to 

attract and compete for order flow with 

other exchanges which assess higher 

Priority Customer taker fees. The 

proposed changes to update its routing 

fee table set forth Section 1(b) of the Fee 

Schedule to reflect recent exchange 

name changes will have no impact on 

competition as they are not designed to 

address any competitive issues but 

rather are designed to make nonsubstantive technical corrections and 

update the Exchange’s Fee Schedule. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive. In such an environment, the 

Exchange must continually adjust its 

rebates and fees to remain competitive 

with other exchanges and to attract 

order flow. The Exchange believes that 

the proposed rule change reflects this 

competitive environment because it 

modifies the Exchange’s fees in a 

manner that will continue to encourage 

market participants to send order flow 

to the Exchange. 

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,25 and Rule 

19b–4(f)(2) 26 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–2017–34 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–2017–34. 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 Web site (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 Web site 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

PEARL–2017–34 and should be 

submitted on or before November 6, 

2017. 


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27 17 CFR 200.30–3(a)(12). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22264 Filed 10–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Changes to SBA Secondary Market 

Program 

AGENCY: U.S. Small Business 

Administration (‘‘SBA’’). 

ACTION: Notice. 

SUMMARY: The purpose of this Notice is 

to provide the public with notification 

of a procedural change in SBA’s 

Secondary Market Pooling program. 

This change involves the pass through 

of principal payments to Registered 

Holders of Pool Certificates resulting 

from Pool loan prepayments. 

DATES: The change referenced in this 

Notice affects all outstanding Pools 

issued between October 1, 2004, and on 

or about September 1, 2017. The change 

will be incorporated into payments 

made to Registered Holders of Pool 

Certificates before the end of the 

calendar year. 

FOR FURTHER INFORMATION CONTACT: John 

M. Wade, Chief, Secondary Market 

Division, U.S. Small Business 

Administration, 409 3rd Street SW., 

Washington, DC 20416, or john.wade@

sba.gov. 

SUPPLEMENTARY INFORMATION: The 

Secondary Market Improvements Act of 

1984 authorized SBA to guaranty the 

timely payment of principal and interest 

on Pool Certificates. A Pool Certificate 

represents a fractional undivided 

interest in a ‘‘Pool,’’ which is an 

aggregation of SBA guaranteed portions 

of loans made by SBA Lenders under 

section 7(a) of the Small Business Act, 

15 U.S.C. 636(a). In order to support the 

timely payment guaranty requirement, 

SBA established the Master Reserve 

Fund (‘‘MRF’’), which serves as a 

mechanism to cover the cost of SBA’s 

timely payment guaranty on Pool 

Certificates. 

Pool payments to Registered Holders 

of Pool Certificates are made monthly 

and consist of scheduled payments of 

pool principal and interest. The 

payments may also include a return of 

pool principal from full or partial 

prepayments of pool loans prior to the 

Pool maturity date. Principal from these 

prepayments are passed through to 

Registered Holders of Pool Certificates, 

but the amounts may vary based on 

amortization excess associated with the 

prepaid loan. 

Amortization excess represents that 

portion of the outstanding principal 

balance of a Pool allocated to a 

particular pool loan compared to the 

actual loan principal balance 

outstanding at the time the loan is 

prepaid. Amortization excess may 

include differences attributed to 

principal prepayments on a pool loan 

that is less than or equal to 20% of the 

outstanding principal balance. Borrower 

payments of loan principal made up to 

the date of prepayment are based on the 

amortization schedule of the borrower’s 

Note, but paid to Registered Holders of 

Pool Certificates based on the 

amortization schedule of the Pool. This 

variance comes from differences in 

interest rates and maturity dates of the 

pool loan compared with the Pool 

Certificate. 

On September 21, 2004, SBA issued 

Notice of a Change in the SBA 

Secondary Market Program (and 

referenced herein as the ‘‘2004 Notice’’). 

69 FR 56472. This 2004 Notice 

described program changes made to all 

Pools formed on or after October 1, 2004 

including the disposition of 

amortization excess. Prior to October 1, 

2004, SBA spread the amortization 

excess from prepaid loans over the 

remaining life of the Pool. In the 2004 

Notice, SBA revised the program to pass 

through amortization excess once a pool 

loan is prepaid. In certain 

circumstances, however, amortization 

excess resulted in a reduction in the 

amount of a principal passed through to 

Registered Holders of Pool Certificates, 

with the retained principal remaining in 

the MRF to be paid out through 

scheduled principal payments until the 

Pool matures, or as all pool loans are 

fully paid. 

In order to improve the efficiency of 

the program, SBA is implementing a 

procedural change that will adjust the 

timing of certain principal distributions 

from the MRF. For Pools formed 

between October 1, 2004 and on or 

about September 1, 2017 with pool 

loans remaining, SBA will reallocate the 

outstanding Pool balances pro rata 

across the remaining pool loan principal 

within a Pool. When a pool loan 

subsequently prepays in full, payments 

to Registered Holders of Pool 

Certificates may include retained 

principal in addition to the scheduled 

payments of pool principal, interest and 

related prepayments. This change will 

be incorporated, as needed, into the 

SBA Secondary Market Program Guide, 

and all other appropriate SBA 

Secondary Market materials. 

It is important to note that there is no 

change to SBA’s obligation to honor its 

guaranty of the amount owed to 

Registered Holders of Pool Certificates 

and that such guaranty continues to be 

backed by the full faith and credit of the 

United States. 

Authority: 15 U.S.C. 634(g)(2). 

William M. Manger, 

Associate Administrator, Office of Capital 

Access. 

[FR Doc. 2017–22466 Filed 10–13–17; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15342 and #15343; 

US VIRGIN ISLANDS Disaster Number VI– 

00012] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the U.S. Virgin Islands 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the US Virgin Islands (FEMA–4340– 

DR), dated 10/05/2017. 

Incident: Hurricane Maria. 

Incident Period: 09/16/2017 and 

continuing. 

DATES: Issued on 10/05/2017. 

Physical Loan Application Deadline 

Date: 12/04/2017. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 07/05/2018. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: 

A. Escobar, Office of Disaster 

Assistance, U.S. Small Business 

Administration, 409 3rd Street SW., 

Suite 6050, Washington, DC 20416, 

(202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

10/05/2017, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Saint Croix, Saint 

John, Saint Thomas. 


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