Document ID: SEC-2019-1985-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX PEARL, LLC
Posted Date: 2019-12-30T05:00Z

[Federal Register Volume 84, Number 249 (Monday, December 30, 2019)]
[Notices]
[Pages 72061-72063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28085]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87829; File No. SR-PEARL-2019-35]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange 
Rule 100, Definitions, Exchange Rule 503, Openings on the Exchange, 
Exchange Rule 515, Execution of Orders, Exchange Rule 516, Order Types, 
and Exchange Rule 521, Nullification and Adjustment of Options 
Transactions Including Obvious Errors

December 20, 2019.
    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 December 19, 2019, MIAX PEARL, LLC (``MIAX PEARL'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Rule 100, Definitions; 
Exchange Rule 503, Openings on the Exchange; Exchange Rule 515, 
Execution of Orders; Exchange Rule 516, Order Types; and Exchange Rule 
521, Nullification and Adjustment of Options Transactions Including 
Obvious Errors.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/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 Exchange Rule 100, Definitions; 
Exchange Rule 503, Openings on the Exchange; Exchange Rule 515, 
Execution of Orders; Exchange Rule 516, Order Types; and Exchange Rule 
521, Nullification and Adjustment of Options Transactions Including 
Obvious Errors, to make non-substantive edits to update internal cross 
references in the Exchange's rulebook.
    The Exchange is an affiliate of the Miami International Securities 
Exchange, LLC (``MIAX'') and incorporates by reference a number of MIAX 
Exchange rules into its rulebook. MIAX Exchange recently amended Rule 
1400, Definitions, found in Chapter XIV of the MIAX Exchange rules, 
which are

[[Page 72062]]

its rules pertaining to the Options Order Protection and Locked and 
Crossed Market Plan.\3\ The MIAX Exchange adopted a definition for 
Complex Trade which, when inserted into its proper alphabetical 
position in MIAX Exchange Rule 1400, caused the subsequent following 
definitions to be renumbered (e.g., the existing subparagraph (d) 
became new subparagraph (e); existing subparagraph (e) became new 
subparagraph (f), etc . . .). As a result of the change to the MIAX 
Exchange Rule 1400, a number of internal cross references contained in 
the Exchange's rulebook must be updated.
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    \3\ See Securities Exchange Act Release No. 87693 (December 9, 
2019), 84 FR 68264 (December 13, 2019) (SR-MIAX-2019-48).
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    Specifically, the internal cross-reference to Eligible Exchanges in 
the definition of ABBO or Away Best Bid or Offer, in Exchange Rule 100, 
must be updated from Rule 1400(f) to Rule 1400(g). The internal cross-
reference to Eligible Exchanges in Exchange Rule 503(a)(5) must be 
updated from Rule 1400(f) to Rule 1400(g). The internal cross-reference 
to the NBBO in Exchange Rule 515(a) must be updated from Rule 1400(j) 
to Rule 1400(k). The internal cross-reference to Intermarket Sweep 
Orders in Exchange Rule 516(f) must be updated from Rule 1400(h) to 
Rule 1400(i). Similarly in Rule 516(f) the internal cross-references to 
Protected Quotations and Eligible Exchanges must be updated from 
1400(p) and (f) to 1400(q) and (g) respectively. Lastly, in Rule 
516(f), the internal cross-reference to Protected Bid or Protected 
Offer must be updated from 1400(o) to 1400 (p). Finally, the internal 
cross-reference to the Options Order Protection and Locked/Crossed 
Market Plan in Exchange Rule 521(j) must be updated from Rule 1400(n) 
to Rule 1400(o).
    The Exchange believes that these non-substantive changes will add 
clarity and precision to the Exchange's rules.
2. Statutory Basis
    MIAX PEARL believes that its proposed rule change is consistent 
with Section 6(b) of the Act \4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \5\ in particular, 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 regulating, 
clearing, settling, processing information with respect to, and 
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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed non-substantive rule 
changes to update internal cross-references within the Exchange's Rules 
promotes just and equitable principles of trade and removes impediments 
to and perfects the mechanism of a free and open market and a national 
market system and, in general, protects investors and the public 
interest by providing additional clarity and precision in the 
Exchange's rules. The Exchange believes it is in the public interest 
for rules to be accurate and precise so as to eliminate the potential 
for confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition as the proposed change is 
non-substantive in nature. The non-substantive edits to update internal 
cross-references in the Exchange's rulebook provides precision and 
accuracy in the Exchange's rules.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intramarket competition as the non-substantive 
edits to update internal cross-references in the Exchange's rulebook 
provide additional detail and clarity in the Exchange's rules, which 
apply equally to all Exchange Members.\6\
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    \6\ The term ``Member'' means an individual or organization that 
is registered with the Exchange pursuant to Chapter II of the MIAX 
PEARL 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.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act and subparagraph (f)(6) of Rule 19b-4 
thereunder.
    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \7\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \8\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay so 
that the proposed rule change may become operative upon filing. Waiver 
of the operative delay would allow the Exchange to immediately 
harmonize its rules to MIAX Options to ensure that the internal cross-
references in the Exchange's rulebook are correct. Therefore, the 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\9\
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6)(iii).
    \9\ For purposes only of waiving the 30-day operative delay, the 
Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule 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

[[Page 72063]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-PEARL-2019-35 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-2019-35. 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-PEARL-2019-35 and should be submitted on 
or before January 21, 2020.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-28085 Filed 12-27-19; 8:45 am]
BILLING CODE 8011-01-P