Document ID: SEC-2021-1361-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX PEARL, LLC
Posted Date: 2021-10-05T04:00Z

[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Notices]
[Pages 55085-55087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21747]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93209; File No. SR-PEARL-2021-43]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change by MIAX PEARL, 
LLC To Amend Exchange Rule 100, Definitions, Rule 402, Criteria for 
Underlying Securities, Rule 403, Withdrawal of Approval of Underlying 
Securities, Rule 404, Series of Option Contracts Open for Trading, Rule 
404A, Select Provisions of Options Listing Procedures Plan, Rule 406, 
Long-Term Option Contracts, Rule 500, Access to and Conduct on the 
Exchange, Rule 503, Openings on the Exchange, Rule 515, Execution of 
Orders, and Rule 519, MIAX Pearl Order Monitor (``MOM'')

September 30, 2021.
    Pursuant to the provisions of 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 24, 2021, 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 Exchange Rules 100, 
Definitions, 402, Criteria for Underlying Securities, 403, Withdrawal 
of Approval of Underlying Securities, 404, Series of Option Contracts 
Open for Trading, 404A, Select Provisions of Options Listing Procedures 
Plan, 406, Long-Term Option Contracts, 500, Access to and Conduct on 
the Exchange, 503, Openings on the Exchange, 515, Execution of Orders, 
and 519, MIAX Pearl Order Monitor (``MOM''), to make minor, non-
substantive edits and clarifying changes to the rule text.
    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, to 
make minor non-substantive edits and clarifying changes. First, the 
Exchange proposes to amend Exchange Rule 100, Definitions, to make a 
minor, non-substantive clarifying change to the definition for 
``PBBO.'' Currently, the definition for ``PBBO'' is as follows: ``The 
term `PBBO' means the best bid or offer on the PEARL Exchange.'' 
Pursuant to Exchange Rule 100, when referring to the Exchange, the term 
``MIAX Pearl'' is used. The Exchange proposes to amend the definition 
for ``PBBO'' in Exchange Rule 100 to insert the word ``MIAX'' in front 
of the words ``PEARL Exchange'' to align the name of the Exchange with 
how the term is defined and used throughout the Exchange's rulebook. 
Further, the Exchange proposes to delete the word ``the'' before the 
newly inserted word ``MIAX'' and delete the last word, ``Exchange,'' 
for clarity. With the proposed changes, the definition for ``PBBO'' 
will be as follows: ``The term `PBBO' means the best bid or offer on 
MIAX Pearl.''
    Next, the Exchange proposes to delete the period at the end of 
subparagraph (a)(1) of Exchange Rule 402(a) and add ``; and'' for 
purposes of clarity in the rule text that both conditions listed in 
Exchange Rule 402(a)(1)-(2) must be met.

[[Page 55086]]

    Next, the Exchange proposes to amend subparagraph (b) of Exchange 
Rule 402 to correctly spell the word ``foregoing'' in the last sentence 
before subparagraph (b)(1). The purpose of this change is for clarity 
in the rule text.
    Next, the Exchange proposes to delete the period at the end of 
subparagraph (b)(6)(i) of Exchange Rule 402 and add ``; and'' for the 
sentence to be grammatically correct and for purposes of clarity in the 
rule text that both conditions listed in Exchange Rule 402(b)(6)(i)-
(ii) must be met.
    Next, the Exchange proposes to delete the period at the end of 
subparagraph (c)(2)(i)(A) of Exchange Rule 402 and add ``; and'' for 
the sentence to be grammatically correct and for purposes of clarity in 
the rule text.
    Next, the Exchange proposes to delete the comma at the end of 
subparagraph (g)(1) of Exchange Rule 402 and add a semicolon for 
purposes of clarity in the rule text.
    Next, the Exchange proposes to amend subparagraph (i) of Exchange 
Rule 402 to remove the word ``or'' after proposed renumbered 
subparagraphs (i)(1), (2) and (3). The Exchange also proposes to amend 
the hierarchical headings in Exchange Rule 402(i) as follows: 
Subparagraphs (i)(A)-(E) will be renumbered as (i)(1)-(5); subparagraph 
(i)(E)(1) will be renumbered as (i)(5)(i); subparagraphs (i)(E)(1)(i)-
(iii) will be renumbered as (i)(5)(i)(A)-(C); subparagraph (i)(E)(2) 
will be renumbered as (i)(5)(ii); subparagraphs (i)(E)(2)(i)-(ii) will 
be renumbered as (i)(5)(ii)(A)-(B); and subparagraphs (i)(E)(2)(ii)(A)-
(D) will be renumbered as (i)(5)(ii)(B)1.-4. The purpose of these 
proposed changes is to provide consistency and clarity throughout the 
rule text for the hierarchical subparagraph headings.
    Next, the Exchange proposes to delete the semicolon at the end of 
subparagraph (k)(1)(vi) of Exchange Rule 402 and add a period for the 
sentence to be grammatically correct and for purposes of clarity in the 
rule text.
    Next, the Exchange proposes to amend subparagraph (g) of Exchange 
Rule 403 to capitalize the word ``In'' that begins subparagraphs (g)(1) 
and (g)(2). The Exchange also proposes to amend subparagraph (g) of 
Exchange Rule 403 to replace certain internal cross reference to other 
rules in light of the changes described above. In particular, the 
Exchange proposes to amend the cross references contained in Exchange 
Rule 403(g)(1)-(2), that are to Exchange Rules 402(i)(E)(1)(i)-(ii), to 
now be to Exchange Rule 402(i)(5)(i)(A)-(B). These proposed rule 
changes are for clarity and consistency with the rule text.
    Next, the Exchange proposes to amend Exchange Rule 403, 
Interpretation and Policy .02, to add a colon before an itemized list 
in the second sentence, which uses semicolons for the sentence to be 
grammatically correct.
    Next, the Exchange proposes to amend Exchange Rule 404, 
Interpretation and Policy .02(a), to remove the word ``Pilot'' when 
referring to the Short Term Option Series Program. The purpose of this 
proposed change is to provide consistency and clarity throughout the 
rule text as the Short Term Options Series Program is not a pilot 
program.\3\
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    \3\ See Exchange Rule 404, Interpretation and Policy .02.
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    Next, the Exchange proposes to amend Exchange Rule 404, 
Interpretation and Policy .02(c), to add the word ``thirty'' before the 
number in parentheses in the first sentence for purposes of consistency 
and clarity in the rule text.
    Next, the Exchange proposes to amend Exchange Rule 404, 
Interpretation and Policy .02(f), to add the number ``(21)'' after the 
word ``twenty-one'' for purposes of consistency and clarity in the rule 
text.
    Next, the Exchange proposes to amend Exchange Rule 404, 
Interpretation and Policy .10, to update the name of one of the 
Exchange-Traded Funds (``ETF'') from ``PowerShares Trust (``QQQ'')'' to 
its updated name ``Invesco QQQ Trust (``QQQ'').'' \4\ According to the 
most recent Prospectus for the QQQ ETF, the ETF Sponsor changed that 
ETF's name. Accordingly, the Exchange proposes to update the name of 
the QQQ ETF for consistency with the QQQ ETF's Prospectus.
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    \4\ See Invesco QQQ Trust, Series 1 Prospectus, dated January 
31, 2021, https://connect.rightprospectus.com/Invesco/TADF/46090E103/P?site=ETF.
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    Next, the Exchange proposes to amend Exchange Rule 404, 
Interpretation and Policy .11, to add the number ``(21)'' after the 
word ``twenty-one'' for purposes of consistency and clarity in the rule 
text.
    Next, the Exchange proposes to amend subparagraph (b) of Exchange 
Rule 404A to add quotation marks around the phrase ``Exchange Traded 
Fund Shares'' for the sentence to be grammatically correct.
    Next, the Exchange proposes to amend subparagraph (a) of Exchange 
Rule 406, Long-Term Option Contracts, to add the number ``(10)'' after 
the word ``ten'' for purposes of consistency and clarity in the rule 
text.
    Next, the Exchange proposes to amend subparagraphs (b)(i)-(iv) of 
Exchange Rule 500, Access to and Conduct on the Exchange, to: (1) 
Replace periods with semicolons; and (2) add the word ``and'' to 
subparagraph (b)(iv) in the list for the sentence to be grammatically 
correct. The Exchange proposes to replace the periods in (i)-(iv) for 
the sentence to be grammatically correct and for purposes of clarity in 
the rule text.
    Next, the Exchange proposes to amend subparagraph (b)(1)(ii)(A) to 
Exchange Rule 503, Openings on the Exchange, to remove the word ``or'' 
for purposes of clarity and consistency in the rule text.
    Next, the Exchange proposes to amend Exchange Rule 515, Execution 
of Orders, to make minor, non-substantive edits and clarifying changes 
to the rule text in order to provide consistency and clarity within the 
rule text. Exchange Rule 515(g)(3)(iv) currently contains several 
references to the term ``Post-Only.'' However, there are two instances 
in subparagraph (g)(3)(iv) of Exchange Rule 515 where the term ``Post-
Only'' is missing the hyphen connecting the two words. The Exchange now 
proposes to amend paragraph (g)(3)(iv) to amend all references to 
``Post-Only'' to add the hyphen where it is missing. The purpose of 
these changes is to provide consistency and clarity throughout the rule 
text.
    Next, the Exchange proposes to amend Exchange Rule 519, MIAX Pearl 
Order Monitor (``MOM''), to make minor, non-substantive edits and 
clarifying changes to the rule text. The Exchange proposes to amend the 
example in Exchange Rule 519(a)(3) to move the word ``not'' in clause 
``(B)'' of that example. With the proposed change, clause ``(B)'' will 
state as follows: ``(B) if the NBO is $0.10 an incoming limit order to 
buy options for $0.15 will not be rejected; whereas if the NBO is $0.10 
an incoming limit order to buy options for $0.35 will be rejected as 
the limit price of the order is $0.25 greater than the NBO.'' 
Similarly, the Exchange proposes to amend the example in Exchange Rule 
519(a)(4) to delete the extra word ``be'' in the last part of clause 
``(B'') of that example. With the proposed change, clause ``(B)'' will 
state as follows: ``(B) if the NBB is $0.30 an incoming limit order to 
sell options for $0.15 will be rejected; whereas if the NBB is $0.30 an 
incoming limit order to sell options for $0.20 will not be rejected as 
the limit price of the order is not less than 50% of the NBB price.'' 
The purpose of these changes is to provide clarity in the rule text.

[[Page 55087]]

2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \6\ 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 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed 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 changes will provide greater clarity to 
Members \7\ 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.
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    \7\ The term ``Member'' means an individual or organization that 
is registered with the Exchange pursuant to Chapter II of these 
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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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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. Specifically, the Exchange 
believes the proposed changes will not impose any burden on intra-
market competition as there is no functional change to the Exchange's 
System and because the rules of the Exchange apply to all MIAX Pearl 
participants equally. The proposed rule change will have no impact on 
competition as it is not designed to address any competitive issue but 
rather is designed to remedy minor non-substantive issues and provide 
added clarity to the rule text of Exchange Rules 100, 402, 403, 404, 
404A, 406, 500, 503, 515, and 519. In addition, the Exchange does not 
believe the proposal will impose any burden on inter-market competition 
as the proposal does not address any competitive issues and is intended 
to protect investors by providing further transparency regarding the 
Exchange's functionality.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) \8\ of the Act and Rule 19b-4(f)(6) thereunder.\9\ 
Because the foregoing 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)(iii) of the Act and subparagraph (f)(6) of Rule 
19b-4 thereunder.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of its intent to file the 
proposed rule change at least five business days prior to the date 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange has satisfied this 
requirement.
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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 should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-PEARL-2021-43 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-PEARL-2021-43. 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-2021-43, and should be submitted 
on or before October 26, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21747 Filed 10-4-21; 8:45 am]
BILLING CODE 8011-01-P