Document ID: SEC-2023-0869-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX PEARL, LLC
Posted Date: 2023-08-14T04:00Z

[Federal Register Volume 88, Number 155 (Monday, August 14, 2023)]
[Notices]
[Pages 55107-55109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17305]

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SECURITIES AND EXCHANGE COMMISSION

[[Release No. 34-98089; File No. SR-PEARL-2023-34]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rules 
2614, 2617, and 2626 of the MIAX Pearl Equities Rulebook

August 8, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 31, 2023, MIAX PEARL, LLC (``MIAX Pearl'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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 2614, 
Orders and Order Instructions, 2617, Order Execution and Routing and 
2626, Retail Order Attribution Program, to make minor, non-substantive 
edits and clarifying changes to the rule text applicable to MIAX Pearl 
Equities (``MIAX Pearl Equities''),\3\ an equities trading facility of 
the Exchange.
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    \3\ The term ``MIAX Pearl Equities'' shall mean MIAX Pearl 
Equities, a facility of MIAX PEARL, LLC. See Exchange Rule 1901.
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    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings, 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 hierarchical headings in 
Exchange Rule 2617 as follows: subparagraph (a)(2)(A) will be 
renumbered as (a)(2)(i); subparagraphs (a)(4)(A)-(D) will be renumbered 
as (a)(4)(i)-(iv); subparagraph (b)(1)(A) will be renumbered as 
(b)(1)(i); subparagraphs (b)(1)(A)(i)-(vi) will be renumbered as 
(b)(1)(i)(A)-(F); subparagraphs (b)(4)(A)-(C) will be renumbered as 
(b)(4)(i)-(iii); subparagraphs (b)(4)(B)(i)-(iii) will be renumbered as 
(b)(4)(ii)(A)-(C); subparagraphs (b)(5)(A)-(C) will be renumbered as 
(b)(5)(i)-(iii); subparagraphs (b)(5)(B)(1)-(2) will be renumbered as 
(b)(5)(ii)(A)-(B); subparagraphs (b)(5)(B)(1)(i)-(iii) will be 
renumbered as (b)(5)(ii)(A)1.-3.; subparagraphs (b)(5)(B)(1)(i)(a)-(b) 
will be renumbered as (b)(5)(ii)(A)1. a.-b.; subparagraphs 
(b)(5)(B)(1)(ii)(a)-(b) will be renumbered as (b)(5)(ii)(A)2. a.-b.; 
subparagraphs (b)(5)(B)(2)(i)-(iv) will be renumbered as 
(b)(5)(ii)(B)1.-4.; subparagraph (b)(5)(B)(2)(i)(a) will be renumbered 
as (b)(5)(ii)(B)1. a.; subparagraph (b)(5)(B)(2)(ii)(a) will be 
renumbered as (b)(5)(ii)(B)2. a.; subparagraphs (b)(5)(C)(1)-(2) will 
be renumbered as (b)(5)(iii)(A)-(B); and subparagraphs (b)(6)(A)-(E) 
will be renumbered as (b)(6)(i)-(v).
    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (a)(4)(iii) of Exchange Rule 2617 to replace certain 
internal cross references to other subparagraphs of Exchange Rule 2617 
in light of the proposed hierarchical heading changes described above. 
In particular, the Exchange proposes to amend the cross references 
contained in proposed renumbered Exchange Rule 2617(a)(4)(iii), that 
are to subparagraphs (D), (A), and (B), to now be to proposed 
renumbered subparagraphs (iv), (i), and (ii), respectively. 
Accordingly, with all the proposed changes, Exchange Rule 
2617(a)(4)(iii) will provide as follows:

    (iii) Consistent with Exchange Rule 2614, based on User 
instructions, certain orders are permitted to post and rest on the 
MIAX Pearl Equities Book at prices that lock or cross contra-side 
liquidity, provided, however, that the System will never display a 
locked or crossed market. Subject to sub-paragraph (iv) below, if an 
Aggressing Order or an incoming order to buy (sell), pursuant to 
paragraph (i) or (ii) above, would execute upon entry against a 
resting order to sell (buy) at the same or a worse price as a 
resting displayed order to buy (sell), the Aggressing Order or 
incoming order to buy (sell) will be cancelled or posted to the MIAX 
Pearl Equities Book and ranked in accordance with Exchange Rule 
2616.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (a)(4)(iv) of Exchange Rule 2617 to replace certain 
internal cross references to other subparagraphs of Exchange Rule 2617 
in light of the hierarchical heading changes described above. In 
particular, the Exchange proposes to amend the cross references 
contained in proposed renumbered Exchange Rule 2617(a)(4)(iv) that are 
to subparagraphs (C), (A), and (B), to now be to subparagraphs (iii), 
(i), and (ii), respectively. Accordingly, with all the proposed 
changes, Exchange Rule 2617(a)(4)(iv) will provide as follows:

    (iv) For securities priced equal to or greater than $1.00 per 
share, in the case where a non-displayed order to sell (buy) is 
posted on the MIAX Pearl Equities Book at a price that locks or 
crosses a displayed order to buy (sell) pursuant to sub-paragraph 
(iii) above, an Aggressing Order or an incoming order to buy (sell) 
described in sub-paragraphs (i) and (ii) above that is a Market 
Order or a Limit Order priced more aggressively than the order to 
buy (sell) displayed on the MIAX Pearl Equities Book will execute 
against the non-displayed order to sell (buy) resting on the MIAX 
Pearl Equities Book at one-half minimum price variation greater 
(less) than the price of the resting displayed order to buy (sell). 
For bids or offers under $1.00 per share, this sub-paragraph is 
inapplicable.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (b)(5)(ii) of Exchange Rule 2617 to replace a certain 
internal cross reference to another subparagraph of Exchange Rule 2617 
in light of the hierarchical heading changes described above. In 
particular, the Exchange proposes to amend the cross references 
contained in proposed renumbered Exchange Rule 2617(b)(5)(ii) that is 
to subparagraph (b)(5)(C), to now be to subparagraph (b)(5)(iii). 
Accordingly, with the proposed change, Exchange Rule 2617 (b)(5)(ii) 
will provide as follows:

[[Page 55108]]

    (ii) Route to Primary Auction (``PAC''). PAC is a routing option 
for Market Orders and displayed Limit Orders designated as RHO that 
the entering firm wishes to designate for participation in the 
opening, re-opening (following a regulatory halt, suspension, or 
pause), or closing process of a primary listing market (Cboe BZX, 
NYSE, Nasdaq, NYSE American, or NYSE Arca) if received before the 
opening, re-opening, or closing process of such market. The System 
will designate such orders routed pursuant to the PAC routing option 
with the time-in-force accepted by the primary listing market. 
Displayed Limit Orders coupled with the PAC routing option will be 
eligible to be routed pursuant to the PI routing option described 
under paragraph (b)(5)(iii) of this Rule.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (b)(5)(ii)(A)1.a. of Exchange Rule 2617 to replace a 
certain internal cross reference to another subparagraph of Exchange 
Rule 2617 in light of the changes described above. In particular, the 
Exchange proposes to amend the cross references contained in proposed 
renumbered Exchange Rule 2617 (b)(5)(ii)(A)1.a. that is to subparagraph 
(b)(5)(C) to now be to subparagraph (b)(5)(iii). Accordingly, with the 
proposed change, Exchange Rule 2617 (b)(5)(ii)(A)1.a. will provide as 
follows:

    a. Limit Orders. Any shares that remain unexecuted after 
attempting to execute in the primary listing market's opening or re-
opening process will either be posted to the MIAX Pearl Equities 
Book, executed, or routed pursuant to the PI routing option 
described under paragraph (b)(5)(iii) of this Rule.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (b)(5)(ii)(A)3. of Exchange Rule 2617 to replace certain 
internal cross references to other subparagraphs of Exchange Rule 2617 
in light of the changes described above. In particular, the Exchange 
proposes to amend the cross references contained in proposed renumbered 
Exchange Rule 2617 (b)(5)(ii)(A)3. that are to subparagraph (i) and 
(ii), to now be to subparagraph 1. and 2., respectively. Accordingly, 
with the proposed changes, Exchange Rule 2617 (b)(5)(ii)(A)3. will 
provide as follows:

    3. Retail Orders. A Retail Member Organization (as defined in 
Rule 2626(a)(1)) may designate a Retail Order (as defined in Rule 
2626(a)(2)) to be identified as Retail on an order-by-order basis or 
instruct the Exchange to identify all of its orders as Retail on a 
port-by-port basis. If so designated, a Retail Order will be 
identified as Retail when routed pursuant to paragraphs 1. and 2. 
above, as well as on the Exchange's proprietary data feeds pursuant 
to Rule 2626(f). A Retail Member Organization that instructs the 
Exchange to identify all its Retail Orders as Retail on a particular 
port will be able to override such setting and designate any 
individual Retail Order from that port to not be identified as 
Retail when routed to the primary listing market pursuant to 
paragraphs 1. and 2. above.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (b)(5)(ii)(B) of Exchange Rule 2617 to replace certain 
internal cross references to other subparagraphs of Exchange Rule 2617 
in light of the changes described above. In particular, the Exchange 
proposes to amend the cross references contained in proposed renumbered 
Exchange Rule 2617 (b)(5)(ii)(B) that are to subparagraphs (1) and 
(b)(5)(C) to now be to subparagraphs (A) and (b)(5)(iii), respectively. 
Accordingly, with the proposed changes, Exchange Rule 2617 
(b)(5)(ii)(B) will provide as follows:

    1. Limit Orders Designated as RHO. If a Limit Order designated 
as RHO is entered after the security has opened on the primary 
listing market, before being routed to the primary listing market's 
re-opening or closing process pursuant to paragraph (A) above, the 
Exchange will check the System for available shares and then route 
the remaining shares pursuant to the PI routing option described 
under paragraph (b)(5)(iii) of this Rule.
    a. Any shares that remain unexecuted after routing will either 
be posted to the MIAX Pearl Equities Book, executed, or routed 
pursuant to the PI routing option described under paragraph 
(b)(5)(iii) of this Rule.
    2. Limit Orders Designated as IOC. If a Limit Order designated 
as IOC is entered after the security has opened on the primary 
listing market, the Exchange will check the System for available 
shares and then route the remaining shares pursuant to the PI 
routing option described under paragraph (b)(5)(iii) of this Rule. 
Any shares that remain unexecuted after routing will be cancelled in 
accordance with the terms of the order.
    a. A Limit Order designated as IOC received during the time when 
the Exchange is in the process of routing orders to the primary 
listing market's re-opening process pursuant to paragraph (A) above 
will be rejected.
    3. Market Orders Designated as RHO. A Market Order designated as 
RHO that is entered after the security has opened on the primary 
listing market will be handled in accordance with paragraph (A) 
above.

    Next, the Exchange proposes to amend proposed renumbered 
subparagraph (b)(5)(iii) of Exchange Rule 2617 to replace certain 
internal cross references to other subparagraphs of Exchange Rule 2617 
in light of the changes described above. In particular, the Exchange 
proposes to amend the cross references contained in proposed renumbered 
Exchange Rule 2617 (b)(5)(iii) that are to subparagraphs (B)(1) and 
(B)(2) to now be to subparagraphs (ii)(A) and (ii)(B), respectively. 
Accordingly, with the proposed changes, Exchange Rule 2617 (b)(5)(iii) 
will provide as follows:

    (A) Limit Orders Designated as RHO. A displayed Limit Order 
designated as RHO that is coupled with the PAC routing option 
described under paragraph (ii)(A) above will automatically be 
coupled by the System with the PI routing option.
    (B) Limit Orders Designated as IOC. A Limit Order designated as 
IOC that is coupled with the PAC routing option described under 
paragraph (ii)(B) above received during continuous trading will be 
automatically defaulted by the System to the PI routing option. Such 
Limit Orders are not eligible to be routed pursuant the PAC routing 
option.

    Next, the Exchange proposes to amend subparagraph (a)(2)(B) of 
Exchange Rule 2614 to replace a certain internal cross reference to 
another rule in light of the hierarchical heading changes described 
above. In particular, the Exchange proposes to amend the cross 
reference contained in Exchange Rule 2614(a)(2)(B) that is to current 
Exchange Rule 2617(b)(5)(B) to now be to proposed renumbered Exchange 
Rule 2617(b)(5)(ii).
    Similarly, the Exchange proposes to amend subparagraph (f) of 
Exchange Rule 2626 to replace a certain internal cross reference to 
another rule in light of the changes described above. In particular, 
the Exchange proposes to amend the cross reference contained in 
Exchange Rule 2626(f) that is to current Exchange Rule 
2617(b)(5)(B)(1)(iii), to now be to proposed renumbered Exchange Rule 
2617(b)(5)(ii)(A)3.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with section 6(b) of the Act \4\ in general, and furthers the 
objectives of section 6(b)(1) of the Act \5\ in particular, in that 
they are designed to enforce compliance by the Exchange's Equity 
Members \6\ and persons associated with its Equity Members, with the 
provisions of the rules of MIAX Pearl Equities. In particular, the 
Exchange believes that the proposed rule changes will provide greater 
clarity to Equity Members and the public regarding the Exchange's Rules 
by providing consistency within the Exchange's Rulebook. The proposed 
changes will ensure the hierarchical heading scheme aligns throughout 
the Exchange's Rulebook. The proposed changes will also make it easier 
for

[[Page 55109]]

Equity Members to interpret the Exchange's Rulebook.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(1).
    \6\ The term ``Equity Member'' is a Member authorized by the 
Exchange to transact business on MIAX Pearl Equities. See Exchange 
Rule 1901.
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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 \7\ and because the rules of the Exchange apply to all MIAX 
Pearl Equities 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 2614, 2617, and 2626. 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.
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    \7\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. 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 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 \8\ and Rule 
19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of its 
intent to file the proposed rule change, along with a brief 
description and text of 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.

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 [email protected]. Please include 
file number SR-PEARL-2023-34 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-2023-34. 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 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-PEARL-2023-34 and should be 
submitted on or before September 5, 2023.
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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\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-17305 Filed 8-11-23; 8:45 am]
BILLING CODE 8011-01-P