Document ID: SEC-2019-1256-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX PEARL, LLC
Posted Date: 2019-09-04T04:00Z

[Federal Register Volume 84, Number 171 (Wednesday, September 4, 2019)]
[Notices]
[Pages 46586-46588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19000]

[[Page 46586]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86787; File No. SR-PEARL-2019-24]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange 
Rules 503, Openings on the Exchange, and 515, Execution of Orders

August 28, 2019.
    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 August 19, 2019, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 503, 
Openings on the Exchange, and 515, Execution of Orders, 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 503, Openings on the 
Exchange, to amend paragraph (c), Deviation from Standard Opening 
Process, to adopt new rule text that identifies the Help Desk staff 
authorized to take actions during the Opening Process to maintain a 
fair and orderly market and to add greater specificity to the language 
currently in place.
    First, the Exchange proposes to amend Exchange Rule 503(c), 
Deviation from Standard Opening Process, to further clarify which 
authorized personnel at the Exchange that may deviate from the standard 
Opening Process in certain market conditions. Exchange Rule 503(c) 
currently states that the Exchange may deviate from the standard manner 
of the Opening Process, including adjusting the timing of the Opening 
Process in any option class, when it believes it is necessary in the 
interests of a fair and orderly market. The Exchange now proposes to 
amend subparagraph (c) to state that Senior Help Desk personnel may 
deviate from the standard manner of the Opening Process when necessary, 
including delay or compel the opening of any series in any option 
class, adjusting the timing of the Opening Process in any option class, 
when necessary in the interests of commencing or maintaining a fair and 
orderly market, in the event of unusual market conditions or in the 
public interest. The Exchange also proposes that it will make and 
maintain records to document all determinations to deviate from the 
standard manner of the Opening Process, and periodically review these 
determinations for consistency with the interests of a fair and orderly 
market.
    The Exchange is amending the rule to add additional specificity by 
designating that only Senior Help Desk personnel may deviate from the 
standard manner of the Opening Process when necessary. The Exchange is 
also providing examples of the type of actions that Senior Help Desk 
personnel may take to ensure a fair and orderly market is maintained. 
Additionally, the Exchange is proposing to amend the rule to adopt a 
provision stating that the Exchange will maintain records to document 
all determinations to deviate from the standard manner of the Opening 
Process, and periodically review these determinations for consistency 
with the interests of a fair and orderly market. The Exchange notes 
that the proposed rule text is similar to that found in the rules for 
the Opening Process of the Exchange's affiliates, Miami International 
Securities Exchange, LLC (``MIAX'') and MIAX Emerald, LLC (``MIAX 
Emerald'').\3\
---------------------------------------------------------------------------

    \3\ See MIAX Rule 503(g) and MIAX Emerald Rule 503(g).
---------------------------------------------------------------------------

    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. Specifically, the Exchange proposes to make a number of 
minor non-substantive edits to references to ``Rule 515'' throughout 
the rule text. Currently, there are several references in Exchange Rule 
515 where the rule refers back to itself generally as ``Rule 515.'' The 
Exchange proposes to amend all general references in Exchange Rule 515 
that are to ``Rule 515'' that do not refer to any particular subsection 
or paragraph to be replaced with ``this Rule'' in order to provide 
consistency and clarity within the rule text. The proposed changes 
would be to references to ``Rule 515'' that are currently in the 
following subsections and paragraphs in Exchange Rule 515: Paragraph 
(a); paragraph (d); subsection (d)(1); subsection (d)(2)(i); subsection 
(d)(2)(iii)(C); subsection (g)(3)(i); and Interpretation and Policy 
.02.
    Next, the Exchange proposes to amend several paragraphs and 
subsections to make corrective changes to the numerical and 
alphabetical list item identifiers to properly conform to the 
hierarchical heading scheme and list item identifiers used throughout 
the Exchange's rulebook. The Exchange notes that anytime there is block 
text in a paragraph or subsection that contains a list of numbered 
clauses or items that are not specifically broken out into their own 
subsections, the Exchange uses romanettes to identify each clause or 
item. Accordingly, paragraph (b) contains independent clauses currently 
numbered ``(1)'' and ``(2)'' which will be renumbered as ``(i)'' and 
``(ii)''. Paragraph (c) contains three separate sentences each with 
independent clauses numbered ``(1)'' and ``(2)'' which will each be 
renumbered as ``(i)'' and ``(ii)''. Subparagraph (d)(2)(i) contains 
three independent clauses currently numbered ``(A)'', ``(B)'' and 
``(C)'' which will be renumbered as ``(i)'', ``(ii)'' and ``(iii)'', 
respectively. Subparagraph (d)(2)(ii) contains four independent clauses 
currently numbered ``(A)'', ``(B)'', ``(C)'' and ``(D)'' which will be 
renumbered as ``(i)'', ``(ii)'', ``(iii)'' and ``(iv)'', respectively. 
Subparagraph

[[Page 46587]]

(g)(3)(i) contains three independent clauses currently numbered 
``(A)'', ``(B)'' and ``(C)'' which will be renumbered as ``(i)'', 
``(ii)'' and ``(iii)'', respectively. Finally, subparagraph (g)(3)(ii) 
contains four independent clauses currently numbered ``(A)'', ``(B)'', 
``(C)'' and ``(D)'' which will be renumbered as ``(i)'', ``(ii)'', 
``(iii)'' and ``(iv)'', respectively.
2. Statutory Basis
    The Exchange 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 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    First, the Exchange is proposing to amend its current provision 
pertaining to the actions that the Exchange may take in the interests 
of maintaining a fair and orderly market to adopt a more detailed and 
nuanced provision from the Exchange's affiliates, MIAX and MIAX 
Emerald.\6\ This provision now identifies which Help Desk personnel may 
take actions during the Opening Process (Senior Help Desk personnel) 
and provides examples of the type of actions which may be undertaken. 
Additionally, the provision provides that the Exchange will make and 
maintain records to document all determinations to deviate from the 
standard manner of the Opening Process and will periodically review 
these determinations for consistency with the interests of a fair and 
orderly market. The Exchange believes its proposal promotes just and 
equitable principles of trade, removes impediments to and perfects the 
mechanisms of a free and open market and a national market system and, 
in general, protects investors and the public interest by providing 
additional detail in the Exchange's rules and by providing a review 
process for instances where there was a deviation from the standard 
Opening Process.
---------------------------------------------------------------------------

    \6\ See supra note 3.
---------------------------------------------------------------------------

    The Exchange believes its proposal removes impediments to and 
perfects the mechanisms of a free and open market by providing clarity 
in the Exchange's rules and more detail concerning the Opening Process 
on the Exchange. The Exchange believes clarity and transparency 
benefits investors and the public and allows investors and the public 
to make informed decisions regarding the Opening Process on the 
Exchange.
    Additionally, the Exchange believes that although MIAX PEARL rules 
may, in certain instances, intentionally differ from MIAX and MIAX 
Emerald rules, the proposed changes will promote uniformity with MIAX 
and MIAX Emerald with respect to rules that are intended to be 
identical. The Exchange believes that it will reduce the potential for 
confusion by its members that are also members of MIAX and MIAX Emerald 
if the only differences between MIAX PEARL, MIAX and MIAX Emerald rules 
are those that are intended.
    The Exchange also believes the proposed changes to Exchange Rule 
515 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 changes make clarifying 
edits to the rule text of Exchange Rule 515, and correct errors in the 
hierarchical heading scheme and list item identifiers to provide 
uniformity in the Exchange's rulebook and paragraph formatting. The 
Exchange believes that these proposed changes will provide greater 
clarity to Members and the public regarding the Exchange's rules and 
that 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

    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 changes will have no impact on 
competition as they are not designed to address any competitive issues 
but rather are designed to remedy minor non-substantive issues and 
provide added clarity to the rule text of Exchange Rules 503 and 515. 
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. The 
Exchange does not believe that the proposed rule change to amend the 
provision concerning the actions that the Help Desk may take to deviate 
from the standard manner of the Opening Process to maintain a fair and 
orderly market will impose any burden on inter-market competition as 
the proposed rule change is designed to identify the specific Help Desk 
personnel authorized to deviate from the standard manner of the Opening 
Process and to provide some examples of the type of actions that may be 
undertaken to ensure the operation of a fair and orderly market.

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) \8\ 
thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization 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.
---------------------------------------------------------------------------

    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:

[[Page 46588]]

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-2019-24 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-2019-24. 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-2019-24 and should be submitted on 
or before September 25, 2019.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19000 Filed 9-3-19; 8:45 am]
 BILLING CODE 8011-01-P