Notice2023-08225
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Pearl Equities Fee Schedule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 19, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 75 (Wednesday, April 19, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 75 (Wednesday, April 19, 2023)]
[Notices]
[Pages 24249-24253]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-08225]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97308; File No. SR-PEARL-2023-16]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Equities Fee Schedule
April 13, 2023.
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 March 31, 2023, MIAX PEARL, LLC (``MIAX Pearl'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'' or
``SEC'') 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 the fee schedule (the
``Fee Schedule'') applicable to MIAX Pearl Equities, an equities
trading facility of the Exchange.
The text of the proposed rule change is available on the Exchange's
website at <a href="http://www.miaxoptions.com/rule-filings/pearl">http://www.miaxoptions.com/rule-filings/pearl</a> at MIAX
Pearl's principal
[[Page 24250]]
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 Fee Schedule to: (i) increase
the rebate for Adding Liquidity Displayed Orders and Adding Liquidity
Non-Displayed Orders in securities priced below $1.00 per share; (ii)
increase the fee for Removing Liquidity in securities priced below
$1.00 per share; (iii) update the corresponding liquidity indicator
codes to reflect the aforementioned proposed changes in (i) and (ii)
above; and (iv) increase the percentage threshold for Add Volume Tier 3
from 0.20% to 0.30% of total consolidated volume (``TCV'').\3\
---------------------------------------------------------------------------
\3\ The term ``TCV'' means total consolidated volume calculated
as the volume in shares reported by all exchanges and reporting
facilities to a consolidated transaction reporting plan for the
month for which the fees apply. The Exchange excludes from its
calculation of TCV volume on any given day that the Exchange's
system experiences a disruption that lasts for more than 60 minutes
during Regular Trading Hours, on any day with a scheduled early
market close, and on the ``Russell Reconstitution Day'' (typically
the last Friday in June). See the Definition Section of the Fee
Schedule.
---------------------------------------------------------------------------
The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of many venues, including 16 registered equities
exchanges as well as a number of alternative trading systems and other
off-exchange venues, to which market participants may direct their
order flow. Based on publicly available information, no single
registered equities exchange currently has more than approximately 15-
16% of the total market share of executed volume of equities
trading.\4\
---------------------------------------------------------------------------
\4\ Market share percentage calculated as of March 29, 2023. The
Exchange receives and processes data made available through
consolidated data feeds.
---------------------------------------------------------------------------
Proposal To Increase the Rebate for Adding Liquidity Displayed Orders
and Adding Liquidity Non-Displayed Orders in Securities Priced Below
$1.00 per Share
Currently, the Exchange provides a rebate of (0.10%) \5\ of the
total dollar value of any transaction in securities priced below $1.00
per share that adds liquidity (displayed or non-displayed) across all
Tapes to the Exchange.\6\ The Exchange now proposes to increase the
rebate from (0.10%) to (0.15%) of the total dollar value of any
transaction in securities priced below $1.00 per share that adds
liquidity (displayed or non-displayed) across all Tapes to the
Exchange. The purpose of the proposed change is for business and
competitive reasons.
---------------------------------------------------------------------------
\5\ The Exchange indicates rebates in parentheses in the Fee
Schedule. See the General Notes Section of the Fee Schedule.
\6\ See Fee Schedule, Section 1)a). See also Fee Schedule,
Section 1)b), Liquidity Indicator Codes AA, AB, AC, AR, Aa, Ab, Ac,
Ap, and Ar.
---------------------------------------------------------------------------
Proposal To Increase the Fee for Removing Liquidity in Securities
Priced Below $1.00 per Share
Currently, the Exchange assesses a fee of 0.20% of the total dollar
value of any transaction in securities priced below $1.00 per share
that removes liquidity across all Tapes from the Exchange.\7\ The
Exchange now proposes to increase the fee from 0.20% to 0.25% of the
total dollar value of any transaction in securities priced below $1.00
per share that removes liquidity across all Tapes from the Exchange.
The purpose of the proposed change is for business and competitive
reasons.
---------------------------------------------------------------------------
\7\ See Fee Schedule, Section 1)a). See also Fee Schedule,
Section 1)b), Liquidity Indicator Codes RA, RB, RC, RR, Ra, Rb, Rc,
Rp and Rr.
---------------------------------------------------------------------------
Proposal To Harmonize Section 1)b), Liquidity Indicator Codes and
Associated Fees, With the Proposed Changes to the Standard Rates Table
The Exchange provides a table of liquidity indicator codes and
associated fees/rebates that are applied to transactions so that Equity
Members \8\ may better understand the fee or rebate that is applied to
each execution. The liquidity indicator code for each execution is
returned on the real-time trade report sent to the Equity Member that
submitted the order. Currently, the Exchange provides over thirty
different liquidity indicator codes, nine of which relate to adding
liquidity to the Exchange and nine that relate to removing liquidity
from the Exchange.
---------------------------------------------------------------------------
\8\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
---------------------------------------------------------------------------
The Exchange now proposes to update the rebates for liquidity
indicator codes that add liquidity to the Exchange to align to the
aforementioned proposed change to increase the standard rebate for
Adding Liquidity Displayed Orders and Adding Liquidity Non-Displayed
Orders from (0.10%) to (0.15%) of the total dollar value of the
transaction in securities priced below $1.00 per share. Specifically,
the Exchange proposes to amend the column titled ``Fee/(Rebate)
Securities Priced Below $1.00'' in Section 1)b) of the Fee Schedule to
reflect the proposed increase to the standard rebate for Adding
Liquidity (Displayed Orders and Non-Displayed Orders) in securities
priced below $1.00 per share for the following liquidity indicator
codes: AA, AB, AC, AR, Aa, Ab, Ac, Ap, and Ar.
Additionally, the Exchange proposes to update the fees for
liquidity indicator codes that remove liquidity from the Exchange to
align to the aforementioned proposed change to increase the standard
fee for Removing Liquidity from 0.20% to 0.25% of the total dollar
value of the transaction in securities priced below $1.00 per share.
Specifically, the Exchange proposes to amend the column titled ``Fee/
(Rebate) Securities Priced Below $1.00'' in Section 1)b) of the Fee
Schedule to reflect the proposed increase to the standard fee for
Removing Liquidity in securities priced below $1.00 per share for the
following liquidity indicator codes: RA, RB, RC, RR, Ra, Rb, Rc, Rp,
and Rr. The purpose of these changes is to harmonize the table in
Section 1)b) of the Fee Schedule to the changes proposed in Section
1)a) of the Fee Schedule.
Proposal To Amend the Percentage Threshold for Tier 3 of the Add Volume
Tiers
Currently, the Exchange provides a volume-based tier structure in
Section 1)c) of the Fee Schedule, referred to as the Add Volume Tiers,
in which the Exchange provides an enhanced rebate for executions of
Adding Liquidity Displayed Orders in securities priced at or above
$1.00 per share for Equity Members that meet certain specified volume
thresholds on the Exchange (applicable to Liquidity Indicator Codes AA,
AB and AC). Pursuant to the Add Volume Tiers table in Section 1)c) of
the Fee Schedule, an Equity Member qualifies for an enhanced rebate
under Tier 1 by achieving an average daily
[[Page 24251]]
volume added (``ADAV'') \9\ of at least 0.07% of the TCV. Equity
Members that qualify for Tier 1 receive an enhanced rebate of ($0.0032)
per share for executions of Adding Liquidity Displayed Orders for
executions of orders in securities priced at or above $1.00 per share
across all Tapes. An Equity Member qualifies for an enhanced rebate
under Tier 2 by achieving an ADAV of at least 0.10% of the TCV. Equity
Members that qualify for Tier 2 receive an enhanced rebate of ($0.0035)
per share for executions of Added Displayed Volume for executions of
orders in securities priced at or above $1.00 per share across all
Tapes. An Equity Member qualifies for an enhanced rebate under Tier 3
by achieving an ADAV of at least 0.20% of the TCV. Equity Members that
qualify for Tier 3 receive an enhanced rebate of ($0.0036) per share
for executions of Added Displayed Volume for executions of orders in
securities priced at or above $1.00 per share across all Tapes.
---------------------------------------------------------------------------
\9\ The term ``ADAV'' means average daily added volume
calculated as the number of shares added per day and ``ADV'' means
average daily volume calculated as the number of shares added or
removed, combined, per day. ADAV and ADV are calculated on a monthly
basis. See the Definitions Section of the Fee Schedule.
---------------------------------------------------------------------------
The Exchange now proposes to amend the Add Volume Tiers table in
Section 1)c) of the Fee Schedule to increase the percentage threshold
for Add Volume Tier 3 from 0.20% to 0.30% of TCV. The Exchange does not
propose to amend the percentage thresholds for Add Volume Tiers 1 or 2
and does not propose to amend any of the enhanced rebates applicable to
the Add Volume Tiers table. With the proposed change, an Equity Member
will now qualify for an enhanced rebate under Tier 3 by achieving an
ADAV of at least 0.30% of the TCV (enhanced rebate of ($0.0036) per
share for executions of Added Displayed Volume for executions of orders
in securities priced at or above $1.00 per share across all Tapes). The
purpose of this change is for business and competitive reasons and to
level-set the Tier 3 volume threshold in light of recent market share
change on the Exchange.
Implementation
The Exchange proposes to implement the changes to the Fee Schedule
pursuant to this proposal on April 1, 2023.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among its Equity Members and issuers and other
persons using its facilities. The Exchange also believes that the
proposed rule change is consistent with the objectives of Section
6(b)(5) \12\ requirements that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, and 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 mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange operates in a highly fragmented and competitive market
in which market participants can readily direct their order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of many venues, including 16 registered equities
exchanges as well as a number of alternative trading systems and other
off-exchange venues, to which market participants may direct their
order flow. Based on publicly available information, no single
registered equities exchange currently has more than approximately 15-
16% of the total market share of executed volume of equities
trading.\13\ Thus, in such a low-concentrated and highly competitive
market, no single equities exchange possesses significant pricing power
in the execution of order flow, and the Exchange currently represents
less than 2% of the overall market share.\14\ The Commission and the
courts have repeatedly expressed their preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and also recognized that current regulation of the market
system ``has been remarkably successful in promoting market competition
in its broader forms that are most important to investors and listed
companies.'' \15\
---------------------------------------------------------------------------
\13\ See ``The Market at a Glance,'' available at <a href="https://www.miaxoptions.com/">https://www.miaxoptions.com/</a> (last visited March 29, 2023).
\14\ Id.
\15\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37499 (June 29, 2005).
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to reduce use of certain categories of
products, in response to new or different pricing structures being
introduced into the market. Accordingly, competitive forces constrain
the Exchange's transaction fees and rebates, and market participants
can readily trade on competing venues if they deem pricing levels at
those other venues to be more favorable. The Exchange believes the
proposal reflects a reasonable and competitive pricing structure
designed to incentivize market participants to direct their order flow
to the Exchange, which the Exchange believes would enhance liquidity
and market quality to the benefit of all Equity Members and market
participants.
Proposal To Increase the Rebate for Adding Liquidity (Displayed Orders
and Non-Displayed Orders) in Securities Priced Below $1.00 per Share
The Exchange believes that the proposed increased rebate for
executions of all orders in securities priced below $1.00 per share
that add displayed and non-displayed liquidity to the Exchange is
reasonable, equitable, and non-discriminatory because it would further
incentivize Equity Members to submit displayed and non-displayed
liquidity-adding orders in sub-dollar securities to the Exchange. The
Exchange believes that this would deepen liquidity and promote price
discovery in such securities to the benefit of all Equity Members, and
such rebates would continue to apply equally to all Equity Members. The
Exchange further believes that the proposed increased rebate is
reasonable because the proposed rebates for executions of liquidity-
adding orders in sub-dollar securities are higher than the rebates
provided by competing exchanges for sub-dollar securities.\16\
---------------------------------------------------------------------------
\16\ See e.g., NYSE Arca Equities Fee Schedule, III. Standard
Rates--Transactions, available at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf</a> (providing a
standard rebate of 0.0% of the total dollar value of the transaction
for liquidity-adding transactions in securities priced below $1.00
per share, and tiered rebates for such transactions ranging from
0.05% to 0.15% of the total dollar value of the transaction based on
a participant achieving certain volume thresholds); see also MEMX
Fee Schedule, Transaction Fees, available at <a href="https://info.memxtrading.com/fee-schedule/">https://info.memxtrading.com/fee-schedule/</a> (providing standard rebates
ranging from 0.075% to 0.15% of the total dollar value for
executions in securities priced below $1.00 per share).
---------------------------------------------------------------------------
[[Page 24252]]
Proposal To Increase the Fee for Removing Liquidity in Securities
Priced Below $1.00 per Share
The Exchange believes that the proposed change to increase the
standard fee for executions of all orders in securities priced below
$1.00 per share that remove liquidity from the Exchange is reasonable,
equitable, and consistent with the Act because it represents a modest
increase from the current standard fee (change from 0.20% to 0.25% of
the total dollar value). Even with the proposed increase, the
Exchange's standard fee for executions of all orders in securities
priced below $1.00 per share that remove liquidity from the Exchange
remains lower than, or similar to, the standard fee to remove liquidity
in securities priced below $1.00 per share charged by competing
equities exchanges.\17\ The Exchange further believes that the proposal
to increase the standard fee for executions of all orders in securities
priced below $1.00 per share that remove liquidity from the Exchange is
equitably allocated and not unfairly discriminatory because it will
apply to all Equity Members that remove liquidity from the Exchange.
---------------------------------------------------------------------------
\17\ See Cboe EDGX Equities Fee Schedule, Standard Rates,
available at <a href="https://www.cboe.com/us/equities/membership/fee_schedule/edgx/">https://www.cboe.com/us/equities/membership/fee_schedule/edgx/</a> (charging a standard fee of 0.30% of the dollar
value to remove liquidity in securities priced below $1.00 per
share); see also MEMX Fee Schedule, Transaction Fees (charging a
standard fee of 0.28% of the total dollar value to remove liquidity
in securities priced below $1.00 per share) and NYSE American
Equities Price List, Section I.A.2., available at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf</a> (charging a standard fee of
0.25% of the total dollar value of the transaction to remove
liquidity in securities priced below $1.00 per share).
---------------------------------------------------------------------------
Proposal To Amend the Percentage Threshold for Tier 3 of the Add Volume
Tiers
The Exchange believes that the proposed change to increase the
percentage threshold for Add Volume Tier 3 is reasonable, equitable,
and consistent with the Act because the Exchange's market share has
risen over the past few months and the proposed change is designed to
level-set Equity Members' trading activity on the Exchange with recent
performance. Even with the proposed percentage threshold increase, the
Exchange's percentage thresholds and corresponding enhanced rebates for
executions of orders in securities priced at or above $1.00 per share
that add liquidity in displayed orders remains similar to the enhanced
rebates to add such liquidity by at least one competing equities
exchange.\18\ The Exchange believes that even with the proposed volume
threshold change to the Add Volume Tier 3, the Exchange's enhanced
rebates and volume thresholds will still allow the Exchange to remain
highly competitive such that the thresholds should enable the Exchange
to continue to attract order flow and maintain market share. As the
amount and type of volume that is executed on the Exchange has shifted
since it first established the Add Volume Tier thresholds, the Exchange
has determined to level-set the volume criteria threshold amount in
Tier 3 so that is more reflective of the current operating conditions
and the current type and amount of volume executed on the Exchange.
---------------------------------------------------------------------------
\18\ See MEMX Fee Schedule, Liquidity Provision Tiers, available
at <a href="https://info.memxtrading.com/fee-schedule/">https://info.memxtrading.com/fee-schedule/</a> (providing enhanced
rebate for added displayed volume in Tier 1 of $0.00335 if the
member has an ADAV (excluding retail orders) greater than or equal
to 0.45% of the TCV).
---------------------------------------------------------------------------
For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act in that it provides for the equitable allocation of reasonable
dues, fees and other charges among its Equity Members and other persons
using its facilities and is not designed to unfairly discriminate
between customers, issuers, brokers, or dealers. As described more
fully below in the Exchange's statement regarding the burden on
competition, the Exchange believes that its transaction pricing is
subject to significant competitive forces, and that the proposed fees
and rebates described herein are appropriate to address such forces.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed changes will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes the proposed changes
will continue to encourage Equity Members to maintain or increase their
order flow to the Exchange, thereby contributing to a deeper and more
liquid market to the benefit of all market participants and enhancing
the attractiveness of the Exchange as a trading venue. As a result, the
Exchange believes the proposal will enhance its competitiveness as a
market that attracts actionable orders, thereby making it a more
desirable destination venue for its customers. For these reasons, the
Exchange believes that the proposal furthers the Commission's goal in
adopting Regulation NMS of fostering competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \19\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 47396 (June 29, 2005).
---------------------------------------------------------------------------
Intra-Market Competition
The Exchange believes that the proposed changes will continue to
incentivize market participants to direct order flow to the Exchange,
thereby contributing to a deeper and more liquid market to the benefit
of all market participants and enhancing the attractiveness of the
Exchange as a trading venue, which the Exchange believes, in turn, will
continue to encourage market participants to direct additional order
flow to the Exchange. Greater liquidity benefits all Equity Members by
providing more trading opportunities and encourages Equity Members to
send orders to the Exchange, thereby contributing to robust levels of
liquidity, which benefits all Equity Members.
The opportunity to qualify for the Add Volume Tiers, and thus
receive the proposed enhanced rebates for executions of displayed added
volume will continue to be available to all Equity Members that meet
the associated volume requirement in any month. The Exchange believes
that meeting the volume requirement of the Add Volume Tiers is
attainable for market participants, as the Exchange believes the
thresholds are relatively low, even with the proposed change to Tier 3,
and are reasonably related to the enhanced liquidity and market quality
that the Add Volume Tiers are designed to promote. Similarly, the
proposed increase to the standard fee for executions of orders that
remove volume from the Exchange will continue to apply equally to all
Equity Members. As such, the Exchange believes the proposed changes
would not impose any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
Intermarket Competition
The Exchange believes its proposal will benefit competition as the
Exchange operates in a highly competitive market. Equity Members have
numerous alternative venues they may participate on and direct their
order flow to, including fifteen other
[[Page 24253]]
equities exchanges and numerous alternative trading systems and other
off-exchange venues. As noted above, no single registered equities
exchange currently has more than 15-16% of the total market share of
executed volume of equities trading.\20\ Thus, in such a low-
concentrated and highly competitive market, no single equities exchange
possesses significant pricing power in the execution of order flow.
Moreover, the Exchange believes that the ever-shifting market share
among the exchanges from month to month demonstrates that market
participants can shift order flow in response to new or different
pricing structures being introduced to the market. Accordingly,
competitive forces constrain the Exchange's transaction fees and
rebates generally, including with respect to executions of orders that
remove volume from the Exchange, and market participants can readily
choose to send their orders to other exchanges and off-exchange venues
if they deem fee levels at those other venues to be more favorable.
---------------------------------------------------------------------------
\20\ See supra note 13.
---------------------------------------------------------------------------
As described above, the proposed changes are competitive proposals
through which the Exchange is seeking to encourage additional order
flow to the Exchange. Such proposed changes to (i) increase the Adding
Liquidity (displayed and non-displayed orders) rebates and Removing
Liquidity fee and (ii) increase the threshold to achieve the enhanced
Tier 3 Add Volume rebate are comparable to, and competitive with, rates
charged by other exchanges.\21\ The proposed change to update the
Liquidity Indicator Codes and Associated Fees table is in conjunction
with the Exchange's abovementioned proposed changes.
---------------------------------------------------------------------------
\21\ See supra notes 16, 17 and 18.
---------------------------------------------------------------------------
Additionally, the Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \22\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
circuit stated: ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their routing agents, have a wide range of choices of where to
route orders for execution'; [and] `no exchange can afford to take its
market share percentages for granted' because `no exchange possess a
monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers' . . . .'' \23\ Accordingly, the Exchange does not
believe its proposed pricing changes impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
---------------------------------------------------------------------------
\22\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\23\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSE-2006-21)).
---------------------------------------------------------------------------
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,\24\ and Rule 19b-4(f)(2) \25\ 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.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78s(b)(3)(A)(ii).
\25\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1361667f763e707c7e7e767d6760536076703d747c65"><span class="__cf_email__" data-cfemail="4e3c3b222b632d2123232b203a3d0e3d2b2d60292138">[email protected]</span></a>. Please include
File Number SR-PEARL-2023-16 on the subject line.
Paper Comments
<bullet> 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-2023-16. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-2023-16, and should be submitted
on or before May 10, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
---------------------------------------------------------------------------
\26\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08225 Filed 4-18-23; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on April 19, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.