Notice2023-17305
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
Primary source
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Published
August 14, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 155 (Monday, August 14, 2023)</title>
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[Federal Register Volume 88, Number 155 (Monday, August 14, 2023)]
[Notices]
[Pages 55107-55109]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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 <a href="https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings">https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings</a>, 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7705021b125a14181a1a121903043704121459101801"><span class="__cf_email__" data-cfemail="7002051c155d131f1d1d151e0403300315135e171f06">[email protected]</span></a>. Please include
file number SR-PEARL-2023-34 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-2023-34. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://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
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
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