Notice2024-03644
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule Regarding the Open-Close Report Data
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
February 23, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 37 (Friday, February 23, 2024)</title>
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[Federal Register Volume 89, Number 37 (Friday, February 23, 2024)]
[Notices]
[Pages 13789-13791]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03644]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99554; File No. SR-PEARL-2024-08]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee
Schedule Regarding the Open-Close Report Data
February 16, 2024.
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 February 5, 2024, 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.
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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 proposes to amend the MIAX Pearl Options Exchange Fee
Schedule (the ``Fee Schedule'') regarding the Open-Close Report to
allow subscribers who purchase Intra-Day Open Close data the ability to
request End-of-Day Open-Close data for no additional charge.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings">https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings</a>, at the Exchange'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 offers a data product known as the Open-Close Report
that is available for purchase by Exchange Members \3\ and non-Members.
The Open-Close Report is described under Exchange Rule 531(b)(1). The
data contained in the Open-Close Report is proprietary Exchange trade
data and does not include trade data from any other exchange. It is
also a historical data product and not a real-time data feed. The
Exchange now proposes to amend fees for the Open-Close Report to allow
subscribers who purchase Intra-Day Open Close data the ability to
request End-of-Day Open-Close data for no additional charge.
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\3\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report. The End-of-
Day version is a volume summary of trading activity on the Exchange at
the option level by origin (Priority Customer,\4\ Non-Priority
Customer, Firm, Broker-Dealer, and Market Maker \5\), side of the
market (buy or sell), contract volume, and transaction type (opening or
closing). The customer and professional customer volume is further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts).
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\4\ See Exchange Rule 100.
\5\ Id.
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The Intra-Day Open-Close Report provides similar information to
that of the End-of-Day version but is produced and updated every 10
minutes during the trading day. Data is captured in ``snapshots'' taken
every 10 minutes throughout the trading day and is available to
subscribers within five minutes of the conclusion of each 10-minute
period. Each update represents the aggregate data captured from the
current ``snapshot'' and all previous ``snapshots.'' The Intra-Day
Open-Close data provides a volume summary of trading activity on the
Exchange at the option level by origin (Priority Customer, Non-Priority
Customer, Firm, Broker-Dealer, and Market Maker), side of the market
(buy or sell), and transaction type (opening or closing). All volume is
further broken down into trade size buckets (less than 100 contracts,
100-199 contracts, greater than 199 contracts).
The Exchange assesses a monthly fee of $600 per month for
subscribing to the End-of-Day summary Open-Close Report and $2,000 per
month for subscribing to the Intra-Day Open-Close Report. The Exchange
also assesses a fee of $500 per request per month for ad-hoc requests
for historical End-of-Day Open-Close data. An ad-hoc request for
historical End-of-Day Open-Close data can be for any number of months
beginning with June 2021 for which the data is available. The Exchange
also assesses a fee of $1,000 per request per month for ad-hoc requests
for historical Intra-Day Open-Close data. An ad-hoc request for
historical Intra-Day Open-Close data can be for any number of months
beginning with March 2017 for which the data is available.
The Exchange now proposes to amend fees for the Open-Close Report
to allow subscribers who purchase Intra-Day Open Close data the ability
to request End-of-Day Open-Close data for no additional charge. This
proposal is akin to a fee break for subscribers because it would
decrease the cost to purchase a broader scope of Open-Close Report data
from the Exchange by allowing Intra-Day subscribers to request End-of-
Day data for no additional charge Specifically, the Exchange proposes
to allow subscribers who purchase an Intra-Day monthly subscription to
request an End-of-Day monthly subscription for no additional charge.
Similarly, the Exchange proposes to also allow subscribers who purchase
an Intra-Day Ad-hoc Request (historical data) to submit an End-of-Day
Ad-hoc Request (historical data) for the same date or date range for no
additional charge upon request. The Exchange proposes to codify these
proposed changes under new footnotes a. and b. under Section 6 of its
Fee Schedule.\6\
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\6\ The Exchange also proposes to renumber existing footnotes
``*'' as ``c.'' and ``**''as ``d.'' to account for the new footnotes
proposed herein. The Exchange does not proposes to amend the
substance of these existing footnotes.
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[[Page 13790]]
The Open-Close Report remains a completely voluntary product. The
Exchange is not required by any rule or regulation to make this data
available and potential subscribers may purchase it only if they
voluntarily choose to do so. The Exchange notes that other exchanges
offer a similar data product.\7\
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\7\ See, e.g., Cboe Options Fees Schedule, Livevol Fees, Open-
Close Data; Nasdaq ISE, LLC (``ISE'') Options 7 Pricing Schedule,
Section 10.A; Nasdaq PHLX, LLC (``PHLX'') Options 7 Pricing
Schedule, Section 10, PHLX Options Trade Outline (``PHOTO''); Cboe
EDGX Exchange, Inc. (``EDGX'') fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/edgx/">http://markets.cboe.com/us/options/membership/fee_schedule/edgx/</a>; and the
Cboe BZX Exchange, Inc. (``BZX'') fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/bzx/">http://markets.cboe.com/us/options/membership/fee_schedule/bzx/</a>.
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Implementation Date
The proposed changes are immediately effective.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange also believes that
its proposed changes to its Fee Schedule concerning fees for the Open-
Close Report 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 dues, fees and
other charges among its members and other recipients of Exchange data.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. Particularly, the Open-Close Report further
broadens the availability of U.S. option market data to investors
consistent with the principles of Regulation NMS. The data product also
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing
activity across different option series during the trading day may
indicate investor sentiment, which may allow market participants to
make better informed trading decisions throughout the day. Subscribers
to the data may also be able to enhance their ability to analyze option
trade and volume data and create and test trading models and analytical
strategies. The Exchange believes the Open-Close Report provides a
valuable tool that subscribers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading and completely optional.
Moreover, other exchanges offer a similar data product.\12\
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\12\ See supra note 7.
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The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered options exchanges that trade options.
As of January 30, 2024, based on publicly available information, no
single options exchange has more than approximately 14-15% of the
equity options market share and currently the Exchange represents only
approximately 5.40% of the equity options market share for the month of
January 2024.\13\ The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Particularly,
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.'' \14\ Making
similar data products available to market participants fosters
competition in the marketplace, and constrains the ability of exchanges
to charge supra-competitive fees. In the event that a market
participant views one exchange's data product as more or less
attractive than the competition they can and do switch between similar
products.
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\13\ See the ``Market Share'' section of the Exchange's website,
available at <a href="https://www.miaxglobal.com/">https://www.miaxglobal.com/</a>.
\14\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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The Exchange believes its proposal proposes to amend fees for the
Open-Close Report to allow subscribers who purchase Intra-Day Open
Close data the ability to request End-of-Day Open-Close data for no
additional charge promotes just and equitable principles of trade
because it enables subscribers to request additional Open-Close data
for no additional charge. The End-of-Day version is a volume summary of
trading activity on the Exchange, and essentially contains the same
data as is provided in the final Intra-Day version at the end of the
trading day and it is, therefore, reasonable and equitable to provide
that data to Intra-Day subscribers for no additional charge. The
Exchange believes the proposal is reasonable as the Exchange is simply
making additional Open-Close data available for no additional charge,
and fees for the Open-Close Report continue to be both modest and
similar to, or even lower than, the fees assessed by other exchanges
that provide similar data products.\15\ The Exchange is not aware that
any other U.S. options exchange offers portions of their Open-Close
Report data for no additional charge, including as proposed herein.
Nonetheless, should it propose to assess fees in a different manner or
at a significantly higher rate than established fees for similar data
products of other exchanges would simply serve to reduce demand for the
Exchange's data product, which as noted, is entirely optional. Like the
Exchange's Open-Close Report, other exchanges offer similar data
products that each provide insight into trading on those markets and
may likewise aid in assessing investor sentiment. Although each of
these similar Open-Close data products provide only proprietary trade
data and not trade data from other exchanges, it is possible investors
are still able to gauge overall investor sentiment across different
option series based on open and closing interest on any one
exchange.\16\ Similarly, market participants may be able to analyze
option trade and volume data, and create and test trading models and
analytical strategies using only Open-Close data relating to trading
activity on one or more of the other markets that provide similar data
products. As such, if a market participant views another exchange's
Open-Close data as more attractive than its proposed Open-Close Report,
then such market participant can merely choose not to purchase the
Exchange's Open-Close Report and instead purchase another exchange's
Open-Close data product, which offer
[[Page 13791]]
similar data points, albeit based on that other market's trading
activity.
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\15\ See supra note 7.
\16\ The exchange notes that its Open-Close Report data product
does not include data on any exclusive, singly-listed option series.
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Lastly, the Exchange believes the proposal is not unfairly
discriminatory as it would apply equally to all users who choose to
purchase or receive such data.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Rather, the
Exchange believes that the proposal will promote competition by
permitting the Exchange to enhance the value of a data product that is
similar to those offered by other competitor options exchanges.\17\ The
Exchange proposes to allow subscribers who purchase Intra-Day Open
Close data the ability to request End-of-Day Open-Close data for no
additional charge to keep pace with evolving customer needs, and
believes that providing such data to market participants that make
requests for it will continue to contribute to robust competition among
national securities exchanges. Multiple other U.S. options exchanges
offer end-of-day and intra-day Open-Close report data with fees that
are substantially similar to the Exchange's fees. As a result, the
Exchange believes this proposed rule change permits fair competition
among national securities exchanges.
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\17\ See supra note 7.
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Furthermore, the Exchange operates in a highly competitive
environment, and its ability to price Open-Close Report data is
constrained by competition among exchanges that offer Open-Close report
data to their customers. The Exchange notes that there are currently a
number of similar products available to market participants and
investors. Multiple other U.S. options exchanges offer Open-Close
report data, which the Exchange must consider in its pricing discipline
in order to compete for the market data.\18\ The Exchange notes that
this proposal is akin to a fee break for subscribers because it would
decrease the cost to purchase a broader scope of Open-Close Report data
from the Exchange by allowing Intra-Day subscribers to request End-of-
Day data for no additional charge. Further, the Exchange is not aware
that any other U.S. options exchange offers portions of their Open-
Close Report data for no additional charge, including as proposed
herein. Nonetheless, should the Exchange propose fees that are
excessively higher than established fees for Open-Close Report data
would simply serve to reduce demand for the Exchange's data product,
which as discussed, market participants are under no obligation to
utilize. In this competitive environment, potential purchasers are free
to choose which, if any, similar product to purchase to satisfy their
need for market information. As a result, the Exchange believes this
proposed rule change permits fair competition among national securities
exchanges.
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\18\ Id.
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The Exchange also does not believe the proposal would cause any
unnecessary or inappropriate burden on intermarket competition as other
exchanges are free to introduce their own comparable data product and
lower their prices for Open-Close Report data to better compete with
the Exchange's offering. The Exchange does not believe the proposed
rule change would cause any unnecessary or inappropriate burden on
intramarket competition. Particularly, the proposal would apply
uniformly to any market participant. The proposal allows any interested
Member or non-Member to request Open-Close Report data based on their
business needs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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,\19\ and Rule 19b-4(f)(2) \20\ 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.
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\19\ 15 U.S.C. 78s(b)(3)(A)(ii).
\20\ 17 CFR 240.19b-4(f)(2).
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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#5f2d2a333a723c3032323a312b2c1f2c3a3c71383029"><span class="__cf_email__" data-cfemail="3240475e571f515d5f5f575c4641724157511c555d44">[email protected]</span></a>. Please include
file number SR-PEARL-2024-08 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-2024-08. 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-2024-08 and should be
submitted on or before March 15, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03644 Filed 2-22-24; 8:45 am]
BILLING CODE 8011-01-P
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