Notice2024-22261
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Pearl Options 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
September 30, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 189 (Monday, September 30, 2024)</title>
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[Federal Register Volume 89, Number 189 (Monday, September 30, 2024)]
[Notices]
[Pages 79658-79660]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22261]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101146; File No. SR-PEARL-2024-42]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Options Fee Schedule
September 24, 2024.
Pursuant to the provisions of 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 September 10, 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 and II 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 is filing a proposal to amend the MIAX Pearl Options
Exchange Fee Schedule (the ``Fee Schedule'') to amend Section 5)f),
Member and Non-Member Technical Support Request Fee.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings">https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings</a> at
[[Page 79659]]
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 \3\ proposes to amend Section 5)f), Member and Non-
Member Technical Support Request Fee, to now include in the fee to be
assessed to Members \4\ and non-Members the cost of materials necessary
for the Exchange's data center personnel to complete such technical
support.
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\3\ References to ``MIAX Pearl'' in this filing are to the
options trading facility of MIAX PEARL, LLC.
\4\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions section of
the Fee Schedule and Exchange Rule 100.
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Background
The Exchange established the technical support request fee at the
current hourly rate of $200 per hour in 2017.\5\ The Exchange has an
infrastructure comprised of low latency and ultra-low latency proximity
solutions in several offsite data center locales offering universal
access to all Exchange services via a single common connection across a
variety of high speed network interfaces. The Exchange offers
connectivity in and between its data center facilities and supports
direct attachment of all network equipment or direct attached host
systems of both Member and non-Member users of the Exchange.
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\5\ See Securities Exchange Act Release No. 80061 (February 17,
2017), 82 FR 11676 (February 24, 2017) (SR-PEARL-2017-10). See also
Fee Schedule, Section 5)f).
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Technical support refers to the use of Exchange engineers to
perform on-site technical support tasks in the data centers for Members
and non-Members, including the following support-related tasks: (1)
power cycling of equipment; (2) patching and plugging in cabling and
circuits; (3) observing, describing or reporting on display indicators;
(4) configuration of hardware components instructed by the customer;
(5) diagnosis and repairs as instructed by the customer; (6) swapping
hardware components with Exchange-supplied or customer-supplied spares
or upgrades; (7) troubleshooting heat related issues as instructed by
customers; and (8) returning defective equipment to the manufacturer or
customer.
Proposal
The Exchange proposes to amend Section 5)f), Member and Non-Member
Technical Support Request Fee, to now include in the fee to be assessed
to Members and non-Members that request technical support the cost of
materials necessary for the Exchange to complete such technical support
in any of the Exchange's data centers. Some examples of materials for
such technical support may include, but are not limited to, fiber optic
cables, fiber spool, optical connectors (a device used to connect fiber
optic cables), and patch cables.
The Exchange does not propose to assess any amount in excess of the
cost of any materials that are necessary for the Exchange's on-site
engineers to complete the requested technical support. The Exchange
simply proposes to pass through the costs of the materials, if
necessary, to complete such technical support. At least one competing
exchange group similarly passes through the cost of materials to their
customers when performing similar types of services in their data
centers.\6\
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\6\ See Nasdaq PHLX LLC Rules, General 8 Connectivity, Section
1(d) Additional Charges/Services (assessing $264 per hour for Power
Consulting Service plus the cost of materials, if necessary); The
Nasdaq Stock Market LLC Rules, General 8: Connectivity, Section 1(d)
Additional Charges/Services (assessing $264 per hour for Power
Consulting Service plus the cost of materials, if necessary); Nasdaq
ISE, LLC Rules, General 8: Connectivity, Section 1(d) Additional
Charges/Services (assessing $264 per hour for Power Consulting
Service plus the cost of materials, if necessary).
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2. Statutory Basis
The Exchange believes that the proposed fees are consistent with
Section 6(b) of the Act \7\ in general, and furthers the objectives of
Section 6(b)(4) of the Act \8\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among Members and other persons using any facility or system which the
Exchange operates or controls. The Exchange also believes the proposed
fees further the objectives of Section 6(b)(5) of the Act \9\ in that
they are designed to promote just and equitable principles of trade,
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general protect investors
and the public interest and are not designed to permit unfair
discrimination between customers, issuers, brokers and dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes it is reasonable to include in the cost of
the technical support request fee the cost of any materials that are
necessary for the Exchange's on-site engineers to complete the
requested technical support because the Exchange will only pass through
the actual costs it is charged by external vendors of such materials.
The Exchange will not pass through any amount in excess of the cost of
any materials that are necessary for the Exchange's on-site engineers
to complete the requested technical support.
The Exchange believes the proposal is equitable and not unfairly
discriminatory because the Exchange will pass through the costs of
materials for requested technical support in an equal manner to all
Members and non-Members that request technical support in the data
centers that requires the Exchange to purchase materials to complete
such request. The cost for materials provided by the Exchange's
external vendors supplying the materials will be passed through
directly to the Member or non-Member requesting technical support.
Furthermore, Members and non-Members are not required to use the
technical support service. The Exchange offers this service as a
convenience to all Members and non-Members. The Exchange believes the
proposal is reasonable because it will permit both Members and non-
Members to request the use of the Exchange's on-site data center
personnel as technical support and as a convenience in order to test or
otherwise assess the user's connectivity to the Exchange via its data
centers, while paying for the cost of any materials the Exchange is
required to purchase to complete such requests.
Additionally, at least one competing options exchange group passes
through the cost of materials to their customers when performing
similar types of services in their data centers.\10\
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\10\ See supra note 6.
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[[Page 79660]]
Accordingly, the Exchange believes the proposal is reasonable,
equitable and not unfairly discriminatory.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intra-Market Competition
The Exchange believes the proposal to pass through the cost of any
materials that are necessary for the Exchange's on-site engineers to
complete the requested technical support will not result in any burden
on intra-market competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the Exchange will only
pass-through the actual costs it is charged by third-party external
vendors for such materials. At least one competing options exchange
group similarly passes along charges assessed to those exchanges by
third-party external vendors supplying materials on behalf of that
exchange group's customers.\11\
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\11\ See id.
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Additionally, the pass through of costs for materials will be
assessed equally to all Members and non-Members who request technical
support that requires the Exchange to purchase materials to complete
the requested support. The Exchange notes that Members and non-Members
are not required to use the service. The Exchange offers this service
as a convenience to all Members and non-Members. The Exchange believes
the proposal will not impose any burden on intra-market competition
because it will permit both Members and non-Members to request the use
of the Exchange's on-site data center personnel as technical support
and as a convenience in order to test or otherwise assess the user's
connectivity to the Exchange via its data centers.
Inter-Market Competition
The Exchange believes that the proposed changes will not result in
any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As discussed
above, market participants are not forced to connect to and trade on
all exchanges. The Exchange believes that the proposed pass-through of
costs for materials for technical support will not cause any burden on
inter-market competition because none of these changes impact other
exchanges' ability to compete.
Accordingly, the Exchange does not believe its proposed fee changes
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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 \12\ and Rule 19b-4(f)(2) \13\ 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 change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 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#196b6c757c347a7674747c776d6a596a7c7a377e766f"><span class="__cf_email__" data-cfemail="a7d5d2cbc28ac4c8cacac2c9d3d4e7d4c2c489c0c8d1">[email protected]</span></a>. Please include
file number SR-PEARL-2024-42 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-2024-42. 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-2024-42 and should be
submitted on or before October 21, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-22261 Filed 9-27-24; 8:45 am]
BILLING CODE 8011-01-P
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