Notice2024-30781
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Certain Clarifying Changes Related to New Time-In-Force Instructions on MIAX Pearl Equities
Primary source
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Published
December 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 247 (Thursday, December 26, 2024)</title>
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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Notices]
[Pages 105163-105165]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30781]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101977; File No. SR-PEARL-2024-58]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Make Certain
Clarifying Changes Related to New Time-In-Force Instructions on MIAX
Pearl Equities
December 19, 2024
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on December 10, 2024, MIAX PEARL, LLC (``MIAX Pearl'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the 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\ 15 U.S.C. 78a.
\3\ 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 make clarifying changes related to new
Time-In-Force (``TIF'') instructions that were adopted as part of a
recent proposal to expand the trading hours of its equity trading
platform (referred to herein as ``MIAX Pearl Equities'').
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 make clarifying changes related to new TIF
instructions that were adopted as part of a recent proposal to expand
the trading hours of MIAX Pearl Equities. The Exchange recently
submitted a proposed rule change to expand its hours of operations by
adopting both an Early and Late Trading Session.\4\ Pursuant to that
proposal,\5\ the Early Trading Session would operate from 4:00 a.m.
until 9:30 a.m. Eastern Time. Then the existing Regular Trading Hours
\6\ would follow, which currently operates from 9:30 a.m. until 4:00
p.m. Eastern Time. Within Regular Trading Hours, the Exchange also
operates the existing Regular Trading Session,\7\ which operates from
the completion of the Exchange's Opening Process described in Exchange
Rule 2615 until 4:00 p.m. Eastern Time. The Late Trading Session would
follow and operate from 4:00 p.m. until 8:00 p.m. Eastern Time.
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\4\ See Securities Exchange Act Release No. 101358 (October 16,
2024), 89 FR 84406 (October 22, 2024) (SR-PEARL-2024-47) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Adopt Both an Early and Late Trading Session on its Equity Trading
Platform).
\5\ Id.
\6\ See Exchange Rule 1901.
\7\ Id.
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The Exchange currently offers two TIF instructions, Immediate-Or-
Cancel (``IOC'') and Regular Hours Only (``RHO''), the operation of
each are described under Exchange Rule 2614(b)(1) and (2),
respectively. In its proposal to add the Early and Late Trading
Sessions, among other things, the Exchange amended its rules to adopt
the following four additional TIF instructions: Day, Fill-Or-Kill
(``FOK''), Good-`til Time (``GTT''), and Good-`til Extended Day
(``GTX''). In sum, the Day TIF is an instruction that may be attached
to an order stating that an order to buy or sell which, if not
executed, expires at the end of Regular Trading Hours. The FOK TIF is
an instruction that may be attached to an order stating that the order
is to be executed in its entirety as soon as it is received and, if not
so executed, cancelled. The GTT TIF is an instruction that may be
attached to an order specifying the time of day at which the order
expires. Lastly, the GTX TIF is an instruction that may be attached to
an order to buy or sell which, if not executed, will be cancelled by
the close of the Late Trading Session.
Like RHO, the TIF instructions of Day, GTT, and GTX all allow
Equity Members \8\ to instruct the Exchange to post their order to the
MIAX Pearl Equities Book if not executed upon entry. Also, like IOC,
the TIF instruction of FOK provides that an order be executed upon
entry and not posted to the MIAX Pearl Equities Book. Therefore, as
part of its proposal to add the Early and Late Trading Session, the
Exchange amended provisions within its rules to account for the TIF
instructions where appropriate, such as adding the TIF instructions of
Day, GTT, and GTX following references to RHO, or FOK following
references to IOC.\9\
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\8\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
\9\ See supra note 3.
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The Exchange now proposes to make other clarifying changes to its
rules to account for the new TIF instructions that it inadvertently did
not include in its earlier proposed rule change. As described below,
each of these changes would ensure the Exchange's rules provide for the
consistent treatment of like TIF instructions, provide additional
clarity, and are consistent with the rules of other national securities
exchanges. The Exchange does not propose to make any other changes to
its rules or to amend functionality. Each of these changes are as
follows:
<bullet> Exchange Rule 2614(a)(1)(ii) currently provides that a
Limit Order may include a TIF of IOC or RHO. In the filing to adopt the
Early and Late Trading Sessions and additional TIF instructions,
Exchange Rule 2614(a)(1)(ii) was amended to also provide that a Limit
Order may include a TIF of FOK, Day, GTT, or GTX.\10\ The Exchange now
proposes to amend Exchange Rule 2614(a)(1)(vi) to account for the new
additional TIF instructions by providing that ``[d]uring a Short Sale
[[Page 105164]]
Period, as defined in Exchange Rule 2614(g)(3)(i), the System will
immediately cancel any portion of an incoming Limit Order designated as
ISO and short that includes a time-in-force instruction RHO, Day, GTT,
or GTX that cannot be executed or displayed at its limit price at the
time of entry pursuant to Rule 201 of Regulation SHO.''
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\10\ Id.
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<bullet> In sum, Exchange Rule 2614(c)(7) provides that Minimum
Execution Quantity (``MEQ'') is an order instruction that may be
attached to a non-displayed order requiring the System to execute the
order only to the extent that a minimum quantity can be satisfied.
Exchange Rule 2614(c)(7)(B) describes the operation of orders with an
MEQ instruction when resting on the MIAX Pearl Equities Book. The
Exchange now proposes to amend Exchange Rule 2614(c)(7)(ii) to account
for the new additional TIF instructions and provide that ``[w]here
there is insufficient size to satisfy an incoming order's minimum
quantity condition, that incoming order with a Minimum Execution
Quantity instruction with a time-in-force of RHO, Day, GTT, or GTX will
not trade and will be posted on the MIAX Pearl Equities Book.''
<bullet> Exchange Rule 2614(e) provides for the cancelation and
replacement of an existing order. The Exchange now proposes to amend
Exchange Rule 2614(e)(1) to include the new additional TIF instruction
of FOK and provide that ``[o]rders may only be cancelled or replaced if
the order has a time-in-force term other than IOC or FOK and if the
order has not yet been executed.''
<bullet> Exchange Rule 2615(e) describes how the Exchange re-opens
a security following a halt and provides, in sum, that the re-opening
process would operate in the same manners as the Exchange's Opening
Process set forth under Exchange Rule 2615(a)--(c), with certain
exceptions. One exception is provided for under Exchange Rule
2615(e)(1) which states that orders with a TIF instruction of IOC would
be cancelled or rejected, as applicable. The Exchange proposes to amend
Exchange Rule 2615(e)(1) to include the TIF instruction of FOK and
provide that ``ISOs and orders that include a time-in-force of IOC or
FOK be cancelled or rejected, as applicable.''
<bullet> Exchange Rule 2622 discusses the Exchange's mechanisms to
comply with the Limit Up-Limit Down Plan.
[cir] First, Exchange Rule 2622(h)(2)(i)5.a. provides that Market
Orders and orders designated IOC will only be executed at or within the
Price Bands. This provision would be amended to also provide that
orders designated as FOK will only be executed at or within the Price
Bands.
[cir] Second, Exchange Rule 2622(h)(3)(B) provides that during any
Operational Halt, the System will accept all orders, except orders
designated as ISO and orders that include a TIF instruction of IOC, for
queuing and participation in the Re-Opening Process pursuant to Rule
2615(e). This provision would be amended to also provide that orders
that include a TIF instruction of FOK will not be accepted for queuing
and participation in the Re-Opening Process pursuant to Rule 2615(e).
Implementation
Due to the technological changes associated with this proposed
change, the Exchange will issue a trading alert publicly announcing the
implementation date of the proposed enhancements to its risk controls
set forth herein. The Exchange anticipates that the implementation date
will be in the first or second quarter of 2025.\11\
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\11\ See, e.g., MIAX Pearl Equities--Roll Out of Extended Hours
Trading & Update to Mandatory FOI and MEO Upgrade Deadline, dated
November 13, 2024, available at <a href="https://www.miaxglobal.com/alert/2024/11/13/miax-pearl-equities-roll-out-extended-hours-trading-update-mandatory-foi">https://www.miaxglobal.com/alert/2024/11/13/miax-pearl-equities-roll-out-extended-hours-trading-update-mandatory-foi</a>.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\12\ in general, and furthers the objectives of Section
6(b)(5),\13\ in particular, because it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in 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. Specifically, the Exchange
believes the proposed amendments will remove impediments to and perfect
the mechanism of a free and open market and a national market system
because they would provide for the consistent treatment of like TIF
instructions and are consistent with the rules of other national
securities exchanges.\14\ The proposed rule change is also consistent
with changes the Exchange proposed in its earlier filing to adopt the
Early and Late Trading Sessions where it amended certain Exchange Rules
to account for the additional TIF instructions.\15\ The Exchange does
not propose any new changes to functionality, but rather to provide
additional clarity within the rule text, make the Exchange's rules
easier to understand, and accurately reflect Exchange functionality.
The proposed rule changes would, therefore, help prevent any potential
investor confusion and thus protect investors and the public interest,
as well as remove impediments to and perfect the mechanism of a free
and open market and a national market system. The Exchange also
believes that the proposed rule change is non-discriminatory as it
would apply to all Equity Members uniformly and all Equity Members
would be treated equally.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ See, e.g., NYSE Arca, Inc. (``NYSE Arca'') Rule
7.31(i)(3)(C); and Cboe EDGA Exchange, Inc. (``Cboe EDGA'') and Cboe
EDGX Exchange, Inc. (``Cboe EDGX'') Rules 11.8(c)(6). Like NYSE
Arca, Exchange Rule Exchange Rule 2614(c)(7)(ii) lists all TIF
instructions that if offers that allow for an order to be posted to
the order book. While Cboe EDGA and Cboe EDGX offer the same TIF
instructions that are listed in this proposal, Exchange Rule
Exchange Rule 2614(a)(1)(vi) lists the TIF instruction while the
Cboe EDGA and Cboe EDGX Rules lack this additional specificity.
\15\ See supra note 3.
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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. The Exchange believes its
proposal will not impose any burden on inter-market competition because
the proposal simply seeks to provide for the consistent treatment of
like TIF instructions, provide market participants additional clarity
within the Exchange's Rules, and provide consistency with the rules of
other national securities exchanges.\16\ The proposal is not designed
to enhance the Exchange's competitive standing, but rather ensure its
rules accurately reflect functionality. The proposal also does not seek
to amend any functionality proposed in the Exchange's previous proposal
to adopt the Early and Late Trading Sessions.\17\ The Exchange believes
its proposal will not impose any burden on intra-market competition
because all orders coupled with the above listed TIF instructions would
be treated equally under the proposed amendments.
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\16\ See supra note 13.
\17\ See supra note 3.
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[[Page 105165]]
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) of the Act and Rule
19b-4(f)(6) thereunder.\18\
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\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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#2351564f460e404c4e4e464d5750635046400d444c55"><span class="__cf_email__" data-cfemail="91e3e4fdf4bcf2fefcfcf4ffe5e2d1e2f4f2bff6fee7">[email protected]</span></a>. Please include
file number SR-PEARL-2024-58 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-2024-58. 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-2024-58 and should be
submitted on or before January 16, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30781 Filed 12-23-24; 8:45 am]
BILLING CODE 8011-01-P
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