Notice2025-10973
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 To Reduce Certain Rebates Provided Under the NBBO Setter Plus Program and the Requirements for Qualifying for the NBBO Setter Additive Rebate and NBBO First Joiner Additive Rebate Under the NBBO Setter Plus Program
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
June 17, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 115 (Tuesday, June 17, 2025)</title>
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[Federal Register Volume 90, Number 115 (Tuesday, June 17, 2025)]
[Notices]
[Pages 25699-25705]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10973]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103234; File No. SR-PEARL-2025-28]
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 To Reduce Certain Rebates Provided Under
the NBBO Setter Plus Program and the Requirements for Qualifying for
the NBBO Setter Additive Rebate and NBBO First Joiner Additive Rebate
Under the NBBO Setter Plus Program
June 11, 2025.
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 June 6, 2025, 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, 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 fee schedule (the ``Fee
Schedule'') applicable to MIAX Pearl Equities, an equities trading
facility of the Exchange, to: (1) reduce the rebate provided under the
NBBO Setter Additive Rebate under the NBBO Setter Plus Program
(referred to in this filing as the ``NBBO Program'') (defined below);
(2) reduce the rebate provided under the NBBO First Joiner Additive
Rebate under the NBBO Program; (3) amend the requirements for
qualifying for the rebates provided under for the NBBO Setter Additive
Rebate and NBBO First Joiner Additive Rebate programs; and (4) make a
non-substantive cleanup change to footnote 5 of the NBBO Setter Plus
Table.
[[Page 25700]]
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 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 Fee Schedule to: (1) reduce the
rebate provided under the NBBO Setter Additive Rebate under the NBBO
Setter Plus Program (referred to in this filing as the ``NBBO
Program''); \3\ (2) reduce the rebate provided under the NBBO First
Joiner Additive Rebate under the NBBO Program; (3) amend the
requirements for qualifying for the rebates provided under for the NBBO
Setter Additive Rebate and NBBO First Joiner Additive Rebate programs;
and (4) make a non-substantive cleanup change to footnote 5 of the NBBO
Setter Plus Table.
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\3\ See, generally, Fee Schedule, Section 1)c).
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The Exchange initially filed this proposal on May 30, 2025 (SR-
PEARL-2025-25), which was withdrawn without being noticed. On June 6,
2025, the Exchange withdrew SR-PEARL-2025-25 and refiled this proposal.
Background of the NBBO Program
In general, the NBBO Program provides enhanced rebates for Equity
Members \4\ that add displayed liquidity (``Added Displayed Volume'')
in securities priced at or above $1.00 per share in all Tapes based on
increasing volume thresholds and increasing market quality levels
(described below), and provides an additive rebate \5\ applied to
orders that set the NBB or NBO \6\ upon entry.\7\ The NBBO Program was
implemented beginning September 1, 2023, and amended when the Exchange
adopted two additional tiers of rebates, effective January 1, 2024.\8\
The NBBO Program was subsequently amended multiple times, including
when the Exchange adopted the NBBO First Joiner Additive Rebate, and
reduced various NBBO Program rebates.\9\
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\4\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
\5\ See Fee Schedule, Section 1)c), NBBO Setter Additive Rebate.
\6\ With respect to the trading of equity securities, the term
``NBB'' shall mean the national best bid, the term ``NBO'' shall
mean the national best offer, and the term ``NBBO'' shall mean the
national best bid and offer. See Exchange Rule 1901.
\7\ See supra note 3.
\8\ See Securities Exchange Act Release Nos. 98472 (September
21, 2023), 88 FR 66533 (September 27, 2023) (SR-PEARL-2023-45) and
99318 (January 11, 2024), 89 FR 3488 (January 18, 2024) (SR-PEARL-
2023-73).
\9\ See, e.g., Securities Exchange Act Release Nos. 98472
(September 21, 2023), 88 FR 66533 (September 27, 2023) (SR-PEARL-
2023-45); 99318 (January 11, 2024), 89 FR 3488 (January 18, 2024)
(SR-PEARL-2023-73); 99695 (March 8, 2024), 89 FR 18694 (March 14,
2024) (SR-PEARL-2024-11); and 102448 (February 13, 2025) 90 FR 10676
(February 25, 2025).
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Pursuant to the NBBO Setter Plus Table in Section 1)c) of the Fee
Schedule, the NBBO Program provides six volume tiers enhanced by three
market quality levels to provide increasing rebates in this segment.
The six volume tiers are achievable by greater volume from the best of
four alternative methods. The three market quality levels are
achievable by greater NBBO participation in a minimum number of
specific securities (described below).
MIAX Pearl Equities first determines the applicable NBBO Program
tier based on four different volume calculation methods. The four
volume-based methods to determine the Equity Member's tier for purposes
of the NBBO Program are calculated in parallel in each month, and each
Equity Member receives the highest tier achieved from any of the four
methods each month. All four volume calculation methods are based on an
Equity Member's respective ADAV,\10\ NBBO Set Volume, ADV, or ADAV
(excluding Sub-Dollar Volume) each as a percent of industry TCV \11\ as
the denominator.
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\10\ ``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.
``NBBO Set Volume'' means the ADAV in all securities of an Equity
Member that sets the NBB or NBO on MIAX Pearl Equities. The Exchange
excludes from its calculation of ADAV, ADV, and NBBO Set Volume
shares added or removed on any 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). Routed shares are not included in the ADAV or ADV
calculation. See the Definitions section of the Fee Schedule.
\11\ ``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 id.
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Under volume calculation Method 1, the Exchange provides tiered
rebates based on an Equity Member's ADAV as a percentage of TCV. An
Equity Member qualifies for the base rebates in Tier 1 for executions
of orders in securities priced at or above $1.00 per share for Added
Displayed Volume across all Tapes by achieving an ADAV of at least
0.00% and less than 0.035% of TCV. An Equity Member qualifies for the
enhanced rebates in Tier 2 for executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume across
all Tapes by achieving an ADAV of at least 0.035% and less than 0.05%
of TCV. An Equity Member qualifies for the enhanced rebates in Tier 3
for executions of orders in securities priced at or above $1.00 per
share for Added Displayed Volume across all Tapes by achieving an ADAV
of at least 0.05% and less than 0.08% of TCV. An Equity Member
qualifies for the enhanced rebates in Tier 4 for executions of orders
in securities priced at or above $1.00 per share for Added Displayed
Volume across all Tapes by achieving an ADAV of at least 0.08% and less
than 0.20% of TCV. An Equity Member qualifies for the enhanced rebates
in Tier 5 for executions of orders in securities priced at or above
$1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.20% and less than 0.40% of TCV.
Finally, an Equity Member qualifies for the enhanced rebates in Tier 6
for executions of orders in securities priced at or above $1.00 per
share for Added Displayed Volume across all Tapes by achieving an ADAV
equal to or greater than 0.40% of TCV.
Under volume calculation Method 2, the Exchange provides tiered
rebates based on an Equity Member's NBBO Set Volume as a percentage of
TCV. Under volume calculation Method 2, an Equity Member qualifies for
the base rebates in Tier 1 for executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume across
all Tapes by achieving an NBBO Set Volume of at least 0.00% and less
than 0.01% of TCV. An Equity Member qualifies for the enhanced rebates
in
[[Page 25701]]
Tier 2 for executions of orders in securities priced at or above $1.00
per share for Added Displayed Volume across all Tapes by achieving an
NBBO Set Volume of at least 0.01% and less than 0.015% of TCV. An
Equity Member qualifies for the enhanced rebates in Tier 3 for
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume across all Tapes by achieving an NBBO Set
Volume of at least 0.015% and less than 0.02% of TCV. An Equity Member
qualifies for the enhanced rebates in Tier 4 for executions of orders
in securities priced at or above $1.00 per share for Added Displayed
Volume across all Tapes by achieving an NBBO Set Volume of at least
0.02% and less than 0.03% of TCV. An Equity Member qualifies for the
enhanced rebates in Tier 5 for executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume across
all Tapes by achieving an NBBO Set Volume of at least 0.03% and less
than 0.08% of TCV. Finally, an Equity Member qualifies for the enhanced
rebates in Tier 6 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an NBBO Set Volume equal to or greater than 0.08% of TCV.
Under volume calculation Method 3, the Exchange provides tiered
rebates based on an Equity Member's ADV as a percentage of TCV. An
Equity Member qualifies for the base rebates in Tier 1 for executions
of orders in securities priced at or above $1.00 per share for Added
Displayed Volume across all Tapes by achieving an ADV of at least 0.00%
and less than 0.15% of TCV. An Equity Member qualifies for the enhanced
rebates in Tier 2 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADV of at least 0.15% and less than 0.18% of TCV. An
Equity Member qualifies for the enhanced rebates in Tier 3 for
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume across all Tapes by achieving an ADV of at
least 0.18% and less than 0.20% of TCV. An Equity Member qualifies for
the enhanced rebates in Tier 4 for executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume across
all Tapes by achieving an ADV of at least 0.20% and less than 0.60% of
TCV. An Equity Member qualifies for the enhanced rebates in Tier 5 for
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume across all Tapes by achieving an ADV of at
least 0.60% and less than 1.00% of TCV. Finally, an Equity Member
qualifies for the enhanced rebates in Tier 6 for executions of orders
in securities priced at or above $1.00 per share for Added Displayed
Volume across all Tapes by achieving an ADV equal to or greater than
1.00% of TCV.
Under volume calculation Method 4, the Exchange provides tiered
rebates based on an Equity Member's ADAV as a percentage of TCV
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. An Equity Member qualifies for the base rebates
in Tier 1 for executions of orders in securities priced at or above
$1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.00% and less than 0.035% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. An Equity Member qualifies for the enhanced
rebates in Tier 2 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.035% and less than 0.05% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. An Equity Member qualifies for the enhanced
rebates in Tier 3 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.05% and less than 0.08% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. An Equity Member qualifies for the enhanced
rebates in Tier 4 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.08% and less than 0.20% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. An Equity Member qualifies for the enhanced
rebates in Tier 5 for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an ADAV of at least 0.20% and less than 0.40% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes. Finally, an Equity Member will qualify for the
enhanced rebates in Tier 6 for executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume across
all Tapes by achieving an ADAV equal to or greater than 0.40% of TCV,
exclusive of executions of orders in securities priced below $1.00 per
share across all Tapes.
After the volume calculation is performed to determine highest tier
achieved by the Equity Member, the applicable rebate is calculated
based on two different measurements based on the Equity Member's
participation at the NBBO on the Exchange in certain securities
(referenced below).
The Exchange provides one column of base rebates (referred to in
the NBBO Program table as ``Level A'') and two columns of enhanced
rebates (referred to in the NBBO Program table as ``Level B'' and
``Level C''),\12\ depending on the Equity Member's Percent Time at NBBO
\13\ on MIAX Pearl Equities in a certain amount of specified securities
(``Market Quality Securities'' or ``MQ Securities'').\14\ The NBBO
Setter Plus Table specifies the percentage of time that the Equity
Member must be at the NBB or NBO on MIAX Pearl Equities in at least 200
symbols out of the full list of 1,000 MQ Securities (which symbols may
vary from time to time based on market conditions). The list of MQ
Securities is generally based on the top multi-listed 1,000 symbols by
ADV across all U.S. securities exchanges. The list of MQ Securities is
updated monthly by the Exchange and published on the Exchange's
website.\15\
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\12\ For the purpose of determining qualification for the
rebates described in Level B and Level C of the Market Quality Tier
columns in the NBBO Setter Plus Program, the Exchange will exclude
from its calculation: (1) any trading day that the Exchange's system
experiences a disruption that lasts for more than 60 minutes during
regular trading hours; (2) any day with a scheduled early market
close; and (3) the ``Russell Reconstitution Day'' (typically the
last Friday in June). See the Definitions section of the Fee
Schedule.
\13\ ``Percent Time at NBBO'' means the aggregate of the
percentage of time during regular trading hours where a Member has a
displayed order of at least one round lot at the national best bid
(``NBB'') or national best offer (``NBO''). See id.
\14\ ``Market Quality Securities'' or ``MQ Securities'' shall
mean a list of securities designated as such, that are used for the
purposes of qualifying for the rebates described in Level B and
Level C of the Market Quality Tier columns in the NBBO Setter Plus
Program. The universe of these securities will be determined by the
Exchange and published on the Exchange's website. See id.
\15\ See e.g., MIAX Pearl Equities Exchange--Market Quality
Securities (MQ Securities) List, effective May 1 through May 31,
2025, available at <a href="https://www.miaxglobal.com/markets/us-equities/pearl-equities/fees">https://www.miaxglobal.com/markets/us-equities/pearl-equities/fees</a> (last visited May 22, 2025).
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The base rebates (``Level A'') are as follows: ($0.00210) \16\ per
share in Tier 1; ($0.00280) per share in Tier 2; ($0.00290) per share
in Tier 3; ($0.00300) per share in Tier 4; ($0.00325) per share in Tier
5; and ($0.00330) per share in Tier 6. Under Level B, the Exchange
provides
[[Page 25702]]
enhanced rebates for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes if
the Equity Member's Percent Time at NBBO is at least 25% and less than
50% in at least 200 MQ Securities per trading day during the month. The
Level B rebates are as follows: ($0.00215) per share in Tier 1;
($0.00285) per share in Tier 2; ($0.00295) per share in Tier 3;
($0.00305) per share in Tier 4; ($0.00330) per share in Tier 5; and
($0.00335) per share in Tier 6. Under Level C, the Exchange provides
enhanced rebates for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes if
the Equity Member's Percent Time at NBBO is at least 50% in at least
200 MQ Securities per trading day during the month. The Level C rebates
are as follows: ($0.00220) per share in Tier 1; ($0.00290) per share in
Tier 2; ($0.00300) per share in Tier 3; ($0.00310) per share in Tier 4;
($0.00335) per share in Tier 5; and ($0.00340) per share in Tier 6. As
referenced above, Equity Members may also qualify for the Tier 5, Level
C enhanced rebate via an alternative method by satisfying the following
three requirements in the relevant month: (1) Midpoint ADAV \17\ of at
least 2,500,000 shares; (2) Displayed ADAV of at least 10,000,000
shares; and (3) Percent Time at the NBB or NBO of at least 50% in 200
or more symbols from the list of MQ Securities.\18\
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\16\ Rebates are indicated by parentheses. See the General Notes
section of the Fee Schedule.
\17\ Midpoint ADAV means the ADAV for the current month
consisting of Midpoint Peg Orders in securities priced at or above
$1.00 per share that execute at the midpoint of the Protected NBBO
and add liquidity to the Exchange. A Midpoint Peg Order is a non-
displayed Limit Order that is assigned a working price pegged to the
midpoint of the PBBO. A Midpoint Peg Order receives a new timestamp
each time its working price changes in response to changes in the
midpoint of the PBBO. See Exchange Rule 2614(a)(3). With respect to
the trading of equity securities, the term ``the term ``Protected
NBB'' or ``PBB'' shall mean the national best bid that is a
Protected Quotation, the term ``Protected NBO'' or ``PBO'' shall
mean the national best offer that is a Protected Quotation, and the
term ``Protected NBBO'' or ``PBBO'' shall mean the national best bid
and offer that is a Protected Quotation. See Exchange Rule 1901.
\18\ See Fee Schedule, Section 1)c), Notes to NBBO Setter Plus
Table, note 3.
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The Exchange also offers an NBBO Setter Additive Rebate, which is
an additive rebate of ($0.0004) per share for executions of orders in
securities priced at or above $1.00 per share for Added Displayed
Volume (other than Retail Orders \19\) that set the NBB or NBO on MIAX
Pearl Equities with a minimum size of a round lot.\20\
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\19\ A ``Retail Order'' is an agency or riskless principal order
that meets the criteria of FINRA Rule 5320.03 that originates from a
natural person and is submitted to the Exchange by a Retail Member
Organization, provided that no change is made to the terms of the
order with respect to price or side of market and the order does not
originate from a trading algorithm or any other computerized
methodology. See Exchange Rule 2626(a)(2).
\20\ See Fee Schedule, Section 1)c).
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Additionally, the Exchange offers an NBBO First Joiner Additive
Rebate, which is an additive rebate of ($0.0002) per share for
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume (other than Retail Orders) for the first
Equity Member that brings MIAX Pearl Equities to the established NBB or
NBO with a minimum size of a round lot.
Proposal To Reduce the NBBO Setter Additive Rebate
The Exchange proposes to reduce the NBBO Setter Additive Rebate in
the NBBO Setter Plus Table in Section (1)(c) of the Fee Schedule.
Currently, the Exchange provides an NBBO Setter Additive Rebate of
($0.0004) per share, which applies only to executions of orders in
securities priced at or above $1.00 per share for Added Displayed
Volume (other than Retail Orders) that set the NBB or NBO on MIAX Pearl
Equities with a minimum size of a round lot. The Exchange now proposes
to decrease the NBBO Setter Additive Rebate from ($0.0004) to ($0.0003)
per share for executions of orders in securities priced at or above
$1.00 per share for Added Displayed Volume (other than Retail Orders)
that set the NBB or NBO on MIAX Pearl Equities with a minimum size of a
round lot. The purpose of reducing the NBBO Setter Additive Rebate is
for business and competitive reasons in light of recent volume growth
on the Exchange. The Exchange notes that despite the modest reduction
proposed herein, the proposed NBBO Setter Additive Rebate (i.e.,
($0.0003) per share) remains competitive with the NBBO Setter Additive
Rebate provided by other exchanges for executions of orders in
securities priced at or above $1.00 per share that add displayed
liquidity to those exchanges.\21\
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\21\ See e.g., MEMX LLC Equities Fee Schedule, Transaction fees
(last visited May 22, 2025), available at <a href="https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/">https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/</a>.
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Proposal To Reduce NBBO First Joiner Additive Rebate
The Exchange proposes to reduce the NBBO First Joiner Additive
Rebate in the NBBO Setter Plus Table in Section (1)(c) of the Fee
Schedule. Currently, the Exchange provides an NBBO First Joiner
Additive Rebate of ($0.0002) per share, which applies only to
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume (other than Retail Orders) for the first
Equity Member that brings MIAX Pearl Equities to the established NBB or
NBO with a minimum size of a round lot. The Exchange now proposes to
decrease the NBBO First Joiner Additive Rebate from ($0.0002) to
($0.0001) per share for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume (other than Retail
Orders) for the first Equity Member that brings MIAX Pearl Equities to
the established NBB or NBO with a minimum size of a round lot. The
purpose of reducing the NBBO First Joiner Additive Rebate is for
business and competitive reasons in light of recent volume growth on
the Exchange. The Exchange notes that NBBO First Joiner Additive Rebate
is comparable to other volume-based incentives and discounts, which
have been widely adopted by exchanges, and that the Exchange's proposal
to provide an additive rebate for an Equity Member's transaction that
brings MIAX Pearl Equities to the established NBB or NBO with a minimum
size of a round lot is similar in construct to pricing incentives that
have been adopted by other exchanges.\22\
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\22\ See, e.g., Securities Exchange Act Release No. 96471
(December 9, 2022), 87 FR 76648 (December 15, 2022) (SR-MEMX-2022-
33) (establishing NBBO Setter/Joiner Tiers with an additive rebate
for member's orders that establish the NBBO or establish a new best
bid or offer on MEMX that matched the NBBO first established on an
away market).
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Proposal To Amend the Requirements To Qualify for the NBBO Setter
Additive Rebate and the NBBO First Joiner Additive Rebate
The Exchange proposes to modify the requirements by which Equity
Members qualify for the NBBO Setter Additive Rebate and the NBBO First
Joiner Additive Rebate by requiring Equity Members to achieve an
additional requirement. In particular, an Equity Member will qualify
for the NBBO Setter Additive Rebate and/or the NBBO First Joiner
Additive Rebate for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes by
achieving an NBBO Set Volume of at least 0.015% of TCV in the relevant
month, in addition to the current set of requirements for Equity
Members to achieve each rebate.
The Exchange notes that the rebates in NBBO Setter Plus program
table offered by the Exchange are calculated using in a similar measure
to the measures proposed herein, specifically volume
[[Page 25703]]
calculation Method 2 of the NBBO Program, and the Exchange provides
tiered rebates based on an Equity Member's NBBO Set Volume as a
percentage of TCV, described above. Additionally, other competing
equities exchanges offer an enhanced or additive rebate utilizing a
volume comparison.\23\
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\23\ See e.g., MEMX LLC Equities Fee Schedule, Transaction fees
(last visited May 22, 2025), available at <a href="https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/">https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/</a> (to qualify for an Additive Rebate in the NBBO Setter
Tier, an equity member has to have an ADAV with respect to orders
with Fee Code B >= 0.05% of the TCV).
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The purpose of this proposed change is to provide an incentive for
Equity Members to strive for higher ADAV in all securities for which
the Equity Member sets the NBB or NBO on the Exchange to receive the
additive rebates. The Exchange believes that this change will encourage
the submission of additional Added Displayed Volume to the Exchange,
thereby promoting price discovery and contributing to a deeper and more
liquid market, which benefits all market participants and enhances the
attractiveness of the Exchange as a trading venue.
Cleanup Change to Footnote 5 of the NBBO Setter Plus Table
The Exchange proposes to amend footnote 5 of the NBBO Setter Plus
Table to make a minor non-substantive cleanup change. Currently,
footnote 5 provides that ``Retail Orders are not eligible for the NBBO
Setter Additive Rebate, the NBBO First Joiner Additive Rebate, or the
Step-Up Rebate as these rebates only apply to Liquidity Indicator Codes
AA, AB and AC.'' \24\ The Exchange previously filed to amend the Fee
Schedule to remove the Step-Up Rebate and leave footnote 4 of the NBBO
Setter Plus Table as ``Reserved.'' \25\ Accordingly, the Exchange
proposes to delete the reference to the Step-Up Rebate in footnote 5 of
the NBBO Setter Plus Table as that rebate is no longer in effect. The
purpose of this change is to provide consistency and clarify in the Fee
Schedule.
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\24\ See Fee Schedule, Section 1)c), footnote 5.
\25\ See Securities Exchange Act Release No. 102448 (February
19, 2025), 90 FR 10676 (February 25, 2025) (SR-PEARL-2025-05).
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Implementation
The proposed fee changes are effective immediately.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \26\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \27\ in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among its Equity Members and
issuers and other persons using its facilities. Additionally, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \28\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers or dealers.
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\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(4).
\28\ 15 U.S.C. 78f(b)(5).
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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 sixteen registered equities exchanges, and
there are 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 had more than approximately 14% of the total market
share of executed volume of equities trading for the month of April
2025.\29\ 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 represented
approximately 1% of the overall market share for the month of April
2025. 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.'' \30\
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\29\ See the ``Market Share'' section of the Exchange's website,
available at <a href="https://www.miaxglobal.com/">https://www.miaxglobal.com/</a> (last visited May 27,
2025).
\30\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37499 (June 29, 2005).
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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 or 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 in both a broad manner and in a targeted manner with
respect to the NBBO Program, in particular, and Added Displayed Volume
in securities priced at or above $1.00 per share, in general.
Proposal To Reduce the NBBO Setter Additive Rebate
The Exchange believes its proposal to reduce the NBBO Setter
Additive Rebate from ($0.0004) per share for Added Displayed Volume
(other than Retail Orders) for executions of orders in securities
priced at or above $1.00 per share that set the NBB or NBO on MIAX
Pearl Equities with a minimum size of a round lot to ($0.0003) per
share is reasonable, equitably allocated and not unfairly
discriminatory because the Exchange believes it will continue to
provide an additional incentive for Equity Members to contribute Added
Displayed Volume in securities priced at or above $1.00 per share that
sets the NBB or NBO on MIAX Pearl Equities. In turn, this should
benefit all Equity Members by providing greater execution opportunities
on the Exchange and contribute to a deeper, more liquid market, to the
benefit of all investors and market participants. Further, the NBBO
Setter Additive Rebate is available to all Equity Members of the
Exchange that transact in securities priced at or above $1.00 per share
in all Tapes. The Exchange notes that despite the modest reduction
proposed herein, the proposed NBBO Setter Additive Rebate (i.e.,
($0.0003) per share) remains competitive with the NBBO Setter Additive
Rebate provided by other exchanges for executions of orders in
securities priced at or above $1.00 per share that add displayed
liquidity to those exchanges.\31\
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\31\ See supra note 22.
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Proposal To Reduce the NBBO First Joiner Additive Rebate
The Exchange believes its proposal to reduce the NBBO First Joiner
Additive Rebate from ($0.0002) to ($0.0001) per share for executions of
orders in securities priced at or above $1.00 per share for Added
Displayed Volume (other than Retail Orders) for the first
[[Page 25704]]
Equity Member that brings MIAX Pearl Equities to the established NBB or
NBO with a minimum size of a round lot is reasonable because the
Exchange believes that it will continue to provide an additional
incentive for Equity Members to send aggressively priced displayed
liquidity to the Exchange, which will encourage the submission of
orders that join the established NBB or NBO on the Exchange. This
should result in increased orders of aggressively priced displayed
liquidity, which would enhance the Exchange's market quality by
increasing execution opportunities, tightening spreads, and promoting
price discovery on the Exchange to the benefit of all market
participants. The Exchange believes its proposal to reduce the NBBO
First Joiner Additive Rebate is equitably allocated and not unfairly
discriminatory because it will be available to all Equity Members and
is comparable to other volume-based incentives and discounts, which
have been widely adopted by exchanges.\32\
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\32\ See supra note 22.
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Proposal To Amend the Requirements To Qualify for the NBBO Setter
Additive and the NBBO First Joiner Additive Rebate
The Exchange believes that the proposal to modify the requirements
by which Equity Members qualify for the NBBO Setter Additive Rebate and
the NBBO First Joiner Additive Rebate is comparable to the Exchange's
other incentive calculation methods and incentive calculation methods
currently offered by other exchanges,\33\ and is reasonable, equitable
and not unfairly discriminatory for these same reasons, as it provides
Equity Members with additional incentives. Further, the proposal to
modify the requirement by which Equity Members qualify for the NBBO
Setter Additive Rebate and the NBBO First Joiner Additive Rebate, will
be available to all Equity Members and is designed to encourage Equity
Members to increase their orders of Added Displayed Volume in order to
qualify for the additive rebates, which, in turn, the Exchange believes
would encourage the submission of additional Added Displayed Volume to
the Exchange, thereby promoting price discovery and contributing to a
deeper and more liquid market to the benefit of all market
participants.
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\33\ See supra note 23.
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Cleanup Change to Footnote 5 of the NBBO Setter Plus Table
The Exchange believes its proposal to amend footnote 5 of the NBBO
Setter Plus Table to remove the reference to the Step-Up Rebate
promotes just and equitable principles of trade, removes impediments to
and perfects the mechanism of a free and open market and a national
market system because the proposed change will provide greater clarity
to Equity Members and the public regarding the Fee Schedule. The
proposed change will remove an additive rebate that is no longer in
effect.\34\ Removing the reference to the Step-Up Rebate would render
the Exchange's Fee Schedule more accurate and reduce the potential for
investor confusion. It is in the public interest for the Exchange's Fee
Schedule to be accurate and consistent so as to eliminate the potential
for confusion.
---------------------------------------------------------------------------
\34\ See supra note 25.
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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.
Intramarket Competition
The Exchange does not believe that the proposal will impose any
burden on intra-market competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes its
proposed changes to the NBBO Program, a decrease to the NBBO Setter
Additive Rebate, a decrease to the NBBO First Joiner Additive Rebate,
and an amendment to the requirements to qualify for the NBBO Setter
Additive Rebate and the NBBO First Joiner Additive Rebate would
continue to incentivize Equity Members to submit additional orders that
add liquidity to the Exchange, thereby contributing to a deeper and
more liquid market and promoting price discovery and market quality on
the Exchange to the benefit of all market participants and enhancing
the attractiveness of the Exchange as a trading venue, which the
Exchange believes, in turn, would 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 additional orders
to the Exchange, thereby contributing to robust levels of liquidity,
which benefits all market participants. As described above, the
opportunity to qualify for the NBBO First Joiner Additive Rebate or
increased NBBO Setter Additive Rebate, and thus receive the additive
rebates for qualifying executions of Added Displayed Volume, would be
available to all Equity Members that meet the associated requirements,
and the Exchange believes the proposed changes provide such incentives
is reasonably related to the enhanced market quality that they are
designed to promote. As such the Exchange does not believe the proposed
changes would impose any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purpose of the Act.
Intermarket Competition
The Exchange believes the proposed changes will benefit
competition, and the Exchange notes that it 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 equities exchanges and numerous alternative trading
systems and other off-exchange venues. As noted above, no single
registered equities exchange currently had more than 14% of the total
market share of executed volume of equities trading for the month of
April 2024.\35\ 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
Added Displayed Volume, 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.
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\35\ See supra note 29.
---------------------------------------------------------------------------
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 self-regulatory organization (``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.'' \36\ The fact that this market is competitive has also
long been recognized by the courts. In
[[Page 25705]]
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' . . .''.\37\ 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.
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\36\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\37\ See 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)).
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Cleanup Change to Footnote 5 of the NBBO Setter Plus Table
The Exchange does not believe that the proposed change to amend
footnote 5 of the NBBO Setter Plus Table to remove the reference to the
Step-Up Rebate will impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. The proposal
will have no impact on competition as it is not designed to address any
competitive issue but rather is designed to make a minor cleanup change
to provide added clarity to the Fee Schedule by removing the reference
to an additive rebate that is no longer in effect.\38\ 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 Fee Schedule.
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\38\ See supra note 25.
---------------------------------------------------------------------------
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,\39\ and Rule 19b-4(f)(2) \40\ 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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\39\ 15 U.S.C. 78s(b)(3)(A)(ii).
\40\ 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#fe8c8b929bd39d9193939b908a8dbe8d9b9dd0999188"><span class="__cf_email__" data-cfemail="2f5d5a434a024c4042424a415b5c6f5c4a4c01484059">[email protected]</span></a>. Please include
file number SR-PEARL-2025-28 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-2025-28. 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-2025-28 and should be
submitted on or before July 8, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\41\
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\41\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-10973 Filed 6-16-25; 8:45 am]
BILLING CODE 8011-01-P
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