Notice2025-15170
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 Modify the Rebates for Executions of Orders in Securities Priced at or Above $1.00 per Share That Add Displayed Liquidity
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
August 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 90, Number 152 (Monday, August 11, 2025)]
[Notices]
[Pages 38677-38682]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-15170]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103645; File No. SR-PEARL-2025-38]
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 Modify the Rebates for Executions of
Orders in Securities Priced at or Above $1.00 per Share That Add
Displayed Liquidity
August 6, 2025.
Pursuant to 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 July 31, 2025, MIAX PEARL, LLC (``MIAX Pearl'' or ``Exchange'')
filed with the Securities and Exchange Commission (``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: (i) amend the standard rebate for
executions of orders in securities priced at or above $1.00 per share
that add displayed liquidity to the Exchange and update the
corresponding Liquidity Indicator Codes; and (ii) amend the NBBO Setter
Plus Table (described below) to amend the standard and enhanced rebates
for executions of orders in securities priced at or above $1.00 per
share that add displayed liquidity to the Exchange.
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> and at MIAX Pearl's principal office.
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: (i) amend the
standard rebate \3\ for executions of orders in securities priced at or
above $1.00 per share that add displayed liquidity to the Exchange
(``Added Displayed Volume'') across all Tapes and update the
corresponding Liquidity Indicator Codes; \4\ and (ii) amend the NBBO
Setter Plus Table \5\ to amend the standard and enhanced rebates for
executions of orders in securities priced at or above $1.00 per share
that add displayed liquidity to the Exchange. The proposed changes will
apply to orders executed during the Early Trading Session,\6\ Regular
Trading Session,\7\ and Late Trading Session.\8\
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\3\ The Exchange notes that rebates are indicated by parentheses
in the Fee Schedule. See the General Notes section of the Fee
Schedule.
\4\ See, generally, Fee Schedule, Section 1)b).
\5\ See, generally, Fee Schedule, Section 1)c).
\6\ The term ``Early Trading Session'' shall mean the time
between 4:00 a.m. and 9:30 a.m. Eastern Time. See Exchange Rule
1901.
\7\ The term ``Regular Trading Session'' shall mean the time
between the completion of the Opening Process or Contingent Open as
defined in Exchange Rule 2615 and 4:00 p.m. Eastern Time. See
Exchange Rule 1901.
\8\ The term ``Late Trading Session'' shall mean the time
between 4:00 p.m. and 8:00 p.m. Eastern Time. See Exchange Rule
1901.
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Proposal To Amend Standard Rebate for Added Displayed Volume
The Exchange proposes to amend Section 1)a) of the Fee Schedule to
amend the standard rebate for executions of orders in securities priced
at or above $1.00 per share that add displayed liquidity to the
Exchange across all Tapes in all trading sessions. Currently, the
Exchange provides a standard rebate of ($0.0021) per share for
executions of orders in securities priced at or above $1.00 per share
that add displayed liquidity to the Exchange across all Tapes in all
trading sessions.\9\ The Liquidity Indicator Codes applicable to this
rebate are as follows: AA, EA, FA, AB, EB, FB, AC, EC, FC.\10\
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\9\ See Fee Schedule, Section 1)a).
\10\ See Fee Schedule, Section 1)a)-b).
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The Exchange now proposes to reduce the standard rebate from
($0.0021) to ($0.0018) per share for executions of orders in securities
priced at or above $1.00 per share that add displayed liquidity to the
Exchange across all Tapes in all trading sessions. The purpose of this
proposed change is for business and competitive reasons. The Exchange
notes that despite the change proposed herein, the Exchange's proposed
standard rebate of ($0.0018) per share for executions of orders in
securities priced at or above $1.00 per share that add displayed
liquidity to the Exchange remains competitive with the standard rebate
for executions of orders in securities priced at or above $1.00 per
share for Added Displayed Volume that is provided by other equity
exchanges.\11\
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\11\ See, e.g., MEMX LLC (``MEMX'') Equities Fee Schedule,
Transaction Fees (providing standard rebate of $0.0015 per share for
executions of orders in securities priced at or above $1.00 per
share for added displayed volume); and Cboe EDGX Exchange, Inc.
(``EDGX''), Equities Fee Schedule, Standard Rates (providing
standard rebate of $0.0016 per share for executions of orders in
securities priced at or above $1.00 per share that add liquidity).
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Proposal To Make Corresponding Changes to Liquidity Indicator Codes
Next, the Exchange proposes to amend Section 1)b) of the Fee
Schedule to make the corresponding changes to the Liquidity Indicator
Codes that are impacted as a result of the Exchange's proposal to amend
the standard rebate for executions of orders in securities priced at or
above $1.00 per share that add displayed liquidity to the Exchange
across all Tapes in all trading sessions. In particular, the Exchange
proposes to amend the table of Liquidity Indicator Codes and Associated
Fees to update the rebate from ($0.0021) to ($0.0018) that is
associated with Liquidity Indicator Codes AA, EA, FA, AB, EB, FB, AC,
EC, FC. The purpose of amending these Liquidity Indicator Codes is to
provide Equity Members \12\ increased clarity as to the amended rebate
that will be applied to these particular executions in light of the
Exchange's proposed change the standard rebate described above.
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\12\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
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[[Page 38678]]
Proposal To Amend the NBBO Setter Plus Table
The NBBO Program was implemented beginning September 1, 2023 and
subsequently amended several times.\13\ In general, the NBBO Program
provides enhanced rebates for Equity Members that add displayed
liquidity 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).\14\
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\13\ 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); and 99695 (March 8, 2024), 89 FR 18694 (March
14, 2024) (SR-PEARL-2024-11).
\14\ The NBBO Program provides the following additional
incentives that Equity Members may achieve: (1) an NBBO Setter
Additive Rebate; and (2) an NBBO First Joiner Additive Rebate. The
Exchange does not propose to amend the NBBO Setter Additive Rebate,
which is an additive rebate of ($0.0003) per share 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. Equity Members must also execute at least 0.015% of NBBO Set
Volume as a percentage of TCV during the relevant month to qualify
for this additive rebate. See Fee Schedule, Section 1)c). ``NBBO Set
Volume'' means the ADAV in all securities of an Equity Member that
sets the NBB or NBO on MIAX Pearl Equities. See id. ``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.
Id. Likewise, the Exchange does not propose to amend the NBBO First
Joiner Additive Rebate, which is an additive rebate of ($0.0001) per
share for executions of orders in securities priced at or above
$1.00 per share that bring MIAX Pearl Equities to the established
NBB or NBO with a minimum size of a round lot. See Fee Schedule,
Section 1)c). Equity Members must also execute at least 0.015% of
NBBO Set Volume as a percentage of TCV during the relevant month to
qualify for this additive rebate. See id.
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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, NBBO Set Volume, or ADV, each as a
percent of industry TCV as the denominator.\15\
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\15\ ``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.
See the Definitions Section of the Fee Schedule.
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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
of at least 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 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 of at least 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
[[Page 38679]]
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 of at least 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,
excluding sub-dollar volume in the calculation. 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 (excluding sub-dollar securities) 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 (excluding sub-dollar securities) 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 (excluding sub-dollar securities) 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 (excluding sub-dollar securities) 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 (excluding sub-dollar securities) 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 (excluding sub-dollar securities) across all
Tapes by achieving an ADAV of at least 0.40% of TCV.
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 Setter Plus Table as ``Level A'') and two columns of enhanced
rebates (referred to in the NBBO Setter Plus Table as ``Level B'' and
``Level C''),\16\ depending on the Equity Member's Percent Time at NBBO
on MIAX Pearl Equities in a certain amount of specified securities
(``Market Quality Securities'' or ``MQ Securities'').\17\ 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.\18\
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\16\ For the purpose of determining qualification for the
rebates described in all Levels of the Market Quality Tier columns
in the NBBO Setter Plus Table, 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; (3) the ``Russell Reconstitution Day'' (typically the last
Friday in June); (4) any day that the MSCI Equities Indexes are
rebalanced (i.e., on a quarterly basis); and (5) any day that the
S&P 400, S&P 500, and S&P 600 Indexes are rebalanced (i.e., on a
quarterly basis). See the General Notes section of the Fee Schedule.
\17\ ``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.
\18\ See e.g, MIAX Pearl Equities Exchange--Market Quality
Securities (MQ Securities) List, 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 July 28, 2025).
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The base rebates (``Level A'') are as follows: ($0.00210) 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
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; \19\ and ($0.00340) per share in Tier
6.
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\19\ The Exchange provides an alternative method for Equity
Members to qualify for the enhanced rebate of Tier 5, Level C by
satisfying the following three requirements in the relevant month:
(1) Midpoint ADAV of at least 2,500,000 shares; (2) displayed ADAV
of at least 10,000,000 shares; and (3) Percent Time at the NBBO of
at least 50% in 200 or more symbols from the list of MQ Securities.
See Fee Schedule, Section 1)c), note 3. The Exchange does not
propose to amend these alternative requirements pursuant to this
proposal.
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The Exchange proposes to amend the NBBO Setter Plus Table in
Section 1)c) of the Fee Schedule to decrease the rebates for all tiers
for all rebate levels of the NBBO Program. With the proposed changes,
the Level A rebates will be as follows: ($0.00180) per share in Tier 1;
($0.00275) per share in Tier 2; ($0.00285) per share in Tier 3;
($0.00295) per share in Tier 4; ($0.00320) per share in Tier 5; and
($0.00325) per share in Tier 6. The Level B rebates will be as follows:
($0.00210) 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. The
Level C rebates will be 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.
The Exchange does not propose to amend any of volume calculation
methods used to determine the Equity Member's tier for purposes of the
NBBO Program, which will continue to be calculated in parallel in each
month, and each Equity Member will continue to receive the highest tier
achieved from any of the four methods each month.\20\ The Exchange also
does not propose to amend the different measurements to calculate an
Equity Member's participation at the NBBO on the Exchange in Market
Quality Securities under the NBBO Program.
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\20\ The Exchange does not propose to amend the alternative
volume calculation method for Equity Members to quality for the Tier
5, Level C enhanced rebate, as proposed to be reduced.
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The purpose of reducing the standard and enhanced rebates for
executions of Added Displayed Volume for all tiers and market quality
levels of the NBBO Program is for business and competitive
[[Page 38680]]
reasons. The Exchange notes that even with the proposed decrease in the
NBBO Program rebates, the base and enhanced rebates of the NBBO Program
remain competitive with, or higher than, the rebates 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 MEMX Equities Fee Schedule, Transaction Fees section
(providing a highest enhanced rebate of $0.0033 per share for
executions of orders in securities priced at or above $1.00 per
share that meet certain volume requirements); and Cboe BZX Exchange,
Inc. (``BZX''), Equities Fee Schedule, Add/Remove Volume Tiers
(providing a highest enhanced rebate of $0.0032 per share for
executions of orders in securities priced at or above $1.00 per
share that meet certain volume requirements).
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Implementation
The proposed changes are effective beginning August 1, 2025.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \22\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \23\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among its Equity Members and issuers and other
persons using its facilities. The Exchange also believes that the
proposal is consistent with the objectives of Section 6(b)(5) \24\
requirements that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, and 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, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\22\ 15 U.S.C. 78f(b).
\23\ 15 U.S.C. 78f(b)(4).
\24\ 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 seventeen 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. For the month of June 2025, based on publicly available
information, no single registered equities exchange had more than
approximately 13.39% of the total market share of executed volume of
equities trading.\25\ Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. For the month of June
2025, the Exchange represented 1.04% of the total market share of
executed volume of equities trading.\26\ 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.'' \27\
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\25\ 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 July 28,
2025).
\26\ Id.
\27\ 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 to 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 continue to incentivize market participants to direct their
order flow to the Exchange, which the Exchange believes would continue
to enhance liquidity and market quality to the benefit of all Equity
Members and market participants.
Proposal To Amend the Standard Rebate for Adding Displayed Liquidity
The proposal to reduce the rebate for executions of orders in
securities priced at or above $1.00 per share that add displayed
liquidity to the Exchange is reasonable, equitably allocated, and not
unfairly discriminatory because, even with the proposed decrease, the
Exchange believes the proposed rebate of ($0.0018) per share will not
discourage order flow. The Exchange notes that despite the change
proposed herein, the Exchange's proposed standard rebate of ($0.0018)
per share for executions of orders in securities priced at or above
$1.00 per share that add displayed liquidity to the Exchange remains
competitive with the standard rebate for similar executions that is
provided by other equity exchanges.\28\ The Exchange believes that even
with the proposed decrease, the Exchange's standard rebate will
continue to encourage Equity Members to maintain their order flow
directed to the Exchange. In turn, this should continue to contribute
to a deep and liquid market to the benefit of all market participants
and allow the Exchange to maintain its attractiveness as a trading
venue. The Exchange further believes the proposed reduced standard
rebate for executions of orders that add displayed liquidity is fair,
equitable and not unfairly discriminatory because the standard rebate
will apply to all Equity Members that add displayed liquidity in
securities priced at or above $1.00 per share across all Tapes and
trading sessions.
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\28\ See supra note 11.
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Proposal To Make Corresponding Changes to Liquidity Indicator Codes
The Exchange believes its proposal to amend the table of Liquidity
Indicator Codes and Associated Fees to update the rebate from ($0.0021)
to ($0.0018) that is associated with Liquidity Indicator Codes AA, EA,
FA, AB, EB, FB, AC, EC, FC is reasonable, equitably allocated and not
unfairly discriminatory. This is because the proposed changes will
provide clarity and consistency in the Fee Schedule as to the amended
rebate that will be applied to these executions in light of the
Exchange's proposed change to reduce the standard rebate for executions
of orders in securities priced at or above $1.00 per share that add
displayed liquidity to the Exchange across all Tapes and trading
sessions. It is in the public interest for the Fee Schedule to be clear
and concise.
Proposal To Amend the NBBO Program Rebates
The Exchange believes its proposal to reduce the standard and
enhanced rebates for executions of orders in securities priced at or
above $1.00 per share for Added Displayed Volume across all Tapes under
the NBBO Program is reasonable because the
[[Page 38681]]
Exchange's standard rebate and enhanced rebates will remain competitive
with, or higher than, the rebates 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.\29\ The Exchange
believes that the enhanced rebates under the NBBO Program, as modified
by this proposal, continue to be equitable and not unfairly
discriminatory because the NBBO Program is open to all Equity Members
on an equal basis and provides enhanced rebates that are reasonably
related to the value of the Exchange's market quality associated with
greater order flow by Equity Members that set the NBB or NBO, and the
introduction of higher volumes of orders into the price and volume
discovery process. The Exchange believes the proposal is equitable and
not unfairly discriminatory because the Exchange's pricing structure,
as modified by this proposal, continues to be designed to incentivize
the entry of aggressively priced displayed liquidity that may create
tighter spreads, thereby promoting price discovery and market quality
on the Exchange to the benefit of all Equity Members and public
investors.
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\29\ See supra note 21.
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For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act in that it provides for the equitable allocation of reasonable
dues, fees and other charges among its Equity Members and other persons
using its facilities and is not designed to unfairly discriminate
between customers, issuers, brokers, or dealers.
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 that its
proposal to reduce the standard and enhanced rebates provided for in
the NBBO Program that apply to executions of orders in securities
priced at or above $1.00 per share for Added Displayed Volume will not
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because these
changes are for business and competitive reasons. The Exchange notes
that despite the modest reduction proposed herein to the standard and
enhanced rebates for executions of orders in securities priced at or
above $1.00 per share that add displayed liquidity to the Exchange, the
Exchange's rebates remain competitive with, or higher than, the
standard and enhanced rebates provided by other exchanges for
executions of orders in securities priced at or above $1.00 per share
for Added Displayed Volume on those exchanges.\30\
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\30\ See supra notes 11 and 21.
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The Exchange believes that even with the proposed decrease to the
standard and enhanced Added Displayed Volume rebates, the Exchange's
rebate structure for such orders will continue to incentivize market
participants to direct order flow to the Exchange, thereby contributing
to a deeper and more liquid market to the benefit of all market
participants and enhancing the attractiveness of the Exchange as a
trading venue. The Exchange believes that this, in turn, will continue
to encourage market participants to direct additional orders in
securities priced at or above $1.00 per share to the Exchange. Greater
liquidity benefits all Equity Members by providing more trading
opportunities and encourages Equity Members to send orders to the
Exchange, thereby contributing to robust levels of liquidity, which
benefits all market participants.
The Exchange does not believe its proposal to update the rebates
associated with Liquidity Indicator Codes AA, EA, FA, AB, EB, FB, AC,
EC, and FC due to the proposed change to reduce the standard rebate for
executions of orders in securities that are priced at or above $1.00
per share for Added Displayed Volume will impose any burden on
intramarket competition. The changes to these Liquidity Indicator Codes
is to provide consistency throughout the Fee Schedule. Additionally,
the proposed changes will provide specificity to the Fee Schedule so
that Equity Members may connect an execution to the applicable rebate.
Intermarket Competition
The Exchange believes its proposal will benefit competition as the
Exchange operates in a highly competitive market. Equity Members have
numerous alternative venues they may participate on and direct their
order flow to, including seventeen other equities exchanges and
numerous alternative trading systems and other off-exchange venues. As
noted above, no single registered equities exchange currently has more
than approximately 13.39% of the total market share of executed
equities volume. 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 all orders in securities priced at or above
$1.00 per share that add displayed liquidity to the Exchange. 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.
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 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.'' \31\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the DC
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'. . . .'' \32\ Accordingly, the
[[Page 38682]]
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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\31\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\32\ 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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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,\33\ and Rule 19b-4(f)(2) \34\ 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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\33\ 15 U.S.C. 78s(b)(3)(A)(ii).
\34\ 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#d9abacb5bcf4bab6b4b4bcb7adaa99aabcbaf7beb6af"><span class="__cf_email__" data-cfemail="d2a0a7beb7ffb1bdbfbfb7bca6a192a1b7b1fcb5bda4">[email protected]</span></a>. Please include
file number SR-PEARL-2025-38 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-2025-38. 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 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-2025-38 and
should be submitted on or before September 2, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-15170 Filed 8-8-25; 8:45 am]
BILLING CODE 8011-01-P
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