Notice2025-18792
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Lower the Options Regulatory Fee (ORF)
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Published
September 29, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 186 (Monday, September 29, 2025)</title>
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[Federal Register Volume 90, Number 186 (Monday, September 29, 2025)]
[Notices]
[Pages 46670-46674]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18792]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104040; File No. SR-PEARL-2025-45]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Lower the
Options Regulatory Fee (ORF)
September 24, 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 September 23, 2025, MIAX PEARL, LLC (``MIAX Pearl'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') a proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the fee schedule applicable to the
options trading platform of MIAX Pearl (the ``Fee Schedule'') regarding
the Options Regulatory Fee (``ORF'').
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) temporarily
decrease the ORF from $0.0018 per
[[Page 46671]]
contract to $0.0014 per contract between September 1, 2025 and December
31, 2025; \3\ and (ii) increase the ORF from $0.0014 per contract to
$0.0016 per contract, effective January 1, 2026.
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\3\ The Exchange initially filed the proposed fee changes on
August 28, 2025 (SR-PEARL-2025-41). On September 12, 2025, the
Exchange withdrew that filing and submitted SR-PEARL-2025-44. On
September 23, the Exchange withdrew that filing and submitted this
proposal.
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Background
The ORF is designed to recover a material portion of the costs to
the Exchange of the supervision and regulation of Members' \4\ customer
options business, including performing routine surveillances and
investigations, as well as policy, rulemaking, interpretive and
enforcement activities. The Exchange believes that revenue generated
from the ORF, when combined with all of the Exchange's other regulatory
fees and fines, will cover a material portion, but not all, of the
Exchange's regulatory costs.
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\4\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions section of
the Fee Schedule and Exchange Rule 100.
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Collection of ORF
The Exchange assesses the per-contract ORF to each Member for all
options transactions cleared or ultimately cleared by the Member, which
are cleared by the Options Clearing Corporation (``OCC'') in the
``customer'' range,\5\ regardless of the exchange on which the
transaction occurs. The ORF is collected by OCC on behalf of the
Exchange from either: (1) a Member that was the ultimate clearing firm
for the transaction; or (2) a non-Member that was the ultimate clearing
firm where a Member was the executing clearing firm for the
transaction. The Exchange uses reports from OCC to determine the
identity of the executing clearing firm and ultimate clearing firm.
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\5\ Exchange participants must record the appropriate account
origin code on all orders at the time of entry in order. The
Exchange represents that it has surveillances in place to verify
that Members mark orders with the correct account origin code.
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As a practical matter, when a transaction that is subject to the
ORF is not executed on the Exchange, the Exchange lacks the information
necessary to identify the order-entering member for that transaction.
There are a multitude of order-entering market participants throughout
the industry, and such participants can make changes to the market
centers to which they connect, including dropping their connection to
one market center and establishing themselves as participants on
another. For these reasons, it is not possible for the Exchange to
identify, and thus assess fees such as ORF, on order-entering
participants on away markets on a given trading day. Clearing members,
however, are distinguished from order-entering participants because
they remain identified to the Exchange on information the Exchange
receives from OCC regardless of the identity of the order-entering
participant, their location, and the market center on which they
execute transactions.
ORF Revenue and Monitoring of ORF
The Exchange monitors the amount of revenue collected from the ORF
to ensure that it, in combination with other regulatory fees and fines,
does not exceed regulatory costs. In determining whether an expense is
considered a regulatory cost, the Exchange reviews all costs and makes
determinations if there is a nexus between the expense and a regulatory
function. The Exchange notes that fines collected by the Exchange in
connection with a disciplinary matter offset ORF.
The Exchange believes that its broad regulatory responsibilities
with respect to a Member's activities supports applying the ORF to
transactions cleared but not executed by a Member. The Exchange's
regulatory responsibilities are the same regardless of whether a Member
enters a transaction or clears a transaction executed on its behalf.
The Exchange regularly reviews all such activities, including
performing surveillance for position limit violations, manipulation,
front-running, contrary exercise advice violations and insider trading.
These activities span across multiple exchanges.
Revenue generated from ORF, when combined with all of the
Exchange's other regulatory fees and fines, is designed to recover a
material portion of the regulatory costs to the Exchange of the
supervision and regulation of Members' customer options business
including performing routine surveillances, investigations,
examinations, financial monitoring, and policy, rulemaking,
interpretive, and enforcement activities. Regulatory costs include
direct regulatory expenses and certain indirect expenses in support of
the regulatory function. The direct expenses include in-house and third
party service provider costs to support the day-to-day regulatory work
such as surveillances, investigations and examinations.
The ORF revenue is based on options transactions volume, the amount
of ORF collected is variable. For example, if options transactions
reported to OCC in a given month increase, the ORF collected from
Members will likely increase as well. Similarly, if options
transactions reported to OCC in a given month decrease, the ORF
collected from Members will likely decrease as well. Accordingly, the
Exchange monitors the amount of ORF collected to ensure that it does
not exceed a material portion of regulatory costs. If the Exchange
determines the amount of ORF collected exceeds or may exceed a material
portion of regulatory costs, the Exchange will, as appropriate, adjust
the ORF by submitting a fee change filing to the Securities and
Exchange Commission (the ``Commission'').
Proposal
Based on the Exchange's recent review of regulatory costs, ORF
revenue, and options transaction volume, the Exchange proposes to
temporarily decrease the ORF from $0.0018 per contract to $0.0014 per
contract, between September 1, 2025 and December 31, 2025. This
proposed decrease will help ensure that the amount collected from the
ORF, in combination with other regulatory fees and fines, does not
exceed the Exchange's total regulatory costs. On July 31, 2025, the
Exchange notified Members of the proposed temporary decrease to the ORF
via a Regulatory Circular to afford market participants sufficient
opportunity to configure their systems to account properly for the
modified ORF.\6\
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\6\ See <a href="https://www.miaxglobal.com/sites/default/files/circular-files/MIAX_Pearl_Options_RC_2025_49.pdf">https://www.miaxglobal.com/sites/default/files/circular-files/MIAX_Pearl_Options_RC_2025_49.pdf</a>.
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The proposed change to the ORF is based on the Exchange's analysis
of recent options volumes and its regulatory costs. The Exchange
believes that, if the ORF is not temporarily reduced for the remainder
of 2025, the ORF revenue to the Exchange year over year could exceed a
material portion of the Exchange's 2025 regulatory costs.
Over the past few years, the options industry has experienced high
options trading volumes and volatility and the persisting increased
options volumes have impacted the Exchange's ORF collection. The table
below reflects industry data from OCC and illustrates that both total
average daily volume and customer average daily volume in 2025
increased over the already elevated levels in 2023 and 2024.\7\
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\7\ The OCC publishes options and futures volume in a variety of
formats, including daily and monthly volume by exchange, available
here: <a href="https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics">https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics</a>. The volume
discussed in this filing is based on a compilation of OCC data for
monthly volume of equity-based options and monthly volume of ETF-
based options, in contract sides.
[[Page 46672]]
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2023 2024 2025 YTD
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Customer ADV.................................................... 35,327,417 39,365,049 46,831,086
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Total ADV................................................... 40,368,590 44,360,426 53,043,204
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In addition, as shown in the table below, during 2025, options
trading volumes have remained elevated and volatility has persisted.\8\
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\8\ See id.
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Jan. 2025 Feb. 2025 Mar. 2025 Apr. 2025 May 2025 June 2025 July 2025
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Customer ADV............................ 46,758,284 48,508,333 46,281,134 47,786,196 46,234,519 45,453,082 47,244,127
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Total ADV........................... 53,134,932 54,563,396 53,182,376 55,339,630 51,351,579 50,576,203 51,516,242
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Because of the sustained impact of the trading volumes that have
persisted through July 2025, along with the difficulty of predicting
whether and when volumes may return to historical levels, the Exchange
proposes to temporarily decrease the ORF from September 1 through
December 31, 2025, to help ensure that ORF collection will not exceed
the Exchange's 2025 regulatory costs. The Exchange cannot predict
whether options volumes will remain at these levels going forward and
projections for future regulatory costs are estimated. Particularly,
based on the Exchange's estimated projections for its regulatory costs,
the revenue generated by ORF using the temporarily reduced rate, would
result in projected revenue that is insufficient to cover a material
portion of its regulatory costs. Further, when combined with the
Exchange's projected other non-ORF regulatory fees and fines, the
revenue generated by ORF using the temporarily reduced rate is
projected to result in a combined revenue that is less than the
Exchange's estimated regulatory costs for the year. Because the
projected revenue is projected to insufficiently cover a material
portion of its regulatory costs, the Exchange proposes to increase the
ORF starting January 1, 2026 from $0.0014 per contract to $0.0016 per
contract. The Exchange will notify Members of the proposed change via a
Regulatory Circular at least 30 calendar days prior to the effective
date of the change.
Potential ORF Reform
The Exchange appreciates the evolving changes in the markets and
regulatory environment and, in connection with industry and other
feedback, has been evaluating the current methodologies and practices
for the assessment and collection of ORF. The Exchange recognizes that
an alternative model is being pursued among industry participants but
that a consensus has not yet been reached. The Exchange is committed to
switching to a new, modified model as soon as a consistent framework
has been established with the Commission, adopted by all the options
exchanges, and necessary regulatory filings submitted.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities. The Exchange also believes the proposal furthers the
objectives of Section 6(b)(5) of the Act \11\ in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
\11\ 15 U.S.C. 78f(b)(5).
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The Proposal Is Reasonable
The Exchange believes the proposed fee changes are reasonable
because customer transactions will be subject to a lower ORF fee than
the current rate. Moreover, the proposed temporary reduction to $0.0014
per contract is reasonable because it would help ensure that
collections from the ORF do not exceed a material portion of the
Exchange's projected regulatory costs for 2025. As noted above, the ORF
is designed to recover a material portion, but not all, of the
Exchange's regulatory costs.
Although there can be no assurance that the Exchange's final costs
for 2025 will not differ materially from its expectations and prior
practice, nor can the Exchange predict with certainty whether options
volume will remain at current or similar levels going forward, the
Exchange believes that the amount collected based on the current ORF
rate, when combined with regulatory fees and fines, may result in
collections in excess of the projected regulatory costs for the year.
Particularly, as noted above, the options market has continued to
experience elevated volumes and volatility in 2025, thereby resulting
in higher ORF collections than projected. The Exchange therefore
believes that the proposed temporary decrease to the ORF is reasonable
because it would help ensure that ORF collection does not exceed the
projected regulatory costs for 2025. Particularly, the Exchange
believes that this temporary reduction in the ORF, taken together with
the Exchange's other regulatory fees and fines, would allow the
Exchange to continue covering a material portion of the projected
regulatory costs, while lessening the potential for generating excess
funds that may otherwise occur using the current rate.
The Exchange also believes that the increase of the ORF to $0.0016
per contract on January 1, 2026 is reasonable because it would permit
the Exchange to collect an ORF that is designed to recover a material
portion, but not all, of the Exchange's projected regulatory costs.
The Exchange's proposal to increase the ORF rate on January 1, 2026
is based on the Exchange's estimated projections
[[Page 46673]]
for its regulatory costs, which are currently projected to increase in
2026, balanced with the increase in options volumes that has persisted
into 2025 and that may continue into 2026. When taking into account the
recent options volume, outlined above, coupled with the anticipated
regulatory fees and anticipated reductions in other regulatory fees,
the Exchange believes it's reasonable to increase the ORF.
Particularly, the proposed change is reasonable as it would offset the
anticipated increased regulatory costs. Moreover, the proposed increase
is still lower than the Exchange is assessing currently and has
assessed previously.
The Proposal Is an Equitable Allocation of Fees
The Exchange also believes the proposed fee change is equitable and
not unfairly discriminatory in that it is charged to all Members on all
their transactions that clear in the customer range at the OCC.\12\ The
Exchange believes the ORF ensures fairness by assessing higher fees to
those members that require more Exchange regulatory services based on
the amount of customer options business they conduct. Regulating
customer trading activity is much more labor intensive and requires
greater expenditure of human and technical resources than regulating
non-customer trading activity, which tends to be more automated and
less labor-intensive. For example, there are costs associated with main
office and branch office examinations (e.g., staff expenses), as well
as investigations into customer complaints and the terminations of
registered persons. As a result, the costs associated with
administering the customer component of the Exchange's overall
regulatory program are materially higher than the costs associated with
administering the non-customer component (e.g., member proprietary
transactions) of its regulatory program. Moreover, the Exchange notes
that it has broad regulatory responsibilities with respect to
activities of its Members, irrespective of where their transactions
take place. Many of the Exchange's surveillance programs for customer
trading activity may require the Exchange to look at activity across
all markets, such as reviews related to position limit violations and
manipulation. Indeed, the Exchange cannot effectively review for such
conduct without looking at and evaluating activity regardless of where
it transpires. In addition to its own surveillance programs, the
Exchange also works with other SROs and exchanges on intermarket
surveillance related issues. Through its participation in the
Intermarket Surveillance Group (``ISG'') \13\ the Exchange shares
information and coordinates inquiries and investigations with other
exchanges designed to address potential intermarket manipulation and
trading abuses. Accordingly, there is a strong nexus between the ORF
and the Exchange's regulatory activities with respect to customer
trading activity of its Members.
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\12\ If the OCC clearing member is an Exchange Member, ORF is
assessed and collected on all cleared customer contracts (after
adjustment for CMTA); and (2) if the OCC clearing member is not an
Exchange Member, ORF is collected only on the cleared customer
contracts executed at the Exchange, taking into account any CMTA
instructions which may result in collecting the ORF from a non-
Member. ``CMTA'' or Clearing Member Trade Assignment is a form of
``give-up'' whereby the position will be assigned to a specific
clearing firm at OCC.
\13\ ISG is an industry organization formed in 1983 to
coordinate intermarket surveillance among the SROs by cooperatively
sharing regulatory information pursuant to a written agreement
between the parties. The goal of the ISG's information sharing is to
coordinate regulatory efforts to address potential intermarket
trading abuses and manipulations.
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The Exchange also believes that increasing the ORF rate on January
1, 2026, is equitable because the ORF would continue to apply equally
to all Members on options transactions in the ``customer'' range, at a
rate designed to recover a material portion, but not all, of the
Exchange's projected regulatory costs, based on current projections
that such costs will increase in 2026.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. The Exchange believes that the proposed temporary
decrease to the ORF rate would not place certain market participants at
an unfair disadvantage because it would apply to all Members subject to
the ORF and would allow the Exchange to continue to monitor the amount
collected from the ORF to help ensure that ORF collection, in
combination with other regulatory fees and fines, does not exceed
regulatory costs. The Exchange also has provided all such Members with
advance notice of the planned change to the ORF.\14\ Further, the
Exchange believes that increasing the ORF on January 1, 2026, is not
unfairly discriminatory because the Exchange would continue assessing
the ORF equally to all Members based on their transactions that clear
in the ``customer'' range at the OCC.
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\14\ See supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intramarket Competition
The Exchange believes the proposed change would not impose an undue
burden on intramarket competition because the ORF is charged to all
Members on all their transactions that clear in the ``customer'' range
at the OCC; thus, the amount of ORF imposed is based on the amount of
customer volume transacted. The Exchange believes that the proposed
temporary decrease of the ORF would not place certain market
participants at an unfair disadvantage because all options transactions
must clear via a clearing firm. Such clearing firms can then choose to
pass through all, a portion, or none of the cost of the ORF to its
customers, i.e., the entering firms. The ORF is collected from Member
clearing firms by the OCC on behalf of the Exchange and is assessed on
all options transactions cleared at the OCC in the ``customer'' range.
The Exchange also believes that increasing ORF a on January 1, 2026
would not impose an undue burden on competition because it would permit
the Exchange to resume assessing an ORF that is designed to recover a
material portion, but not all, of the Exchange's projected regulatory
costs, based on current projections that such costs will increase in
2026.
Intermarket Competition
The proposed fee change is not designed to address any competitive
issues. Rather, the proposed change is designed to help the Exchange
adequately fund its regulatory activities while seeking to ensure that
total collections from regulatory fees do not exceed total regulatory
costs.
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) of the Act \15\ and paragraph (f) of Rule
[[Page 46674]]
19b-4 \16\ thereunder. At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. If
the Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule change should be
approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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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#80f2f5ece5ade3efedede5eef4f3c0f3e5e3aee7eff6"><span class="__cf_email__" data-cfemail="92e0e7fef7bff1fdfffff7fce6e1d2e1f7f1bcf5fde4">[email protected]</span></a>. Please include
file number SR-PEARL-2025-45 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-2025-45. 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 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-2025-45 and should be submitted on
or before October 20, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18792 Filed 9-26-25; 8:45 am]
BILLING CODE 8011-01-P
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