Notice2026-04708
Self-Regulatory Organizations: Notice of Filing of a Proposed Rule Change by MIAX Emerald, LLC To Amend the By-Laws To Establish the Role of Observers
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
March 11, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 47 (Wednesday, March 11, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 47 (Wednesday, March 11, 2026)]
[Notices]
[Pages 12018-12024]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04708]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104941; File No. SR-EMERALD-2026-07]
Self-Regulatory Organizations: Notice of Filing of a Proposed
Rule Change by MIAX Emerald, LLC To Amend the By-Laws To Establish the
Role of Observers
March 6, 2026.
Pursuant to the provisions of 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 February 27, 2026, MIAX Emerald, LLC (``MIAX
Emerald'' or the ``Company''),\3\ filed with the Securities and
Exchange Commission (``Commission'') a proposed rule change as
described in Items I and II below, which Items have been prepared by
the Company. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ As used throughout the By-Laws of MIAX Emerald, the term
``Company'' means MIAX Emerald, LLC, a Delaware limited liability
company. See By-Laws of MIAX Emerald, Article I, subparagraph (g)
(Effective Date of February 10, 2025), available at <a href="https://www.miaxglobal.com/miax_emerald_amended_and_restated_by_laws.pdf">https://www.miaxglobal.com/miax_emerald_amended_and_restated_by_laws.pdf</a>
(referred to herein as the ``By-Laws'').
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Company proposes to amend the By-Laws to establish the role of
Observers (defined and described below) to the Board,\4\ including,
among other things, the rights of Observers and the nomination process.
The Company also proposes to remove outdated text regarding Interim
Directors.\5\ All changes to the By-Laws proposed herein are referred
to as the ``By-Law Amendments''. The By-Laws of the Company may be
amended by written consent of the LLC Member \6\ or at any regular or
special meeting of the Board of MIAX Emerald by a resolution adopted by
the Board.\7\
---------------------------------------------------------------------------
\4\ The term ``Board'' or ``Board of Directors'' means the Board
of Directors of the Company. See By-Laws, Article I, subparagraph
(c).
\5\ In general, the term ``Interim Directors'' means the Interim
Directors of the Board of Directors that were appointed by the LLC
Member and served until the first annual meeting of the LLC Member
following the approval of the Company as a national securities
exchange by the U.S. Securities and Exchange Commission
(``Commission''), which meeting was held within ninety (90) days
after the MIAX Emerald application for registration as a national
securities exchange was granted. See, generally, By-Laws, Article
II, Section 2.5.
\6\ The term ``LLC Member'' means any person who maintains a
direct ownership interest in the Company. The sole LLC Member of the
Company is Miami International Holdings, Inc. See By-Laws, Article
I, subparagraph (v).
\7\ See By-Laws, Article VIII, Section 8.1.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Company's
website at <a href="https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings">https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings</a>, or at the Company'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 Company 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 Company 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 Company proposes to amend the By-Laws to establish the role of
Observers to the Board, including, among other things, the rights of
Observers and the nomination process. The Company also proposes to
remove outdated text regarding Interim Directors. The Company believes
that individuals who are employed by, or otherwise affiliated with, its
Exchange Members \8\ may provide valuable expertise and knowledge to
help the Company carry out its business but may not be able, or
willing, to serve as a Board member for one reason or another.
Accordingly, the Company believes that the proposed Observer position
may provide a suitable alternative for these individuals to serve the
Company in a similar manner to observer positions that at least one
other exchange has in place.
---------------------------------------------------------------------------
\8\ The term ``Exchange Member'' means any registered broker or
dealer that has been admitted to membership in the national
securities exchange operated by the Company. An Exchange Member is
not a member of the Company by reason of being an Exchange Member.
An Exchange Member will have the status of a ``member'' of the
Exchange as that term is defined in Section 3(a)(3) of the Act. See
By-Laws, Article I, subparagraph (n).
---------------------------------------------------------------------------
Proposal To Establish the Role of Observers, Rights and Nomination
Process
First, the Company proposes to amend Article I, Definitions, of the
By-Laws to establish the following defined terms for ``Observer'' and
``Observer Threshold'', which will be numbered as proposed
subparagraphs (cc) and (dd),\9\ respectively:
---------------------------------------------------------------------------
\9\ In connection with the addition of the proposed defined
terms, the Company also proposes to renumber current subparagraphs
(cc) through (ii) to now be (ee) through (kk) in Article I of the
By-Laws. The purpose of these changes is to provide uniformity and
clarity in the By-Laws with the addition of the newly proposed
definitions, all of which are in alphabetical order.
<bullet> ``Observer'' shall mean a person affiliated with an
Exchange Member that is elected by the LLC Member to be an observer
to the Board, after having been nominated by the Member Nominating
Committee, all as set forth in Section 2.21 below.
<bullet> ``Observer Threshold'' means the minimum percentage of
issued and outstanding shares of common stock or securities
exercisable or convertible into shares of common stock of the LLC
Member that an Exchange Member (including its affiliates) must own
in order to qualify for a person affiliated with such Exchange
Member being elected as an Observer to the Board, all as set forth
in Section 2.21 below. The Observer Threshold shall be equal to at
least one percent (1%) of the issued and outstanding shares of
common stock of the
[[Page 12019]]
LLC Member, taking into account securities that are exercisable or
convertible into shares of common stock of the LLC Member.
The purpose of the proposed changes to amend the By-Laws to add the
defined terms for ``Observer'' and ``Observer Threshold'' is to provide
clarity to Exchange Members regarding the proposed new position of
Observer to the Board and the requirements for being able to nominate
an individual in such capacity.
The proposed defined terms are not new or novel. MEMX LLC
(``MEMX'') provides for the ability of certain of its members to
nominate observers to its board of directors in a similar capacity as
proposed herein, and the corporate governance documents of MEMX and its
parent holding company, MEMX Holdings LLC (``MEMX Holdco''), when read
together, provide for similarly defined terms.\10\ In particular, the
MEMX LLC Agreement defines ``Observer Threshold'' as follows:
---------------------------------------------------------------------------
\10\ See, generally, Third Amended and Restated Limited
Liability Company Agreement of MEMX (dated as of June 5, 2025),
available at <a href="https://info.memxtrading.com/wp-content/uploads/2025/08/MEMX-LLC-3rdAR_LLCA.pdf">https://info.memxtrading.com/wp-content/uploads/2025/08/MEMX-LLC-3rdAR_LLCA.pdf</a> (referred to herein as the ``MEMX LLC
Agreement'') and Eighth Amended and Restated Limited Liability
Company Agreement of MEMX Holdco (dated as of July 29, 2025),
available at <a href="https://info.memxtrading.com/wp-content/uploads/2026/01/MEMX-Holdings-LLC-8th-AR-LLC-Agreement-12.16.25-1.pdf">https://info.memxtrading.com/wp-content/uploads/2026/01/MEMX-Holdings-LLC-8th-AR-LLC-Agreement-12.16.25-1.pdf</a> (referred
to herein as ``MEMX Holdco LLC Agreement'').
---------------------------------------------------------------------------
``Observer Threshold'' means the minimum number of units of
Holdco Class A Units that an Investor Holdco Member must hold in
order to have the right to appoint a Board Observer pursuant to
Section 8.18(g) of the Holdco LLC Agreement.\11\
---------------------------------------------------------------------------
\11\ See MEMX LLC Agreement, Section 1.1. The MEMX Holdco LLC
Agreement provides the specific requirement for the number of units
that must be held in order for MEMX members to be able to appoint an
observer to the MEMX exchange board of directors. See MEMX Holdco
LLC Agreement, Section 8.18(g) (providing, in summary, that ``each
Exchange Board Observer Appointing Member shall have the right, but
not the obligation, to appoint one (1) observer to each Exchange
Board . . . for so long as such Exchange Board Observer Appointing
Member holds an aggregate number of Class A Units, Class C Units
and/or Class D Units equal to at least 1,250,000 (subject to
adjustment . . .'').
The Company notes that MEMX's board observer provisions in its
corporate documents automatically grant the right to its exchange
members to appoint an observer (barring any disqualifier, such as
already having a director position on the same board) so long as the
requisite ownership threshold is met.\12\ This is slightly different
from the Company's proposal that Exchange Members that satisfy the
proposed Observer Threshold (and all other proposed Observer
requirements, as described further below), may submit candidate names
to the Member Nominating Committee \13\ for consideration for
nomination as an Observer. The Company believes this slight difference
is reasonable due to the difference in ownership structures of MEMX and
the Company, including its affiliated regulated exchanges (Miami
International Securities Exchange, LLC (``MIAX''); MIAX PEARL, LLC
(``MIAX Pearl''); and MIAX Emerald, LLC (``MIAX Emerald'')). MEMX,
through its holding company, MEMX Holdco, is a privately owned company
while the Company and its affiliated exchanges are wholly-owned
subsidiaries of a publicly-traded company, Miami International
Holdings, Inc. (i.e., the LLC Member). As such, MEMX Holdco is able to
restrict ownership in itself and subsidiaries to particular market
participants and, therefore, only those particular members of MEMX
would be able to meet the requirements to appoint a board observer. In
the Company's case, its stock is publicly traded and any Exchange
Member may acquire the requisite percentage of securities to be able to
nominate a candidate for consideration by the Member Nominating
Committee for nomination as an Observer to the Board. The Company
believes this proposed part of the nominating process, whereby the
Member Nominating Committee reviews candidate submissions for the
Observer positions, provides an additional benefit of ensuring only the
appropriate individuals are nominated for election to Observer
positions.
---------------------------------------------------------------------------
\12\ See MEMX LLC Agreement, Section 7.3(c)(ix).
\13\ The term ``Member Nominating Committee'' means the Member
Nominating Committee elected pursuant to these By-Laws. See By-Laws,
Article I, subparagraph (w).
---------------------------------------------------------------------------
Next, the Company proposes to amend Section 2.9 of the By-Laws to
provide for removal and resignation provisions for Observers. In
particular, the Company proposes to amend Section 2.9(a) of the By-Laws
to provide that any Observer to the Board may be removed or expelled
with or without cause by the LLC Member, which is similar to the
removal provision applicable to Directors.\14\ The purpose of this
proposed provision is to ensure that the LLC Member retains discretion
to be able to remove an Observer from such position in a similar manner
as Directors of the Company.\15\ In connection with this proposed
change to the first sentence of Section 2.9(a), the Company also
proposes to amend that sentence to specify that a Director may be
removed by the Board of Directors in the manner provided by Article II,
Section 2.9(b). The purpose of this proposed provision is to clarify
that the provisions of Section 2.9(b) apply solely to the removal
process for Directors, not Observers. The Company also proposes to
amend Section 2.9(c) of the By-Laws to specify that an Observer, like a
Director, may resign at any time either upon notice of resignation to
the Chairman of the Board, the President or Secretary. The purpose of
this proposed provision is to make it clear that Observers retain the
right to be able to resign from such position in the event that they
need to do so, while also providing the requisite notice to the Company
to effectuate such removal.\16\
---------------------------------------------------------------------------
\14\ The term ``Director'' means the persons elected or
appointed to the Board of Directors from time to time in accordance
with the LLC Agreement and the By-Laws in their capacity as managers
of the Company. See By-Laws, Article I, subparagraph (j).
\15\ The Company notes that this removal provision is comparable
to the similar provision in the MEMX LLC Agreement concerning the
removal of its board observers. See MEMX LLC Agreement, Section
7.6(a) (providing, in relevant part, that ``[a] Board Observer may
be removed at any time by [MEMX] Holdco (subject, in each case, to
the provisions of [the MEMX LLC] Agreement and the [MEMX] Holdco LLC
Agreement regarding the right to nominate and remove [MEMX] Board
Observers.'').
\16\ This provision is also comparable to the similar
resignation provision in the MEMX LLC Agreement concerning the
resignation of board observers. See MEMX LLC Agreement, Section
7.6(c) (``Any Director or Board Observer may resign at any time from
his or her position as such upon notice of resignation to the
Chairman of the Board, the CEO or the Secretary.'').
---------------------------------------------------------------------------
Next, the Company proposes to amend Section 2.10 of the By-Laws to
specify that Observers may participate in a meeting of the Board either
at the place of the meeting or via the same mode of communication as
provided to the members of the Board. The purpose of this change is to
provide the right of Observers to be able to attend Board meetings in
the same manner and through the same mode of communication as provided
to Directors and members of any committee of the Board.\17\
---------------------------------------------------------------------------
\17\ The Company believes that the MEMX LLC Agreement provides
for similar provisions. See MEMX LLC Agreement, Section 7.7(a)
(providing, in sum, that meetings of the board may be held either in
person or by means of telephone or video conference or other
communications device that permits all participants to hear each
other) and MEMX LLC Agreement, Section 7.3(c)(xi) (providing, in
sum, that board observers have the right to participate in any
discussions taking place at a meeting of the board of directors of
MEMX).
---------------------------------------------------------------------------
Next, the Company proposes to amend Section 2.18 of the By-Laws to
include Observers in the list of individuals that the Board may provide
for the reasonable compensation (in addition to the Chairman, Directors
and members of committees). By including Observers in the first
sentence of Section 2.18, the Company also intends that the Board may
provide for reimbursement of reasonable expenses
[[Page 12020]]
incurred by Observers, along with the Chairman, Directors and members
of committees, in connection with the business of the Company. The
purpose of this change is to provide the Board with discretion to offer
reasonable compensation to Observers and reimburse reasonable expenses
for Observers in connection with the business of the Company (i.e.,
reimbursement of travel expenses for Observers to attend in-person
Board meetings). The Company believes this proposed change is
reasonable because the decision of whether to compensate Observers and/
or reimburse reasonable expenses of Observers related to the business
of the Company will ultimately remain with the Board.
Next, the Company proposes to amend Section 2.20 of the By-Laws to
amend the provisions regarding conflicts of interest as well as
contracts and transactions involving Directors to include Observers in
those subparagraphs. In particular, the Company proposes to amend
subparagraph (a) of Section 2.20 to provide that an Observer, along
with Directors and members of any committee, may not participate in the
consideration or decision of any matter relating to a particular
Exchange Member, company, or individual if such Observer has a material
interest in, or a professional, business, or personal relationship
with, that Exchange Member, company, or individual, or if such
participation shall create an appearance of impropriety. The Company
proposes to further amend subparagraph (a) to provide that in any such
case resulting in the appearance of impropriety, an Observer (along
with Directors and members of any committee) shall recuse himself or
herself or shall be disqualified.\18\ The purpose of this change is to
provide that Observers will be subject to the substantively similar
conflicts of interest provisions as the Company's Directors and members
of any committee.\19\
---------------------------------------------------------------------------
\18\ The Company notes that the disqualification language
pertains to Directors or committee members recusing themselves from
any vote taking place; however, Observers will not have voting
rights, as such, this last phrase ``disqualified'' in subparagraph
(a) of Section 2.20 will not apply to Observers recusing themselves.
\19\ These changes are also in line with the similar conflicts
of interest provisions in the MEMX LLC Agreement. See MEMX LLC
Agreement, Section 7.9(a).
---------------------------------------------------------------------------
The Company also proposes to amend subparagraph (b) of Section 2.20
of the By-Laws to include Observers in the provisions concerning
certain contracts or transactions between the Company and Directors or
Officers. In particular, the Company proposes to amend subparagraph (b)
to provide that no contract or transaction between the Company and one
or more Observers (along with Directors or officers), or between the
Company and any other corporation, partnership, association, or other
organization in which one or more Observers (or Directors or officers)
are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason if: (i) the material facts
pertaining to such Observer's (or Director's or officer's) relationship
or interest and the contract or transaction are disclosed or are known
to the Board or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum; or (ii) the material facts are
disclosed or become known to the Board or committee after the contract
or transaction is entered into, and the Board or committee in good
faith ratifies the contract or transaction by the affirmative vote of a
majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum. The purpose of this change is to
provide that Observers will be subject to the same provisions allowing
certain contracts or transactions with the Company in substantially
similar circumstances as the Company's Directors, officers and members
of any committee.\20\
---------------------------------------------------------------------------
\20\ This provision is also in line with the similar provisions
in the MEMX LLC Agreement. See MEMX LLC Agreement, Section 7.9(b).
---------------------------------------------------------------------------
Next, the Company proposes to establish new Section 2.21 of the By-
Laws, titled ``Observers,'' which will contain subparagraphs describing
the number, term, nomination and election process, and rights and
obligations for Observers. In particular, proposed Section 2.21(a) will
provide that there may be up to three (3) Observers to the Board at any
time, as determined by the LLC Member in its sole and absolute
discretion.\21\ Further, proposed subparagraph (a) will provide that no
current Observer may be affiliated \22\ with another current Observer
or current Director of the Board. The purpose of these provisions is to
place a limit \23\ on the number of Observers that may be appointed and
specify that no Observer may be affiliated with another Observer or
Director.\24\
---------------------------------------------------------------------------
\21\ At the time of this filing, the Company does not believe
that more than three (3) Exchange Members would meet the
requirements to be able to nominate a candidate for appointment as
an Observer. In the event that there was a significant change
whereby more Exchange Members could meet the requirements to be able
to nominate a candidate for appointment as an Observer, the Company
would consider whether additional changes to the By-Laws were needed
at that time. If the Company decides that more than three (3)
Observers are needed, it will file another 19b-4 Rule Filing with
the Securities and Exchange Commission (``Commission'') to amend the
By-Laws.
\22\ An ``affiliate'' of, or person ``affiliated'' with a
specific person, is a person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified. See By-Laws,
Article I, subparagraph (b).
\23\ The Company does not believe that this limit will impede
any Exchange Member from being able to appoint an Observer for those
Exchange Members that meet the Observer Threshold and other
requirements to be able to nominate a candidate to the Member
Nominating Committee for nomination as an Observer. Certain Exchange
Members already have an individual serving in a Director capacity on
the Board, thereby eliminating their ability to also have an
Observer to the Board pursuant to proposed Section 2.21(a) of the
By-Laws. Further, the Company's affiliated exchanges (MIAX, MIAX
Pearl, and MIAX Sapphire) plan to also file with the Commission to
amend their by-laws to provide for the same Observer provisions as
proposed herein. As such, the Company's Exchange Members who are
also members of one or more of the Company's affiliated exchanges
will have the opportunity to nominate a candidate to be considered
for the Board Observer position by the Member Nominating Committees
of those exchanges. At the time of this filing, the Company and all
of its affiliated exchanges hold their board meetings at the same
time, effectively allowing Board Observers for each affiliated
exchange to be present at one time.
\24\ This is in line with the similar provision in the MEMX LLC
Agreement which does not permit an exchange member to have
individuals holding a director position and observer position at the
same time. See MEMX LLC Agreement, Section 7.3(c)(x) (``When a
Nominating Investor Holdco Member reaches its turn in the Investor
Director Nomination Rotation and its Investor Director nominee is
elected to the Board . . . and is seated as a Director, its Board
Observer (if any) shall be deemed automatically removed from his or
her position . . . and, for as long as such Nominating Investor
Holdco Member's Investor Director nominee is serving as an Investor
Director, such Nominating Investor Holdco Member shall have no right
to have a Board Observer.'').
---------------------------------------------------------------------------
Proposed subparagraph (b) of Section 2.21 of the By-Laws will
describe the terms for Observers. In particular, proposed subparagraph
(b) will provide that term of office for each Observer shall be three
(3) years from the date of their election. An Observer may serve for
any number of terms, consecutive or otherwise. Observers shall be
divided into up to three (3) classes, designated Class I, Class II, and
Class III. Observers shall serve staggered three-year terms, with the
term of one class expiring each year. In order to commence such
staggered three-year terms, Observers in Class I shall serve until the
second annual election of the Board of Directors, Observers in Class II
shall initially serve until the third annual election of the Board of
Directors, and Observers in Class III shall initially serve until the
fourth annual election of
[[Page 12021]]
the Board of Directors. Commencing with the second annual election of
the Board of Directors, the term for each class of Observers elected at
such time shall be three years from the date of their election.
Notwithstanding the foregoing, in the case of any new Observer as
contemplated by (proposed) Article II, Section 2.21(a), such Observer
shall be added to a class, as determined by the Board at the time of
such Observer's initial election or appointment, and shall have an
initial term expiring at the same time as the term of the class to
which such Observer has been added. The Exchange Member affiliated with
an Observer must continue to satisfy the Observer Threshold for the
duration of the Observer's term. If the Exchange Member affiliated with
an Observer fails to meet the Observer Threshold at any time during the
duration of the Observer's term, the Observer's term shall immediately
terminate at such time. The Exchange Member affiliated with an Observer
has an ongoing obligation to immediately notify the Company if such
Exchange Member no longer meets the Observer Threshold.
The proposed term lengths and classes for Observers are based on
the similar term provisions for the Company's Directors, which are also
divided into three classes with staggered terms.\25\ The purpose of
this provision is to provide Observers with the same term length as
Directors and avoid the Company having to go through lengthy nomination
processes each year in the event there are several Observers. The
requirement that the Exchange Member affiliated with an Observer must
maintain the ownership requirement set forth in the Observer Threshold
is to ensure that Exchange Members who meet such threshold continue to
do so throughout the entire term of the Observer.\26\
---------------------------------------------------------------------------
\25\ See By-Laws, Article II, Section 2.3(b).
\26\ This holding requirement is in line with the similar
provision in the MEMX LLC Agreement. See MEMX LLC Agreement, Section
7.3(d)(vi) (``An individual Board Observer position shall be
immediately terminated following a Transfer of Holdco Units by an
Investor Holdco Member which, after giving effect to such Transfer,
results in such Investor Holdco Member holding a number of Holdco
Class A Units that is less than the Observer Threshold . . .'').
---------------------------------------------------------------------------
Proposed subparagraph (c) of Section 2.21 will describe the
nomination and election process for Observers. In particular, proposed
subparagraph (c) will provide that an Exchange Member that meets the
requirements for the Observer Threshold and as specified in Section
2.21 may submit candidate names to the Member Nominating Committee for
consideration for nomination as an Observer. The Member Nominating
Committee shall consult with the Nominating Committee \27\ and the
Chairman and Chief Executive Officer for the purpose of nominating
candidates for election as an Observer to the Board at the annual
meeting of the LLC Member. The Nominating Committee shall nominate only
those persons whose names have been submitted by the Member Nominating
Committee. The LLC Member shall elect the persons nominated by the
Nominating Committee to be Observers to the Board at the annual meeting
of the LLC Member. The purpose of conducting the nomination and
election process for Observers in the manner described above is to keep
this process in line with the process used to nominate and elect Member
Representative Directors.\28\
---------------------------------------------------------------------------
\27\ The term ``Nominating Committee'' means the Nominating
Committee elected pursuant to the By-Laws. See By-Laws, Article I,
subparagraph (z).
\28\ See By-Laws, Article II, Section 2.4(b). The Company notes
that the process for nominating and electing Observers does not
include the petition process for the Member Representative Director
elections, as described in subparagraphs (c)-(f) of Section 2.4 of
the By-Laws. The Company believes the petition process is not needed
for Observers as Observers have no voting rights, the pool of
candidates is much smaller for Observers as compared to Member
Representative Directors, and Exchange Members that are members of
the Company's affiliated exchanges and meet the requirements to be
able to nominate a candidate as an Observer, may submit candidate
names to the Member Nominating Committees of the Company's
affiliated exchanges for consideration for nomination as an
Observer.
---------------------------------------------------------------------------
Proposed subparagraph (d) to Section 2.21 of the By-Laws would
describe the rights and obligations of Observers. In particular,
subparagraph (d) will provide that the Company shall invite the
Observers to attend all meetings of its Board of Directors in a non-
voting observer capacity, and, in this respect, shall give Observers
copies of all notices, minutes, consents, and other materials that it
provides to Directors, at the same time and in the same manner as
provided to such Directors; provided, however, that such Observers
shall agree in writing to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and
provided further, that the Company reserves the right to withhold any
information and to exclude any such Observers from any meeting or
portion thereof if access to such information or attendance at such
meeting could adversely affect the attorney-client privilege between
the Company and its counsel or result in disclosure of trade secrets or
a conflict of interest.\29\ The purpose of this provision is to clarify
the rights of Observers and limitations on their capacity to attend
Board meetings and receive Board materials.\30\
---------------------------------------------------------------------------
\29\ The Company notes that proposed Section 2.21(d) does not
override the confidentiality provisions related to the Company's
self-regulatory function that are described in Section 10.4 of the
By-Laws.
\30\ This is in line with the similar provision in the MEMX LLC
Agreement describing the rights, obligations and limitations for its
board observers. See MEMX LLC Agreement, Section 7.3(c)(xi).
---------------------------------------------------------------------------
Next, the Company proposes to amend Section 3.1(a) of the By-Laws
to include Observers in the list of individuals that are to be elected
at the annual meeting of the LLC Member, with such time and place of
the annual meeting to be determined by the Board. The purpose of this
change is to provide specific details concerning the time and place for
Observer candidates to be elected to such position. The Company
believes this to be reasonable as it would allow Observers to be
elected at the same annual meeting as Directors and committee members,
as described in proposed Section 3.1(a) of the By-Laws.
The Company also proposes to amend Section 5.3 of the By-Laws to
add a sentence regarding the Member Nominating Committee's role in
connection with the nomination of Observers. As described above,
proposed Section 2.21(c) will provide, among other things, that the
Member Nominating Committee shall consult with the Nominating Committee
and the Chairman and Chief Executive Officer for the purpose of
nominating candidates for election as an Observer to the Board at the
annual meeting of the LLC Member. The Company proposes to amend Section
5.3 to add that same sentence since this section also discusses the
Member Nominating Committee's role in nominating candidates for certain
positions on the Board.
Finally, the Company proposes to amend Section 10.3 of the By-Laws
to include Observers in the list of individuals that may participate in
Board meetings that pertain to the self-regulatory function of the
Company.\31\
---------------------------------------------------------------------------
\31\ This is in line with the similar provision in the MEMX LLC
Agreement. See MEMX LLC Agreement, Section 7.12.
---------------------------------------------------------------------------
Proposal To Remove References to Interim Directors and Initial
Committees
The Company proposes to amend various subparagraphs and sections of
the By-Laws to delete outdated references to Interim Directors and
initial committees. On December 20, 2018, the Commission approved the
[[Page 12022]]
Company's Form 1 application for registration as a national securities
exchange under Section 6 of the Exchange Act.\32\ On March 1, 2019, the
Company launched electronic operations as a national securities
exchange.\33\ Pursuant to the By-Laws and prior to commencing
operations, the LLC Member (i.e., Miami International Holdings, Inc.)
appointed an interim board of directors (the ``Interim Exchange
Board'') \34\ and appointed the initial Nominating Committee and Member
Nominating Committee. The Interim Exchange Board served until the first
annual meeting of the LLC Member pursuant to Section 2.5(a) of the By-
Laws.\35\ The initial Nominating Committee and Member Nominating
Committee served until the second annual meeting of the LLC Member.
Accordingly, the Company proposes to amend the By-Laws to remove all
references and sections relating to ``Interim Directors'' and the
initial Nominating Committee and Member Nominating Committee as those
provisions are outdated. In particular, the Company proposes to make
the following changes:
---------------------------------------------------------------------------
\32\ See Securities Exchange Act Release No. 84891 (December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233).
\33\ See Press Release, MIAX Emerald Successfully Launches
Trading Operations (dated March 4, 2019), available at <a href="https://www.miaxglobal.com/sites/default/files/press_release-files/MIAX_Press_Release_03042019.pdf">https://www.miaxglobal.com/sites/default/files/press_release-files/MIAX_Press_Release_03042019.pdf</a>.
\34\ See By-Laws, Article II, Section 2.5. See also MIAX Emerald
Form 1 Amendment, Exhibit J, filed February 8, 2019, available at
<a href="https://www.sec.gov/Archives/edgar/vprr/1900/19003562.pdf">https://www.sec.gov/Archives/edgar/vprr/1900/19003562.pdf</a>.
\35\ See By-Laws, Article II, Sections 2.2(e) and 2.5(a).
---------------------------------------------------------------------------
<bullet> delete ``appointed as such to the initial Board of
Directors pursuant to Article II, Section 2.5 of these By-Laws, or'' in
Article I, subparagraph (x);
<bullet> delete the reference to ``or Section 2.5'' in Section
2.2(b)(i);
<bullet> delete subparagraph (e) of Section 2.2;
<bullet> delete the heading and subparagraphs (a)-(f) of Section
2.5 and replace the heading with ``[Reserved]'' so as to keep the
remaining hierarchical headings in place throughout the By-Laws;
<bullet> delete subparagraph (b) of Section 3.1; and
<bullet> delete several sentences in Section 5.1 relating to the
initial appointment of the Nominating Committee and Member Nominating
Committee.
The purpose of these proposed changes is to update the By-Laws to
remove outdated references, which will provide clarity to market
participants regarding the status of the Company's Directors,
Nominating Committee and Member Nominating Committee throughout the By-
Laws.
2. Statutory Basis
The Company believes that the proposed By-Law Amendments are
consistent with Section 6(b) of the Exchange Act,\36\ in general, and
furthers the objectives of Section 6(b)(1) \37\ in particular, in that
it enables the Company to be so organized as to have the capacity to be
able to carry out the purposes of the Exchange Act and to comply, and
to enforce compliance by its Exchange Members and persons associated
with its Exchange Members, with the provisions of the Exchange Act, the
rules and regulations thereunder, and the rules of the Company. The
Company also believes that the proposed By-Law Amendments are
consistent with Section 6(b)(5) of the Exchange Act,\38\ in that they
are designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, remove impediments to and perfect the mechanism of a free
and open market and a national market system and, in general, protect
investors and the public interest.
---------------------------------------------------------------------------
\36\ 15 U.S.C. 78f(b).
\37\ 15 U.S.C. 78f(b)(1).
\38\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Proposal To Establish the Role of Observers, Rights and Nomination
Process
The Company believes its proposal to amend the By-Laws to establish
the role of Observers to the Board is consistent with the Act as this
may facilitate additional participation by individuals affiliated with
Exchange Members who have the expertise and knowledge in securities
markets to help the Board in carrying out the Company's business.
Although Observers will not have the right to vote on Company matters
at Board meetings, they will be able to attend, review Board materials
and participate in Board meetings, which may provide additional view
points for relevant issues concerning the business of the Company that
may impact other Exchange Members. Thus, the Company does not believe
the creation of the Observer position to the Board will have any impact
on the Company's ability to be organized as to have the capacity to
carry out the purposes of the Act and to comply with the provisions of
the Act, the rules and regulations thereunder, and the rules of the
Company, which promotes just and equitable principles of trade and
continues to protect investors and the public interest. Further, the
Company believes the proposed changes to the By-Laws are consistent
with, and will not interfere with, the self-regulatory obligations of
the Company.
The Company believes the proposed Observer provisions in the
amended By-Laws are consistent with the Act because the Observer
position will provide a means for individuals who are employed by, or
otherwise affiliated with, an Exchange Member but may not be able, or
willing, to serve as a Board member for one reason or another, to now
be able to serve the Company in an advisory role and provide such
valuable expertise and knowledge to help the Company carry out its
business.
The Company believes the proposed changes to the By-Laws pertaining
to Observers enables the Company to be so organized as to have the
capacity to be able to carry out the purposes of the Exchange Act
because all of the changes are based on similar provisions already in
place at the Company for its Directors (or committee members) or are
substantively similar to provisions in place at a competing exchange
that provides for board observers. The addition of the proposed defined
terms for ``Observer'' and ``Observer Threshold'' will provide clarity
to Exchange Members regarding the Observer position and are
substantively similar to the corresponding terms in the MEMX LLC
Agreement and MEMX Holdco LLC Agreement.\39\ As noted above, the
Company believes the slight difference between its proposal and MEMX's
corporate documents, which automatically grant the right to its
exchange members to appoint an observer (assuming the threshold and
other requirements are met), is reasonable due to the difference in
ownership structures. The Company's proposal provides that Exchange
Members that meet the Observer Threshold and requirements of proposed
Section 2.21, may nominate a candidate to the Member Nominating
Committee for consideration as an Observer. The Company believes that
this nomination structure enables the Company to be so organized as to
have the capacity to be able to carry out the purposes of the Exchange
Act by not granting Exchange Members the automatic right to appoint
Observers; rather, those candidates must go through a standard
nomination and election process with the Member Nominating Committee
consulting with
[[Page 12023]]
the Nominating Committee and the Chairman and Chief Executive Officer.
---------------------------------------------------------------------------
\39\ See supra note 10.
---------------------------------------------------------------------------
The following proposed Observer provisions are all substantively
similar to provisions already in the By-Laws for Directors (or
committee members) or in place at MEMX and, therefore, will enable the
Company to continue to be so organized as to have the capacity to be
able to carry out the purposes of the Exchange Act: removal and
resignation of Observers; \40\ participation by Observers at Board
meetings; \41\ the ability of the Board to provide for reasonable
compensation and reimbursement of expenses for Observers; \42\
conflicts of interest related to Observers; contracts and transactions
with the Company that may involve Observers; \43\ the requirement that
Observers not be affiliated with any other Director or Observer; \44\
term length and staggered classes for Observers; \45\ the nomination
and election process for Observers; \46\ and certain rights and
obligations of Observers.\47\
---------------------------------------------------------------------------
\40\ See supra notes 15 and 16.
\41\ See supra notes 17, 30, and 31.
\42\ See By-Laws, Section 2.18.
\43\ See supra notes 19 and 20.
\44\ See supra note 24.
\45\ See supra note 25.
\46\ See supra note 28.
\47\ See supra note 30.
---------------------------------------------------------------------------
Proposal To Remove References to Interim Directors and Initial
Committees
The Company believes its proposal to amend various subparagraphs
and sections of the By-Laws to delete outdated references to Interim
Directors and initial committees enables the Company to be so organized
as to have the capacity to be able to carry out the purposes of the
Exchange Act because it will remove outdated text. Pursuant to the By-
Laws and prior to commencing operations, the LLC Member appointed an
Interim Exchange Board and appointed the initial Nominating Committee
and Member Nominating Committee. The Interim Exchange Board served
until the first annual meeting of the LLC Member pursuant to Section
2.5(a) of the By-Laws and the initial Nominating Committee and Member
Nominating Committee served until the second annual meeting of the LLC
Member. Accordingly, the Interim Exchange Board and initial Nominating
Committee and Member Nominating Committee served until their specified
time expired. The Company further believes this proposed change removes
impediments to and perfects the mechanism of a free and open market by
providing greater transparency and clarity in the Company's governing
documents. It is in the public interest for the Company's By-Laws to be
up-to-date and accurate, which protects investors by providing
transparency and clarity, thereby reducing potential confusion.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Company does not believe that the proposed By-Law Amendments
will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed By-
Law Amendments relate to the corporate governance of the Company and
not to the Company's operations. As such, the proposed By-Law
Amendments do not impact competition among the various market
participants of the Company or among competing exchanges. This is not
intended to address competitive issues and, therefore, imposes no
burden on competition.
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 Exchange has designated this rule filing as non-controversial
under Section 19(b)(3)(A) \48\ of the Act and Rule 19b-4(f)(6) \49\
thereunder. Because the proposed rule change does not (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \50\ and Rule 19b-4(f)(6)
thereunder.\51\
---------------------------------------------------------------------------
\48\ 15 U.S.C. 78s(b)(3)(A).
\49\ 17 CFR 240.19b-4(f)(6).
\50\ 15 U.S.C. 78s(b)(3)(A).
\51\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \52\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \53\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
states that the proposed changes related to establishing the Board
Observer position are similar to provisions already in place at MEMX
for its board observers and the proposed changes do not impact the
ownership of the Company, voting rights, or restrictions of Directors.
The Exchange also states that the proposed changes to remove text
regarding the Interim Exchange Board and initial committee are non-
substantive, clarifying edits. For these reasons, and because the
proposed rule change raises no new or novel legal or regulatory issues,
the Commission finds that waiver of the operative delay is consistent
with the protection of investors and the public interest. Therefore,
the Commission hereby waives the operative delay and designates the
proposal operative upon filing.\54\
---------------------------------------------------------------------------
\52\ 17 CFR 240.19b-4(f)(6).
\53\ 17 CFR 240.19b-4(f)(6)(iii).
\54\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 under
Section 19(b)(2)(B) \55\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\55\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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#1d6f687178307e7270707873696e5d6e787e337a726b"><span class="__cf_email__" data-cfemail="4e3c3b222b632d2123232b203a3d0e3d2b2d60292138">[email protected]</span></a>. Please include
File Number SR-EMERALD-2026-07 on the subject line.
[[Page 12024]]
Paper Comments
<bullet> Send paper comments in triplicate to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to file number SR-EMERALD-2026-07. 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 Company. 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-EMERALD-2026-07 and should be submitted on or
before April 1, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\56\
---------------------------------------------------------------------------
\56\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04708 Filed 3-10-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on March 11, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.