Notice2026-05661
Self-Regulatory Organizations; MIAX PEARL, LLC; Order Granting Approval of a Proposed Rule Change To Allow Post Only Orders in Sub-Dollar Securities
Primary source
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Published
March 24, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 56 (Tuesday, March 24, 2026)</title>
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[Federal Register Volume 91, Number 56 (Tuesday, March 24, 2026)]
[Notices]
[Pages 14061-14063]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05661]
[[Page 14061]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105053; File No. SR-PEARL-2025-50]
Self-Regulatory Organizations; MIAX PEARL, LLC; Order Granting
Approval of a Proposed Rule Change To Allow Post Only Orders in Sub-
Dollar Securities
March 19, 2026.
I. Introduction
On December 10, 2025, MIAX PEARL, LLC (``MIAX Pearl'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to allow a Post Only order instruction to be
applied to displayed and non-displayed orders in securities priced
below $1.00 per share (``sub-dollar security(ies)''). The proposed rule
change was published for comment in the Federal Register on December
29, 2025.\3\ On January 28, 2026, pursuant to Section 19(b)(2) of the
Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\5\ This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104462 (Dec. 19,
2025), 90 FR 60807 (``Notice''). The Commission has received no
comment letters on the proposed rule change.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104731, 91 FR 4652
(February 2, 2026). The Commission designated March 29, 2026, as the
date by which the Commission shall approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change.
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II. Description of the Proposed Rule Change \6\
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\6\ The Exchange sets forth additional detail and justification
regarding the proposal in the Notice. See supra note 3.
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An order designated as Post Only on the Exchange is a non-routable
order that is designed to post to the Exchange's Equities Book
(``Equities Book'') and not remove liquidity except when the value of
an execution when removing liquidity would equal or exceed the value of
an execution if the order instead posted to the Equities Book and
subsequently provided liquidity.\7\ Pursuant to Rule 2614(c)(2)(i), it
is only for Post Only orders in securities priced at or above $1.00 per
share that the Exchange performs this economic analysis to determine
whether to allow the removal of liquidity. Under Rule 2614(c)(2)(i)(A),
an order designated as Post Only in a sub-dollar security may remove
liquidity without regard to what the value of an execution would be if
the order instead posted to the Equities Book and subsequently provided
liquidity.
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\7\ See Exchange Rule (``Rule'') 2614(c)(2). To determine at the
time of a potential execution whether the value of such execution
when removing liquidity would equal or exceed the value of such
execution if the order instead posted to the Equities Book and
subsequently provided liquidity, the Exchange uses the highest
possible fee charged and highest possible rebate paid for such
executions on the Exchange. See Rule 2614(c)(2)(i)(B). Post Only
orders for securities priced at or above $1.00 per share may be
displayed or non-displayed on the Exchange. See Rule 2614(c)(3)-(4).
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The Exchange proposed to amend Rule 2614(c)(2)(i) such that, as is
currently the case for a Post Only order in a security priced at or
above $1.00, a Post Only order in a sub-dollar security would remove
liquidity from the Equities Book only if the value of such execution
would equal or exceed the value of an execution if the order instead
posted to the Equities Book and subsequently provided liquidity.\8\
Broadly speaking then, as a result of this proposed rule amendment, the
Exchange would apply Post Only functionality to any order so designated
by an Equity Member,\9\ whether displayed or non-displayed, in any
security traded on the Exchange.\10\ The Exchange states that other
national securities exchanges already offer Post Only functionality for
sub-dollar securities.\11\
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\8\ See proposed Rule 2614(c)(2)(i). As is the case currently
for Post Only orders in securities priced at or above $1.00 per
share, this economic analysis for sub-dollar securities would be
based on the highest possible rebate that would be paid for
providing liquidity and the highest possible fee that would be
charged for removing liquidity. See proposed Rule 2614(c)(2)(i). In
addition, as a technical matter, this particular rule amendment
would be accomplished by the elimination of current Rule
2614(c)(2)(i)(A).
\9\ The term ``Equity Member'' means a member of the Exchange
authorized to transact business on MIAX Pearl Equities. See Rule
1901.
\10\ See Notice, 90 FR at 60808, 60810, 60815.
\11\ Id. at 60810.
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The Exchange proposed additional amendments to Rule 2614(c)(2)(i),
as well as Rule 2617(a)(4), in connection with the proposed expansion
of Post Only functionality to orders in sub-dollar securities. These
additional amendments are designed to facilitate the use of displayed
and non-displayed Post Only orders in sub-dollar securities by
addressing the potential for such orders to cause internally locked or
crossed markets on the Exchange.\12\ The Exchange states that there are
differences between the market structure for securities priced at or
above $1.00 and the market structure for sub-dollar securities, and
these differences impact how the Post Only instruction may
function.\13\ Specifically, the Exchange states that, due to the
different fee levels and minimum price increments for securities priced
at or above $1.00 per share compared to sub-dollar securities, a Post
Only order in a sub-dollar security could cause an internally locked or
crossed market on the Equities Book, whereas a Post Only order in a
security priced at or above $1.00 per share could cause an internally
locked market but not an internally crossed market.\14\ The Exchange
further states that these proposed rule amendments expand existing
Exchange functionality.\15\
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\12\ Id. at 60810-15.
\13\ Id. at 60808, 60810; see also id. at 60809 n. 15 and 19
(setting forth the Exchange's different maker-taker fee structures
for securities priced at or above $1.00 versus sub-dollar
securities, respectively); id. at 60812 n. 36 (citing Rule 2612(a),
which provides that the minimum pricing increment is $.01 for
securities priced at or above $1.00 per share, and $.0001 for sub-
dollar securities).
\14\ Id. at 60808. An internally locked or crossed market could
occur on the Exchange based on the working price of non-displayed
interest on one or both sides of the market. The Exchange will not
display a locked or crossed market. See Rule 2617(a)(4)(iii).
\15\ See Notice, 90 FR at 60811.
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Proposed Rule 2614(c)(2)(i)(A), which would assume the rule
provision numbering vacated by the elimination of current Rule
2614(c)(2)(i)(A),\16\ is designed to address the potential for
internally crossed markets that could occur on the Exchange due to the
usage of Post Only orders in sub-dollar securities and the above-noted,
sub-dollar security market structure features that are different from
the at/above dollar security context. Under this proposed rule, (1) if
a non-displayed order designated as Post Only to buy (sell) does not
remove liquidity, and that order, if posted at its limit price, would
cross a resting displayed order to sell (buy) on the Equities Book, the
non-displayed Post Only order to buy (sell) will post to the Equities
Book with a working price equal to the price of the displayed order to
sell (buy), and (2) if a displayed order designated as Post Only to buy
(sell) does not remove liquidity and the limit price of that order
would cross a non-displayed order to sell (buy) resting on the Equities
Book, the non-displayed order to sell (buy) will re-price to a working
price equal to the limit price of the displayed
[[Page 14062]]
Post Only order to buy (sell).\17\ The Exchange states that this re-
pricing functionality for a non-displayed order is consistent with how:
(1) the Exchange currently re-prices orders with a Minimum Execution
Quantity (``MEQ'') instruction in the same circumstances,\18\ (2) the
Exchange currently re-prices a non-displayed order that crosses the
Protected Quotation of an external market,\19\ and (3) other national
securities exchanges re-price non-displayed orders in certain
circumstances.\20\
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\16\ In connection with this rule numbering change, current Rule
2614(c)(2)(i)(B) would be incorporated into Rule 2614(c)(2)(i) under
the proposal.
\17\ See proposed Rule 2614(c)(2)(i)(A). The Exchange has
provided examples of how the proposed re-pricing functionality would
work. See Notice, 90 FR at 60811-12. Proposed Rule 2614(c)(2)(i)(A)
would apply when the potential cross would involve non-displayed
interest on one side of the market and displayed interest on the
other side of the market, and would not apply when the potential
cross would involve non-displayed interest on both sides of the
market. Pursuant to Rule 2617(a)(4)(iii), a non-displayed Post Only
order that does not remove liquidity may post and rest on the
Equities Book at a price that crosses (or locks) contra-side non-
displayed interest.
\18\ See Notice, 90 FR at 60811; see also Rule
2614(c)(7)(ii)(B).
\19\ See Notice, 90 FR at 60811; see also Rule 2614(g).
\20\ See Notice, 90 FR at 60811.
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Rule 2617(a)(4)(iv) currently applies only to orders in securities
priced at or above $1.00 per share, and sets forth functionality that
dictates when the Exchange would allow an Aggressing Order \21\ or
incoming order to execute against locked or crossed interest resting on
the Equities Book. In connection with expanding Post Only functionality
to orders in sub-dollar securities, the Exchange proposes to amend Rule
2617(a)(4)(iv) such that the functionality set forth in the rule would
apply to orders in securities of any price, including Post Only orders
in sub-dollar securities. The Exchange states that the execution
mechanism set forth in Rule 2617(a)(4)(iv) is designed to maintain
intra-market price priority by governing the price at which a non-
displayed order is executable when there is a contra-side displayed
order at a price that results in an internally locked or crossed
book.\22\ Under the amended rule, for a security of any price, when a
non-displayed order to sell (buy) is posted on the Equities Book at a
price that locks or crosses a displayed order to buy (sell), an
Aggressing Order or an incoming order to buy (sell) that is priced more
aggressively than the order to buy (sell) displayed on the Equities
Book will execute against the non-displayed order to sell (buy) resting
on the Equities Book at one-half minimum price variation higher (lower)
than the price of the resting displayed order to buy (sell).\23\
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\21\ The term ``Aggressing Order'' means an order to buy (sell)
that is or becomes marketable against sell (buy) interest on the
MIAX Pearl Equities Book. A resting order may become an Aggressing
Order if its working price changes, if the PBBO or NBBO is updated,
because of changes to other orders on the MIAX Pearl Equities Book,
or when processing inbound messages. See Rule 1901.
\22\ See Notice, 90 FR at 60812.
\23\ See proposed Rule 2617(a)(4)(iv). The Exchange has provided
examples of the operation of this order handling functionality for
securities priced at, above or below $1.00 per share, for scenarios
involving an incoming Post Only order as well as an Aggressing Order
executing against contra-side interest when there is a re-evaluation
of the Equities Book. See Notice, 90 FR at 60813-14. Since proposed
Rule 2617(a)(4)(iv) would apply when there is non-displayed interest
on one side of the market and displayed interest on the other side
of the market, and since proposed Rule 2614(c)(2)(i)(A) would not
permit an internal cross involving a Post Only order in that
scenario, the application of proposed Rule 2617(a)(4)(iv) to Post
Only orders is with regard to the potential occurrence of an
internally locked market.
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III. Discussion and Commission Findings
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\24\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\25\ which requires, among
other things, that the rules of a national securities exchange be
designed to prevent fraudulent and manipulative acts and practices, 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 not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\24\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\25\ 15 U.S.C. 78f(b)(5).
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In general, according to the Exchange, the Post Only order
instruction provides Equity Members with an increased likelihood that
the order will add liquidity to the order book and not remove liquidity
unless certain price improvement requirements are satisfied.\26\ The
Exchange states that Post Only orders are an important tool because
they allow market participants to post aggressively-priced liquidity
while achieving cost control with regard to the fee or rebate
associated with the potential execution of their orders.\27\ The
Exchange further states that, by incentivizing aggressively-priced
liquidity, Post Only functionality contributes to improved liquidity,
market depth, and if the orders are displayed, price transparency.\28\
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\26\ See Notice, 90 FR at 60809.
\27\ Id. at 60815.
\28\ Id. at 60810, 60815.
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The Exchange states that this proposal is not intended to encourage
an increase in the overall volume or order flow in sub-dollar
securities.\29\ According to the Exchange, average daily sub-dollar
trading volume comprised approximately 9% of overall daily volume in
September 2025, and the majority of sub-dollar trading volume occurs
off-exchange.\30\ In addition, the Exchange states that other exchanges
already allow Post Only functionality for orders in sub-dollar
securities.\31\ Therefore, according to the Exchange, this proposal is
designed to allow the Exchange to better compete with other exchanges
and off-exchange venues for sub-dollar security order flow, as well as
encourage market participants to send such order flow to an exchange-
level pool of liquidity.\32\
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\29\ Id. at 60808, 60816.
\30\ Id.
\31\ See supra note 11 and accompanying text.
\32\ See Notice, 90 FR at 60807-08, 60815.
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The Commission agrees that an exchange providing Post Only
functionality for orders in sub-dollar securities is not novel, as the
Commission understands, consistent with what the Exchange has stated,
that other exchanges already provide Post Only functionality for sub-
dollar securities.\33\ To the extent the Exchange's proposed Post Only
functionality for orders in sub-dollar securities differs from how
other exchanges handle Post Only orders in sub-dollar securities, these
differences may manifest in the order interaction scenarios that the
Exchange has contemplated and addressed in the proposal, in the
Commission's view. Specifically, the proposal addresses the potential
for the Exchange to experience an internally crossed order book in a
sub-dollar security as a result of the interaction of non-displayed
Post Only orders with contra-side displayed orders, or the interaction
of displayed Post Only orders with contra-side non-displayed orders, by
re-pricing the non-displayed order to the locking price in those
scenarios.\34\ Likewise, the proposal expands to sub-dollar securities
order handling functionality that already exists for securities priced
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at or above $1.00 and is designed to alleviate, insofar as Post Only
orders are concerned, any internal locks on the Equities Book involving
contra side displayed and non-displayed interest.\35\
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\33\ See supra note 11 and accompanying text.
\34\ See proposed Rule 2614(c)(2)(i). The Exchange states that
internally locked or crossed markets on the Exchange are rare events
and should continue to be rare under this proposal. See Notice, 90
FR at 60808.
\35\ See proposed Rule 2617(a)(4)(iv). The Exchange states that,
based on its observations and experience with MEQ orders, an
internally locked or crossed book is typically alleviated almost
immediately or within an extremely short period of time after the
initial occurrence. See Notice, 90 FR at 60808.
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VI. Conclusion
For the reasons set forth above, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange and, in particular, the requirements of Section
6(b)(5) of the Act.\36\
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\36\ 15 U.S.C. 78f(b)(5).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\37\ that the proposed rule change (SR-PEARL-2025-50) be, and
hereby is, approved.
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\37\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-05661 Filed 3-23-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on March 24, 2026.
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