Notice2026-09960
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 515A, MIAX Emerald Price Improvement Mechanism and PRIME Solicitation Mechanism
Primary source
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Published
May 19, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 96 (Tuesday, May 19, 2026)</title>
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[Federal Register Volume 91, Number 96 (Tuesday, May 19, 2026)]
[Notices]
[Pages 29202-29204]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-09960]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105488; File No. SR-EMERALD-2026-13]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 515A, MIAX Emerald Price Improvement Mechanism and PRIME
Solicitation Mechanism
May 14, 2026.
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 May 1, 2026, MIAX Emerald, LLC (``MIAX Emerald'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 515A, MIAX Emerald
Price Improvement Mechanism (``PRIME'') and PRIME Solicitation
Mechanism, to permit orders for the accounts of Market Makers assigned
in the applicable options class, to be solicited as a contra party to
the Agency Order submitted for execution in a PRIME or cPRIME Auction.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings">https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings</a>, and at the Exchange'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 Policy .04 of Exchange Rule 515A,
MIAX Emerald Price Improvement Mechanism (``PRIME'') and PRIME
Solicitation Mechanism, (``Solicitation Auction''),\3\ to permit orders
for the accounts of Market Makers \4\ assigned in the applicable
options class, to be solicited as a contra party to the Agency Order
\5\ submitted for execution in a PRIME or cPRIME Auction.\6\
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\3\ See Exchange Rule 515A(b).
\4\ The term ``Market Makers'' refers to ``Lead Market Makers,''
``Primary Lead Market Makers,'' and ``Register Market Makers''
collectively. See Exchange Rule 100.
\5\ PRIME Is a process by which a Member may electronically
submit for execution (``Auction'') an order it represents as agent
(``Agency Order'') again principal interest, and/or an Agency Order
against solicited interest. See Exchange Rule 515A(a). The term
``Member'' means and individual or organization approved to exercise
the trading rights associated with a Trading Permit. Members are
deemed ``members'' under the Exchange Act. See Exchange Rule 100.
\6\ ``cPRIME'' is the process by which a Member may
electronically submit a ``cPRIME Order'' (as defined in Rule
518(b)(7)) it represents as agent (a ``cPRIME Agency Order'')
against principal or solicited interest for execution (a ``cPRIME
Auction''). See Exchange Rule 515A.12(a).
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PRIME is a process by which a Member \7\ may electronically submit
for execution (``Auction'') an order it represents as agent (``Agency
Order'') against principal interest, and/or an Agency Order against
solicited interest.\8\ A Member (the ``Initiating Member'') may
initiate an Auction provided all of the following are met: (i) the
Agency Order is in a class designated as eligible for PRIME as
determined by the Exchange and within the designated Auction order
eligibility size parameters as such size parameters are determined by
the Exchange; (ii) the Initiating Member must stop the entire Agency
Order as principal or with a solicited order at the better of the NBBO
\9\ or the Agency Order's limit price (if the order is a limit order);
and (iii) with respect to Agency Orders that have a size of less than
50 contracts, if at the time of receipt of the Agency Order, the NBBO
has a bid/ask differential of $0.01, the System \10\ will reject the
Agency Order.\11\ Members may use PRIME to execute complex orders at a
net price. ``cPRIME'' is the process by which a Member may
electronically submit a ``cPRIME Order'' (as defined in Rule 518(b)(7))
it represents as agent (a ``cPRIME Agency Order'') against principal or
solicited interest for execution (a ``cPRIME Auction''), subject to the
criteria enumerated in Policy .12 of Rule 515A.\12\
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\7\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\8\ See Exchange Rule 515A(a).
\9\ The term ``NBBO'' means the national best bid or offer as
calculated by the Exchange based on market information received by
the Exchange from OPRA. See Exchange Rule 100.
\10\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\11\ See Exchange Rule 515A(a)(1).
\12\ See Exchange Rule 515A.12(a).
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Currently, Policy .04 of Rule 515A provides that Members may enter
contra orders that are solicited. The PRIME provides a facility for
Members that locate liquidity for their customer orders. Members may
not use the Solicitation Auction to circumvent Rule 520 limiting
principal transactions. This may include, but is not limited to,
Members entering contra orders that are solicited from (a) affiliated
broker-dealers, or (b) broker-dealers with which the Member has an
arrangement that allows the Member to realize similar economic benefits
from the solicited transaction as it would achieve by executing the
customer order in whole or in part as principal. Additionally,
solicited contra orders entered by Members to trade against Agency
Orders may not be for the account of a MIAX Market Maker assigned to
the options class.\13\
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\13\ See Policy .04 of Exchange Rule 515A.
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The last sentence of Policy .04 of Rule 515A prohibits orders for
the accounts of Market Makers assigned to the applicable options class
on the
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Exchange to be solicited to execute against the Agency Order in a PRIME
or cPRIME Auction. While market participants other than appointed MIAX
Emerald Market Makers may contribute liquidity to these crossing
auctions as either contra orders or responses, Market Makers assigned
to the options class, who are the primary source of liquidity on the
Exchange in their assigned options class, are limited in the manner in
which they may provide liquidity to these auctions.
The Exchange believes that eliminating the prohibition against
assigned Market Makers acting as contra in PRIME and cPRIME Auctions
would enhance price improvement opportunities. Allowing the assigned
Market Maker in the options class to be solicited as a contra party may
result in exposure of more orders to potential price improvement via
the auction processes.
Further, the Exchange notes that the electronic crossing price
improvement auction of at least one other options exchange currently
permits orders for the accounts of appointed market-makers to be
solicited as the contra for that auction.\14\
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\14\ See Securities Exchange Act Release No.105049 (March 19,
2026), 91 FR 14057 (March 24, 2026) (SR-CBOE-2025-090) (Order
Approving a Proposed Rule Change To Permit Orders for the Accounts
of Market-Makers With an Appointment in the Applicable Class To Be
Solicited as the Contra-Side Order Submitted Into Certain Exchange
Auctions).
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Implementation
The Exchange proposes to implement this change in Q3 of 2026 and
will issue a Regulatory Circular notifying market participants of the
exact date at least 30 days in advance.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\15\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\16\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The Exchange also believes the proposed rule change is consistent with
the Section 6(b)(5) \17\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ Id.
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In particular, the Exchange believes the proposed rule change will
promote just and equitable principles of trade and remove impediments
to and perfect the mechanisms of a free and open market and a national
market system because it will provide the primary liquidity providers
on the Exchange with an additional way to participate in electronic
auctions. Additionally, by permitting Members to solicit primary
liquidity providers in a class for electronic auctions, the Exchange
believes Members will be able to more efficiently locate liquidity to
fill their customer orders, particularly during times of volatility. As
a result, the Exchange believes the proposed rule change will likely
expand available liquidity for these auctions, which may create
additional execution and price improvement opportunities for customers
at all times, which ultimately benefits investors.
The Exchange believes the proposed rule change will promote
competition in PRIME and cPRIME Auctions, including competition to
initiate PRIME and cPRIME Auctions, which will remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors. The Exchange
believes the availability of this liquidity to Agency Orders will
positively affect the experience for Agency Orders and overall quality
of the auctions, and may increase the number of PRIME and cPRIME
Auctions being initiated. Furthermore, the Exchange believes increasing
the number of market participants available to be solicited may
increase competition to provide Agency Orders, which may lead to a
PRIME Auction being initiated at a better price. More market
participants competing to provide Agency Orders may lead to solicited
parties providing more aggressive initial prices. The Exchange believes
the ability of all market participants, including assigned Market
Makers that did not submit an Agency Order, to submit responses to a
PRIME Auction will continue to provide competition for executions
against these Agency Orders.
The Exchange believes any risk that appointed Market Makers may
misuse the non-public information of an upcoming PRIME or cPRIME
Auction is de minimis. Currently, that risk is present for non-
appointed Market Makers, but the Exchange has not observed any trends
of solicited market participants separately submitting unrelated orders
as a result of knowledge of impending PRIME or cPRIME Auctions in other
classes. The Exchange notes that Policy .01 of Exchange Rule 515A
provides that it shall be considered conduct inconsistent with just and
equitable principles of trade, in accordance to Exchange Rule 301 \18\
for any Member to enter orders, quotes, Agency Orders, or other
responses for the purpose of disrupting or manipulating the
Auction.\19\ Additionally, Exchange Rule 303 provides that each Member
must establish, maintain and enforce written procedures reasonably
designed, taking into consideration the nature of such Member's
business, to prevent the misuse of material, non-public information by
such Member or persons associated with such Member.\20\
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\18\ The Exchange notes that the rules contained in MIAX Chapter
III, are incorporated by reference into MIAX Emerald Chapter III,
and are thus MIAX Emerald Rules and thereby applicable to MIAX
Emerald Members. See Chapter III of the MIAX Emerald Rulebook.
\19\ See Interpretations and Policies .01 of Exchange Rule 515A.
\20\ See Exchange Rule 303.
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The Exchange believes the proposed rule change is not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers because it will permit orders for accounts of assigned Market
Makers to be solicited in the same manner as orders for the accounts or
all other market participants. Currently, all market participants,
other than assigned Market Makers, may be solicited as the contra and
submit responses in PRIME Auctions for all classes. Given the
additional costs and obligations associated with being an assigned
Market Maker, the Exchange does not believe these Market Makers should
have fewer execution opportunities with respect to volume submitted for
execution through PRIME Auctions. The Exchange believes the proposed
rule change will provide all Market Makers on the Exchange with the
same ability to participate in PRIME Auctions in all classes at all
times, which may further increase execution and price improvement
opportunities for customers.
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. The
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Exchange does not believe the proposed rule change will impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because it provides the same
execution opportunities in PRIME Auctions to assigned Market Makers
that are currently available to all other market participants.
The Exchange does not believe the proposed rule change will impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it
relates to orders submitted into the PRIME Auction mechanism on the
Exchange. Additionally, the Exchange notes that the rules of at least
one other options exchange permits orders for the accounts of appointed
market makers to be solicited as contra orders for that exchange's
electronic crossing price improvement auction.\21\ The Exchange
believes the proposed rule change may improve price competition with
PRIME Auctions, because the primary liquidity providers will be able to
increase participation in PRIME Auctions.
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\21\ See supra note 14.
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For all the reasons stated, the Exchange does not believe that the
proposed rule change will impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act, and
believes the proposed change will enhance competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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 after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A)(iii) of the Act \22\ and subparagraph
(f)(6) of Rule 19b-4 thereunder.\23\
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\22\ 15 U.S.C. 78s(b)(3)(A)(iii).
\23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
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.
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At any time within 60 days of the filing of such 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) \24\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\24\ 15 U.S.C. 78s(b)(2)(B).
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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#8efcfbe2eba3ede1e3e3ebe0fafdcefdebeda0e9e1f8"><span class="__cf_email__" data-cfemail="4634332a236b25292b2b232832350635232568212930">[email protected]</span></a>. Please include
file number SR-EMERALD-2026-13 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-EMERALD-2026-13. 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-EMERALD-2026-13 and should be submitted
on or before June 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-09960 Filed 5-18-26; 8:45 am]
BILLING CODE 8011-01-P
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