Notice2026-19865
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 2621 (Clearly Erroneous Executions)
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Published
September 29, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 187 (Tuesday, September 29, 2026)</title>
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[Federal Register Volume 91, Number 187 (Tuesday, September 29, 2026)]
[Notices]
[Pages 61526-61528]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19865]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106482; File No. SR-PEARL-2026-40]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Rule
2621 (Clearly Erroneous Executions)
September 24, 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 September 18, 2026, MIAX PEARL, LLC (``MIAX
Pearl'' or the ``Exchange''),\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 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.
\3\ All references to ``MIAX Pearl'' in this filing are to MIAX
Pearl Equities, the equities trading facility of MIAX PEARL, LLC.
See Exchange Rule 1901.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange to Rule 2621 (``Clearly Erroneous Executions'') in
light of the Commission's approval of Overnight Protected Bands for 23/
5 Trading.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings">https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings</a>, and at MIAX Pearl's principal office.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, MIAX Pearl 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. MIAX Pearl 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 Rule 2621 (``Clearly Erroneous
Executions'') in light of the Commission's approval of Overnight
Protected Bands under the LULD Plan for 23/5 Trading.
Background
In conjunction with the industry's plans for the introduction of
trading 23 hours a day, 5 days a week (``23/5 Trading''), the Operating
Committee of the Plan to Address Extraordinary Market Volatility
(``LULD Plan'') filed proposed Amendment 27 to the LULD Plan, which
proposed to establish price band protections during overnight trading
hours (``Overnight Price Bands'').\4\ The Operating Committee proposed
that the Overnight Price Bands would initially be temporary static
bands 20% above and below two reference points, and that after
implementation, the Operating Committee would evaluate the performance
of such Overnight Price Bands and propose appropriate changes in a new
plan amendment.\5\ On August 5, 2026, the Commission approved the
proposal.\6\
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\4\ See Securities Exchange Act Release No. 105596 (June 1,
2026), 91 FR 33774 (June 4, 2026) (File No. 4-631) (Notice of Filing
of 27th Amendment to the National Market System Plan).
\5\ See id.
\6\ See Securities Exchange Act Release No. 106042 (August 5,
2026), 91 FR 51515 (August 10, 2026) (File No. 4-631) (Order
Granting Approval of the 27th Amendment to the National Market
System Plan to Address Extraordinary Market Volatility to Establish
Temporary Price Band Protections in Overnight Trading).
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In light of the Commission's approval of these changes to the LULD
Plan, the Exchange now proposes several amendments to Rule 2621
regarding Clearly Erroneous Executions. In general, the rule describes
the process a market participant may use to request cancellation of a
transaction that was ``clearly erroneous.'' The current rule's central
premise is that if LULD Price Bands under the LULD Plan were available
and correct at the time the transaction was executed, the transaction
is not eligible for clearly erroneous review. Specifically, Rule
2621(c)(1) currently provides that ``[i]f the execution time of the
transaction(s) under review is during the Regular Trading Hours, the
transaction will not be reviewable as clearly erroneous'' except in
certain limited circumstances, including when (i) the transaction is in
an NMS stock that is not subject to the LULD Plan (e.g., rights and
warrants), (ii) the transaction was executed at a time with LULD Price
Bands were unavailable or trading should have been prevented due to a
regulatory halt or other halt, or (iii) several other limited
circumstances.\7\ In approving the existing version of the rule, the
Commission noted that restricting clearly erroneous review in this way
during times when LULD Price Bands were in effect was ``consistent with
the Act and will further the goal of providing greater certainty to
market participants that trades executed within the Price Bands will
stand and not be broken. . . . Thus, the proposal is designed to limit
the potential discordance between the LULD mechanism and CEE review
process.'' \8\
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\7\ See Rule 2621(c)(1)(i), (ii), and (iii).
\8\ See Securities Exchange Act Release No. 95658 (September 1,
2022), 87 FR 55060 at 55063 (September 8, 2022) (SR-CboeBZX-2022-
037) (Order Approving a Proposed Rule Change, as Modified by
Amendment Nos. 1 and 2, to Amend BZX Rule 11.17, Clearly Erroneous
Executions).
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Currently, LULD Price Bands are available only during Regular
Trading Hours, meaning that the restrictions on clearly erroneous
review described above apply only during Regular Trading Hours. With
the introduction of Overnight Price Bands, the Exchange now proposes to
extend the existing restrictions on clearly erroneous review to the
period when Overnight Price Bands are in place. This proposed change
would be consistent with the Commission's rationale in approving the
current version of the rule because it would limit any potential
discordance between the LULD mechanism and CEE review in the overnight
trading session, providing greater certainty to market participants
that trades executed with the Overnight Price Bands will stand and not
be broken.
Proposed Changes to Rule 2621(c)(1)
To implement this change, the Exchange proposes to add several
definitions to Rule 2621(c)(1). First, the Exchange would add that the
term ``LULD Protected Hours'' includes Regular Trading Hours and
``Overnight Protected Hours'' defined in Section VIII of the LULD Plan.
Second, the Exchange would define ``LULD Price Bands'' or ``Price
Bands'' to mean the Price Bands defined in Section V of the LULD Plan
(i.e., the Price Bands that apply during Regular Trading Hours) and
``Overnight Price Bands'' as defined in Section VIII
[[Page 61527]]
of the LULD Plan (i.e., the Price Bands that apply to the Overnight
Protected Hours from 9:00 p.m. ET through 4:00 a.m. ET).
The Exchange proposes to amend the current first sentence of Rule
2621(c)(1) to replace the phrase ``Regular Trading Hours'' with ``LULD
Protected Hours,'' to provide that ``[i]f the execution time of the
transaction(s) under review is during LULD Protected Hours, the
transaction will not be reviewable as clearly erroneous . . . .'' This
change would extend the LULD-based restrictions on clearly erroneous
review currently in place during Regular Trading Hours to the Overnight
Protected Hours.
The Exchange also proposes to amend Rule 2621(c)(1)(ii)'s reference
to ``Percentage Parameter'' to incorporate the Percentage Parameter
that applies to Overnight Protected Hours. The amended provision would
provide for the applicability of clearly erroneous review if the price
of the transaction to buy (sell) that is the subject of the clearly
erroneous complaint is greater than (less than) the Reference Price by
an amount that equals or exceeds the applicable Percentage Parameter
defined in Appendix A to the LULD Plan (with respect to the Price Bands
that apply during Regular Trading Hours) or the ``Overnight Percentage
Parameter defined in Section VIII of the LULD Plan'' (with respect to
Overnight Protected Hours).
In addition to these changes, the Exchange also proposes to make a
non-substantive change to Rule 2621(c)(1)(i), substituting the term
``LULD Plan'' for the current text ``the Plan to Address Extraordinary
Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act
(the `Limit Up-Limit Down Plan' or `LULD Plan,')'' as the ``LULD Plan''
would be defined in the proposed revision to Rule 2621(c)(1).
Proposed Changes to Rule 2621(c)(2), (d)(3), and (f)
As noted above, current Rule 2621(c)(1)(i) permits clearly
erroneous review even during Regular Trading Hours when the transaction
in question is in an NMS Stock that is not subject to the LULD Plan,
i.e., rights and warrants. Such transactions are reviewed for clearly
erroneous status using the procedures set out in Rule 2621(c)(2),
including the Numerical Guidelines set out in the table accompanying
Rule 2621(c)(2)(i). The Exchange now proposes to introduce a similar
provision regarding transactions in NMS Stocks not subject to the LULD
Plan that are executed during the Overnight Protected Hours; such
transactions would be subject to the same Numerical Guidelines as
transactions occurring in the Early and Late Trading Sessions.
The heading of Rule 2621(c)(2) addresses ``[r]eview of transactions
occurring during the Early or Late Trading Session or eligible for
review pursuant to paragraph (c)(1)(A).'' The Exchange proposes to
replace the phrase ``eligible for review pursuant to paragraph
(c)(1)(A)'' (which, in the current rule, means transactions executed
during Regular Trading Hours in NMS Stocks not subject to the LULD
Plan) with ``during LULD Protected Hours in NMS Stocks not subject to
the LULD Plan.'' This proposed language would cover transactions in NMS
Stocks not subject to the LULD Plan during Regular Trading Hours and
expand the same treatment to transactions executed in NMS Stocks not
subject to the LULD Plan during Overnight Protected Hours. As such, the
proposed change is not novel.
The Exchange proposes to make the same change everywhere else such
language appears in the rule--namely, in the text of paragraphs
(c)(2)(i), (c)(2)(ii), (c)(2)(iii), (c)(2)(iv), (d)(iii), and (f).\9\
In each case, the Exchange proposes to replace the phrase
``transactions occurring during the Early or Late Trading Session or
eligible for review pursuant to paragraph (c)(1)(A)'' with
``transactions occurring during the Early or Late Trading Session or
during LULD Protected Hours in NMS Stocks not subject to the LULD
Plan.''
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\9\ Rule 2621(c)(2)(1)-(iv) specifies general rules for applying
clearly erroneous review to transactions where such review is not
precluded by paragraph (c)(1). Rule 2621(d)(3) specifies conditions
where the Exchange may use a revised Reference Price for the purpose
of clearly erroneous review in certain transactions where such
review is not precluded by paragraph (c)(1). Rule 2621(f) specifies
that for transactions where clearly erroneous review is not
precluded by paragraph (c)(1), an officer may initiate clearly
erroneous review on his or her own motion.
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The Exchange also proposes to make corresponding changes to the
headings of the table accompanying Rule 2621(c)(2)(i). The Exchange
proposes to change the heading of the second column from ``Regular
Trading Hours Numerical Guidelines'' to ``Numerical Guidelines for
Transactions Executed During Regular Trading Hours in NMS Stocks Not
Subject to the LULD Plan.'' This change would simply add a fuller
description that such transactions are ``executed during the Regular
Trading Hours in NMS Stocks not subject to the LULD Plan,'' and is not
a substantive change.
Similarly, the Exchange proposes to change the heading of the third
column from ``Early and Late Trading Session Numerical Guidelines'' to
``Numerical Guidelines for Transactions Executed During the Early and
Late Trading Session or During Overnight Protected Hours in NMS Stocks
Not Subject to the LULD Plan.'' The proposed change addresses the fact
that transactions executed during Overnight Protected Hours in NMS
Stocks not subject to the LULD Plan are eligible for clearly erroneous
review--just as are transactions in NMS Stocks not subject to the LULD
Plan executed during Regular Trading Hours--but at the Numerical
Guidelines that apply outside of Regular Trading Hours.
Together, these proposed changes would extend the eligibility of
clearly erroneous review for transactions in NMS Stocks not subject to
the LULD Plan that is currently in place during Regular Trading Hours
to the Overnight Protected Hours, and would apply the Commission's
recent approval of Overnight Price Bands to the clearly erroneous
executions rule.
Implementation
The Exchange understands that the other national securities
exchanges and FINRA will also file similar proposals, the substance of
which are identical to this proposal. The Exchange proposes that this
rule change would become operative at the commencement of 23/5 Trading,
which is scheduled to commence industry-wide on December 6, 2026.
1. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\10\ Specifically, the
proposal is consistent with Section 6(b)(5) of the Act \11\ because it
would promote just and equitable principles of trade, 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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change is consistent with
just and equitable principles of trade because it extends the basic
premise of the current rule that clearly erroneous review should be
generally unavailable any time a transaction is executed within LULD
Price Bands at a time the Price Bands were available and correct.
[[Page 61528]]
Currently, LULD Price Bands are available only during Regular Trading
Hours, meaning that the restrictions on clearly erroneous review
described above apply only during Regular Trading Hours. With the
introduction of Overnight Price Bands, the Exchange believes that
extending such restrictions on clearly erroneous review to the period
when Overnight Price Bands are in place would remove impediments to and
perfect the mechanism of a free and open market and a national market
system by enhancing the transparency and consistency of the rule.
The resulting rule would thus extend the LULD-related limits on
clearly erroneous review that are applicable during Regular Trading
Hours to the overnight period. The proposed change would also be
consistent with the Commission's rationale in approving the current
version of the rule because it would limit any potential discordance
between the LULD mechanism and CEE review in the overnight trading
session, providing greater certainty to market participants that trades
executed with the Overnight Price Bands will stand and not be
broken.\12\
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\12\ See 87 FR 55060 at 55063, supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposal is consistent with Section
6(b)(8) of the Act \13\ in that it does not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Rather than impacting competition, the proposed
change would simply extend the basic premise of the current rule that
clearly erroneous review should be generally unavailable any time a
transaction is executed within LULD Price Bands at a time the Price
Bands were available and correct. The Exchange understands that the
other national securities exchanges and FINRA will also file similar
proposals, the substance of which are identical to this proposal. Thus,
the proposed rule change will help to ensure consistency across SROs
without implicating any competitive issues.
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\13\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) \15\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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 this 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.
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#7002051c155d131f1d1d151e0403300315135e171f06"><span class="__cf_email__" data-cfemail="9defe8f1f8b0fef2f0f0f8f3e9eeddeef8feb3faf2eb">[email protected]</span></a>. Please include
File Number SR-PEARL-2026-40 on the subject line.
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-PEARL-2026-40. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-PEARL-2026-40 and should be submitted on
or before October 20, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19865 Filed 9-28-26; 8:45 am]
BILLING CODE 8011-01-P
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