FR 2024-29928

The document under review is a notice from the Securities and Exchange Commission (SEC) regarding a proposed rule change filed by MIAX PEARL, LLC, an equities trading platform. The proposed amendment focuses on altering the fee schedule to enhance clarity for users regarding the rebates applicable to certain trading activities. Specifically, it aims to delineate the rebates for retail orders, thereby assisting users in easily understanding the fees associated with their trading activities. Importantly, it is noted that this change does not impact the actual fees or rebates; it purports to offer a clearer presentation to reduce possible confusion.

Significant Issues and Concerns

There are several concerns associated with this proposal:

1. Lack of Financial Impact Discussion: The document does not discuss the financial implications of these changes. This omission makes it challenging for stakeholders to assess whether the resources used to implement these changes are justified.

2. Technical Language: The document is dense with legal jargon and technical language, potentially alienating readers who do not have a background in securities law or trading. This can limit the broader audience's understanding of what the changes entail.

3. Rationale for Maintaining the Current Structure: There is no clear explanation for why the existing rebate structure is being maintained. This lack of transparency might be seen as a missed opportunity to evaluate the current system and explore potentially more efficient alternatives.

4. Justification for Changes: Beyond stating a need for clarity, the document does not thoroughly justify why these specific changes are necessary. This can lead to questions about the value and priority of these updates.

5. Stakeholder Impacts: The notice does not clearly outline how different groups might be affected by these changes. Without such analysis, there may be unintended favoritism or bias in how the rebate information is utilized by different entities.

Impact on the Public and Stakeholders

Broad Public Impact: For the general public, especially those not deeply versed in the intricacies of trading fee schedules, the primary impact may lie in improved transparency and potential simplification of complex financial documents. This can contribute to a more transparent marketplace, although the language should be more accessible.

Impact on Specific Stakeholders: - Equity Members: These changes are likely to affect members of MIAX PEARL who are directly involved with trading on this platform. By providing clearer rebate information, members can better strategize their trades, potentially leading to more informed decision-making.

• Trading Firms and Retail Investors: Retail investors and trading firms may find these clarifications helpful, but without a change in the actual rebate amounts or structures, the notice arguably doesn't yield substantial financial benefit.

Concluding Remarks

While the intention behind this proposal is to enhance clarity and transparency, its implementation could have been more comprehensively articulated. By focusing only on document clarity without addressing potential financial benefits or conducting a deeper review of the existing rebate structures, the proposed rule change may miss opportunities for more significant improvements. Moreover, ensuring that such documents are accessible to a wider audience could foster greater understanding and engagement in the regulatory processes governing equities trading.

The document from the Securities and Exchange Commission (SEC) regarding a proposed rule change by MIAX PEARL, LLC includes several references to monetary figures in the context of rebates connected to liquidity transactions. However, it largely focuses on clarifying existing fee schedules without introducing new financial allocations or changes in spending.

In summary, the proposed modifications emphasize clarifying the rebate structure for the addition of displayed liquidity through retail orders on the exchange. The document describes how the exchange currently provides monetary rebates:

• A standard rebate of ($0.0021) per share for transactions where the order adds displayed liquidity and the securities are priced at or above $1.00 per share.
• For securities priced below $1.00 per share, the rebate is 0.15% of the total dollar value of the transaction.
• Importantly, there's a higher standard rebate of ($0.0037) per share specifically for retail orders that meet certain criteria, which is a central point of addressed clarity in this document.

The money references primarily clarify existing rebates rather than proposing changes to financial structures or spending, aligning with the non-controversial and clarifying nature of the rule change. This is significant because it addresses potential misunderstandings about the rebates for retail orders in securities priced at or above $1.00 per share. Since July 2021, the exchange had already been providing a ($0.0037) per share rebate, a fact the document points out to correct potential misconceptions stemming from the fee schedule's current presentation.

This clarification impacts stakeholders by ensuring they have accurate information on expected rebates. Clarity in rebate structures is critical as it directly affects the trading activities of market participants, possibly influencing trading strategies and financial forecasts. However, the document does not address broader implications for competition or equity among stakeholders, stating that the changes do not aim to impact competition but simply to provide clarity.

The emphasis on clarity in financial terms underscores a response to possible confusion the current fee schedule might cause. Yet, there is no detailed discussion of any administrative costs or efforts associated with implementing these descriptive changes, which is a relevant financial consideration given the effort needed to communicate and enforce new interpretations of existing rules. The document does not detail cost efficiencies or justify maintaining current rebate structures over exploring potentially improved alternatives, which could be a critical area of interest for some stakeholders.

Overall, the financial references in this document aim to reduce confusion rather than introduce new spending, primarily affecting how market members interpret and plan around existing rebate structures.