FR 2025-03028

The document in question is an announcement from the Securities and Exchange Commission (SEC) regarding a proposed rule change submitted by MIAX PEARL, LLC. This change involves amendments to the fee schedule for their equities trading platform, MIAX Pearl Equities. The announcement was published on February 25, 2025, in the Federal Register.

General Summary

MIAX PEARL, an equities trading facility, has proposed modifications to its fee structure that impact how fees and rebates are calculated for trading orders. The amendments focus on trades executed during newly defined early and late trading sessions. The early trading session is defined as the time between 4:00 a.m. and 9:30 a.m. Eastern Time, while the late session extends from 4:00 p.m. to 8:00 p.m. The proposal includes establishing new Liquidity Indicator Codes, updating fee structures, and removing certain rebates.

This proposed change has been designated for immediate effectiveness, meaning it will take effect upon filing unless the SEC deems it necessary to suspend the change temporarily for further review.

Significant Issues and Concerns

Several issues arise from the document:

• Lack of Specificity: The notice references various Liquidity Indicator Codes and new fees without providing detailed explanations or the potential financial impacts these might have. This could create confusion for stakeholders attempting to assess the implications of these changes.

• Referenced Documents: The trading sessions are defined by a separate document not summarized here, potentially making it difficult for those unfamiliar to fully grasp the new trading schedule.

• Impact Explanation: The removal of the Step-Up Rebate lacks explanation regarding its impact, leaving readers to speculate how this might affect different market participants.

• Summary of Details: Specific sections of the Fee Schedule are referenced, yet not elaborated on within the document. Readers are encouraged to visit the Exchange’s website for more information, which could hinder understanding and accessibility.

Broader Public Impact

For the general public, particularly investors and traders who engage through MIAX Pearl, these changes could alter trading costs. The introduction of new fees and adjustments to existing rebate programs might affect trading strategies and profitability. However, without concrete examples or cost implications, it's challenging to specifically ascertain this impact.

Impact on Stakeholders

Positive Aspects:

• For more active traders or institutions that can engage during the early or late sessions, the establishment of distinct periods with defined fee structures might offer new opportunities for trading and potentially lower costs if rebates are beneficial.

Negative Aspects:

• Smaller investors or those unaccustomed to the nuances of trading fee schedules could inadvertently face higher fees. Complexity and a lack of transparency in understanding these new structures may discourage participation or lead to misinformed trading decisions.

• Participants reliant on the Step-Up Rebate might find the removal detrimental, potentially increasing operational costs or necessitating revised trading tactics.

In conclusion, while the SEC invites public comments on this rule change, the primary concern remains clarity and accessibility of information. If these are enhanced, stakeholders would have a better basis for evaluation and feedback, ultimately aiding in more effective regulatory outcomes.

In reviewing the Federal Register document regarding the MIAX PEARL, LLC’s proposed rule change, several financial references and implications stand out. These changes pertain to alterations in the fee structures and associated rebates for trading activities on the MIAX Pearl Equities platform. Here's a breakdown of these references and their potential implications.

Summary of Financial Changes

The document outlines several key modifications to the MIAX Pearl Equities fee schedule:

1. Liquidity Indicator Codes and Associated Fees: The proposal introduces new Liquidity Indicator Codes during the "Early Trading Session" and "Late Trading Session." While these codes are meant to streamline how financial activities are tracked and billed, specific details about these codes or their potential financial impact are omitted from the document. This creates ambiguity regarding the exact changes traders and stakeholders may experience in their fee structures.

2. Increased Fees for Executions: One of the significant financial changes mentioned is the increase in the fee for executing orders where securities are priced at or above $1.00 per share that remove liquidity from the Exchange. However, the document does not quantify the increase or the current fee level, making it difficult to assess how this might affect trading costs for participants.

3. NBBO Program Revisions: The proposal includes changes to the "NBBO Setter Plus Program", specifically the removal of the Step-Up Rebate. Rebate programs typically serve as incentives for certain trading behaviors, and eliminating such a rebate may discourage activities that previously benefited from this financial incentive. Without specifics on how this removal impacts fees or trading strategies, it's challenging to predict the market response.

Financial Implications and Issues

• Opaque Liquidity Indicators and Fees: The introduction of new Liquidity Indicator Codes without detailed explanation contributes to uncertainty. Traders may be left to interpret how these new codes affect their cost structure, which is further complicated by the absence of precise fee amounts or rebate details.

• Impact of Fee Increases: While the document mentions a fee increase for certain securities executions at or above $1.00 per share, it lacks specific figures. This vagueness regarding the financial impact could lead to confusion or unintended financial consequences for trading entities adjusting to the new schedule.

• Rebate Removal Consequences: Removing the Step-Up Rebate under the NBBO program could alter trading dynamics. Rebates often encourage liquidity provision, and their removal might decrease market maker participation or alter trading volumes, affecting overall market liquidity.

Conclusion and Accessibility Concerns

This document hints at several changes with financial ramifications but lacks the detailed cost breakdowns or justifications needed for stakeholders to thoroughly assess the financial impacts. The references to specific sections of the Fee Schedule, such as "Section 1)b) and 1)c)", without direct quotations or clearer guidance, leave a gap in understanding. Additionally, while links to websites for further reading are provided, a direct hyperlink to the proposed rule details could improve accessibility and ensure stakeholders have the necessary information to make informed decisions.

Overall, while the overarching goal may be to refine and adjust fee structures to optimize trading on MIAX Pearl Equities, the lack of detailed financial data creates potential challenges for stakeholders trying to align their strategies with the new rules.