[Federal Register Volume 86, Number 22 (Thursday, February 4, 2021)]
[Notices]
[Pages 8243-8246]
[FR Doc No: 2021-02267]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91019; File No. SR-LTSE-2021-01]

Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing of a Proposed Rule Change To Amend LTSE Rule 14.501 To
Specify the Process for Enforcing Compliance With LTSE Rule 14.425 for
Listed Companies

January 29, 2021.
    Pursuant to 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 January 19, 2021, Long-Term Stock Exchange, Inc. (``LTSE'' 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

    LTSE proposes to amend LTSE Rule 14.501 to specify the process for
enforcing compliance with LTSE Rule 14.425 for listed companies.
    The text of the proposed rule change is available at the Exchange's
website at https://longtermstockexchange.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.

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 self-regulatory organization
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 self-regulatory
organization 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 14.501(d)(2)(A)(iii) to specify
the process for enforcing compliance with the Long-Term Policies
pursuant to LTSE Rule 14.425 under LTSE Rule Series 14.500.\3\ LTSE
Rule 14.425(a) requires Companies to adopt and publish the following
policies: A Long-Term Stakeholder Policy; a Long-Term Strategy Policy;
a Long-Term Compensation Policy; a Long-Term Board Policy; and a Long-
Term Investor Policy (collectively, the ``Policies''). While Companies
have flexibility to develop appropriate Policies for their businesses,
each of the Policies must be consistent with the set of principles
articulated in LTSE Rule 14.425(b) (collectively, the
``Principles'').\4\ Companies also are required to at least annually
review their Policies, make them publicly available and free of charge
on or through their websites, and provide related disclosures in
certain filings with the Commission, as provided for in LTSE Rule
14.425(c).
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    \3\ See LTSE Rule 14.001 (``The consequences of a failure to
meet LTSE's listing standards are contained in the LTSE Rule Series
14.500.'').
    \4\ See Securities Exchange Act Release No. 86722 (August 21,
2019), 84 FR 44953 (August 27, 2019) (order approving proposed rule
change to adopt LTSE Rule 14.425).
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    The Exchange enforces the provisions of LTSE Rule 14.425 by
ensuring that each LTSE-listed issuer has addressed all of the elements
enumerated in each of the Policies, consistent with the Principles, and
has made the Polices publicly available without cost.\5\ A number of
rules in the Rulebook enable the Exchange to ensure such compliance.
First, with respect to identification of a deficiency, LTSE Rule
14.500(a) provides that LTSE staff is responsible for identifying
deficiencies that may lead to delisting. Additionally, LTSE Rule 14.410
requires a Company provide the Exchange with prompt notification after
an Executive Officer of the Company becomes aware of any noncompliance
by the Company with the LTSE Rule Series 14.400, which includes Rule
14.425. Second, the Exchange retains the authority to elicit necessary
information for reaching a deficiency determination, as LTSE Rule
14.207(a)(1) provides that the Exchange may request any additional
information or documentation, public or non-public, deemed necessary to
make a determination regarding a Company's continued listing, and a
Company may be denied continued listing if it fails to provide such
information within a reasonable period of time.\6\
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    \5\ Id. at 44954.
    \6\ In addition, the Exchange plans to monitor Company
compliance with Rule 14.425 annually and on an ad hoc basis.
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    Third, LTSE Rule 14.501 sets forth the provisions regarding the
Exchange's process for notifying Companies regarding different types of
deficiencies and their corresponding consequences. There are four types
of Company deficiency notifications that the Exchange may issue
pursuant to LTSE Rule 14.501(a): (i) Staff Delisting Determinations,
which are notifications of deficiencies that, unless appealed, subject
the Company to immediate suspension and delisting; (ii) notifications
of deficiencies for which the Company may submit a plan of compliance
for staff review; (iii) notifications of deficiencies for which a
Company is entitled to an automatic cure or compliance period; and (iv)
Public Reprimand Letters. LTSE Rule 14.501(d) identifies the
deficiencies that fall within each of these four categories.\7\
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    \7\ LTSE Rule 14.501(d) provides that in case of a deficiency
not specified in subparagraphs (1)-(4), LTSE staff will issue either
a Staff Delisting Determination or a Public Reprimand Letter.
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    The proposed rule change would amend LTSE Rule 14.501(d)(2)(A)(iii)
to specify that deficiencies relating to LTSE Rule 14.425 would include
those for which a Company may submit a plan of compliance (``Plan of
Compliance'') for staff review, similar to how other corporate
governance rules are handled generally in LTSE Rule
14.501(d)(2)(A)(iii).\8\ The timeline for such a Plan of Compliance is
governed by LTSE Rule 14.501(d)(2)(C), which establishes that a Company
has 45 calendar days to submit a plan to regain compliance. LTSE staff
may extend this deadline for up to an additional 5 calendar days upon
good cause shown and may request such additional information from the
Company as is necessary to make a determination regarding whether to
grant such an extension. The Exchange believes that this time period
appropriately balances the interests of the Exchange in ensuring
compliance with its listing standards with the application of
principles-based listing standards by the Company.\9\
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    \8\ See, e.g., LTSE Rules 14.408(a) (Meetings of Shareholders),
14.408(c) (Quorum), 14.411(Review of Related Party Transactions),
14.412 (Shareholder Approval), 14.406 (Code of Conduct),
14.407(a)(4)(D) (Partner Meetings of Limited Partners),
14.407(a)(4)(E) (Quorum of Limited Partnerships), 14.407(a)(4)(G)
(Related Party Transactions of Limited Partnerships), 14.413 (Voting
Rights), or 14.414 (Internal Audit Function). The proposed rule
change also would remove two erroneous ``or''s in LTSE Rule
14.501(d)(2)(A)(iii).
    \9\ Notwithstanding the mandated period to submit a Plan of
Compliance and regain compliance under LTSE Rule 14.501(d)(2), as
set forth in LTSE Rule 14.501(c) and repeated in LTSE Rule
14.207(b)(2), ``a listed Company that receives a notification of
deficiency from the Exchange is required to make a public
announcement by filing a Form 8-K, where required by SEC rules, or
by issuing a press release disclosing receipt of the notification
and the Rule(s) upon which the deficiency is based, and describing
each specific basis and concern identified by the Exchange in
reaching its determination that the Company does not meet the
listing standard.'' For avoidance of doubt, a request for
information by LTSE staff pursuant to LTSE Rule 14.207(a)(1), absent
a notification of deficiency, will not require a public announcement
by the subject Company pursuant to LTSE Rules 14.501(c) or
14.207(b)(2).
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    The process for reviewing such a Plan of Compliance is set forth in
LTSE Rule 14.501(d)(2)(B) and would be unchanged. Under this
subparagraph (B), LTSE may provide the Company with up to 180 days to
regain compliance (with certain exceptions), issue a Staff Delisting
Determination letter, or issue a Public Reprimand Letter in accordance
with LTSE Rule 14.501(d)(4). As set forth in LTSE Rule 14.500(a), a
Public Reprimand Letter or Staff Delisting Determination, upon timely
request by a Company, is subject to review by a Listings Review
Committee, which will adjudicate the request in accordance with
procedures and timelines set forth in LTSE Rules 14.502, 14.504 and
14.505.
    LTSE Rule 14.425 provides Companies flexibility in developing what
they believe to be appropriate Policies for their businesses; however,
each of the required Policies must include certain minimum elements,
and must be consistent with the Principles. The Exchange has
represented to the Commission that it will enforce the provisions of
LTSE Rule 14.425 by ensuring that each Company has addressed all of the
requirements enumerated for each of the prescribed Policies, that the
Company's Policies are consistent with the Principles, and it has made
the Policies publicly available without cost.\10\ Additionally, LTSE
Rule 14.425(c) mandates that Companies annually review their Policies
because the Exchange has anticipated that, over time, Companies may
choose to or need to recalibrate their Policies with new objectives or
initiatives, provided that the amended Policies continue to align with
the Principles noted in LTSE Rule

14.425. The Exchange believes the ability to tailor Policies, if
necessary, to changing circumstances, while remaining anchored to the
Principles, is essential for ensuring that the Policies are effective
and meaningful tools for supporting long-term value creation for
Companies and their investors.
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    \10\ See supra note 4.
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    The Exchange holds that, in case of a deficiency, Companies may
achieve compliance by changing Policies or practices \11\ related to
the deficiency, amending the applicable Policies or some combination of
both, provided that the changes are consistent with the Principles
discussed in LTSE Rule 14.425. The Exchange's objective is to help
foster long-term value creation for each Company and the Exchange
believes that providing an opportunity for remediation to Companies
that face a deficiency with respect to LTSE Rule 14.425 will aid in
achieving that goal by allowing Companies to formulate effective
Policies tailored to Company-specific needs. At all times, the Exchange
may exercise its broad discretionary authority under LTSE Rule 14.101
to suspend or delist Companies based on any event, condition, or
circumstance that exists or occurs that makes initial or continued
listing of the securities on the Exchange inadvisable or unwarranted in
the opinion of the Exchange to protect investors and the public
interest, among other objectives.
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    \11\ For the avoidance of doubt, each Company shall be solely
responsible for ensuring any changes in its practices to conform to
its Policies do not violate any legal, regulatory, contractual, or
other requirements applicable to the Company.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\12\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\13\ in
particular, because 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 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, particularly those investors with a long-term focus.
Further, the Exchange believes the proposal is not designed to permit
unfair discrimination between issuers or to regulate by virtue of any
authority conferred by the Act matters not related to the purposes of
the Act or the administration of the Exchange, for the reasons set
forth below.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change brings
deficiencies with respect to LTSE Rule 14.425 in alignment with other
LTSE rules pertaining to corporate governance that allow a Company to
submit a Plan of Compliance in the case of a deficiency. The proposed
rule change furthers the Exchange's objective to promote long-term
value creation while retaining effective enforcement mechanisms for
deficiencies with respect to LTSE Rule 14.425. Pursuant to the proposed
amendment, Companies will be provided an opportunity to regain
compliance with LTSE Rule 14.425 by formulating appropriate Policies
that remain anchored to the Principles enumerated in LTSE Rule 14.425
through an existing process that has already been determined to be
consistent with the Act in that it removes impediments to and perfects
the mechanism of a free and open market and a national market system,
consistent with the protection of investors and the public
interest.\14\
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    \14\ See Securities Exchange Act Release No. 85828 (May 10,
2019), 84 FR 21841 (May 15, 2019) (order approving the application
of Long Term Stock Exchange, Inc. for registration as a National
Securities Exchange).
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    The Exchange believes that its proposed rule change is fair and not
unfairly discriminatory because it is applicable to all listed
Companies that experience a deficiency with respect to LTSE Rule 14.425
and is part of the adjudicatory process set forth in the LTSE Rule
Series 14.500.\15\
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    \15\ See supra note 3.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
impose any burden on competing venues that is not necessary or
appropriate in furtherance of the purposes of the Act. The degree to
which the proposed amendment could impose any burden on intermarket
competition is extremely limited because other national securities
exchanges may propose similar listing standards with appropriate
remediation mechanisms and issuers are able to list on other national
securities exchanges. Further, issuers that do not wish to meet the
Exchange's listing standards also are able to list on other national
securities exchanges.
    LTSE also does not believe that the proposed rule change will
result in any burden on intramarket competition since it is applicable
to all listed Companies without differentiation. Consequently, LTSE
does not believe that the proposed change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-LTSE-2021-01 on the subject line.

Paper Comments

     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-LTSE-2021-01. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the

Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
LTSE-2021-01, and should be submitted on or before February 25, 2021.

    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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02267 Filed 2-3-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 203 (Tuesday, October 20, 2020)]
[Notices]
[Pages 66656-66666]
[FR Doc No: 2020-23151]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90186; File No. SR-PEARL-2020-19]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
PEARL Equities Fee Schedule To Adopt Connectivity Fees, Port Fees, a
Technical Support Request Fee, and Historical Market Data Fee

October 14, 2020.
    Pursuant to 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 October 5, 2020, MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
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 is filing a proposal to amend the MIAX PEARL Equities
Fee Schedule (the ``Fee Schedule'') by adopting fees applicable to
participants trading equity securities on and/or using services
provided by MIAX PEARL Equities.\3\ The proposed fees are scheduled to
become operative September 25, 2020.
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    \3\ See Exchange Rule 1901. The Exchange notes that it submitted
a separate filing with the Commission pursuant to Section
19(b)(3)(A) of the Act to establish the Fee Schedule and adopt
transaction fees. See SR-PEARL-2020-17 (filed September 24, 2020).
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    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.

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
    On August 14, 2020, the Commission approved the Exchange's proposal
to adopt rules governing the trading of equity securities, referred to
as MIAX PEARL Equities.\4\ The Exchange expects to launch MIAX PEARL
Equities on September 25, 2020. The Exchange now proposes to adopt a
Definitions section in the Fee Schedule as well as the following fees
in anticipation of the launch of MIAX PEARL Equities: (1) Connectivity
fees for Equity Members \5\ and non-Members; (2) Port fees (together
with the proposed connectivity fees, the ``Proposed Access Fees''); (3)
a Technical Support Request fee; and (4) a fee for Historical Market
Data (collectively, the ``Proposed Fees'').\6\
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    \4\ See Securities Exchange Act Release No. 89563 (August 14,
2020), 85 FR 51510 (August 20, 2020) (SR-PEARL-2020-03) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, To
Establish Rules Governing the Trading of Equity Securities)
(``Approval Order'').
    \5\ The term ``Equity Member'' means a Member authorized by the
Exchange to transact business on MIAX PEARL Equities. See Exchange
Rule 1901.
    \6\ The Exchange initially filed the proposed fee changes on
September 24, 2020 (SR-PEARL-2020-18). On October 5, 2020, the
Exchange withdrew that filing and submitted this filing.
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    MIAX PEARL Equities, as a new entrant into the equity securities
marketplace, has no revenues and no market share. The Exchange believes
that exchanges, in setting fees of all types, should meet very high
standards of transparency to demonstrate why each new fee or fee
increase meets the requirements of the Act that fees be reasonable,
equitably allocated, not unfairly discriminatory, and not create an
undue burden on competition among members and markets. The Exchange
believes this high standard is especially important when an exchange
imposes various access fees for market participants to access an
exchange's marketplace. The Exchange believes that it is important to
demonstrate that these fees are based on its costs and reasonable
business needs. Accordingly, the Exchange believes the Proposed Fees in
general, and the Proposed Access Fees in particular, will allow the
Exchange to offset a portion of the expenses the Exchange has and will
incur and that the Exchange has provided sufficient transparency (as
described below) into how the Exchange determined to charge such fees.
Definitions
    The Exchange proposes to include a Definitions section at the
beginning of the Fee Schedule, before the General Notes section. The
purpose of the Definitions section is to provide market participants
greater clarity and transparency regarding the applicability of fees
and rebates by defining terms used within the Fee Schedule in a single
location. The Exchange notes that other equities exchanges include
Definitions sections in their respective fee schedules,\7\ and the
Exchange believes that including a Definitions section in the front of
the Fee Schedule makes the Fee Schedule more user-friendly and makes
the Fee Schedule more comprehensive.
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    \7\ See Cboe BZX Exchange, Inc. Fee Schedule, Definitions
section; Cboe BYX Exchange, Inc., Definitions section; Cboe EDGA
Exchange, Inc., Definitions section; Cboe EDGX Exchange, Inc.,
Definitions section.
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    Unless included in the Definition section, capitalized terms used
in the Fee Schedule are defined in the MIAX PEARL Equities Rules. Each
of the definitions proposed to be included in the Fee Schedule are
based on definitions included in the existing MIAX PEARL fee schedule
applicable to options or those of another exchange. The Exchange
proposes to define the following terms in the Fee Schedule:
     ``Cross-connect'' occurs when the affected third-party
system is sited at the same data center where MIAX

PEARL Equities systems are sited, and the third-party connects to MIAX
PEARL Equities through the data center, rather than connecting directly
to MIAX PEARL Equities outside of the data center.
     ``Exchange System Disruption'' means an outage of a
Matching Engine or collective Matching Engines for a period of two
consecutive hours or more, during trading hours.
     ``Extranet Provider'' means a technology provider that
connects with MIAX PEARL Equities systems and in turn provides such
connectivity to MIAX PEARL Equities participants that do not connect
directly with MIAX PEARL Equities.
     ``FIX Order by Order'' means a type of FXD Port that sends
all order activities other than reject message, including Execution
Reports and Trade Cancel/Correct messages.
     ``FIX Order Interface'' or ``FOI'' means the Financial
Information Exchange interface for certain order types as set forth in
Exchange Rule 2614.
     ``FIX Port'' means a FIX port that allows Equity Members
to send orders and other messages using the FIX protocol.
     ``Full Service Port'' or ``FSP'' means an MEO port that
supports all MEO order input message types.
     ``FIX Drop Port'' or ``FXD'' means a messaging interface
that provides real-time order activities of firms' MEO and FOI orders.
MIAX PEARL Equities offers two types of FXD ports: (1) Standard FIX
Drop; and (2) FIX Order by Order Drop. FXD Ports may be used by
Equities Market Makers, Order Entry Firms and clearing firms.
     ``MENI'' means the MIAX Express Network Interconnect,
which is a network infrastructure which provides Equity Members and
non-Members network connectivity to the trading platforms, market data
systems, test systems, and disaster recovery facilities of the
Exchange. The MENI consists of the low latency and ultra-low latency
(``ULL'') connectivity options set forth in the Exchange's Fee
Schedule.
     ``MEO Interface'' or ``MEO'' means a binary order
interface for certain order types as set forth in Rule 516 into the
MIAX PEARL System. See Exchange Rule 100.
     ``Service Bureau'' means a technology provider that offers
and supplies technology and technology services to a trading firm that
does not have its own proprietary system.
     ``Standard FIX Drop'' means an FXD Port that only sends
trade information, including Execution Reports and Trade Cancel/Correct
messages.
     ``Third Party Vendor'' means a subscriber of MIAX PEARL
Equities' market and other data feeds, which they in turn use for
redistribution purposes.
     ``Waiver Period'' means, for each applicable fee, the
period of time from the initial effective date of the MIAX PEARL
Equities Fee Schedule until such time that MIAX PEARL has an effective
fee filing establishing the applicable fee. MIAX PEARL Equities will
issue a Regulatory Circular announcing the establishment of an
applicable fee that was subject to a Waiver Period at least fifteen
(15) days prior to the termination of the Waiver Period and effective
date of any such applicable fee.
Proposed Access Fees
    To provide market participants with a better understanding of how
the Exchange has established the levels of the Proposed Access Fees,
the Exchange is providing information in this proposal regarding the
costs incurred by the Exchange to provide services associated with the
Proposed Access Fees, including the Exchange's cost allocation
methodology (information that explains the Exchange's rationale for
determining that it was reasonable to allocate certain expenses
described in this filing towards the total cost to the Exchange to
provide the services associated with the Proposed Access Fees). The
Exchange is also providing an analysis of its expected revenues and
profitability (following the proposed fee change) for the services
associated with the Proposed Access Fees.
    In order to determine the Exchange's costs for providing the
services associated with the Proposed Access Fees, the Exchange
conducted an extensive review in which the Exchange analyzed every
expense item in the Exchange's general expense ledger to determine
whether each such expense relates to the services associated with the
Proposed Access Fees, and, if such expense did so relate, what portion
(or percentage) of such expense actually supports those services. The
sum of all such portions of expenses represents the total cost of the
Exchange to provide the services associated with the Proposed Access
Fees. For the avoidance of doubt, no expense amount was allocated
twice.
    Since MIAX PEARL Equities did not exist in 2019 (operations are
expected to launch on September 25, 2020), the Exchange's most recent
publicly available financial statement (2019 Audited Unconsolidated
Financial Statement) is not an accurate reflection of the total annual
costs associated with the development and operation of MIAX PEARL
Equities. Accordingly, the Exchange believes it is more appropriate
justify its fees using cost figures that are isolated specifically for
MIAX PEARL Equities on an annualized basis, utilizing its 2020 actual
(to date) and projected (for the remainder) costs, as described herein.
The purpose of presenting it in this manner is to provide greater
transparency into the Exchange's actual and expected revenues, costs,
and profitability associated with providing the services associated
with the Proposed Access Fees. Based on this analysis, the Exchange
believes that the Proposed Access Fees are fair and reasonable because
they will permit recovery of less than all of the Exchange's costs for
providing the services associated with the Proposed Access Fees and
will not result in excessive pricing or supra-competitive profit when
comparing the Exchange's total annual expense associated with providing
the services associated with the Proposed Access Fees versus the total
projected annual revenue the Exchange will collect for providing those
services.
Connectivity Fees
    Specifically, proposed Sections 2(a) and (b) of the Fee Schedule
describe network connectivity fees for the 1 Gigabit (``Gb'') ultra-low
latency (``ULL'') fiber connection and the 10Gb ULL fiber connection,
which are to be charged to both Equity Members and non-Members of MIAX
PEARL Equities for connectivity to the Exchange's primary/secondary
facility. The Exchange also proposes to adopt network connectivity fees
for the 1Gb ULL and 10Gb ULL fiber connections for connectivity to the
Exchange's disaster recovery facility.
    The Exchange will offer to both Equity Members and non-Members
various bandwidth alternatives for connectivity to MIAX PEARL Equities,
to its primary and secondary facilities, which consists of a 1Gb ULL
fiber connection and a 10Gb ULL fiber connection. The Exchange also
offers to both Equity Members and non-Members various bandwidth
alternatives for connectivity to the disaster recovery facility of MIAX
PEARL Equities, which consists of a 1Gb ULL fiber connection and a 10Gb
ULL connection.
    The Exchange proposes to establish the monthly network connectivity
fees for such connections for both Equity Members and non-Members. The
Exchange proposes to adopt the following fees for connectivity to MIAX
PEARL Equities' primary/secondary facility for both Equity Members and
non-Members: (a) $1,000 for the 1Gb

ULL connection; and (b) $3,500 for the 10Gb ULL connection. The
Exchange proposes to adopt the following fees for connectivity to MIAX
PEARL Equities' disaster recovery facility for both Equity Members and
non-Members: (a) $1,000 for the 1Gb ULL connection; and (b) $3,000 for
the 10Gb ULL connection.
    Monthly network connectivity fees for Equity Members and non-
Members for connectivity with the primary/secondary facility will be
assessed in any month the Equity Member or non-Members is credentialed
to use any of the MIAX PEARL Equities Application Programming
Interfaces (``APIs'') or market data feeds in the production
environment and will be pro-rated when an Equity Member or non-Member
makes a change to the connectivity (by adding or deleting connections)
with such pro-rated fees based on the number of trading days that the
Equity Member or non-Member has been credentialed to utilize any of the
MIAX PEARL Equities' APIs or market data feeds in the production
environment through such connection, divided by the total number of
trading days in such month multiplied by the applicable monthly rate.
Monthly network connectivity fees for Equity Members and non-Members
for connectivity to the Disaster Recovery Facility will be assessed in
each month during which the Equity Member or non-Member has established
connectivity to the Disaster Recovery Facility.
    Proposed Section 2(c) of the Fee Schedule, Pass-Through of External
Connectivity Fees, provides for the pass through of external
connectivity fees (described below) to Equity Members and non-Members
that establish connections with MIAX PEARL Equities through a third-
party. Fees assessed to MIAX PEARL Equities by third-party external
vendors on behalf of an Equity Member or non-Member connecting to MIAX
PEARL Equities (including cross-connects), will be passed through to
the Equity Member or non-Member. The external connectivity fees passed
through can include one-time set-up fees, monthly charges, and other
fees charged to MIAX PEARL Equities by a third-party for the benefit of
an Equity Member or non-Member.
Port Fees
    Proposed Section 2(d), Port Fees, of the Fee Schedule describes
fees for access and services used by Equity Members and non-Members.
MIAX PEARL Equities provides three Port types: (i) the Financial
Information Exchange Port (``FIX Port''), which allows Equity Members
to send orders and other messages using the FIX protocol;\8\ (ii) the
MIAX Express Orders Interface (``MEO Port''), which allows Equity
Members order entry capabilities to all MIAX PEARL Equities Matching
Engines; \9\ and (iii) the FIX Drop Port (``FXD Port''), which provides
real-time order activities firms' MEO and FOI orders. MIAX PEARL
Equities offers two types of FXD ports: (1) Standard FIX Drop;\10\ and
(2) FIX Order by Order.\11\ FXD Ports may be used by Equities Market
Makers,\12\ Order Entry Firms \13\ and clearing firms.
---------------------------------------------------------------------------

    \8\ ``FIX Order Interface'' or ``FOI'' means the Financial
Information Exchange interface for certain order types as set forth
in Exchange Rule 2614. See the Definitions section of the Fee
Schedule.
    \9\ Each MEO interface will have one Full Service Port (``FSP'')
and one Priority Purge Port. ``Full Service Port'' or ``FSP'' means
an MEO port that supports all MEO order input message types. See the
Definitions section of the Fee Schedule.
    \10\ ``Standard FIX Drop'' means an FXD Port that only sends
trade information, including Execution Reports and Trade Cancel/
Correct messages. See the Definitions section of the Fee Schedule.
    \11\ ``FIX Order by Order'' means a type of FXD Port that sends
all order activities other than reject message, including Execution
Reports and Trade Cancel/Correct messages. See the Definitions
section of the Fee Schedule.
    \12\ The term ``Equities Market Maker'' shall mean an Equity
Member that acts as a Market Maker in equity securities, pursuant to
Chapter XXVI. See Exchange Rule 1901.
    \13\ The term ``Equities Order Entry Firm'', ``Order Entry
Firm'', or ``OEF'', shall mean those Equity Members representing
orders as agent on MIAX PEARL Equities and those non-Equity Market
Maker Members conducting proprietary trading. See Exchange Rule
1901.
---------------------------------------------------------------------------

    The Exchange proposes to assess monthly Port fees to Equity Members
in each month the Equity Member is credentialed to use a Port in the
production environment. MIAX PEARL Equities has primary and secondary
data centers and a disaster recovery center. Each Port provides access
to all Exchange data centers for a single fee. The Exchange notes that,
unless otherwise specifically set forth in the Fee Schedule, the Port
fees include the information communicated through the Port. That is,
unless otherwise specifically set forth in the Fee Schedule, there is
no additional charge for the information that is communicated through
the Port apart from what the user is assessed for each Port. The
Exchange proposes to assess Port Fees for FIX Ports, MEO Ports, and FXD
Ports as set forth in the following table:

----------------------------------------------------------------------------------------------------------------
                                              Monthly port fees includes connectivity to the primary, secondary
               Type of port                                  and disaster recovery data centers
----------------------------------------------------------------------------------------------------------------
FIX Port [supcaret].......................  Per Port:
                                            1st-5th Fee Waived for the Waiver Period.
                                            6th-10th Fee Waived for the Waiver Period.
                                            11th-25th Fee Waived for the Waiver Period.
                                               26th-50th $450.
                                               51st-75th $400.
                                               76th-100th $350.
                                               101st or more $300.
MEO Port [supcaret]*......................  Per Port:
                                            1st-5th Fee Waived for the Waiver Period.
                                            6th-10th Fee Waived for the Waiver Period.
                                            11th-25th Fee Waived for the Waiver Period.
                                               26th-50th $450.
                                               51st-75th $400.
                                               76th-100th $350.
                                               101st or more $300.
FXD Port [supcaret].......................  Fee Waived for the Waiver Period.
----------------------------------------------------------------------------------------------------------------
[supcaret] Each port will have access to all Matching Engines.
* The rates set forth above for MEO Ports entitle an Equity Member to one (1) FSP and one (1) Priority Purge
  Port for all Matching Engines for a single port fee.

     MEO and FIX Ports are counted separately for the tiers in
the table.
    The Exchange proposes to waive the fee for the 1st through the 25th
FIX Ports and MEO Ports that Equity Members are credentialed to use, as
well as the fees for all FXD Ports, for the Waiver Period.\14\ For all
Port fees that the Exchange initially proposes to be subject to the
Waiver Period, the Exchange will submit a rule filing to the Commission
to establish the fee amount and any related requirements, and provide
notice to terminate the applicable Waiver Period. Even though most of
the Port fees are waived during the Waiver Period, the Exchange
believes that is appropriate to provide market participants with the
overall structure of the fee by outlining the structure on the Fee
Schedule without setting forth a specific fee amount in certain areas,
so that there is general awareness that the Exchange intends to assess
such a fee in the future, should the Waiver Period terminate and the
Exchange establish an applicable fee.
---------------------------------------------------------------------------

    \14\ ``Waiver Period'' means, for each applicable fee, the
period of time from the initial effective date of the MIAX PEARL
Equities Fee Schedule until such time that MIAX PEARL has an
effective fee filing establishing the applicable fee. MIAX PEARL
Equities will issue a Regulatory Circular announcing the
establishment of an applicable fee that was subject to a Waiver
Period at least fifteen (15) days prior to the termination of the
Waiver Period and effective date of any such applicable fee. See the
Definitions section of the Fee Schedule.
---------------------------------------------------------------------------

Equity Member and Non-Member Technical Support Request Fee
    Proposed Section 2(e), Member and Non-Member Technical Support
Request Fee, of the Fee Schedule describes the technical support
request fee to be charged to both Equity Members and non-Members that
request technical support at any of the MIAX PEARL Equities data
centers. MIAX PEARL Equities proposes to charge a fee of $200 per hour
for requested technical support. The Exchange intends to provide Equity
Members and non-Members access to the Exchange's on-site data center
personnel for technical support as a convenience to the Equity Members
and non-Members to test or otherwise assess their connectivity to the
Exchange. Currently, the Exchange charges the same fee amount for the
same services for options trading, as well as at its affiliate option
exchanges, Miami International Securities Exchange, LLC (``MIAX'') and
MIAX Emerald, LLC (``MIAX Emerald'').\15\
---------------------------------------------------------------------------

    \15\ See MIAX Fee Schedule, Section 5(f), Member and non-Member
Technical Support Request Fee; MIAX PEARL Fee Schedule, Section
5(f), Member and non-Member Technical Support Request Fee; and MIAX
Emerald Fee Schedule, Section 5(f), Member and non-Member Technical
Support Request Fee.
---------------------------------------------------------------------------

Market Data Fees
    Proposed Sections 3(a)-(c) describe the fee to be charged for the
Exchange's proprietary market data products. MIAX PEARL Equities
intends to offer the following three proprietary market data products:
(a) Top of Market (``ToM'') feed; (b) Depth of Market (``DoM'') feed;
and (c) the Historical Market Data feed.
    The ToM feed is a data feed that contains the price and aggregate
size of displayed top of book quotations, order execution information,
and administrative messages for orders entered on MIAX PEARL Equities.
The DOM feed is a data feed that contains the displayed price and size
of each order entered on MIAX PEARL Equities, as well as order
execution information, order cancellations, order modifications, order
identification numbers, and administrative messages.
    The Exchange proposes to provide under Sections 3(a) and 3(b) of
the Fee Schedule that the ToM and DoM would be offered free of charge
during the Waiver Period. Even though the fees for the ToM and DoM data
feeds are waived during the Waiver Period, the Exchange believes that
is appropriate to provide market participants with notice of these
feeds on the Fee Schedule without setting forth a specific fee amount,
so that there is general awareness that the Exchange intends to assess
such a fee in the future, should the Waiver Period terminate and the
Exchange establish an applicable fee.
    The Exchange will also offer Historical Data for MIAX PEARL
Equities, which is a data product that offers historical market data
for orders entered on MIAX PEARL Equities upon request. The Exchange
proposes to charge a modest fee for the Historical Data, which will be
based on the cost incurred by the Exchange in providing that data.
Proposed Section 3(c) of the Fee Schedule describes the fee to be
charged market participants that request Historical Data from MIAX
PEARL Equities. Historical Data is intended to aid market participants
in analyzing trade and volume data, evaluating historical trends in the
trading activity of a particular security, and enabling those market
participants to test trading models and analytical strategies.
Specifically, Historical Data includes all data that is captured and
disseminated on ToM and DoM feeds and is available on a T+1 basis.\16\
---------------------------------------------------------------------------

    \16\ See Fee Schedule, Section 3(c).
---------------------------------------------------------------------------

    The Exchange will only assess the fee for Historical Data on a user
(whether Equity Member or non-Member) that specifically requests such
Historical Data. Historical Data will be uploaded onto an Exchange-
provided device, which the Exchange will incur a cost to procure and
provide to those that request the data.
    The Exchange proposed to charge a flat fee of $500 per device
requested. Each device shall have a maximum storage capacity of 8
terabytes. Users may request up to six months of Historical Data per
device, subject to the device's storage capacity. Historical Data will
be made available beginning from the time of launch of MIAX PEARL
Equities on September 25, 2020 (always on a T+1 basis). However, only
the most recent six months of Historical Data shall be available for
purchase from the request date.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \17\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \18\ in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among Exchange Members and
issuers and other persons using any facility or system which the
Exchange operates or controls. The Exchange also believes the proposal
furthers the objectives of Section 6(b)(5) of the Act \19\ in that it
is designed 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 is not designed to permit unfair
discrimination between customer, issuers, brokers and dealers.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(4).
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    On March 29, 2019, the Commission issued its Order Disapproving
Proposed Rule Changes to Amend the Fee Schedule on the BOX Market LLC
Options Facility to Establish BOX Connectivity Fees for Participants
and Non-Participants Who Connect to the BOX Network (the ``BOX
Order'').\20\ On May 21, 2019, the Commission issued the Staff Guidance
on SRO Rule Filings Relating to Fees.\21\
---------------------------------------------------------------------------

    \20\ See Securities Exchange Act Release No. 85459 (March 29,
2019), 84 FR 13363 (April 4, 2019) (SR-BOX-2018-24, SR-BOX-2018-37,
and SR-BOX-2019-04).
    \21\ See Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019), at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees (the ``Guidance'').
---------------------------------------------------------------------------

    The Exchange believes that the Proposed Fees are consistent with
the

Act because they (i) are reasonable, equitably allocated, not unfairly
discriminatory, and not an undue burden on competition; (ii) comply
with the BOX Order and the Guidance; (iii) are supported by evidence
(including data and analysis), constrained by significant competitive
forces; and (iv) are supported by specific information (including
quantitative information), fair and reasonable because they will permit
recovery of the Exchange's costs (less than all) and will not result in
excessive pricing or supra-competitive profit. Accordingly, the
Exchange believes that the Commission should find that the Proposed
Fees are consistent with the Act.
    The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \22\
---------------------------------------------------------------------------

    \22\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
---------------------------------------------------------------------------

    The Exchange believes its proposal to include a Definitions section
in the Fee Schedule promotes just and equitable principles of trade,
removes impediments to and perfects the mechanism of a free and open
market and a national market system, and, in general protects investors
and the public interest and is not designed to permit unfair
discrimination between customers, issuers, brokers and dealers. The
Exchange believes that the proposal to adopt a Definitions section in
the beginning of the Fee Schedule will provide greater clarity to
Equity Members, non-Members, market participants and the public
regarding the Exchange's fees and rebates, and it is in the public
interest for the Fee Schedule to be transparent, comprehensive and
user-friendly so as to eliminate the potential for confusion.
    The Exchange believes that its proposal is consistent with Section
6(b)(4) of the Act, in that the Proposed Fees are fair, equitable and
not unreasonably discriminatory, because the fees, as proposed, are
constrained by significant competitive forces. The U.S. equity
securities markets are highly competitive (there are currently 16
equity markets) and a reliance on competitive markets is an appropriate
means to ensure equitable and reasonable prices.
    MIAX PEARL Equities has not yet launched trading, with operations
planned to commence on September 25, 2020. Thus, the Exchange has a 0%
market share of the equity securities industry. Market share of 0%
clearly does not provide the Exchange with anti-competitive pricing
power.
    The Exchange believes that its proposal is consistent with Section
6(b)(4) of the Act because the Proposed Access Fees will permit
recovery (less than all) of the Exchange's costs and will not result in
excessive or supra-competitive profit. The Proposed Access Fees will
allow the Exchange to recover a portion (less than all) of the costs
incurred by the Exchange associated with providing and maintaining the
necessary hardware and other infrastructure as well as network
monitoring and support services in order to provide the services
associated with the Proposed Access Fees. The Exchange believes that it
is reasonable and appropriate to establish its fees charged for the
services associated with the Proposed Access Fees at levels that will
partially offset the costs to the Exchange associated with maintaining
and enhancing a state-of-the-art exchange network infrastructure in the
U.S. equities industry.
    The costs associated with building out and maintaining a state-of-
the-art network infrastructure are extensive. This is due to several
factors, including costs associated with maintaining and expanding a
team of highly-skilled network engineers, fees charged by the
Exchange's third-party data center operator, costs associated with
projects and initiatives designed to improve overall network
performance and stability through the Exchange's research and
development (``R&D'') efforts, and costs associated with fully-
supporting advances in infrastructure and expansion of network level
services, including customer monitoring, alerting and reporting. The
Exchange incurs significant technology expense related to establishing
and maintaining Information Security services, enhanced network
monitoring and customer reporting, as well as Regulation SCI mandated
processes, associated with its network technology. While some of the
expense is fixed, much of the expense is not fixed, and thus increases
as the number of connections and ports increase. For example, new 1Gb
ULL and 10Gb ULL connections require the purchase of additional
hardware to support those connections as well as enhanced monitoring
and reporting of customer performance that the Exchange and its
affiliates provide. Further, 10Gb ULL connections require the purchase
of specialized, more costly hardware. As the total number of all
connections increase, the Exchange needs to increase its data center
footprint and consume more power, resulting in increased costs charged
by its third-party data center providers. Accordingly, the cost to the
Exchange to provide access to its network and trading infrastructure is
not entirely fixed.
    Further, because the costs of operating a data center are
significant and not economically feasible for the Exchange, the
Exchange does not operate its own data centers, and instead contracts
with a third-party data center provider. The Exchange notes that
larger, well-established exchange operators own/operate their data
centers, which offers them greater control over their data center
costs. Because those exchanges own and operate their data centers as
profit centers, the Exchange is subject to additional costs. Fees for
the services associated with the Proposed Access Fees, which are
charged for accessing the Exchange's data center network
infrastructure, are directly related to the network and offset such
costs.
    Further, the Exchange invests significant resources in network R&D
to continuously improve the overall performance and stability of its
network. For example, the Exchange has a number of network monitoring
tools (some of which were developed in-house, and some of which are
licensed from third-parties), that continually monitor, detect, and
report network performance, many of which serve as significant value-
adds to Equity Members and enable the Exchange to provide a high level
of customer service. These tools detect and report performance issues,
and thus enable the Exchange to proactively notify an Equity Member
(and the SIPs) when the Exchange detects a problem with an Equity
Member's connectivity. In fact, the Exchange's affiliate options
exchanges, MIAX and MIAX Emerald, often receive inquiries from other
industry participants regarding the status of networking issues outside
of the Exchange's own network environment that are impacting the
industry as a whole via the SIPs, including inquiries from regulators,
because the Exchange has a superior, state-of the-art network that,
through its enhanced monitoring and reporting solutions, often detects
and identifies industry-wide networking issues ahead of the SIPs. The
Exchange also incurs costs associated with the maintenance

and improvement of existing tools and the development of new tools.
    Also, routine R&D projects to improve the performance of the
network's hardware infrastructure result in additional cost. In sum,
the costs associated with maintaining and enhancing a state-of-the-art
exchange network in the U.S. equity securities industry is a
significant expense for the Exchange that is projected to increase
year-over-year, and thus the Exchange believes that it is reasonable to
offset a portion of those costs through establishing the Proposed
Access Fees, which are designed to recover those costs, as described
herein. Overall, the Proposed Access Fees are projected to offset only
a portion of the Exchange's services associated with the Proposed
Access Fees. The Exchange invests in and offers a superior network
infrastructure as part of its overall exchange services offering,
resulting in significant costs associated with maintaining this network
infrastructure, which are directly tied to the amount of the Proposed
Access Fees that must be charged to access it, in order to recover
those costs. The Exchange only has four primary sources of revenue:
transaction fees, access fees (of which the Proposed Access Fees
constitute the majority), regulatory fees, and market data fees.
Accordingly, the Exchange must cover all of its expenses from these
four primary sources of revenue.
    The Proposed Access Fees are fair and reasonable because they will
not result in excessive pricing or supra-competitive profit, when
comparing the total annual expense of MIAX PEARL Equities for providing
the services associated with the Proposed Access Fees versus the total
projected annual revenue of the Exchange for providing those services.
For 2020, the total annual expense for providing the services
associated with the Proposed Access Fees for MIAX PEARL Equities is
projected to be approximately $8.4 million. The $8.4 million in
projected total annual expense is comprised of the following, all of
which are directly related to the services associated with the Proposed
Access Fees by MIAX PEARL Equities to its Equity Members and non-
Members: (1) Third-party expense, relating to fees paid by MIAX PEARL
Equities to third-parties for certain products and services; and (2)
internal expense, relating to the internal costs of MIAX PEARL Equities
to provide the services associated with the Proposed Access Fees. The
$8.4 million in projected total annual expense is directly related to
the services associated with the Proposed Access Fees and not any other
product or service offered by the Exchange. It does not include general
costs of operating matching systems and other trading technology, and
no expense amount was allocated twice.
    As discussed, the Exchange conducted an extensive review in which
the Exchange analyzed every expense item in the Exchange's general
expense ledger (this includes over 150 separate and distinct expense
items) to determine whether each such expense relates to the services
associated with the Proposed Access Fees, and, if such expense did so
relate, what portion (or percentage) of such expense actually supports
those services, and thus bears a relationship that is, ``in nature and
closeness,'' directly related to those services. The sum of all such
portions of expenses represents the total cost of the Exchange to
provide the services associated with the Proposed Access Fees.
    For 2020, total actual and projected third-party expense, relating
to fees paid by the Exchange to third-parties for certain products and
services for the Exchange to be able to provide the services associated
with the Proposed Access Fees, was $1,492,112. This includes, but is
not limited to, a portion of the fees paid to: (1) Equinix, for data
center services, for the primary, secondary, and disaster recovery
locations of the MIAX PEARL Equities trading system infrastructure; (2)
Zayo Group Holdings, Inc. (``Zayo'') for connectivity services (fiber
and bandwidth connectivity) linking MIAX PEARL Equities' office
locations in Princeton, New Jersey and Miami, Florida to all data
center locations; (3) Secure Financial Transaction Infrastructure
(``SFTI''), which supports connectivity and feeds for the entire equity
securities industry; (4); (5) various other services providers
(including Thompson Reuters, NYSE, Nasdaq, Internap, and Options IT),
which provide content, connectivity services, infrastructure services,
and market data services; and (6) various other hardware and software
providers (including Dell and Cisco, which support the production
environment).
    For clarity, only a portion of all fees paid to such third-parties
is included in the third-party expense herein (only the portions that
actually support the services associated with the Proposed Access
Fees), and no expense amount is allocated twice. Accordingly, the
Exchange does not allocate its entire information technology and
communication costs to the services associated with the Proposed Access
Fees.
    The Exchange believes it is reasonable to allocate such third-party
expense described above towards the total cost to the Exchange to
operate and support the network, including providing the services
associated with the Proposed Access Fees. In particular, the Exchange
believes it is reasonable to allocate the identified portions of the
Equinix expense because Equinix operates the data centers (primary,
secondary, and disaster recovery) that host the Exchange's network
infrastructure, which enables the services associated with the Proposed
Access Fees. This includes, among other things, the necessary storage
space, which continues to expand and increase in cost, power to operate
the network infrastructure, and cooling apparatuses to ensure the
Exchange's network infrastructure maintains stability. Without these
services from Equinix, the Exchange would not be able to operate and
support the network and provide the services associated with the
Proposed Access Fees to Equity Members and non-Members and their
customers. The Exchange did not allocate all of the Equinix expense
toward the cost of providing the services associated with the Proposed
Access Fees, only the portions which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 73% of the total Equinix expense. The Exchange believes
these allocations are reasonable because they represent the Exchange's
actual cost to operate and support the network, and not any other
service, as supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portions of the Zayo expense because Zayo provides the internet, fiber
and bandwidth connections with respect to the network, linking MIAX
PEARL Equities with the Exchange's affiliates, MIAX and MIAX Emerald,
as well as the data center and disaster recovery locations. As such,
all of the trade data flow through Zayo's infrastructure over the
Exchange's network. Without these services from Zayo, the Exchange
would not be able to operate and support the network and provide the
services associated with the Proposed Access Fees to Equity Members and
non-Members and their customers. The Exchange did not allocate all of
the Zayo expense toward the cost of providing the services associated
with the Proposed Access Fees, only the portions which the Exchange
identified as being specifically mapped to operating and supporting the
network, approximately 66% of the total Zayo

expense. The Exchange believes these allocations are reasonable because
they represent the Exchange's actual cost to operate and support the
network, and not any other service, as supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portions of the SFTI expense and various other service providers'
(including Thompson Reuters, NYSE, Nasdaq, Internap, and Options IT)
expense because those entities provide connectivity and feeds for the
entire U.S. securities industry as well as the content, connectivity
services, infrastructure services, and market data services for
critical components of the network. Without these services from SFTI
and various other service providers, the Exchange would not be able to
operate and support the network and provide the services associated
with the Proposed Access Fees to Equity Members and non-Members and
their customers. The Exchange did not allocate all of the SFTI and
other service providers' expense toward the cost of providing the
services associated with the Proposed Access Fees, only the portions
which the Exchange identified as being specifically mapped to operating
and supporting the network, approximately 94% of the total SFTI and
other service providers' expense. The Exchange believes these
allocations are reasonable because they represent the Exchange's actual
cost to operate and support the network, and not any other service, as
supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portion of the other hardware and software provider expense because
this includes costs for dedicated hardware licenses for switches and
servers, as well as dedicated software licenses for security monitoring
and reporting across the network. Without this hardware and software,
the Exchange would not be able to operate and support the network and
provide the services associated with the Proposed Access Fees to Equity
Members and non-Members and their customers. The Exchange did not
allocate all of the hardware and software provider expense toward the
cost of providing the services associated with the Proposed Access
Fees, only the portions which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 57% of the total hardware and software provider expense.
The Exchange believes these allocations are reasonable because they
represent the Exchange's actual cost to operate and support the
network, and not any other service, as supported by its cost review.
    For 2020, total projected internal expense, relating to the
internal costs of the Exchange to provide the services associated with
the Proposed Access Fees, is projected to be $6,905,858. This includes,
but is not limited to, costs associated with: (1) Employee compensation
and benefits for full-time employees that support the services
associated with the Proposed Access Fees, including staff in network
operations, trading operations, development, system operations,
business, etc., as well as staff in general corporate departments (such
as legal, regulatory, and finance) that support those employees and
functions; (2) depreciation and amortization of hardware and software
used to provide the services associated with the Proposed Access Fees,
including equipment, servers, cabling, purchased software and
internally developed software used in the production environment to
support those services for trading; and (3) occupancy costs for leased
office space for staff that support the services associated with the
Proposed Access Fees. The breakdown of these costs is more fully-
described below.
    For clarity, only a portion of all such internal expenses are
included in the internal expense herein (only the portions that support
the services associated with the Proposed Access Fees), and no expense
amount is allocated twice. Accordingly, the Exchange does not allocate
its entire costs contained in those line items to the services
associated with the Proposed Access Fees.
    The Exchange believes it is reasonable to allocate such internal
expense described above towards the total cost to the Exchange to
operate and support the network, including providing the services
associated with the Proposed Access Fees. In particular, MIAX PEARL
Equities' employee compensation and benefits expense relating to
providing the services associated with the Proposed Access Fees is
projected to be $4,317,667, which is only a portion of the $13,492,708
total projected expense for employee compensation and benefits. The
Exchange believes it is reasonable to allocate the identified portions
of each expense because they include the time spent by employees of
several departments, including Technology, Back Office, Systems
Operations, Networking, Business Strategy Development (who create the
business requirement documents that the Technology staff use to develop
network features and enhancements), Trade Operations, Finance (who
provide billing and accounting services relating to the network), and
Legal (who provide legal services relating to the network, such as rule
filings and various license agreements and other contracts). As part of
the extensive cost review conducted by the Exchange, the Exchange
reviewed the amount of time spent by each employee on matters relating
to the operation and support of the network, including the services
associated with the Proposed Access Fees. Without these employees, the
Exchange would not be able to operate and support the network and
provide the services associated with the Proposed Access Fees to Equity
Members and non-Members and their customers. The Exchange did not
allocate all of the employee compensation and benefits expense toward
the cost of providing the services associated with the Proposed Access
Fees, only that portion which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 32% of the total employee compensation and benefits
expense. The Exchange believes these allocations are reasonable because
they represent the Exchange's actual cost to operate and support the
network, and not any other service, as supported by its cost review.
    MIAX PEARL Equities' depreciation and amortization expense relating
to providing the services associated with the Proposed Access Fees is
projected to be $2,131,411, which is only a portion of the $2,664,264
total projected expense for depreciation and amortization. The Exchange
believes it is reasonable to allocate the identified portions of such
projected expense because such expense includes the actual cost of the
computer equipment, such as dedicated servers, computers, laptops,
monitors, information security appliances and storage, and network
switching infrastructure equipment, including switches and taps that
were purchased to operate and support the network. Without this
equipment, the Exchange would not be able to operate the network and
provide the services associated with the Proposed Access Fees to Equity
Members and non-Members and their customers. The Exchange did not
allocate all of the projected depreciation and amortization expense
toward the cost of providing the services associated with the Proposed
Access Fees, only the portions which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 80% of the total depreciation and amortization expense.
The services

associated with the Proposed Access Fees would not be possible without
relying on such equipment. The Exchange believes these allocations are
reasonable because they represent the Exchange's actual cost to operate
and support the network, and not any other service, as supported by its
cost review.
    MIAX PEARL Equities' occupancy expense relating to providing the
services associated with the Proposed Access Fees is projected to be
$456,780, which is only a portion of the $878,423 total projected
expense for occupancy. The Exchange believes it is reasonable to
allocate the identified portions of such projected expense because such
expense represents the portion of the Exchange's cost to rent and
maintain a physical location for the Exchange's staff who operate and
support the network, including providing the services associated with
the Proposed Access Fees. These amounts consist primarily of rent for
the Exchange's Princeton, New Jersey office, as well as various related
costs, such as physical security, property management fees, property
taxes, and utilities. The Exchange operates its Network Operations
Center (``NOC'') and Security Operations Center (``SOC'') from its
Princeton, New Jersey office location. A centralized office space is
required to house the staff that operates and supports the network. The
Exchange currently has approximately 150 employees (and continues to
increase its headcount to support the network as the Exchange, and its
affiliates, grow the network). Approximately two-thirds of the
Exchange's staff are in the Technology department, and the majority of
those staff members have some role in the operation and performance of
the network. Without this office space, the Exchange would not be able
to operate and support the network and provide the services associated
with the Proposed Access Fees to Equity Members and non-Members and
their customers. Accordingly, the Exchange believes it is reasonable to
allocate the identified portions of its occupancy expense because such
amounts represent the Exchange's actual cost to house the equipment and
personnel who operate and support the Exchange's network infrastructure
for the services associated with the Proposed Access Fees. The Exchange
did not allocate all of the projected occupancy expense toward the cost
of providing the services associated with the Proposed Access Fees,
only the portions which the Exchange identified as being specifically
mapped to operating and supporting the network, approximately 52% of
the total occupancy expense. The Exchange believes these allocations
are reasonable because they represent the Exchange's actual cost to
operate and support the network, and not any other service, as
supported by its cost review.
    The total revenue projected to be received by MIAX PEARL Equities
for providing the services associated with the Proposed Access Fees, on
a full year run rate, is anticipated to be $4.1 million. However, since
MIAX PEARL Equities has yet to launch, with a projected launch date of
September 25, 2020, it will not start receiving revenue for the
services associated with the Proposed Access Fees until September 25,
2020. Thus, for 2020, MIAX PEARL Equities' projected expense for
providing the services associated with the Proposed Access Fees will be
approximately $8.4 million, while its revenue for providing those
services is projected to be only $1,033,500 (September 25th to December
31st of 2020), and is currently $0 to date. For 2020, MIAX PEARL
Equities projects 3 full months and 5 days of revenue for the services
associated with the Proposed Access Fees (September 25th to December
31st), of approximately $1,033,500, however it also projects increased
expense for providing the services associated with the Proposed Access
Fees for 2021, as compared to 2020.
    Nevertheless, utilizing 2020 projected expense figures, for 2021,
MIAX PEARL Equities' projected expense for providing the Proposed
Access Fees would be approximately $8.4 million, while its projected
revenue for providing network connectivity services would be $4.1
million. Accordingly, the total MIAX PEARL Equities projected revenue
for providing the services associated with the Proposed Access Fees ($0
to date) and on a full year run rate ($4.1 million) is less than total
projected MIAX PEARL Equities expense for providing the services
associated with the Proposed Access Fees for 2020 ($8.4 million) and
2021 (greater than $8.4 million).
    For the avoidance of doubt, none of the expenses included herein
relating to the services associated with the Proposed Access Fees
relate to any other services offered by MIAX PEARL Equities. Stated
differently, no expense amount of the Exchange is allocated twice.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to allocate the respective percentages of each expense
category described above towards the total cost to the Exchange of
operating and supporting the network, including providing the services
associated with the Proposed Access Fees, because the Exchange
performed a line-by-line item analysis of all the expenses of the
Exchange, and has determined the expenses that directly relate to
operation and support of the network, including the services associated
with the Proposed Access Fees. Further, the Exchange notes that,
without the specific third-party and internal items listed above, the
Exchange would not be able to operate and support the network,
including the services associated with the Proposed Access Fees to
Equity Members and non-Members and their customers. Each of these
expense items, including physical hardware, software, employee
compensation and benefits, occupancy costs, and the depreciation and
amortization of equipment, have been identified through a line-by-line
item analysis to be integral to the operation and support of the
network. The Proposed Access Fees are intended to recover the
Exchange's costs (less than all) of operating and supporting the
network, including providing the services associated with the Proposed
Access Fees.
    Accordingly, the Proposed Access Fees are fair and reasonable
because they do not result in excessive pricing or supra-competitive
profit, when comparing the actual network operation and support costs
to the Exchange versus the projected revenue for the services
associated with the Proposed Access Fees.
    The Exchange notes that other equities exchanges have similar
connectivity alternatives for their participants, including similar
low-latency connectivity. For example, the Nasdaq Stock Market LLC
(``Nasdaq''), Nasdaq PHLX LLC (``Phlx''), and Nasdaq ISE, LLC (``ISE'')
all offer a 1Gb, 10Gb and 10Gb low latency ethernet connectivity
alternatives to each of their participants.\23\ NYSE Arca, Inc. (``NYSE
Arca''), NYSE American LLC (``NYSE American''), NYSE Chicago, Inc.
(``NYSE Chicago'') and NYSE National, Inc. (``NYSE National'') all
offer a 1Gb and 10Gb low latency ethernet connectivity alternatives to
each of their participants.\24\ The Exchange notes that

all the other equities exchanges described above charge higher rates
for such similar connectivity to primary and secondary facilities.\25\
While the Exchange's proposed connectivity fees are substantially lower
than the fees charged by Nasdaq, Phlx, ISE, NYSE America, NYSE Arca,
NYSE Chicago and NYSE National, the Exchange believes that it can offer
significant value to Equity Members over other exchanges in terms of
network monitoring and reporting, which the Exchange believes is a
competitive advantage, and differentiates its access services versus
access services at other exchanges. Additionally, the Exchange's
proposed connectivity fees to its disaster recovery facility are within
the range of the fees charged by other exchanges for similar
connectivity alternatives.\26\ The Exchange also notes that other
equities exchanges have similar port alternatives for their
participants, with similar or substantially higher fees.\27\
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    \23\ See Nasdaq, Phlx and ISE General Rules, General 8, Section
1(b). Nasdaq, Phlx and ISE each charge a monthly fee of $2,500 for
each 1Gb connection, $10,000 for each 10Gb connection and $15,000
for each 10Gb Ultra connection, which is the equivalent of the
Exchange's 10Gb ULL connection.
    \24\ See NYSE American Fee Schedule, NYSE Arca Fee Schedule,
NYSE Chicago Fee Schedule and NYSE National Fee Schedule, Co-
Location Fees. NYSE American, NYSE Arca, NYSE Chicago and NYSE
National each charge a monthly fee of $5,000 for each 1Gb circuit
and $22,000 for each 10Gb LX circuit, which is the equivalent of the
Exchange's 10Gb ULL connection.
    \25\ See supra notes 24 and 25.
    \26\ See Cboe EDGA Exchange, Inc. (``EDGA'') and Cboe EDGX
Exchange, Inc. (``EDGX'') Fee Schedules, Physical Connectivity Fees,
(charging a monthly fee of $2,000 for a 1Gb disaster recovery
network access port and a monthly fee of $6,000 for a 10Gb disaster
recovery network access port).
    \27\ See Nasdaq Fee Schedule, Equity Rules, Equity 7, Pricing
Schedule, Ports (charging $575 per FIX port per month); Phlx Fee
Schedule, Equity Rules, Equity 7, Pricing Schedule, Section 3 Nasdaq
PSX Fees (charging $400 per FIX port per month); EDGX Fee Schedule,
Logical Port Fees (charging $550 per Logical Port per month and $650
per Purge port per month).
---------------------------------------------------------------------------

Historical Data
    The Exchange believes the proposed fee for Historical Data is a
reasonable allocation of its costs and expenses among its Equity
Members and other persons using its facilities since it is recovering
the costs associated with distributing such data should an Equity
Member request Historical Data. Access to the Exchange is provided on
fair and non-discriminatory terms. The Exchange believes the proposed
fee for Historical Data is equitable and not unfairly discriminatory
because the fee level results in a reasonable and equitable allocation
of fees amongst users for similar services. Moreover, the decision as
to whether or not to purchase Historical Data is entirely optional to
all users. Potential purchasers are not required to purchase the
Historical Data, and the Exchange is not required to make the
Historical Data available. Purchasers may request the data at any time
or may decline to purchase such data. The allocation of fees among
users is fair and reasonable because, if the market deems the proposed
fees to be unfair or inequitable, firms can diminish or discontinue
their use of this data.
    In adopting Regulation NMS, the Commission granted self-regulatory
organizations and broker-dealers increased authority and flexibility to
offer new and unique market data to the public. It was believed that
this authority would expand the amount of data available to consumers,
and also spur innovation and competition for the provision of market
data:
    ``[E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to receive
(and pay for) such data when broker-dealers may choose to receive (and
pay for) additional market data based on their own internal analysis of
the need for such data.'' \28\
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
---------------------------------------------------------------------------

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well.
    In July, 2010, Congress adopted H.R. 4173, the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank Act''),
which amended Section 19 of the Act. Among other things, Section 916 of
the Dodd-Frank Act amended paragraph (A) of Section 19(b)(3) of the Act
by inserting the phrase ``on any person, whether or not the person is a
member of the self-regulatory organization'' after ``due, fee or other
charge imposed by the self-regulatory organization.'' As a result, all
SRO rule proposals establishing or changing dues, fees or other charges
are immediately effective upon filing regardless of whether such dues,
fees or other charges are imposed on members of the SRO, non-members,
or both. Section 916 further amended paragraph (C) of Section 19(b)(3)
of the Act to read, in pertinent part, ``At any time within the 60-day
period beginning on the date of filing of such a proposed rule change
in accordance with the provisions of paragraph (1) [of Section 19(b)],
the Commission summarily may temporarily suspend the change in the
rules of the self-regulatory organization made thereby, 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 this title. If the Commission takes such
action, the Commission shall institute proceedings under paragraph
(2)(B) [of Section 19(b)] to determine whether the proposed rule should
be approved or disapproved.''
    The Exchange believes that these amendments to Section 19 of the
Act reflect Congress's intent to allow the Commission to rely upon the
forces of competition to ensure that fees for market data are
reasonable and equitably allocated. Although Section 19(b) had formerly
authorized immediate effectiveness for a ``due, fee or other charge
imposed by the self-regulatory organization,'' the Commission adopted a
policy and subsequently a rule stating that fees for data and other
products available to persons that are not members of the self-
regulatory organization must be approved by the Commission after first
being published for comment. At the time, the Commission supported the
adoption of the policy and the rule by pointing out that unlike
members, whose representation in self-regulatory organization
governance was mandated by the Act, non-members should be given the
opportunity to comment on fees before being required to pay them, and
that the Commission should specifically approve all such fees. The
Exchange believes that the amendment to Section 19 reflects Congress's
conclusion that the evolution of self-regulatory organization
governance and competitive market structure have rendered the
Commission's prior policy on non-member fees obsolete. Specifically,
many exchanges have evolved from member-owned, not-for-profit
corporations into for-profit, investor-owned corporations (or
subsidiaries of investor-owned corporations). Accordingly, exchanges no
longer have narrow incentives to manage their affairs for the exclusive
benefit of their members, but rather have incentives to maximize the
appeal of their products to all customers, whether members or non-
members, so as to broaden distribution and grow revenues. Moreover, the
Exchange believes that the change also reflects an endorsement of the
Commission's determinations that reliance on competitive markets is an
appropriate means to ensure equitable and reasonable prices. Simply
put, the change reflects a presumption that all

fee changes should be permitted to take effect immediately, since the
level of all fees are constrained by competitive forces.
    Selling proprietary market data, such as Historical Data, is a
means by which exchanges compete to attract business. To the extent
that exchanges are successful in such competition, they earn trading
revenues and also enhance the value of their data products by
increasing the amount of data they provide. The need to compete for
business places substantial pressure upon exchanges to keep their fees
for both executions and data reasonable.\29\ The Exchange therefore
believes that the fees for Historical Data are properly assessed on
Members and Non-Member users.
---------------------------------------------------------------------------

    \29\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision
Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding
the existence of vigorous competition with respect to non-core
market data).
---------------------------------------------------------------------------

    The decision of the United States Court of Appeals for the District
of Columbia Circuit in NetCoalition v. SEC, No. 09-1042 (D.C. Cir.
2010), although reviewing a Commission decision made prior to the
effective date of the Dodd-Frank Act, upheld the Commission's reliance
upon competitive markets to set reasonable and equitably allocated fees
for market data:
    ``In fact, the legislative history indicates that the Congress
intended that the market system `evolve through the interplay of
competitive forces as unnecessary regulatory restrictions are removed'
and that the SEC wield its regulatory power `in those situations where
competition may not be sufficient,' such as in the creation of a
`consolidated transactional reporting system.' '' \30\
---------------------------------------------------------------------------

    \30\ NetCoalition, at 15 (quoting H.R. Rep. No. 94-229, at 92
(1975), as reprinted in 1975 U.S.C.C.A.N. 321, 323).
---------------------------------------------------------------------------

    The court's conclusions about Congressional intent are therefore
reinforced by the Dodd-Frank Act amendments, which create a presumption
that exchange fees, including market data fees, may take effect
immediately, without prior Commission approval, and that the Commission
should take action to suspend a fee change and institute a proceeding
to determine whether the fee change should be approved or disapproved
only where the Commission has concerns that the change may not be
consistent with the Act.
Pass-Through of External Connectivity Fees
    The Exchange believes that the proposed pass-through of external
connectivity fees constitutes an equitable allocation of fees, and is
not unfairly discriminatory, because it allows the Exchange to recover
costs associated with offering access through the network connections,
responding to customer requests, configuring MIAX PEARL Equities'
systems, programming API user specifications and administering the
various services. Access to the MIAX PEARL Equities market is offered
on fair and non-discriminatory terms.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to pass-through External Connectivity fees to Equity
Members and non-Members that establish connections with MIAX PEARL
Equities through a third-party. MIAX PEARL Equities will only pass-
through the actual costs it is charged by third-party external vendors.
The Exchange believes it is reasonable and equitable to recover costs
charged it on behalf of an Equity Member or non-Member that establishes
connections with MIAX PEARL Equities through a third party. Other
exchanges, including EDGX and EDGA, charge a fee for similar services
to their members and non-members.
Technical Support Request Fee
    The Exchange believes that the proposed Technical Support Request
fee is fair, equitable and not unreasonably discriminatory, because it
is assessed equally to all Equity Members and non-Members who request
technical support. Furthermore, Equity Members and non-Members are not
required to use the service but instead it is offered as a convenience
to all Equity Members and non-Members. The proposed fee is reasonably
designed because it will permit both Equity Members and non-Members to
request the use of the Exchange's on-site data center personnel as
technical support and as a convenience in order to test or otherwise
assess their connectivity to the Exchange and the fee is within the
range of the fee charged by other exchanges for similar services and is
identical to the same fee assessed by the Exchange today for options as
well as the Exchange's affiliates, MIAX and MIAX Emerald.
    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must establish
fees that are competitive with other exchanges. For the reasons
described above, the Exchange believes that the proposed fees in the
MIAX PEARL Equities Fee Schedule appropriately reflect this competitive
environment.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the Proposed Fees do not place certain
market participants at a relative disadvantage to other market
participants because the pricing of the Proposed Fees is associated
with relative usage of the various market participants and does not
impose a barrier to entry to smaller participants. The Exchange
believes the Proposed Fees do not favor certain categories of market
participants in a manner that would impose a burden on competition;
rather, the allocation of the Proposed Fees reflects the network and
access resources consumed by various market participants.
    The Exchange believes the Proposed Fees do not place an undue
burden on competition on other SROs that is not necessary or
appropriate. MIAX PEARL Equities has not yet launched trading
operations and therefore has a 0% market share, with significantly less
members than other SROs. Additionally, other exchanges have similar
connectivity and port alternatives for their participants, including
similar low-latency connectivity, but with much higher rates to
connect.\31\ The Exchange is also unaware of any assertion that the
Proposed Fees would somehow unduly impair its competition with other
equities exchanges. To the contrary, if the fees charged are deemed too
high by market participants, they can simply not connect to the
Exchange or not use the services associated with the Proposed Access
Fees.
---------------------------------------------------------------------------

    \31\ See supra notes 23, 24, 26 and 27.
---------------------------------------------------------------------------

    While the Exchange recognizes the distinction between connecting to
an exchange and trading at the exchange, the Exchange notes that it
plans to operate in a highly competitive market in which market
participants can readily connect and trade with venues they desire. In
such an environment, the Exchange must continually adjust its fees to
remain competitive with other exchanges. The Exchange believes that the
Proposed Fees reflect this competitive environment.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\32\ and Rule 19b-4(f)(2) \33\ thereunder.
At any time within 60 days of the filing of the 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 to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \33\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-PEARL-2020-19 on the subject line.

Paper Comments

     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-PEARL-2020-19. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-PEARL-2020-19 and should be submitted on
or before November 10, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23151 Filed 10-19-20; 8:45 am]
BILLING CODE 8011-01-P