[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)]
[Proposed Rules]
[Pages 69899-69903]
[FR Doc No: 2015-28559]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-4810; Directorate Identifier 2015-NM-090-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for all

Airbus Model A330-200, -200 Freighter, and -300 series airplanes; and
all Airbus Model A340-200, -300, -500, and -600 series airplanes. This
proposed AD was prompted by a report of blockage of Angle of Attack
(AOA) probes during climb, leading to activation of the Alpha
Protection (Alpha Prot) while the Mach number increased. This
activation could cause a continuous nose-down pitch rate that cannot be
stopped with backward sidestick input, even in the full backward
position. For certain airplanes, this proposed AD would require
replacing certain AOA sensors (probes) with certain new AOA sensors.
For certain other airplanes, this proposed AD would also require
inspections and functional heat testing of certain AOA sensors for
discrepancies, and replacement if necessary. We are proposing this AD
to prevent erroneous AOA information and Alpha Prot activation due to
blocked AOA probes, which could result in a continuous nose-down
command and consequent loss of control of the airplane.

DATES: We must receive comments on this proposed AD by December 28,
2015.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Airbus SAS, Airworthiness Office--EAL, 1 Rond Point Maurice Bellonte,
31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61
93 45 80; email<EMAIL_ADDRESS>Internet http://www.airbus.com. You may view this referenced service information at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA, call
425-227-1221.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
4810; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Vladimir Ulyanov, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2015-4810;
Directorate Identifier 2015-NM-090-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2015-0134, dated July 8, 2015 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for all Airbus Model
A330-200, -200 Freighter, and -300 series airplanes; and Model A340-
200, -300, -500, and -600 series airplanes. The MCAI states:

    An occurrence was reported where an Airbus A321 aeroplane
encountered a blockage of two Angle of Attack (AOA) probes during
climb, leading to activation of the Alpha Protection (Alpha Prot)
while the Mach number increased. The flight crew managed to regain
full control and the flight landed uneventfully. It was determined
that the affected AOA probes are also fitted on A330 and A340
aeroplanes.
    When Alpha Prot is activated due to blocked AOA probes, the
flight control laws order a continuous nose down pitch rate that, in
a worst case scenario, cannot be stopped with backward sidestick
inputs, even in the full backward position. If the Mach number
increases during a nose down order, the AOA value of the Alpha Prot
will continue to decrease. As a result, the flight control laws will
continue to order a nose down pitch rate, even if the speed is above
minimum selectable speed, known as VLS.
    This condition, if not corrected, could result in loss of
control of the aeroplane.
    Investigation results indicated that aeroplanes equipped with
certain UTC Aerospace (UTAS, formerly known as Goodrich) AOA
sensors, or equipped with certain SEXTANT/THOMSON AOA sensors,
appear to have a greater susceptibility to adverse environmental
conditions than aeroplanes equipped with the latest Thales AOA
sensor, Part Number (P/N) C16291AB, which was designed to improve
AOA indication behaviour in heavy rain conditions.
    Having determined that replacement of these AOA sensors is
necessary to achieve and maintain the required safety level of the
aeroplane, EASA issued AD 2015-0089, to require modification of the
aeroplanes by replacement of the affected P/N sensors, and, after
modification, prohibits (re-) installation of those P/N AOA sensors.
That [EASA] AD also required repetitive detailed visual inspections
(DET) and functional heating tests of certain Thales AOA sensors and
provided an optional terminating action for those inspections.
    Since EASA AD 2015-0089 was issued, based on further analysis
results, Airbus issued Operators Information Transmission (OIT) Ref.
999.0017/15 Revision 1, instructing operators to speed up the
removal from service of UTAS P/N 0861ED2 AOA sensors.
    For the reasons described above, this [EASA] AD retains the
requirements of EASA AD 2015-0089, which is superseded, but reduces
the compliance times for aeroplanes with UTAS P/N 0861ED2 AOA
sensors installed.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
4810.

Related Service Information Under 1 CFR Part 51

    Airbus has issued the following service information:
     Service Bulletin A330-34-3215, Revision 02, dated March
29, 2010.
     Service Bulletin A330-34-3228, dated October 7, 2009.
     Service Bulletin A330-34-3315, dated March 26, 2015.
     Service Bulletin A340-34-4215, Revision 02, dated March
29, 2010.

     Service Bulletin A340-34-4234, dated October 7, 2009.
     Service Bulletin A340-34-4294, dated March 26, 2015.
     Service Bulletin A340-34-5062, Revision 01, dated March
29, 2010.
     Service Bulletin A340-34-5070, dated October 9, 2009.
     Service Bulletin A340-34-5105, dated March 26, 2015.
    The service information describes procedures for replacing certain
pitot probes with certain new pitot probes. The service information
also describes procedures for inspections and functional heat testing
of certain pitot probes, and replacement if necessary. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section of this NPRM.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of these
same type designs.

Costs of Compliance

    We estimate that this proposed AD affects 55 airplanes of U.S.
registry.

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
              Action                      Labor cost           Parts cost      Cost per product      operators
----------------------------------------------------------------------------------------------------------------
Replacement......................  5 work-hours x $85 per                $0  $425...............         $23,375
                                    hour = $425.
Inspection/test..................  3 work-hours x $85 per                 0  $255 per inspection/         14,025
                                    hour = $255.                              test cycle.
----------------------------------------------------------------------------------------------------------------

    We have received no definitive data that would enable us to provide
a cost estimate for the on-condition actions specified in this proposed
AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

Airbus: Docket No. FAA-2015-4810; Directorate Identifier 2015-NM-
090-AD.

(a) Comments Due Date

    We must receive comments by December 28, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to the airplanes, certificated in any category,
identified in paragraphs (c)(1) and (c)(2) of this AD, all
manufacturer serial numbers.
    (1) Airbus Model A330-201, -202, -203, -223, -223F, -243, -243F,
-301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes.
    (2) Airbus Model A340-211, -212, -213, -311, -312, -313, -541,
and -642 airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 34, Navigation.

(e) Reason

    This AD was prompted by a report of blockage of two Angle of
Attack (AOA) probes during climb, leading to activation of the Alpha
Protection (Alpha Prot) while the Mach number increased. This
activation could cause a continuous nose-down pitch rate that cannot
be stopped with backward sidestick input, even in the full backward
position. We are issuing this AD to prevent erroneous AOA
information and Alpha Prot activation due to blocked AOA probes,
which could result in a continuous nose-down command and consequent
loss of control of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Replacement of Certain UTAS AOA Sensors

    For airplanes on which any UTAS AOA sensor having part number
(P/N) 0861ED or P/N 0861ED2 is installed: At the applicable time
specified in paragraph (h) of this AD, replace all Captain and First
Officer AOA sensors (probes) having P/N 0861ED or 0861ED2 with AOA
sensors having Thales P/N C16291AB, in accordance with the
Accomplishment Instructions of the applicable service information
identified in paragraph (g)(1), (g)(2), or (g)(3) of this AD.
    (1) Airbus Service Bulletin A330-34-3315, dated March 26, 2015
(for Model A330 airplanes).

    (2) Airbus Service Bulletin A340-34-4294, dated March 26, 2015
(for Model A340-200 and -300 airplanes).
    (3) Airbus Service Bulletin A340-34-5105, dated March 26, 2015
(for Model A340-500 and -600 airplanes).

(h) Compliance Times for the Requirements of Paragraph (g) of This AD

    Do the actions required by paragraph (g) of this AD at the
applicable time specified in paragraph (h)(1) or (h)(2) of this AD.
    (1) For airplanes with AOA sensors having P/N 0861ED: Within 22
months after the effective date of this AD.
    (2) For airplanes with AOA sensors having P/N 0861ED2: Within 7
months after the effective date of this AD.

(i) Replacement of Certain SEXTANT/THOMSON AOA Sensors

    For airplanes on which any SEXTANT/THOMSON AOA sensor having P/N
45150320 is installed: Within 22 months after the effective date of
this AD, replace all SEXTANT/THOMSON AOA sensors (probes) having P/N
45150320 with AOA sensors having Thales P/N C16291AB, in accordance
with the Accomplishment Instructions of the applicable service
information identified in paragraph (i)(1) or (i)(2) of this AD.
    (1) Airbus Service Bulletin A330-34-3228, dated October 7, 2009
(for Model A330-200 and -300 airplanes).
    (2) Airbus Service Bulletin A340-34-4234, dated October 7, 2009
(for Model A340-200 and -300 airplanes).

(j) Repetitive Inspections/Tests of Certain Thales AOA Sensors

    For airplanes on which one or more Thales AOA sensor having P/N
C16291AA is installed: Before the accumulation of 17,000 total
flight hours on the AOA sensor since first installation on an
airplane, or within 6 months after the effective date of this AD,
whichever occurs later; and thereafter at intervals not to exceed
3,800 flight hours; do a detailed inspection of the three AOA
sensors at FINs 3FP1, 3FP2, and 3FP3 for discrepancies (e.g., the
vane of the sensor does not deice properly), and a functional
heating test of each AOA sensor having P/N C16291AA, in accordance
with the Accomplishment Instructions of the applicable service
information identified in paragraph (j)(1), (j)(2), or (j)(3) of
this AD.
    (1) Airbus Service Bulletin A330-34-3215, Revision 02, dated
March 29, 2010 (for Model A330-200 and -300 airplanes).
    (2) Airbus Service Bulletin A340-34-4215, Revision 02, dated
March 29, 2010 (for Model A340-200 and -300 airplanes).
    (3) Airbus Service Bulletin A340-34-5062, Revision 01, dated
March 29, 2010 (for Model A340-500 and -600 airplanes).

(k) Corrective Actions

    If any discrepancy is found during any inspection required by
paragraph (j) of this AD, or if any test is failed during the
heating test required by paragraph (j) of this AD: Before further
flight, replace all affected AOA sensors with sensors identified in
paragraph (k)(1) or (k)(2) of this AD, in accordance with the
Accomplishment Instructions of the applicable service information
identified in paragraph (j)(1), (j)(2), or (j)(3) of this AD.
    (1) Replace with AOA sensors having Thales P/N C16291AA, on
which the inspection and test required by paragraph (j) of this AD
were passed.
    (2) Replace with AOA sensors having Thales P/N C16291AB.

(l) Airplanes Excluded From Certain Requirements

    (1) The actions specified in paragraphs (g), (i), (j), and (k)
of this AD are not required, provided that the conditions specified
in paragraphs (l)(1)(i), (l)(1)(ii), and (l)(1)(iii) of this AD are
met.
    (i) Airbus Modification 58555 (installation of Thales P/N
C16291AB AOA sensors) has been embodied in production.
    (ii) Airbus Modification 46921 (installation of UTAS AOA
sensors) has not been embodied in production.
    (iii) No AOA sensor having SEXTANT/THOMSON P/N 45150320 or UTAS
P/N 0861ED or P/N 0861ED2 has been installed on the airplane since
date of issuance of the original airworthiness certificate or date
of issuance of the original export certificate of airworthiness.
    (2) The actions specified in paragraphs (g) and (i) of this AD
are not required, provided that all conditions specified in
paragraphs (l)(2)(i), (l)(2)(ii), and (l)(2)(iii) of this AD are
met.
    (i) Only AOA sensors with P/Ns approved after the effective date
of this AD have been installed.
    (ii) The AOA sensor P/N is approved by the Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA;
the European Aviation Safety Agency (EASA); or Airbus's EASA Design
Organization Approval (DOA).
    (iii) The installation is accomplished in accordance with
airplane modification instructions approved by the Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA;
the EASA; or Airbus's EASA DOA.

(m) Optional Terminating Modification

    Replacement of all Thales AOA sensors having P/N C16291AA with
Thales AOA sensors having P/N C16291AB, in accordance with the
Accomplishment Instructions of the applicable service information
identified in paragraph (m)(1), (m)(2), or (m)(3) of this AD,
terminates the repetitive inspections and functional heating tests
required by paragraph (j) of this AD.
    (1) Airbus Service Bulletin A330-34-3228, dated October 7, 2009
(for Model A330-200 and -300 airplanes).
    (2) Airbus Service Bulletin A340-34-4234, dated October 7, 2009
(for Model A340-200 and -300 airplanes).
    (3) Airbus Service Bulletin A340-34-5070, dated October 9, 2009
(for Model A340-500 and -600 airplanes).

(n) Parts Installation Prohibitions

    (1) For airplanes on which only Thales P/N C16291AB AOA sensors
are installed as of the effective date of this AD: No person may
install, on any airplane, a Thales AOA sensor having P/N C16291AA as
of the effective date of this AD.
    (2) For airplanes on which the modification specified in
paragraph (m) of this AD has been done: No person may install, on
any airplane, a Thales AOA sensor having P/N C16291AA after
accomplishing the specified modification.
    (3) For airplanes on which Thales P/N C16291AA or P/N C16291AB
AOA sensors are installed as of the effective date of this AD: No
person may install, on any airplane, a UTAS AOA sensor having P/N
0861ED or P/N 0861ED2, or a SEXTANT/THOMSON AOA sensor having P/N
45150320, as of the effective date of this AD.
    (4) For airplanes on which the replacement required by paragraph
(i) of this AD has been done: No person may install, on any
airplane, a UTAS AOA sensor having P/N 0861ED or P/N 0861ED2, or a
SEXTANT/THOMSON AOA sensor having P/N 45150320, after accomplishing
the replacement.
    (5) For airplanes on which the replacement required by paragraph
(g) of this AD has been done: No person may install, on any
airplane, a UTAS AOA sensor having P/N 0861ED or P/N 0861ED2, or a
SEXTANT/THOMSON AOA sensor having P/N 45150320, after accomplishing
the replacement, except that a UTAS AOA sensor having P/N 0861ED may
be installed in the standby position of that airplane.

(o) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. In accordance with 14 CFR
39.19, send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Branch, send it to ATTN: Vladimir
Ulyanov, Aerospace Engineer, International Branch, ANM-116,
Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton,
WA 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Information
may be emailed to<EMAIL_ADDRESS>Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office. The
AMOC approval letter must specifically reference this AD.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the EASA;
or Airbus's EASA DOA. If approved by the DOA, the approval must
include the DOA-authorized signature.

(p) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2015-0134, dated July 8, 2015,
for related information. This MCAI may be found in the AD docket on
the Internet at http://www.regulations.gov by

searching for and locating Docket No. FAA-2015-4810.
    (2) For service information identified in this AD, contact
Airbus SAS, Airworthiness Office--EAL, 1 Rond Point Maurice
Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96;
fax +33 5 61 93 45 80; email<EMAIL_ADDRESS>
Internet http://www.airbus.com. You may view this service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on October 30, 2015.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-28559 Filed 11-10-15; 8:45 am]
BILLING CODE 4910-13-P


MFIR 24 2003 11: 26 _. ._

F From: ( ) Art Fraas ( ) Rich Theroux ( ) Jim Laity ( ) Amanda Lee () Q Amy Farrell ( ) Bryon Allen ( ) Margie Malanaski ( 1 David Rostker ( ) Ruth Solomon ( } EdmondToy ( ) Keith Belton P. 01/ 02 MRR 24 2G303 11: 26 P. 02,02 m . ,.


[Federal Register Volume 87, Number 99 (Monday, May 23, 2022)]
[Notices]
[Pages 31269-31275]
[FR Doc No: 2022-10962]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94929; File No. SR-PEARL-2022-21]

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

May 17, 2022.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on May 12, 2022, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 fee schedule (the
``Fee Schedule'') applicable to MIAX Pearl Equities, an equities
trading facility of the Exchange.
    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
    The purpose of the proposed rule change is to amend the Exchange's
Fee Schedule to adopt a new tiered pricing structure, ``Market Quality
Tiers'' or ``MQ Tiers,'' designed to improve market quality on the
Exchange in certain specific securities, the ``Market Quality
Securities'' or ``MQ Securities,'' and more generally in the form of an
enhanced rebate for executions of displayed orders in securities priced
at or above $1.00 per share that add liquidity to the Exchange (such
orders, ``Added Displayed Volume'') for Members that meet certain
minimum quoting requirements across a specified number of securities,
as further described below. The Exchange originally filed this proposal
on April 29, 2022 (SR-PEARL-2022-17). On May 12, 2022, the Exchange
withdrew SR-PEARL-2022-17 and resubmitted this proposal.
    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues, to
which market participants may direct their order flow. Based on
publicly available information, no single registered equities exchange
currently has more than approximately 17% of the total market share of
executed volume of equities trading, and the Exchange currently
represents approximately 1% of the overall market share.\3\
---------------------------------------------------------------------------

    \3\ See MIAX's ``The Market at a Glance'', available at https://www.miaxoptions.com/ (last visited April 27, 2022).
---------------------------------------------------------------------------

    Additionally, in response to the competitive environment, the
Exchange also offers tiered pricing, which provides Equity Members \4\
(``Members'') with opportunities to qualify for higher rebates or lower
fees when certain volume criteria and thresholds are met. Tiered
pricing provides an incremental incentive for Members to strive for
higher tier levels, which provides increasingly higher benefits or
discounts

for satisfying increasingly more stringent criteria.
---------------------------------------------------------------------------

    \4\ The term ``Equity Member'' is a Member authorized by the
Exchange to transact business on MIAX Pearl Equities. See Exchange
Rule 1901.
---------------------------------------------------------------------------

Adoption of Market Quality Tiers
    The Exchange proposes to adopt a new tiered pricing incentive,
referred to by the Exchange as the ``Market Quality Tiers'' (or ``MQ
Tiers''), in the form of an enhanced rebate for executions of Added
Displayed Volume for Members that qualify for the incentive by meeting
certain minimum quoting requirements across a specified number of
securities, as further described below. The proposed MQ Tiers are
designed to encourage Members to improve market quality by quoting at
the NBBO \5\ for a significant portion of the day (as defined below) on
the Exchange in certain specific securities, referred to by the
Exchange as MQ Securities and in all securities more generally.\6\ By
analyzing volume statistics and time at the NBBO the Exchange has
identified a number of securities for which it intends to improve these
metrics (the MQ Securities). The list of MQ Securities is published on
the Exchange's website. The Exchange believes the MQ Tiers will benefit
the Exchange and investors by providing improved trading conditions for
all market participants through narrower bid-ask spreads and increased
depth of liquidity available at the NBBO in a broad base of securities,
including the MQ Securities.
---------------------------------------------------------------------------

    \5\ With respect to the trading of equity securities, the term
``NBB'' shall mean the national best bid, the term ``NBO'' shall
mean the national best offer, and the term ``NBBO'' shall mean the
national best bid and offer. See Exchange Rule 1901.
    \6\ The Exchange notes that it will aggregate each Member's
MPIDs and view quotes by Member Firm to determine the number of
securities in which the Member meets the quoting requirements for
that day.
---------------------------------------------------------------------------

    The Exchange currently provides a standard rebate of $0.0029 per
share for executions of Added Displayed Volume.\7\ The Exchange now
proposes to introduce a tiered pricing structure in which it will
provide an enhanced rebate for executions of Added Displayed Volume to
Members that meet certain quoting requirements. Specifically, the
Exchange proposes to provide an enhanced rebate of $0.0032 in Tier 1 of
the Market Quality Tiers for executions of Added Displayed Volume \8\
if the Member's Percent Time at NBBO \9\ is at least 25% in an average
of at least 250 securities, at least 50 of which must be MQ Securities,
per trading day during the month. Similarly, the Exchange proposes to
provide an enhanced rebate of $0.0034 in Tier 2 of the Market Quality
Tiers for executions of Added Displayed Volume if the Member's Percent
Time at NBBO is at least 25% in an average of at least 1,000
securities, at least 100 of which must be MQ Securities, per trading
day during the month.
---------------------------------------------------------------------------

    \7\ The Exchange notes that the standard rebate of $0.0029 per
share for executions of Added Displayed Volume in securities priced
at or above $1.00, applicable to Liquidity Indicator Codes AA, AB,
and AC, is not changing under this proposal.
    \8\ The incentives provided for in the Market Quality Tiers will
be applicable to the following Liquidity Indicator Codes: AA, AB,
and AC. See section 1(b) Liquidity Indicator Codes and Associated
Fees of the Exchange's Fee Schedule available on its public website
(available at https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_04012022_b.pdf).
    \9\ As proposed, the term ``Percent Time at NBBO'' means the
aggregate of the percentage of time during regular trading hours
where a Member has a displayed order of at least one round lot at
the national best bid (``NBB'') or the national best offer
(``NBO'').
---------------------------------------------------------------------------

    As noted above, to qualify for the incentive provided for in Tier 1
of the Market Quality Tiers, a Member must meet the quoting requirement
in an average of at least 250 securities traded on the Exchange (the
``Tier 1 Securities Requirement''), at least 50 of which must be MQ
Securities (the ``Tier 1 MQ Securities Requirement''), per trading day
during the month. To qualify for the incentive provided for in Tier 2
of the Market Quality Tiers, a Member must meet the quoting requirement
in an average of at least 1,000 securities traded on the Exchange (the
``Tier 2 Securities Requirement''), at least 100 of which must be MQ
Securities (the ``Tier 2 MQ Securities Requirement''), per trading day
during the month. The Tier 1 Securities Requirement and the Tier 2
Securities Requirement, collectively the ``Securities Requirement'' and
the Tier 1 MQ Securities Requirement and Tier 2 MQ Securities
Requirement, collectively the ``MQ Securities Requirement'' is referred
to under this proposal as the ``Incentive Criteria.'' The proposed MQ
Tiers are designed to enhance market quality both in a broad manner
with respect to all securities traded on the Exchange, through the
Securities Requirement, and in a targeted manner with respect to
certain designated securities in which the Exchange specifically seeks
to inject additional quoting competition (i.e., the MQ Securities),
through the MQ Securities Requirement. The number of MQ Securities in
which a Member meets the quoting requirement will be counted toward
both the Securities Requirement and the MQ Securities Requirement. In
order to determine whether a Member meets the applicable Securities
Requirements during a month, the average number of securities in which
such a Member meets the quoting requirement per trading day during the
month will be calculated by summing the number of securities in which
the Member met the quoting requirement for each trading day during the
month then dividing the resulting sum by the total number of trading
days in the month.\10\
---------------------------------------------------------------------------

    \10\ As an example, in a month with 20 trading days, if a Member
satisfied the quoting requirement in 125 securities (of which 25
were MQ Securities) for ten of the trading days in the month, and
satisfied the quoting requirement in 375 securities (of which 75
were MQ Securities) for the other ten trading days in the month,
such Member would meet the quoting requirement in an average of 250
securities (i.e., ((125 x 10) + (375 x 10))/20), inclusive of an
average of 50 MQ Securities (i.e., ((25 x 10) + (75 x 10))/20), per
trading day during the month. Therefore, such Member would meet the
applicable Securities Requirements during the month and would
qualify for the Tier 1 incentive for that month under this proposal.
---------------------------------------------------------------------------

    In addition, for the purposes of determining qualification for the
MQ Tiers, the Exchange will exclude: (1) Any trading day that the
Exchange's system experiences a disruption that lasts for more than 60
minutes during Regular Trading Hours; (2) any day with a scheduled
early market close; and (3) the ``Russell Reconstitution Day''
(typically the last Friday in June). The Exchange will exclude any
trading day that the Exchange's system experiences a disruption that
lasts for more than 60 minutes during Regular Trading Hours, any day
with a scheduled early market close, and the Russell Reconstitution Day
when determining both the numerator (i.e., the number of securities in
which a Member has met the quoting requirement for each trading day
during the month) and the denominator (i.e., the total number of
trading days in the month) for purposes of calculating the average
number of securities in which such Member meets the quoting requirement
per trading day during the month.
    As further detail regarding such proposed exclusions, an Exchange
system disruption may occur, for example, where a certain group of
securities traded on the Exchange is unavailable for trading due to an
Exchange system issue. Similarly, the Exchange may be able to perform
certain functions with respect to accepting and processing orders, but
may have a failure to another significant process, such as routing to
other market centers, that would lead Members that rely on such process
to avoid utilizing the Exchange until the Exchange's entire system was
operational. The Exchange believes that these types of Exchange system
disruptions could preclude Members from participating on the Exchange
to the extent that they might have otherwise participated on such days,
and thus, the Exchange believes it

is appropriate to exclude such days when determining whether a Member
meets the applicable Securities Requirements during a month to avoid
penalizing Members that might otherwise have met such requirements.
Additionally, the Exchange believes that scheduled early market
closures, which typically are the day before, or the day after, a
holiday, may preclude some Members from participating on the Exchange
at the same level that they might otherwise. For similar reasons, the
Exchange believes it is appropriate to exclude the Russell
Reconstitution Day in the same manner, as the Exchange believes that
the Russell Reconstitution Day typically has extraordinarily high, and
abnormally distributed, trading volumes and the Exchange believes this
change to normal activity may affect a Member's ability to meet the
quoting requirement across various securities on that day. The Exchange
notes that the exclusion of any day during which the Exchange's system
experiences a disruption that lasts for more than 60 minutes during
Regular Trading Hours, any day with a scheduled early market close, and
the Russell Reconstitution Day is consistent with the methodologies
used by other exchanges when calculating certain Member trading and
other volume metrics for purposes of determining whether Members
qualify for certain pricing incentives, and the Exchange believes
application of this methodology is similarly appropriate for the
proposed MQ Tiers pricing incentive.\11\
---------------------------------------------------------------------------

    \11\ See e.g., the CBOE BZX Exchange, Inc. (``Cboe BZX'')
equities trading fee schedule on its public website (available at
https://www.cboe.com/us/equities/membership/fee_schedule/bzx/); the
Cboe EDGX Exchange, Inc. (``Cboe EDGX'') equities trading fee
schedule available on its public website (available at https://www.cboe.com/us/equities/membership/fee_schedule/edgx/); and the
MEMX LLC, (``MEMX'') equities trading fee schedule on its public
website (available at https://info.memxtrading.com/fee-schedule/).
---------------------------------------------------------------------------

    A Member that qualifies for the enhanced rebate under MQ Tier 1 by
meeting the requirements described above during a particular month will
receive an enhanced rebate of $0.0032 per share for all executions of
Added Displayed Volume (unless a higher rebate applies) \12\ during
that month. This proposed rebate is $0.0003 higher than the standard
rebate ($0.0029) that would otherwise be applicable to such executions.
Similarly, a Member that qualifies for the enhanced rebate under MQ
Tier 2 by meeting the requirements described above during a particular
month will receive an enhanced rebate of $0.0034 per share for all
executions of Added Displayed Volume (unless a higher rebate applies)
during that month. This proposed rebate is $0.0005 higher than the
standard rebate ($0.0029) that would otherwise be applicable to such
executions. The Exchange notes that the proposed enhanced rebate will
only apply to executions in securities priced at or above $1.00 per
share; executions of a qualifying Member's displayed orders that add
liquidity to the Exchange in securities priced below $1.00 per share
will continue to receive the standard rebate applicable to executions
of such orders on the Exchange (i.e., 0.05% of the total value of the
transaction).
---------------------------------------------------------------------------

    \12\ The Exchange currently provides on its Fee Schedule that,
``to the extent a Pearl Equity Member qualifies for higher rebates
and/or lower fees than those provided by a tier for which such a
Member qualifies, the higher rebate and/or lower fees shall apply.''
See the Exchange's Fee Schedule, General Notes section, on its
public website (available at https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_04012022_b.pdf).
---------------------------------------------------------------------------

    The Exchange is proposing to provide the enhanced rebate for
executions of Added Displayed Volume for qualifying Members as a means
of recognizing the value of market participants that consistently quote
at the NBBO in a large number of securities generally, and in the MQ
Securities in particular. Given the proposed Incentive Criteria for the
Market Quality Tiers a Member must make a significant contribution to
market quality by providing liquidity at the NBBO in a large number of
securities, including certain designated securities in which the
Exchange specifically seeks to inject additional quoting competition
(i.e., the MQ Securities), for a significant portion of the day.
Through the proposed enhanced rebate for qualifying Members, the
Exchange hopes to provide improved trading conditions for all market
participants through narrower bid-ask spreads and increased depth of
liquidity available at the NBBO for a large number of securities
generally, including the MQ Securities in particular.
    The Exchange notes that the proposed MQ Tiers are similar in
structure and purpose to pricing programs at other exchanges that are
designed to enhance market quality by incentivizing Members to achieve
minimum quoting standards, including minimum quoting at the NBBO in a
large number of securities generally, or certain designated securities
in particular.\13\ The Exchange further notes that, like the proposed
MQ Tiers, these programs include as an incentive the provision of an
enhanced rebate for executions of liquidity-adding displayed orders for
Members that meet the quoting and other requirements of those
programs.\14\
---------------------------------------------------------------------------

    \13\ See e.g., the Nasdaq equities trading fee schedule on its
public website, (available at http://www.nasdaqtrader.com/trader.aspx?id=pricelisttrading2) and Nasdaq Rule Equity 7, Section
114(d) describing Nasdaq's Qualified Market Maker Program, which
provides for an additional rebate (ranging from $0.0001 to $0.0002
per share) for executions of liquidity-providing displayed orders
(other than designated retail orders) in securities across all tapes
priced at or above $1.00 per share for members that, in addition to
executing transactions that represent a specified percentage of
consolidated volume and avoiding inefficient order entry practices
that place excessive burdens on Nasdaq's systems, quote at the NBBO
at least 25% of the time during regular market hours in an average
of at least 1,000 securities per day during the month; see also the
Cboe BZX equities trading fee schedule on its public website,
(available at https://www.cboe.com/us/equities/membership/fee_schedule/bzx/), which provides for an additional rebate (ranging
from $0.0001 to $0.0002 per share) under Cboe BZX's Liquidity
Management Program for executions of liquidity-providing displayed
orders in Tape B securities priced at or above $1.00 per share for
members that, in addition to adding a specified percentage of total
consolidated volume in Tape B securities and meeting certain other
quoting requirements with respect to a specified number of
securities designated as ``LMP Securities'' on a list determined by
Cboe BZX, quote at the NBBO at least 15% of the time during regular
trading hours in a specified number of such designated LMP
Securities (or achieve an alternative NBBO quoting standard
involving a size-setting element with respect to such designated LMP
Securities.); see also MEMX equities trading fee schedule on its
public website, (available at https://info.memxtrading.com/fee-schedule/), which provides for a rebate of $0.0033 per share in Tier
1 under MEMX's Displayed Liquidity Incentive (DLI) Tiers for
executions of liquidity providing displayed orders in securities
priced at or above $1.00 per share for members that have an NBBO
Time of at least 25% in an average of at least 1,000 securities, at
least 125 must be DLI Target Securities, per trading day during the
month, and a rebate of $0.0031 per share in Tier 2 for executions of
liquidity providing displayed orders in securities priced at or
above $1.00 per share for members that have an NBBO Time of at least
25% in an average of at least 250 securities, at least 75 of which
must be DLI Target Securities, per trading day during the month.
    \14\ Id.
---------------------------------------------------------------------------

    In addition to the foregoing changes, the Exchange proposes to add
to the Fee Schedule definitions of the terms, ``Market Quality
Securities,'' and ``Percent Time at NBBO,'' that are consistent with
the descriptions of those terms as set forth above, as such terms are
used above describing the calculation methodology and criteria for
determining whether a Members qualifies for a rebate under the MQ Tiers
that the Exchange is proposing to add to the Fee Schedule, as described
above. The Exchange also proposes to make a minor non-substantive edit
to the definition of ADAV to remove the parenthetical ``Exchange System
Disruption'' to avoid confusion as the Exchange has a pre-existing
definition of Exchange System Disruption. The Exchange also proposes to
adopt a new paragraph to the General Notes section

to state that, ``[f]or the purpose of determining qualification for the
Market Quality Tiers the Exchange will exclude from its calculation:
(1) Any trading day that the Exchange's system experiences a disruption
that lasts for more than 60 minutes during regular trading hours; (2)
any day with a scheduled early market close; and (3) the ``Russell
Reconstitution Day'' (typically the last Friday in June).'' The
Exchange believes this adds additional clarity regarding the
methodology used to determine qualification for the Market Quality
Tiers.
Implementation
    The proposed changes are immediately effective.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \15\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \16\ in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among its Members and issuers
and other persons using its facilities. The Exchange also believes that
the proposed rule change is consistent with the objectives of Section
6(b)(5) \17\ requirements that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, and to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4).
    \17\ 15 U.S.C 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange operates in a highly fragmented and competitive market
in which market participants can readily direct their order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of sixteen registered equities exchanges, and
there are a number of alternative trading systems and other off-
exchange venues, to which market participants may direct their order
flow. Based on publicly available information, no single registered
equities exchange currently has more than approximately 17% of the
total market share of executed volume of equities trading.\18\ Thus, in
such a low-concentrated and highly competitive market, no single
equities exchange possesses significant pricing power in the execution
of order flow, and the Exchange currently represents less than 1% of
the overall market share. The Commission and the courts have repeatedly
expressed their 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.'' \19\
---------------------------------------------------------------------------

    \18\ See supra note 3.
    \19\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37499 (June 29, 2005).
---------------------------------------------------------------------------

    The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to reduce use of certain categories of
products, in response to new or different pricing structures being
introduced into the market. Accordingly, competitive forces constrain
the Exchange's transaction fees and rebates, and market participants
can readily trade on competing venues if they deem pricing levels at
those other venues to be more favorable. The Exchange believes the
proposal reflects a reasonable and competitive pricing structure
designed to incentivize market participants to direct their order flow
to the Exchange, which the Exchange believes would enhance liquidity
and market quality in both a broad manner and in a targeted manner with
respect to the MQ Securities.
Market Quality Tiers
    The proposed Market Quality Tiers are intended to encourage Members
to promote price discovery and market quality by quoting at the NBBO
for a significant portion of each day in a large number of securities
generally, and in MQ Securities in particular, thereby benefiting the
Exchange and other investors by providing improved trading conditions
for all market participants through narrower bid-ask spreads and
increasing the depth of liquidity available at the NBBO in a broad base
of securities, including the MQ Securities. Additionally, the Exchange
believes the proposed enhanced rebates for all executions of a
qualifying Member's Added Displayed Volume will simultaneously
incentivize such Member to direct additional displayed liquidity-
providing orders to the Exchange in a more general manner to receive
such enhanced rebate. Thus, the Exchange believes that the proposed
Market Quality Tiers will promote price discovery and market quality in
the MQ Securities and more generally on the Exchange, and, further,
that the resulting tightened spreads and increased displayed liquidity
will benefit all investors by deepening the Exchange's liquidity pool,
supporting the quality of price discovery, enhancing quoting
competition across all exchanges, and promoting market transparency.
    The Exchange believes the proposed enhanced rebate of $0.0032 per
share provided to Members that qualify for Market Quality Tier 1
executions of Added Displayed Volume is reasonable, in that it does not
reflect a disproportionate increase above the standard rebate of
$0.0029 per share provided to all Members with respect to the provision
of Added Displayed Volume. Similarly, the Exchange believes the
proposed enhanced rebate of $0.0034 per share provided to Members that
qualify for Market Quality Tier 2 executions of Added Displayed Volume
is reasonable, in that it does not reflect a disproportionate increase
above the enhanced rebate of $.0.0032 per share provided to qualifying
Members in Tier 1 with respect to the provision of Added Displayed
Volume. Moreover, the Exchange believes the proposed enhanced rebate
associated with Market Quality Tier 2 is a reasonable means to
incentivize Members to increase their participation on the Exchange as
it provides Members with an additional opportunity to qualify for an
enhanced rebate for executions of Added Displayed Volume by satisfying
more stringent criteria than Tier 1.
    The Exchange further believes that the proposed criteria for Tier 1
and Tier 2 of the Market Quality Tiers, and the associated enhanced
rebate for each is reasonable, in that the proposed criteria for Tier 2
is incrementally more difficult to achieve than that of Tier 1, and
thus Tier 2 appropriately offers a higher rebate commensurate with the
corresponding higher volume threshold. Therefore, the Exchange believes
that the Market Quality Tiers, as proposed, are consistent with an
equitable allocation of fees and rebates, as the more stringent
criteria correlates with the corresponding tier's higher rebate.

    In addition the Exchange believes that it is reasonable and
consistent with an equitable allocation of fees to pay a higher rebate
for executions of Added Displayed Volume to Members that qualify for
one of the Market Quality Tiers with respect to the MQ Securities
because of the additional commitment to market quality reflected in the
associated quoting requirements. Such Members benefit all investors by
promoting price discovery and increasing the depth of liquidity
available at the NBBO and benefit the Exchange itself by enhancing its
competitiveness as a market center that attracts actionable orders.
Further, the Exchange notes that the proposed Market Quality Tiers
offers a new incentive on the Exchange that would apply uniformly to
all Members, and any Member may choose to qualify for one of the Market
Quality Tiers by meeting the associated requirements in any month,
regardless of the volume of transactions that it executes on the
Exchange. The Exchange acknowledges that firms that do not post
displayed liquidity on the Exchange or do so on a smaller scale may not
have the level of capital necessary to support meeting the proposed
Incentive Criteria, however, the Exchange believes that the
requirements are attainable for many market participants who do
actively quote on the Exchange and are reasonably related to the
enhanced market quality that the Market Quality Tiers are designed to
promote. Additionally, the Exchange notes that Members that do not meet
the proposed Incentive Criteria may still qualify for a rebate that is
higher than the standard rebate for executions of Added Displayed
Volume through the Add Volume Tiers Incentive, which does not require a
Member to consistently quote at the NBBO across a broad range of
securities. Accordingly, the Exchange believes that it is consistent
with an equitable allocation of fees and is not unfairly discriminatory
to pay a higher rebate in comparison with the rebate paid to other
Members for executions of displayed liquidity providing orders in
recognition of the benefits to the Exchange and market participants,
particularly as the magnitude of the additional rebate is not
unreasonably high, and is instead, reasonably related to such enhanced
market quality.
    The Exchange also believes that including in the proposed Market
Quality Tiers criteria a quoting requirement for certain specified
securities (i.e., the MQ Securities), in addition to the more general
requirements of 250 securities in Tier 1 and 1,000 securities in Tier
2, is equitable and not unfairly discriminatory because the Exchange
has identified the MQ Securities as securities in which it would like
to inject additional quoting competition, which the Exchange believes
will generally act to narrow spreads, increase size at the NBBO, and
increase liquidity depth in such securities, thereby increasing the
attractiveness of the Exchange as a destination venue with respect to
such securities. Accordingly, the Exchange believes that this aspect of
the proposal is reasonable, equitably allocated, and not unfairly
discriminatory because it is consistent with the overall goals of
enhancing market quality.
    Furthermore, as noted above, the proposed Market Quality Tiers are
similar in structure and purpose to pricing programs in place at other
exchanges that are designed to enhance market quality.\20\
Specifically, these programs, like the proposed Market Quality Tiers,
provide a higher rebate for executions of liquidity-adding displayed
orders for members that achieve minimum quoting standards, including
minimum quoting at the NBBO in a large number of securities generally,
or certain designated securities in particular.\21\ The Exchange also
notes that the proposed Market Quality Tiers are not dissimilar from
volume-based rebates and fees which have been widely adopted by
exchanges \22\ and are equitable and not unfairly discriminatory
because they are generally open to all members on an equal basis and
provide higher rebates and/or lower fees that are reasonably related to
the value of an exchange's market quality. Much like volume-based tiers
are designed to incentivize higher levels of liquidity provision, the
proposed Market Quality Tiers are designed to incentivize enhanced
market quality on the Exchange through tighter spreads, greater size at
the NBBO, and greater quoting depth in a large number of securities
generally, and in MQ Securities specifically, through the provision of
an enhanced rebate for all executions of a qualifying Member's Added
Displayed Volume, where such rebate will in turn incentivize higher
levels of displayed liquidity provision in a general manner.
Accordingly, the Exchange believes that the proposed Market Quality
Tiers would act to enhance liquidity and competition across exchanges
in the Market Quality Tiers and enhance liquidity provision in all
securities on the Exchange more generally by providing a rebate
reasonably related to such enhanced market quality to the benefit of
all investors, thereby promoting the principles discussed in Sections
6(b)(4) and 6(b)(5) of the Act.\23\
---------------------------------------------------------------------------

    \20\ See supra note 11.
    \21\ Id.
    \22\ See, e.g., the Cboe BZX equities trading fee schedule on
its public website (available at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/); the Cboe EDGX equities
trading fee schedule on its public website (available at https://markets.cboe.com/us/equities/membership/fee_schedule/edgx/); and the
MEMX equities trading fee schedule on its public website (available
at https://info.memxtrading.com/fee-schedule/).
    \23\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange also believes that the calculation methodology and
criteria for determining whether a Member satisfies the requirements to
qualify for the Market Quality Tiers, as well as the definitions of
terms that are used, is reasonable, equitable, and non-discriminatory
because the definitions are designed to ensure that the Fee Schedule is
clear and as easily understandable as possible with respect to the
requirements of the proposed Market Quality Tiers. Additionally, the
Exchange believes that excluding (1) any trading day that the
Exchange's system experiences a disruption that lasts for more than 60
minutes during Regular Trading Hours; (2) any day with a scheduled
early market close; and (3) the Russell Reconstitution Day, when
determining whether a Member qualifies for a proposed Market Tier
during a month is reasonable, equitable, and non-discriminatory
because, as explained above, the Exchange believes doing so would help
to avoid penalizing Members that might otherwise have met the
requirements to qualify for a proposed Market Quality Tier due to
Exchange system disruptions, abbreviated trading days, and/or abnormal
market conditions. For similar reasons, the Exchange believes it is
appropriate to exclude the Russell Reconstitution Day, as the Exchange
believes the change to normal trading activity as a result of the
Russell Reconstitution may affect a Member's ability to meet the
quoting requirement across various securities on that day. The Exchange
notes that its proposed calculation methodology is consistent with the
methodologies used by other exchanges when calculating certain member
trading and other volume metrics for purposes of determining whether
members qualify for certain pricing incentives.\24\
---------------------------------------------------------------------------

    \24\ See supra note 13.
---------------------------------------------------------------------------

    For the reasons discussed above, the Exchange submits that the
proposal satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of
the Act in that it provides for the equitable allocation of

reasonable dues, fees and other charges among its Members and other
persons using its facilities and is not designed to unfairly
discriminate between customers, issuers, brokers, or dealers. As
described more fully below in the Exchange's statement regarding the
burden on competition, the Exchange believes that its transaction
pricing is subject to significant competitive forces, and that the
proposed fees and rebates described herein are appropriate to address
such forces.

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

    The Exchange does not believe that the proposed change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. Instead, as discussed above, the proposal
is intended to enhance market quality on the Exchange in a large number
of securities generally, and in the MQ Securities specifically, and to
encourage Members to maintain or increase their order flow on the
Exchange, thereby promoting price discovery and contributing to a
deeper and more liquid market to the benefit of all market
participants. As a result, the Exchange believes the proposal would
enhance its competitiveness as a market that attracts actionable
orders, thereby making it a more desirable destination venue for its
customers. For these reasons, the Exchange believes that the proposal
furthers the Commission's goal in adopting Regulation NMS of fostering
competition among orders, which promotes ``more efficient pricing of
individual stocks for all types of orders, large and small.'' \25\
---------------------------------------------------------------------------

    \25\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 47396 (June 29, 2005).
---------------------------------------------------------------------------

Intramarket Competition
    The Exchange believes that the proposal would incentivize Members
to promote price discovery and market quality by quoting at the NBBO
for a significant portion of each day in a large number of securities,
including the MQ Securities, to maintain or increase their order flow
on the Exchange, thereby contributing to a deeper and more liquid
market to the benefit of all market participants and enhancing the
attractiveness of the Exchange as a trading venue, which the Exchange
believes, in turn, would continue to encourage market participants to
direct additional order flow to the Exchange. Greater liquidity
benefits all Members by providing more trading opportunities and
encourages Members to send additional orders to the Exchange, thereby
contributing to robust levels of liquidity, which benefits all market
participants. The opportunity to qualify for one of the Market Quality
Tiers and thus receive the corresponding enhanced rebate for executions
of Added Displayed Volume would be available to all Members that meet
the associated requirements in any month. Further, as noted above, the
Exchange believes that the proposed criteria for Tier 1 and Tier 2
(which has slightly more stringent criteria than Tier 1) of the Market
Quality Tiers, are attainable for Members and that the respective
enhanced rebates provided under each tier are reasonably related to the
enhanced market quality that each tier is designed to promote. As such,
the Exchange believes the proposed changes would not impose any burden
on intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Intermarket Competition
    The Exchange believes its proposal will benefit competition, and
the Exchange notes that it operates in a highly competitive market.
Members have numerous alternative venues they may participate on and
direct their order flow to, including fifteen other equities exchanges
and numerous alternative trading systems and other off-exchange venues.
As noted above, no single registered equities exchange currently has
more than 17% of the total market share of executed volume of equities
trading.\26\ Thus, in such a low-concentrated and highly competitive
market, no single equities exchange possesses significant pricing power
in the execution of order flow. Moreover, the Exchange believes that
the ever-shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow in response
to new or different pricing structures being introduced to the market.
Accordingly, competitive forces constrain the Exchange's transaction
fees and rebates generally, including with respect to executions of
Added Displayed Volume, and market participants can readily choose to
send their orders to other exchanges and off-exchange venues if they
deem fee levels at those other venues to be more favorable.
---------------------------------------------------------------------------

    \26\ See supra note 3.
---------------------------------------------------------------------------

    As described above, the proposal is designed to enhance market
quality on the Exchange and to encourage additional order flow and
quoting activity on the Exchange and to promote market quality through
pricing incentives that are comparable to, and competitive with,
pricing programs in place at other exchanges with respect to executions
of Added Displayed Volume.\27\ Accordingly, the Exchange believes the
proposal would not be a burden on, but rather promote, intermarket
competition by enabling the Exchange to better compete with other
exchanges that offer similar incentives to market participants that
enhance market quality and/or achieve certain volume criteria and
thresholds.
---------------------------------------------------------------------------

    \27\ See supra note 13.
---------------------------------------------------------------------------

    Additionally, the Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
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.'' \28\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
circuit stated: ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their routing agents, have a wide range of choices of where to
route orders for execution'; [and] `no exchange can afford to take its
market share percentages for granted' because `no exchange possess a
monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers' . . .''.\29\ Accordingly, the Exchange does not believe
its proposed pricing changes impose any burden on competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \29\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSE-2006-21)).
---------------------------------------------------------------------------

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,\30\ and Rule 19b-4(f)(2) \31\ 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.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \31\ 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 protected]. Please include
File Number SR-PEARL-2022-21 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-2022-21. 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-2022-21 and should be submitted on
or before June 13, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10962 Filed 5-20-22; 8:45 am]
BILLING CODE 8011-01-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on April 2, 2004

NOTICE OF ACTION TAKEN – DOCKET OST 2001-11101

 _______________________________________________________________________
____________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  AEROLITORAL, S.A. de C.V. and AEROVIAS de MEXICO, S.A. de
C.V.

Date Filed: December 18, 2003

Relief requested:  Exemption from 49 USC section 41301 to permit
Aerolitoral to continue to conduct, using small equipment (see below),
scheduled, combination services between Hermosillo, Mexico, and the U.S.
coterminal points Los Angeles/Ontario, California; and an exemption to
permit Aeromexico to continue to conduct scheduled, combination service
between Hermosillo and Los Angeles (operated only by code-share with
Aerolitoral).

Applicant representative(s):  William C. Evans,<PHONE_NUMBER>       DOT
analyst:  Allen F. Brown,<PHONE_NUMBER>

Responsive pleadings:  None.

	DISPOSITION

Action:  Approved.
         Action date:  April 2, 2004

Effective dates of authority granted:  April 2, 2004, through April 2,
2005.

Basis for approval (bilateral agreement/reciprocity):  United
States-Mexico Air Transport Services Agreement.

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:  Standard exemption
conditions.

Special conditions:  In the conduct of these operations, Aerolitoral may
use aircraft capable of carrying no more than 60 passengers and having a
maximum payload capacity of no more than 18,000 pounds.  Also,
Aeromexico may only conduct its operations by code-share with
Aerolitoral.

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

________________________________________________________________________
________________________________________________________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) the applicant was qualified to perform its proposed
operations; (3) grant of the authority was consistent with the public
interest; and (4) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this
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