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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices notice is hereby given that on February 11, 2021, MIAX PEARL, LLC MIAX
PEARL or Exchange filed with the Securities and Exchange Commission Commission a proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposed rule change to Exchange Rule 200d requiring membership in another national securities exchange or association.
The text of the proposed rule change is available on the Exchanges website at http www.miaxoptions.com/rulefilings/pearl at MIAX PEARLs principal office, and at the Commissions Public Reference Room.
II. Self-Regulatory Organizations 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 Organizations 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 Exchange Rule 200d requiring membership in another national securities exchange or association. In sum, Exchange Rule 200d currently requires that Trading Permit 3 holders be a member in another registered options exchange, other than the Exchanges affiliates, the Miami International Securities Exchange, LLC
MIAX or MIAX Emerald, LLC
Emerald, or the Financial Industry Regulatory Authority, Inc. FINRA
where such other registered options exchange has not been designated by the Commission, pursuant to Rule 17d1
3 The term Trading Permit means a permit issued by the Exchange that confers the ability to transact on the Exchange. See Exchange Rule 100.

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under the Exchange Act, to examine Members for compliance with financial responsibility rules. Exchange Rule 200d, therefore, does not allow a Trading Permit Holder that is not a FINRA member 4 to satisfy this requirement by being a member of a registered equities exchange. The Exchange believes that requiring membership in another registered options exchange is unnecessarily too restrictive and is also not in line with similar membership requirements at other exchanges.5 Therefore, to enable more broker-dealers to become Trading Permit holders, the Exchange proposes to amend Exchange Rule 200d to require membership in a registered national securities exchange, rather than only registered options exchanges.6
Exchange Rule 200d will continue to require Trading Permit holders to be FINRA members where the registered national securities exchange that they maintain membership is not designated by the Commission to examine members for compliance with financial responsibility rules pursuant to Rule 17d1 of the Exchange Act.7
2. Statutory Basis The proposed rule change is consistent with Section 6b of the Act,8
in general, and furthers the objectives of Section 6b5,9 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 regulating, clearing, settling, processing information with respect to, and 4 A Trading Permit Holder that does not transact business with the public is not required to become a FINRA member. Section 15b8 of the Act that requires members that transact business with the public to be a member of FINRA. 15 U.S.C.
78ob8.
5 See Cboe EDGX Exchange, Inc. EDGX Rule 2.5a4, Cboe EDGA Exchange, Inc. EDGA Rule 2.5a4, Cboe BZX Exchange, Inc. BZX Rule 2.5a4, Cboe BYX Exchange, Inc. BYX, collectively with EDGX, EDGA, and BZX, the Cboe Equity Exchanges Rule 2.5a4, MEMX LLC
MEMX Rule 2.5a4, Investors Exchange, Inc.
IEX Rule 2.130a, Long Term Stock Exchange, Inc. LTSE Rule 2.130 and BOX Exchange LLC
BOX Rule 2020a.
6 The Exchange also propose to include the phrase or FINRA at the end of Exchange Rule 200ds title.
7 Rule 17d1 of the Act authorizes the Commission to name a single Self-Regulatory Organization SRO as the Designated Examining Authority DEA to examine members of more than one SRO common member for compliance with the financial responsibility requirements imposed by the Exchange Act, or by Commission or SRO rules. 17 CFR 240.17d1. The Exchange does not currently act as the DEA for any Trading Permit holder.
8 15 U.S.C. 78fb.
9 15 U.S.C. 78fb5.

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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.
The Exchange believes that the proposed rule change would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest by expanding the number of registered brokers-dealers that would be eligible to become Trading Permit holders and trade on the Exchange, while maintaining high regulatory standards and a comprehensive regulatory regime with respect to such firms. Exchange Rule 200d was too restrictive by limiting membership in another registered national securities exchange to only registered options exchanges and, therefore, unnecessarily precluded broker-dealers who were members of a registered equities exchange from becoming Trading Permit holders. As mentioned above, Exchange Rule 200d will continue to require Trading Permit holders to be FINRA
members where the registered national securities exchange that they maintain membership is not designated by the Commission to examine members for compliance with financial responsibility rules pursuant to Rule 17d1 of the Exchange Act. This will ensure that those Trading Permit holders that are not FINRA members maintain membership at a registered options or equities exchange that may be designated as their DEA by the Commission. The proposed rule change would also contribute to perfecting the mechanism of a free and open market and a national market system, which outcomes are also consistent with the protection of investors and the public interest, by aligning the Exchanges membership requirements more closely with those of other national securities exchanges.10
The proposed rule change would also not unfairly discriminate between or among market participants because both current and prospective Trading Permit holders would be subject to the rule. All Trading Permit holders would be regulated in the same manner by the Exchange should they be a member of another registered national options or equities exchange.
B. Self-Regulatory Organizations Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose 10 See
E:FRFM23FEN1.SGM

supra note 5.

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