Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing of a Proposed Rule Change To Allow Post-Only Orders in Sub-Dollar Securities

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104462; File No. SR-PEARL-2025-50]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing of a Proposed Rule Change To Allow Post-Only Orders in Sub-Dollar Securities</SUBJECT> <DATE>December 19, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on December 10, 2025, MIAX PEARL, LLC (“MIAX Pearl” or the “Exchange”) filed with the Securities and Exchange Commission (the “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. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange proposes to amend subparagraph (c)(2) of Exchange Rule 2614, Orders and Order Instructions, to allow the Post Only order instruction to be applied to orders in securities priced below $1.00 on its equity trading platform (referred to herein as “MIAX Pearl Equities”). <SU>3</SU> <FTREF/> The Exchange also proposes to adopt Exchange Rule 2614(c)(2)(i)(A) to reprice non-displayed orders in securities priced below $1.00 to the locking price to help reduce the occurrence of an internally crossed book. Additionally, the Exchange proposes to make a related change to subparagraph (a)(4)(iv) of Exchange Rule 2617, Order Execution and Routing, to also apply to orders in securities priced below $1.00 with a Post Only order instruction to help alleviate an internally locked or crossed book in the rare event they do occur. These proposed changes are designed to allow the Exchange to better compete with other exchanges with like functionality for order flow in securities trading below $1.00 while also seeking to attract more liquidity in securities that trade below $1.00 onto an exchange, where those orders may benefit from price discovery and improved market transparency. <FTNT> <SU>3</SU>  All references to the “Exchange” in this filing refer to MIAX Pearl Equities. Any references to the options trading facility of MIAX PEARL, LLC will specifically be referred to as “MIAX Pearl Options.” </FTNT> The text of the proposed rule change is available on the Exchange's website at <E T="03">https://www.miaxglobal.com/markets/us-equities/pearl-equities/rule-filings,</E> at MIAX Pearl's principal office. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> In its filing with the Commission, MIAX Pearl 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. MIAX Pearl has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> Currently, with the exception of the Post Only instruction (described below), all order types and order instructions are available to orders in all securities regardless of price. Only the Post Only instruction is currently limited to securities priced at or above $1.00. The Exchange proposes to remove this exception and amend subparagraph (c)(2) of Exchange Rule 2614, Orders and Order Instructions, to allow the Post Only order instruction to be applied to orders in securities priced below $1.00 on MIAX Pearl Equities. As explained below, this portion of the proposal is currently available on other equities exchanges. This proposal is, therefore, designed to increase competition among exchanges for order flow in securities priced below $1.00 and to make all order types and order instructions available equally to orders in all securities regardless of the order's price. This proposal is not intended to encourage an increase in the overall volume or order flow in sub-dollar securities. Trading in sub-dollar securities both on- and off-exchange has grown significantly since the Exchange adopted Exchange Rule 2614(c)(2) and launched operations in September 2020. For example, average daily sub-dollar trading volume comprised approximately 9% of the overall daily volume in September 2025. In fact, the Exchange found that overall volume in sub-dollar securities has been slowly decreasing since June 2025 from approximately 14% to 9% in September 2025. Meanwhile, off-exchange market share in sub-dollar securities remained high averaging over 60%. <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU>   <E T="03">See</E> MEMX LLC's December 2024 Exchange Highlights, dated January 10, 2025, <E T="03">available at https://memx.com/exchange-highlights-key-trading-trends-that-defined-another-banner-year-in-the-markets/.</E> </FTNT> There are numerous other factors that contribute to sub-dollar trading volumes, the majority of which occurs off-exchange. <SU>5</SU> <FTREF/> The Exchange believes this proposal will increase exchange competition by allowing the Exchange to provide functionality that would allow it to attract a greater slice of the current volume in sub-dollar securities by encouraging market participants to send their sub-dollar trading volume to an exchange-level pool of liquidity, rather than the opaque off-exchange trading venues ( <E T="03">i.e.,</E> dark pools), which are less transparent. In addition, various Equity Members  <SU>6</SU> <FTREF/> have recently requested the Exchange modify its functionality to allow the Post Only instruction to be available for orders in securities priced below $1.00. <FTNT> <SU>5</SU>  The increase in sub-dollar trading volume has not been due to any new or novel exchange order types, but rather increased retail participation, especially since the Covid-19 pandemic and social media-fueled hype; rise of off-exchange trading, including dark pools; reverse stock splits; and high market volatility causing prices to fall and making them prone to trading below $1.00. <E T="03">See, e.g.,</E> U.S Equities Volume Drivers: Retail Trading in Subdollar Securities, dated November 24, 2024, <E T="03">available at https://www.cboe.com/insights/posts/u-s-equities-volume-drivers-retail-trading-in-subdollar-securities/; and</E> Off Exchange Trading Increases Across all Types of Stocks, dated February 13, 2025, <E T="03">available at https://www.nasdaq.com/articles/exchange-trading-increases-across-all-types-stocks#:~:text=The%20rise%20is%20largely%20driven,ATS%20trades%20printed%20off%2Dexchange.</E> </FTNT> <FTNT> <SU>6</SU>  The term “Equity Member” is a Member authorized by the Exchange to transact business on MIAX Pearl Equities. <E T="03">See</E> Exchange Rule 1901. </FTNT> The Exchange notes that differences exist between the market structures for securities priced at or above $1.00 and those below $1.00 that impact how the Post Only order instruction may function. This includes different fee levels and minimum price increments which allow for both an internally locked or crossed market to be caused by an order with a Post Only instruction priced below $1.00. Meanwhile, these different fee levels and minimum price increments allow for only an internally locked market to be caused by an order with a Post Only instruction priced at or above $1.00. The Exchange reviewed its data and found that internally locked and crossed markets are rare events and should continue to be rare under this proposal. Based on the Exchange's data for securities priced at or above $1.00, an internally non-displayed locked or crossed market caused by an order that includes a Minimum Execution Quantity (“MEQ”) instruction (described below) or an internally non-displayed locked market caused by an order with a Post Only instruction (also described below) is extremely rare. <SU>7</SU> <FTREF/> For securities priced at or above $1.00, the Exchange reviewed a sampling of data that included high volume securities with increased usage of the Post Only and MEQ instructions on active trading days. The selected securities also experienced an increased usage of the MEQ and/or Post Only instructions. Based on this sampling, the Exchange experienced an internally locked book for the selected securities priced at or above $1.00 in approximately 1.00% of all order book updates and an internally crossed book in approximately 0.10% of all order book updates. <FTNT> <SU>7</SU>  The Exchange notes that it reviewed these two order instructions because they are the only instructions available on the Exchange that may cause an internally non-displayed locked or crossed book. </FTNT> The Exchange conducted a similar review for securities priced below $1.00 but focused on a sampling of data that included high volume sub-dollar securities on active trading days that experienced an increased usage of the MEQ instruction. Unlike the above review of securities priced at or above $1.00, the Exchange could not review securities priced below $1.00 with a Post Only instruction because the Exchange does not currently offer such functionality and proposes to do so herein. Based on this review, the Exchange found that an internally non-displayed locked or crossed book in sub-dollar securities caused by an order that includes an MEQ instruction did not occur during a sampling of active trading days in any of the high volume sub-dollar securities the Exchange observed. < ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 99k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━