Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 519C, Mass Cancellation of Trading Interest

[Federal Register Volume 91, Number 107 (Thursday, June 4, 2026)]

[Notices]

[Pages 33832-33836]

From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ]

[FR Doc No: 2026-11145]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-105594; File No. SR-MIAX-2026-22]

Self-Regulatory Organizations; Miami International Securities

Exchange, LLC; Notice of Filing and Immediate Effectiveness of a

Proposed Rule Change To Amend Exchange Rule 519C, Mass Cancellation of

Trading Interest

June 1, 2026.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice

is hereby given that on May 19, 2026, Miami International Securities

Exchange, LLC (``MIAX'' or ``Exchange'') filed with the Securities and

Exchange Commission (``Commission'') the proposed rule change as

described in Items I, II, and III below, which Items have been prepared

by the Exchange. The Commission is publishing this notice to solicit

comments on the proposed rule change from interested persons.

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\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.

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[[Page 33833]]

I. Self-Regulatory Organization's Statement of the Terms of Substance

of the Proposed Rule Change

The Exchange proposes to amend Exchange Rule 519C, Mass

Cancellation of Trading Interest.

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 Exchange proposes to amend Rule 519C, Mass Cancellation of

Trading Interest, to adopt a new Selective Liquidity Auto Purge

(``SLAP'') feature, which provides more granular mass cancellation

functionality. Currently, Members \3\ may submit a mass cancellation

request via the MIAX Express Interface (``MEI'') \4\ using the Mass

Liquidity Cancel Request--Simple and Complex message. The Mass

Liquidity Cancel Request message contains a Simple Mass Cancel field

which allows the Member to determine the scope of the mass cancel

request. For example, populating the Simple Mass Cancel Scope field

with an ``Y'' will instruct the System \5\ to cancel all Standard

quotes \6\ and eQuotes; \7\ populating the field with a ``Q'' will

instruct the System to cancel all Standard quotes only.

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\3\ The term ``Member'' means an individual or organization

approved to exercise the trading rights associated with a Trading

Permit. Members are deemed ``members'' under the Exchange Act. See

Exchange Rule 100.

\4\ The MIAX Express Interface (MEI) is a messaging interface

that MIAX members that are approved as Market Makers use to submit

quotes for trading on the MIAX Options Market. See MIAX Express

Interface for Quoting and Trading Options, MEI Interface

Specification, version 2.10a, 4/8/2024 available online at https://www.miaxglobal.com/sites/default/files/job-files/MIAX_Express_Interface_MEI_v2.10a.pdf .

\5\ The term ``System'' means the automated trading system used

by the Exchange for the trading of securities. See Exchange Rule

100.

\6\ See Section 4.1.9, Mass Liquidity Cancel Request--Simple and

Complex, in the MIAX Express Interface for Quoting and Trading

Options, MEI Interface Specification, version 2.10a, 4/8/2024

available online at https://www.miaxglobal.com/sites/default/files/job-files/MIAX_Express_Interface_MEI_v2.10a.pdf .

\7\ An eQuote is a quote with a specific time in force that does

not automatically cancel and replace a previous Standard quote or

eQuote. See Exchange Rule 517(a)(2).

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The Exchange now proposes to adopt new paragraph (d) to Exchange

Rule 519C, to adopt the SLAP feature. The SLAP feature, the use of

which is optional, will provide more granular mass cancellation

functionality by allowing users to mass cancel specific groups of

Standard quotes \8\ as determined by the Member on a quote-by-quote

basis. Standard quotes submitted via the MIAX Express Interface may

optionally contain one or more SLAP codes from 1 through 8.\9\ Each

individual Standard quote can be part of eight (8) unique SLAP groups

identified by their SLAP code (numbered 1 through 8).\10\

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\8\ A Standard quote is a quote submitted by a Market Maker that

cancels and replaces the Market Maker's previous Standard quote, if

any. See Exchange Rule 517(a)(1).

\9\ A Standard quote may contain multiple SLAP codes.

\10\ The Exchange notes that there is no limit on the number of

Standard quotes that may be included in a SLAP group.

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To remove Standard quotes with a SLAP code, a SLAP request is sent

to the System containing the MPID,\11\ underlying, and SLAP code of the

Standard quotes to be removed from the System. Following completion of

processing the SLAP request all new inbound Standard quotes with

matching criteria submitted to the System will be blocked. The System

will provide a notification to the requestor upon completion of the

SLAP request. A SLAP reset request must be submitted to the System to

resume entry of Standard quotes for the same MPID, underlying, and SLAP

code. Standard quotes received for the same MPID, underlying, and SLAP

code prior to a SLAP reset will be rejected. eQuotes will not be

eligible to receive a SLAP code.

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\11\ The term ``MPID'' means unique Market Participant

Identifier. See Exchange Rule 519C(a).

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To facilitate SLAP processing the Exchange has amended and enhanced

existing MIAX Express Interface messages. Specifically, a Member will

use the Simple Bulk Quote Message in MEI to send a quote to the System.

A new field, ``SLAP Codes,'' has been added to the message, which will

allow the Member to identify the quote with a SLAP Code of 1 through 8,

as desired. A Member will use the Mass Liquidity Cancel Request--Simple

and Complex message in MEI to remove quotes with the designated SLAP

Code. The Simple Mass Cancel field of the Mass Liquidity Cancel

Request--Simple and Complex message has been enhanced to include new

value ``S'' to indicate that the Mass Liquidity Cancel Request--Simple

and Complex message is a Selective Liquidity Auto Purge (``SLAP

request'').

The System will notify the Member that the SLAP request has been

processed using the existing Mass Liquidity Cancel Response message.

Additionally, the Mass Liquidity Cancel Response message has been

modified to include new responses specifically related to SLAP requests

to provide Members with more specific information regarding the status

of their SLAP request should it not be successfully executed.

The Member will submit the existing Liquidity Protection Reset

Request message to re-enable the System to process Standard quotes with

a SLAP code. The Liquidity Protection Reset Request message has been

enhanced to include a value of ``S'' in the Simple Liquidity Reset

field to indicate that the reset is for SLAP. Additionally, the

Liquidity Protection Reset Request message includes SLAP Codes field to

allow a reset for specific SLAP code groups.

The SLAP code is an additional, optional, field and as such Members

may (i) include a SLAP code on a Standard quote; (ii) replace a

Standard quote that does not contain a SLAP code to assign a SLAP code;

(iii) replace a Standard quote that has a SLAP code to change it to a

different SLAP code; or (iv) replace a Standard quote that contains a

SLAP code to remove it.

To implement the SLAP feature the Exchange proposes to adopt new

paragraph (d) to Rule 519C, Mass Cancellation of Trading Interest, to

provide that a Member may use the Selective Liquidity Auto Purge

(``SLAP'') feature for Standard quotes delivered via the MIAX Express

Interface. Standard quotes submitted to the System may optionally

contain one or more SLAP codes numbered 1 through 8. When a Member

submits a SLAP request, Standard quotes with the corresponding MPID,

underlying, and SLAP code will be removed from the System and new

inbound Standard quotes with matching criteria will be blocked. The

System will provide a notification message to the Member regarding the

status of the SLAP request. A Member must submit a SLAP reset

[[Page 33834]]

request to the System to enable new incoming Standard quotes for the

same MPID, underlying, and SLAP code. eQuotes are not eligible to

receive a SLAP code.

The Exchange has analyzed its capacity and represents that it has

the necessary systems capacity to handle the potential additional

message traffic that may arise from the cancellation of quotes as a

result of a SLAP request being received.

Implementation

The Exchange proposes to implement this functionality in Q3 of 2026

and will issue a Regulatory Circular notifying market participants of

the exact date at least 30 days prior to implementation.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent

with Section 6(b) of the Act,\12\ in general, and furthers the

objectives of Section 6(b)(5) of the Act,\13\ in particular, in that 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

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 also believes the proposed rule change is consistent with

the Section 6(b)(5) \14\ requirement that the rules of an exchange not

be designed to permit unfair discrimination between customers, issuers,

brokers, or dealers.

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\12\ 15 U.S.C. 78f(b).

\13\ 15 U.S.C. 78f(b)(5).

\14\ Id.

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The Exchange believes the proposed changes remove impediments to

and perfects the mechanisms of a free and open market and a national

market system and, in general, protects investors and the public

interest by providing Market Makers with an additional risk management

tool. Market Makers on the Exchange connect to the System via the MIAX

Express Interface and have a heightened obligation on the Exchange and

are required to submit continuous two-sided quotations in a certain

number of series in their appointed classes for a certain percentage of

time in each trading session,\15\ rendering them vulnerable to risk

from market conditions. Market Makers are vulnerable to risk from

market events that may cause them to receive executions before they can

appropriately adjust their exposure in the market. The proposed rule

change should instill additional confidence in Market Makers that

submit quotes to the Exchange that there are adequate risk protections

in place, and thus should encourage Market Makers to provide liquidity

to the Exchange, thereby improving market quality for all participants.

The Exchange believes that the proposed risk protection functionality

promotes just and equitable principles of trade and helps to perfect

the mechanisms of a free and open market and a national market system.

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\15\ See Exchange Rule 604(e).

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Without adequate risk management tools Market Makers could reduce

the size of their quotations which could undermine the quality of the

markets available to customers and other market participants. The

ability of a Market Maker to engage the SLAP feature is a valuable tool

in assisting Market Makers in risk management. The proposed rule change

removes impediments to and perfects the mechanism of a free and open

market by giving Market Makers greater control over their quotations in

the market thereby removing impediments to and helping perfect the

mechanisms of a free and open market and national market system and, in

general, protecting investors and the public interest. In addition,

providing Market Makers with more tools for managing risk will

facilitate transactions in securities because, as noted above, the

Market Makers will have more confidence that protections are in place

that reduce the risks from market events.

The Exchange believes its proposal is not unfairly discriminatory

to EEMs as Market Makers have a heightened obligation on the Exchange

and are obligated to submit continuous two-sided quotations in a

certain number of series in their appointed classes for a certain

percentage of time in each trading session,\16\ rendering them

vulnerable to risk from market conditions. As such it is not

unreasonable to provide Market Makers with certain tools to help Market

Makers manage their market risk.

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\16\ See supra note 15.

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The ability of a Market Maker to engage the SLAP feature is a

valuable tool in assisting Market Makers in risk management. Without

adequate risk management tools Market Makers could reduce the size of

their quotations which could undermine the quality of the markets

available to customers and other market participants. The proposed rule

change removes impediments to and is designed to perfect the mechanisms

of a free and open market by giving Market Makers the ability to

further refine their risk protections from an option class level to a

specific subset of user defined groups. Accordingly, the SLAP feature

is designed to provide Market Makers with greater control over their

Standard quotes in the market, thereby removing impediments to and

helping to perfect the mechanisms of a free and open market and a

national market system and, in general, protecting investors and the

public interest.

In addition, providing Market Makers with more tools for managing

risk will facilitate transactions in securities because, as noted

above, Members will have more confidence that protections are in place

that reduce the risks from market events. As a result, the new

functionality has the potential to promote just and equitable

principles of trade.

The proposed rule change removes impediments to and is designed to

perfect the mechanisms of a free and open market by giving Market

Makers more granular control over their Standard quotes by allowing

Market Makers to create custom groupings of Standard quotes by MPID and

underlying, and additional criteria, such as option or side of the

market (buy or sell), by assigning up to eight different SLAP codes to

each Standard quote. This flexibility allows Market Makers to group

specific subsets of their Standard quotes based on their own risk

requirements. The ability to group Standard quotes allows for the

flexibility to submit cancel requests for a subset of Standard quotes

tailored to varying levels of risk tolerance.

The Exchange believes the proposed changes 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, and promote a fair and orderly market by excluding eQuotes

from SLAP functionality. eQuotes are used on the Exchange for specific

purposes and have default time in force values which correspond to the

specific purpose of the eQuote.

Specifically, the Exchange supports Opening Only eQuotes (``OPG),

Auction or Cancel eQuotes (``AOC''), Immediate or Cancel eQuotes, and

Intermarket Sweep eQuotes. An OPG eQuote is a quote that can be

submitted by a Market Maker only during the Opening as set forth in

Rule 503. An OPG eQuote does not automatically cancel or replace the

Market Maker's previous Standard quote or eQuote. OPG eQuotes

automatically

[[Page 33835]]

expire at the end of the Opening Process.\17\ An AOC eQuote is a quote

submitted by a Market Maker to provide liquidity in a specific Exchange

process (such as the Opening Imbalance Process described in Rule 503)

with a time in force that corresponds with the duration of that event

and will automatically expire at the end of that event. AOC eQuotes are

not displayed to any market participant, are not included in the MBBO

and therefore are not eligible for trading outside of the event. An AOC

eQuote does not automatically cancel or replace the Market Maker's

previous Standard quote or eQuote.\18\ An immediate or cancel or

``IOC'' eQuote is an eQuote submitted by a Market Maker that must be

matched with another quote or order for an execution in whole or in

part upon receipt into the System. Any portion of the IOC eQuote not

executed will be immediately canceled. An IOC eQuote does not

automatically cancel or replace the Market Maker's previous Standard

quote or eQuote. An IOC eQuote is not valid during the opening rotation

process described in Rule 503.\19\ A Market Maker may submit an

intermarket sweep eQuote to the Exchange only if it has simultaneously

routed one or more Intermarket Sweep Orders to execute against the full

displayed size of any Protected Bid (as defined in Rule 1400(p)), in

the case of an intermarket sweep offer to sell, or Protected Offer (as

defined in Rule 1400(p)), in the case of an intermarket sweep bid to

buy, an option with a price that is superior to the intermarket sweep

eQuote. Intermarket sweep eQuotes that are not designated as immediate

or cancel will be cancelled by the System if not executed upon receipt.

Intermarket sweep eQuotes do not automatically cancel or replace the

Market Maker's previous Standard quote or eQuote. An intermarket sweep

eQuote is not valid during the opening rotation process described in

Rule 503.\20\ None of the eQuotes discussed above rest on the Book \21\

and therefore do not require the risk protection that is proposed for

Standard quotes.

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\17\ See Exchange Rule 517(a)(2)(iii).

\18\ See Exchange Rule 517(a)(2)(ii).

\19\ See Exchange Rule 517(a)(2)(iv).

\20\ See Exchange Rule 517(a)(2)(v).

\21\ The term ``Book'' means the electronic book of buy and sell

orders and quotes maintained by the System. See Exchange Rule 100.

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The Exchange notes that the proposed rule change will not relieve

Exchange Market Makers of their continuous quoting obligations under

Exchange Rule 604 \22\ or any other obligation under the Rules of the

Exchange, or any obligations arising under Reg NMS Rule 602.\23\ Nor

will the proposed rule change prohibit the Exchange from taking

disciplinary action against a Market Maker for failing to meet their

continuous quoting obligation each trading day.

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\22\ Id.

\23\ 17 CFR 242.602.

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Additionally, the Exchange notes that the proposed rule change is

substantially similar to a rule that is currently operative on the

Exchange's affiliate, the MIAX Pearl Options Exchange (``MIAX

Pearl'').\24\ MIAX Options has two types of Members; Market Makers \25\

and Electronic Exchange Members (``EEMs'').\26\ On MIAX Options Market

Makers connect to the Exchange via the MIAX Express Interface (``MEI'')

connection \27\ which is used to provide quotations \28\ to the market

and Electronic Exchange Members connect to the Exchange using the MIAX

FIX Order Interface (``FOI'').

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\24\ See MIAX Pearl Options Exchange Rule 519C(e).

\25\ The term MIAX Options ``Market Makers'' refers to ``Lead

Market Makers'', ``Primary Lead Market Makers'' and ``Registered

Market Makers'' on MIAX Options Exchange collectively. See MIAX

Options Exchange Rule 100.

\26\ The term MIAX Options ``Electronic Exchange Member'' means

the holder of a Trading Permit who is not a Market Maker. Electronic

Exchange Members are deemed ``members'' under the Exchange Act. See

MIAX Options Exchange Rule 100.

\27\ See supra note 4.

\28\ The term ``quote'' or ``quotation'' means a bid or offer

entered by a Market Maker that is firm and may update the Market

Maker's previous quote, if any. The Rules of the Exchange provide

for the use of different types of quotes, including Standard quotes

and eQuotes, as more fully described in MIAX Options Exchange Rule

517. A Market Maker may, at times, choose to have multiple types of

quotes active in an individual option. See MIAX Options Exchange

Rule 100.

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Similarly, MIAX Pearl has two types of Members; Market Makers \29\

and Electronic Exchange Members.\30\ MIAX Pearl also offers a MIAX

Express Order (MEO'') Interface \31\ connection and a FIX Order

Interface (``FOI'') connection to its Members. Similar to this

proposal, SLAP functionality is available on MIAX Pearl via the MEO

Interface, which is analogous to the MEI Interface on MIAX Options.

However, on MIAX PEARL, Market Makers and EEMs may connect to the

System using either the MEO Interface or the FOI.

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\29\ The term ``Market Maker'' or ``MM'' means a Member

registered with the Exchange for the purpose of making markets in

options contracts traded on the Exchange and that is vested with the

rights and responsibilities specified in Chapter VI of the MIAX

Pearl Rules. See MIAX Pearl Exchange Rule 100.

\30\ The term ``Electronic Exchange Member'' or ``EEM'' means

the holder of a Trading Permit who is a Member representing as agent

Public Customer Orders or Non-Customer Orders on the Exchange and

those non-Market Maker Members conducting proprietary trading.

Electronic Exchange Members are deemed ``members'' under the

Exchange Act. See MIAX Pearl Exchange Rule 100.

\31\ The term ``MEO Interface'' means a binary order interface

used for submitting certain order types (as set forth in MIAX Pearl

Rule 516) to the MIAX Pearl System. See MIAX Pearl Exchange Rule

100.

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

The Exchange does not believe that the proposed rule change will

impose any burden on competition that is not necessary or appropriate

in furtherance of the purposes of the Act. The Exchange believes that

the proposed rule change will foster competition by providing Market

Makers with an additional risk management tool that will allow Exchange

Market Makers to compete for executions and order flow.

Additionally, the Exchange believes that the proposed rule change

should promote competition as it is designed to allow Members greater

flexibility and control of their risk exposure to protect them from

market conditions that may increase their risk exposure in the market.

The Exchange does not believe the proposed rule change will impose a

burden on intra-market competition as the optional risk protection

feature is equally available to all Market Makers on the Exchange.

The Exchange believes that the proposed rule change should promote

inter-market competition as the proposal is designed to allow Members

greater flexibility and control over their risk exposure in order to

protect them from market risk or events that may increase their

exposure in the market. Additionally, the proposed rule change should

instill additional confidence in Market Makers that submit quotes to

the Exchange that there are adequate risk protections in place, and

thus should encourage Market Makers to provide liquidity to the

Exchange, thereby promoting inter-market competition.

For all the reasons stated, the Exchange does not believe that the

proposed rule change will impose any burden on competition not

necessary or appropriate in furtherance of the purposes of the Act, and

believes the proposed change will enhance competition.

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.

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III. Date of Effectiveness of the Proposed Rule Change and Timing for

Commission Action

Pursuant to Section 19(b)(3)(A) of the Act \32\ and Rule 19b-

4(f)(6) \33\ thereunder, the Exchange has designated this proposal as

one that effects a change that: (i) does not significantly affect the

protection of investors or the public interest; (ii) does not impose

any significant burden on competition; and (iii) by its terms, does not

become operative for 30 days after the date of the filing, or such

shorter time as the Commission may designate if consistent with the

protection of investors and the public interest.

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\32\ 15 U.S.C. 78s(b)(3)(A).

\33\ 17 CFR 240.19b-4(f)(6).

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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.

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 ( https://www.sec.gov/rules/sro.shtml ); or

Send an email to [email protected] . Please include

file number SR-MIAX-2026-22 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-MIAX-2026-22. 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 ( https://www.sec.gov/rules/sro.shtml ). Copies of the filing will be available for inspection and

copying at the principal office of the Exchange. Do not include

personal identifiable information in submissions; you should submit

only information that you wish to make available publicly. We may

redact in part or withhold entirely from publication submitted material

that is obscene or subject to copyright protection. All submissions

should refer to file number SR-MIAX-2026-22 and should be submitted on

or before June 25, 2026.

For the Commission, by the Division of Trading and Markets,

pursuant to delegated authority.\34\

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\34\ 17 CFR 200.30-3(a)(12).

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Sherry R. Haywood,

Assistant Secretary.

[FR Doc. 2026-11145 Filed 6-3-26; 8:45 am]

BILLING CODE 8011-01-P