The Securities and Exchange Commission published a notice on February 2, 2026, detailing a proposed rule change by MIAX Pearl, LLC, a self-regulatory organization operating an options trading platform. Filed on January 20, 2026, the proposal seeks to amend the exchange's fee schedule by adopting a new methodology for assessing and collecting the Options Regulatory Fee, or ORF. This fee supports the exchange's regulatory functions, such as surveillance and enforcement related to customer options trading. The change would limit ORF assessment to transactions executed on MIAX Pearl itself, rather than including those cleared by its members on other exchanges. Effective immediately upon filing under Section 19(b)(3)(A) of the Securities Exchange Act of 1934, the proposal invites public comments and could face suspension by the Commission within 60 days. This development reflects ongoing efforts to refine how exchanges fund their regulatory obligations amid evolving market dynamics and feedback from industry stakeholders and regulators.
Background on the Options Regulatory Fee
The ORF is a per-contract fee designed to offset a significant portion of an exchange's costs for supervising and regulating members' customer options business. According to the filing, these costs include routine surveillances, investigations, policy development, rulemaking, and enforcement activities. MIAX Pearl emphasizes that ORF revenue, combined with other regulatory fees and fines, should cover a material portion—but not all—of its regulatory expenses. The exchange monitors these revenues semi-annually to ensure they align with costs, adjusting the fee as needed through future filings.
Historically, the ORF has been applied broadly to support the exchange's oversight responsibilities, which extend to members' activities regardless of where transactions occur. The filing notes that fines from disciplinary matters offset ORF collections, and the exchange allocates both direct expenses—like surveillance and third-party services—and indirect ones, such as legal and technology support, to its regulatory budget.
Current Methodology for ORF Assessment and Collection
Under the existing system, MIAX Pearl assesses the ORF on all options transactions cleared or ultimately cleared by a member in the 'customer' range at The Options Clearing Corporation (OCC), irrespective of the execution venue. The fee is collected by OCC on behalf of the exchange from the ultimate clearing firm, which could be a member or non-member. The filing provides examples illustrating this process: if a transaction executes on MIAX Pearl and no clearing account changes occur, the ORF is collected from the executing clearing firm. If a Clearing Member Trade Assignment (CMTA) transfer happens, the fee shifts to the ultimate clearing firm.
For away-market executions, the ORF applies only if a MIAX Pearl member is involved as the executing or ultimate clearing firm. The exchange excludes outbound linkage trades and uses OCC reports to identify clearing firms. This methodology ensures the fee targets customer-range transactions, which require more intensive regulatory resources due to factors like branch office examinations and customer complaint investigations. Non-customer transactions, such as those in the 'firm' or 'market maker' range, are exempt, as those participants bear other fees and obligations.
Details of the Proposed Rule Change
The proposal introduces an 'On-Exchange ORF,' limiting assessment to customer-range transactions executed specifically on MIAX Pearl. The fee would apply to each side of such transactions, based on clearing instructions at execution, accounting for same-day CMTA adjustments reported to the exchange but ignoring post-trade changes at OCC. This means the ORF would be billed to the clearing member on record at the time of execution on MIAX Pearl, even if a non-member ultimately clears it.
Transactions executed elsewhere, even if cleared by a MIAX Pearl member, would no longer incur the fee. The exchange plans to continue its current methodology until at least June 30, 2026, with implementation of the new approach targeted for July 1, 2026—contingent on all U.S. options exchanges charging an ORF filing similar changes by April 1, 2026. If not, MIAX Pearl would delay rollout accordingly. A separate filing would establish the On-Exchange ORF rate, with members notified via regulatory circular at least 30 days in advance.
The proposal also removes obsolete text from the fee schedule referencing a prior ORF rate no longer in effect, aiming to enhance clarity.
Statutory Basis and Rationale
MIAX Pearl asserts the change complies with Section 6(b) of the Securities Exchange Act, promoting equitable fee allocation and just principles of trade. The filing argues the On-Exchange ORF is reasonable because it narrows the fee to exchange-specific activities, better aligning with regulatory costs while exempting non-customer transactions to avoid burdening market makers and clearing members already subject to other fees. It addresses the higher regulatory intensity of customer trading, such as position limit surveillance and insider trading investigations.
The exchange contends this does not unfairly discriminate, as the fee applies uniformly to all on-exchange customer transactions. By not considering OCC-level CMTA changes, the methodology simplifies collection and ensures accuracy, given that such transfers may lack reliable execution venue data. MIAX Pearl plans ongoing monitoring to prevent revenues from exceeding costs, with semi-annual reviews and adjustments as needed.
Potential Implications and Perspectives
This shift could reduce regulatory fee burdens for members clearing customer trades across multiple venues, potentially encouraging more targeted trading on exchanges with favorable fee structures. Industry feedback, as noted in the filing, has influenced this review, highlighting concerns over broad ORF application in a fragmented market. From a regulatory perspective, limiting the fee to on-exchange activity might streamline oversight but could challenge exchanges' ability to fully fund programs if volumes shift.
Different stakeholders may view this variably: members might appreciate the narrowed scope for cost management, while regulators could scrutinize whether it adequately supports comprehensive oversight. The conditional implementation underscores a push for industry consistency, avoiding overlapping fees that might distort competition.
In summary, MIAX Pearl's proposal refines ORF collection to focus on its own market, balancing regulatory funding with efficiency. Potential next steps include SEC review of comments and possible suspension, alongside monitoring for similar filings from other exchanges. Ongoing debates may center on achieving uniform fee models industry-wide, addressing challenges like evolving trading volumes and ensuring robust investor protections without excessive costs.
