Notice2025-11735
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the LTSE Fee Schedule
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Published
June 26, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 121 (Thursday, June 26, 2025)</title>
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[Federal Register Volume 90, Number 121 (Thursday, June 26, 2025)]
[Notices]
[Pages 27350-27353]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11735]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103298; File No. SR-LTSE-2025-10]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the LTSE Fee Schedule
June 23, 2025.
Pursuant to 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 June 10, 2025, Long-Term Stock Exchange, Inc. (``LTSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the LTSE Fee Schedule.
Specifically, the Exchange proposes to lower the rebates applicable to
transactions in securities priced at or above $1.00 per share that add
displayed liquidity that establish or match the national best bid or
offer (``NBBO'') on the Exchange and to lower the take fee when
removing non-displayed liquidity, effective as of June 10, 2025.
The text of the proposed rule change is available at the Exchange's
website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a>, at the principal office
of the Exchange, 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 self-regulatory organization 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 make changes to the LTSE Fee Schedule.
Specifically, the Exchange proposes to lower the rebates applicable to
transactions in securities priced at or above $1.00 per share that add
displayed liquidity that establish or match the national best bid or
offer (``NBBO'') on the Exchange and to lower the take fee when
removing non-displayed liquidity, effective as of June 10, 2025.
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 will be only one of numerous equities venues to which market
participants may direct
[[Page 27351]]
their order flow. Based on publicly available information, no single
registered equities exchange currently has more than approximately 15%
of total market share.\3\ 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 a small percentage of the overall market.
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\3\ Market share percentage calculated as of April 30, 2025,
with data made available through consolidated data feeds (i.e.,
Consolidated Tape System (CTS) and Unlisted Trading Privilege (UTP)
data feeds).
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The Exchange has put in place a fee structure for all transactions
executed on the Exchange that is meant to incentivize adding both
displayed and non-displayed liquidity on the Exchange in order to
encourage and facilitate price discovery and price formation.\4\ Under
this fee structure, the Exchange is operating a ``Maker-Taker'' model
whereby it provides rebates to Members that provide liquidity and
charges fees to those that remove liquidity. The Exchange notes that it
does not assess volume-based fees or rebates. Accordingly, all fees and
rebates described below are applicable to all Members, regardless of
the overall volume of a Member's trading activities on the Exchange.
The Exchange now proposes to lower the rebate for securities priced at
or above $1.00 per share that add displayed liquidity on the Exchange
that establish or match the NBBO and to lower the take fee when
removing non-displayed liquidity.
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\4\ See Securities Exchange Act Release No. 101226 (October 1,
2024), 89 FR 81587 (October 8, 2024) (SR-LTSE-2024-06). See also
Securities Exchange Act Release No. 102571 (March 11, 2025), 90 FR
12372 (March 17, 2025) (SR-LTSE-2025-03).
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The Exchange seeks to incentivize interaction with hidden
liquidity, and the fee schedule as amended would continue to
incentivize the submission of additional displayed liquidity to the
Exchange, thereby promoting price discovery and price formation, which
the Exchange believes will benefit all Members and investors by driving
liquidity to the Exchange as a whole.
Rebate for Adding Displayed Liquidity That Matches the National Best
Bid or Offer (``NBBO'')
Currently, for executions of Add Displayed Liquidity that establish
a new best bid or offer on the Exchange that matches the NBBO first
established on an away market (``NBBO Joiner''), the Exchange offers a
rebate of $0.0033 per share.\5\ The Exchange proposes to lower this
rebate to $0.0023 per share.
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\5\ The pricing is referred to by the Exchange as ``Add
displayed liquidity--NBBO Joiner'' in the LTSE Fee Schedule.
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Rebate for Adding Displayed Liquidity That Establishes the NBBO
Currently, for executions of Add Displayed Liquidity that establish
the NBBO (``NBBO Setter'') on LTSE, the Exchange offers a rebate of
$0.0033 per share.\6\ The Exchange proposes to lower this rebate to
$0.0023 per share.
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\6\ The pricing is referred to by the Exchange as ``Add
displayed liquidity--NBBO Setter'' in the LTSE Fee Schedule.
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Standard Fee for Removing Liquidity
Currently, the Exchange charges a fee of $0.0030 per share for
executions of orders that remove liquidity from the LTSE Order Book \7\
(``Remove Liquidity'') in securities priced at or above $1.00 per share
or 0.30% of the total dollar value (``TDV'') for securities priced
under $1.00.\8\
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\7\ ``LTSE Order Book'' means the System's electronic file of
orders. See Exchange Rule 1.160(t). The ``System'' shall mean the
electronic communications and trading facility designated by the
Board through which securities orders of Members are consolidated
for ranking and execution. See Exchange Rule 1.160(rr).
\8\ This pricing is referred to as ``Remove liquidity'' on the
proposed Fee Schedule.
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The Exchange proposes to reduce the fee charged for executions
against non-displayed liquidity resting on the LTSE Order Book.
Specifically, the Exchange proposes to lower the take fee for removing
non-displayed liquidity from $0.0030 to $0.0020. This change is
intended to encourage increased interaction with non-displayed orders
by reducing the cost to access such liquidity.
Non-displayed orders serve an important function in U.S. equities
markets, particularly for institutional trading strategies that seek to
minimize market impact. By reducing the take fee for non-displayed
executions, the Exchange aims to incentivize additional market
participants to engage with hidden liquidity, thereby increasing
overall execution volume and improving order interaction and market
efficiency.
In order to effect this change, the Exchange proposes to add the
term ``displayed'' to the previous description of ``Remove Liquidity''
as that charge remains unchanged (``Remove Displayed Liquidity'').
Further, the Exchange proposes to add a row on the LTSE Fee Schedule to
reflect this proposed lower take fee for removing non-displayed
liquidity (``Remove Non-Displayed Liquidity'').
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) of the Act,\9\ in general, and
furthers the objectives of Sections 6(b)(4) and (5) of the Act,\10\ in
particular. The proposed rule change is designed to provide 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.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (5).
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As discussed above, the Exchange operates in a highly fragmented
and competitive market and the Exchange represents only a small
percentage of the overall market and 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, and the
Exchange represents only a small percentage of the overall market. 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.'' \11\
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\11\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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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 flow 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, including
with respect to transactions in securities at or above a dollar, and
market participants can readily trade on competing venues if they deem
pricing levels at those other venues to be more favorable. The Exchange
also believes that the proposed rule change reflects a reasonable and
competitive pricing structure designed to incentivize market
participants to direct order flow to the Exchange, which would enhance
market quality to the benefit of all Members and investors. The
Exchange notes that the
[[Page 27352]]
proposal does not include different fees or rebates for transactions
depending on the amount of orders submitted to, and/or transactions
executed on or through, the Exchange. Accordingly, the proposed pricing
structure is applicable to all Members, regardless of the overall
volume of a Member's trading activities on the Exchange.
Further, the Exchange believes that the proposed rebate of $0.0023
per share for all securities at or above $1.00 that Add Displayed
Liquidity and join or set the NBBO is reasonable because it would
continue to incentivize Members to add displayed liquidity to the
Exchange. The Exchange notes that at least two other exchanges provide
rebates for adding displayed liquidity transactions in securities at or
above $1.00 in the range of the proposed rebate.\12\
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\12\ For example, the Cboe BZX Fee Schedule reflects a standard
rebate for adding displayed liquidity of $0.0016 for executions in
securities priced at or above $1.00. Further, various tiers provide
the ability of a firm to receive a rebate of $0.0032 per share, see
<a href="https://www.cboe.com/us/equities/membership/fee_schedule/bzx/">https://www.cboe.com/us/equities/membership/fee_schedule/bzx/</a>. The
MEMX Fee Schedule reflects rebates for ``adding'' displayed volume
that range from $0.0015 to $0.0034 for shares executed at or above
$1.00 (excluding tier-based rebates), see <a href="https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/">https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/</a>.
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Moreover, the Exchange believes that providing a higher rebate for
adding displayed liquidity that matches or establishes the NBBO is
reasonable, equitable and not unfairly discriminatory as these rebates
are designed to encourage the submission of orders that enhance price
discovery and potentially lower bid-ask spreads, thereby contributing
to deeper and more robust liquidity on the Exchange to the benefit of
all Members and market participants. Further, the rebates are equitably
allocated and not unfairly discriminatory as they apply equally to all
Members.
The Exchange believes that it is reasonable and equitable to
establish separate fees for removing displayed and non-displayed
liquidity. Displayed and non-displayed orders serve different functions
in the market and interact with liquidity in different ways. Displayed
liquidity contributes to the visible quote and encourages price
competition among market participants, while non-displayed liquidity
typically resides deeper in the order book and may reflect longer-term
trading strategies or institutional interest. By differentiating fees
based on the type of liquidity being accessed, the Exchange is better
able to align its fee structure with the distinct characteristics and
market impacts of displayed and non-displayed liquidity.
The Exchange further believes that a lower fee for removing non-
displayed liquidity is reasonable, equitable and not unfairly
discriminatory. Reducing the cost burden on participants accessing non-
displayed liquidity may enhance execution opportunities and promote
greater order interaction. This, in turn, could improve market quality
by facilitating more efficient matching of buyers and sellers and
supporting the price discovery process. The proposed fee reduction is
designed to incentivize market participants to access non-displayed
liquidity more actively, thereby contributing to a more robust and
dynamic trading environment.
The proposal is not unfairly discriminatory, as the lower fee would
apply uniformly to all market participants accessing non-displayed
liquidity, regardless of the type of participant or the size of the
order. Additionally, the lower fee is reasonable because it would
encourage increased interaction with non-displayed orders by reducing
the cost to access such liquidity. The Exchange notes that at least one
other exchange charges a lower fee for removing non-displayed liquidity
than removing displayed liquidity, additionally the proposed fee
differential between removing non-displayed liquidity and removing
displayed liquidity is less than the fee differential between these two
fees at the competing exchange.\13\ Lastly, the proposed fees for
removing non-displayed liquidity and displayed liquidity is within the
range charged by other exchanges.\14\
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\13\ For executions at or above $1,00, the IEX Fee Schedule
reflects a fee for removing displayed liquidity between $0.0022 and
$0.0030, and a fee for removing non-displayed liquidity of $0.0010,
see <a href="https://www.iexexchange.io/resources/trading/fee-schedule">https://www.iexexchange.io/resources/trading/fee-schedule</a>.
\14\ For example, the Nasdaq Fee Schedule reflects a ``free''
take fee for retail orders of shares executed below 8 million shares
in the month or above 8 million if adding at least 3 million shares
ADV of designated retail add volume during the month. Otherwise, a
take fee of $0.0025 applies for shares executed in excess of 8
million shares in the month that remove liquidity on Nasdaq or
execute on other protected Reg NMS venues, excluding taker-maker
venues, see <a href="https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2">https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2</a>. The NYSE American has a $0.0010
fee for Mid-point Passive Liquidity (``MPL'') retail orders removing
liquidity, and a $0.0025 standard take fee for Tier 1 transactions
in securities at or above $1.00, see <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf</a>.
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In conclusion, the Exchange submits that its proposed fee structure
satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act
for the reasons discussed above 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 rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Instead, as
discussed above, the Exchange believes that the proposed change would
encourage the continued submission of displayed orders in securities at
or above $1.00 to the Exchange, thereby promoting market depth,
enhanced execution opportunities, as well as price discovery and
transparency for all Members. Additionally, the Exchange believes that
the proposed lower take fee would increase interaction with hidden
liquidity, thereby contributing to a more robust and dynamic trading
environment for all market participants. Furthermore, the Exchange
believes that the proposed changes would allow the Exchange to continue
to compete with other execution venues by providing competitive pricing
for these securities, thereby making it a desirable destination venue
for its customers. As a result, the Exchange believes that the proposed
change 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.'' \15\
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\15\ See supra note 11.
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Intramarket Competition
The Exchange believes that the proposed changes would continue to
incentivize market participants to direct order flow to the Exchange.
Greater liquidity benefits all Members by providing more trading
opportunities and encourages Members to send orders to the Exchange,
thereby contributing to robust levels of liquidity, which benefits all
Members. The proposed rebates would be available to all market
participants, and, as such, the proposed change would not impose a
disparate burden on competition among market participants on the
Exchange.
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Additionally, the Exchange believes the proposed lower take fee will
not impose a burden on competition as lowering the cost burden for
accessing non-displayed liquidity enhances execution opportunities and
promotes greater order interaction, resulting in improved market
quality for all market participants. 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 operates in a highly competitive market. Members have
numerous alternative venues that they may participate on and direct
their order flow to, including 15 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
approximately 15% of the total market share of executed volume of
equities trading. 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 or discontinue flow 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 therefore can readily choose to send their orders to other
exchange and off-exchange venues if they deem fee levels at those other
venues to be more favorable. As described above, the proposed changes
are competitive proposals through which the Exchange is seeking to
encourage certain order flow to be sent to the Exchange.
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.'' \16\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. SEC, the D.C. Circuit stated as follows:
``[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 order-
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 possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \17\ Accordingly, the Exchange does not believe its
proposed changes imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\16\ See id.
\17\ 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)[sic]).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
This proposed rule change establishes dues, fees or other charges
among its members and, as such, may take effect upon filing with the
Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \18\ and
paragraph (f)(2) of Rule 19b-4 thereunder.\19\ Accordingly, the
proposed rule change would take effect upon filing with the Commission.
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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further 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.
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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#afdddac3ca82ccc0c2c2cac1dbdcefdccacc81c8c0d9"><span class="__cf_email__" data-cfemail="3b494e575e16585456565e554f487b485e58155c544d">[email protected]</span></a>. Please include
file number SR-LTSE-2025-10 on the subject line.
Paper Comments
<bullet> 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-LTSE-2025-10. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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
a.m. and 3 p.m. Copies of the filing also 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-LTSE-2025-10 and should be
submitted on or before July 17, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-11735 Filed 6-25-25; 8:45 am]
BILLING CODE 8011-01-P
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