Notice2025-12917
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Port Fee Pricing in Options 7, Section 9, B
Primary source
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Published
July 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 131 (Friday, July 11, 2025)</title>
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[Federal Register Volume 90, Number 131 (Friday, July 11, 2025)]
[Notices]
[Pages 31096-31097]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12917]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103401; File No. SR-Phlx-2025-27]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Port Fee
Pricing in Options 7, Section 9, B
July 8, 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 July 2, 2025, Nasdaq PHLX LLC (``Phlx'' 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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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Phlx's Pricing Schedule at Options
7, Section 9, B, Port Fees, to specify that the Exchange will not
assess the Port Fees in Options 7, Section 9, B for any pre-production
ports \3\ acquired in anticipation of a technology migration.\4\
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\3\ A pre-production port may be used for port connectivity
testing purposes only and is not connected to the Exchange's match
engine that is currently in production for the execution of
interest. A pre-production may not be used to enter an order or
quote for execution or otherwise send a message through a pre-
production port that would be acted upon by the Exchange. Testing
means the dates designated by the Exchange for user acceptance
testing and final confidence tests.
\4\ On June 25, 2025, the Exchange filed SR-Phlx-2025-23. At
this time, the Exchange proposes to withdraw SR-Phlx-2025-23 and
file this proposal.
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The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings</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 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
Phlx proposes to amend its Pricing Schedule at Options 7, Section
9, B, Port Fees, to specify that the Exchange will not assess the Port
Fees in Options 7, Section 9, B for any pre-production ports acquired
in anticipation of a technology migration.
Phlx is planning a technology migration commencing in November
2025.\5\ As part of this technology migration, Phlx members and member
organizations will need to acquire new ports to connect to the new
technology platform to accommodate the symbol migration plan.\6\
Therefore, members and member organizations will need to utilize both
existing ports and new ports during the technology migration rollout
which will occur over a 5 week period on a symbol-by-symbol basis.\7\
At this time, in order to conduct testing ahead of the technology
migration, Phlx proposes to not assess fees for any pre-production
ports acquired in anticipation of a technology migration to enhance
participation in testing.
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\5\ See <a href="https://www.nasdaqtrader.com/MicroNews.aspx?id=OTU2025-6">https://www.nasdaqtrader.com/MicroNews.aspx?id=OTU2025-6</a>.
\6\ Phlx plans to migrate to the new platform on a symbol-by-
symbol basis over multiple weeks. See id.
\7\ For example, once the technology migration commences in
November 2025, new ports will be utilized to enter order and quote
for symbols that have migrated to the new platform and existing
ports will be utilized to enter orders and quotes that have not yet
migrated to the new platform. Once the 5 week rollout is complete,
or a longer period as the Exchange may designate for the rollout,
the Exchange would sunset the ports, on a defined date, that are
connected to the current environment.
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Pre-production ports will become production ports only after Phlx
begins the technology migration in November 2025 and, at that time, the
ports may be
[[Page 31097]]
used to submit quotes and orders for execution. Prior to the ports
being placed into production, Phlx will file a separate rule change to
address how duplicate ports will be assessed fees during the time the
ports will be in production.\8\ Additionally, in that filing, Phlx will
discuss when duplicate port billing will end, how the Exchange will
assess fees for duplicate ports after the technology migration is
complete, and on what date the Exchange intends to sunset the legacy
ports that would no longer be connected to a production environment.
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\8\ In the past the Exchange has permitted members and members
to replicate the exact amount of ports that they held in the month
prior for free until the migration is complete.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among members and issuers and other persons using any facility,
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\9\ See 15 U.S.C. 78f(b).
\10\ See 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to assess no fees for pre-production ports
acquired in anticipation of a technology migration is reasonable
because the Exchange is seeking to permit members and member
organizations to acquire pre-production ports at no cost to encourage
participation in testing. The Exchange's proposal is equitable and not
unfairly discriminatory as no member or member organization will be
assessed Port Fees for any pre-production ports acquired in
anticipation of a technology migration.
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 not necessary or appropriate in
furtherance of the purposes of the Act.
Intermarket Competition
The proposal does not impose an undue burden on intermarket
competition. The Exchange believes its proposal remains competitive
with other options markets who also offer order entry protocols. The
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. Because competitors are
free to modify their own fees in response, and because market
participants may readily adjust their order routing practices, the
Exchange believes that the degree to which fee changes in this market
may impose any burden on competition is extremely limited.
Intramarket Competition
The Exchange's proposal does not impose an undue burden on intra-
market competition as no member or member organization will be assessed
Port Fees for any pre-production ports acquired in anticipation of a
technology migration.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\11\
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of 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#4230372e276f212d2f2f272c3631023127216c252d34"><span class="__cf_email__" data-cfemail="4230372e276f212d2f2f272c3631023127216c252d34">[email protected]</span></a>. Please include
file number SR-Phlx-2025-27 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-Phlx-2025-27. 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-Phlx-2025-27 and should be
submitted on or before August 1, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-12917 Filed 7-10-25; 8:45 am]
BILLING CODE 8011-01-P
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