Notice2025-14860
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Decrease the Options Regulatory Fee (ORF) as of January 2, 2026
Primary source
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Published
August 6, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 149 (Wednesday, August 6, 2025)</title>
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[Federal Register Volume 90, Number 149 (Wednesday, August 6, 2025)]
[Notices]
[Pages 37910-37912]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14860]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103618; File No. SR-MRX-2025-15]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Decrease the
Options Regulatory Fee (ORF) as of January 2, 2026
August 1, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 25, 2025, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II 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 MRX's Pricing Schedule at Options 7,
Section 5C, Options Regulatory Fee. Specifically, this proposal
decreases MRX's Options Regulatory Fee or ``ORF'' rate for January 2,
2026.\3\
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\3\ The Exchange filed SR-MRX-2025-15 on July 17, 2025. On July
25, 2025, the Exchange withdrew [sic] SR-MRX-2025-15 and filed this
rule change.
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While the changes proposed herein are effective upon filing, the
Exchange has designated the proposed rule change to be operative on
January 2, 2026.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/mrx/rulefilings">https://listingcenter.nasdaq.com/rulebook/mrx/rulefilings</a>
and at the principal office of the Exchange.
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
MRX proposes to decrease its January 2, 2026 ORF rate from $0.0139
to $0.0116 per contract side. MRX previously filed a rule proposal to
amend its current methodology of assessment and collection of ORF to
assess ORF only for options transactions that occur on MRX that are
cleared in the Customer \4\ range at The Options Clearing Corporation
(``OCC'').\5\ In that proposal, MRX amended its ORF rate from the
current MRX ORF of $0.0010 per contract side to $0.0139 per contract
side for January 2, 2026.\6\ At this time, MRX proposes to decrease the
rate it originally filed in its ORF proposal in May 2025,\7\ applicable
to January 2, 2026, because it has experienced a decrease to its FINRA
Regulatory Services Agreement (``RSA'') fees. As a result of this
decrease and accounting for actual revenue since May 2025, MRX proposes
to decrease its ORF rate for January 2, 2026.
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\4\ Currently, the ORF is assessed by MRX and collected via the
OCC from Priority Customers, Professional Customers, and Broker-
Dealers that are not affiliated with a clearing member. These market
participants clear in the ``C'' range at OCC. ORF will continue to
be assessed and collected from these market participants under the
new methodology. On MRX, a ``Priority Customer'' is a person or
entity that is not a broker/dealer in securities, and does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s), as defined in
Nasdaq MRX Options 1, Section 1(a)(36); a ``Professional Customer''
is a person or entity that is not a broker/dealer and is not a
Priority Customer; and a ``Broker-Dealer'' order is an order
submitted by a Member for a broker-dealer account that is not its
own proprietary account.
\5\ See Securities Exchange Act Release No. 103103 (May 22,
2025), 90 FR 22797 (May 29, 2025) (SR-MRX-2025-11) (Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the
Methodology for Its Options Regulatory Fee as of January 2, 2026).
\6\ See id.
\7\ See id.
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Of note, MRX is not amending its methodology for January 2,
2026.\8\ MRX will endeavor to ensure that ORF Regulatory Revenue
generated from ORF will not exceed 82% of Options Regulatory Cost. MRX
will ensure that ORF Regulatory Revenue does not exceed [sic] Options
Regulatory Cost. MRX will notify Members via an Options Trader Alert of
any change in the amount of the fee at least 30 calendar days prior to
the effective date of the change. In this case, the Exchange notified
Members via an Options Trader Alert of these changes at least 30
calendar days prior to January 2, 2026.\9\
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\8\ See id. MRX will assess ORF for options transactions cleared
by OCC in the Customer range to each MRX Member for executions that
occur on MRX. ORF will be collected by OCC on behalf of MRX from MRX
Members and non-Members for all Customer transactions executed on
MRX. ORF will be assessed and collected on all ultimately cleared
Customer contracts, taking into account adjustments for CMTA that
were provided to MRX the same day as the trade. Further, MRX will
bill ORF according to the clearing instructions provided on the
execution. More specifically, MRX will assess ORF based on the
clearing instruction provided on the execution on trade date and
will not take into consideration CMTA changes or transfers that
occur at OCC.
\9\ See <a href="https://www.nasdaqtrader.com/MicroNews.aspx?id=OTA2025-33">https://www.nasdaqtrader.com/MicroNews.aspx?id=OTA2025-33</a>.
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The Exchange will continue to monitor ORF Regulatory Revenue to
ensure that it, in combination with other regulatory fees and fines,
does not exceed Options Regulatory Costs. In determining whether an
expense is considered an Options Regulatory Cost, the Exchange will
continue to review all costs and makes determinations if there is a
nexus between the expense and a regulatory function. The Exchange notes
that fines collected by the Exchange in connection with a disciplinary
matter will continue to offset Options Regulatory Cost.
As is the case today, ORF Regulatory Revenue is designed to recover
a material portion of the Options Regulatory Costs to the Exchange for
the supervision and regulation of Members' transactions, including
performing routine surveillances, investigations, examinations,
financial monitoring, and policy, rulemaking, interpretive, and
enforcement activities. As discussed above, Options Regulatory Costs
include direct regulatory expenses \10\ and certain indirect expenses
in support of the regulatory function.\11\
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\10\ The direct expenses include in-house and third-party
service provider costs to support the day-to-day regulatory work
such as surveillances, investigations, and examinations.
\11\ The indirect expenses include support from such areas as
Office of the General Counsel, technology, finance, and internal
audit.
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Finally, the Exchange notes that this proposal will sunset on
February 1, 2026, at which point the Exchange would revert back to the
ORF methodology and rate of $0.0004 per contract side.\12\
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\12\ The Exchange proposes to reconsider the sunset date in 2026
and determine whether to proceed with the proposed ORF structure at
that time.
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[[Page 37911]]
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act \14\, which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members, and other persons using its facilities.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \15\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
\15\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that decreasing its January 2, 2026 ORF rate
from $0.0139 to $0.0116 per contract side is reasonable because it
would help ensure that ORF Regulatory Revenue does not exceed a
material portion of the Exchange's ORF Regulatory Costs. As noted
above, the ORF is designed to recover a material portion, but not all,
of the Exchange's ORF Regulatory Costs. Further, the Exchange believes
the proposed fee change is reasonable because Customer transactions
will be subject to a lower ORF than the rate that would otherwise be in
effect on January 2, 2026.
The Exchange had designed the ORF to generate ORF Regulatory
Revenue that would be less than the amount of the Exchange's ORF
Regulatory Costs to ensure that it, in combination with its other
regulatory fees and fines, does not exceed ORF Regulatory Costs, which
is consistent with the view of the Commission that regulatory fees be
used for regulatory purposes and not to support the Exchange's business
operations. As discussed above, however, after review of its ORF
Regulatory Costs and ORF Regulatory Revenue, which includes revenues
from ORF and other regulatory fees and fines, the Exchange determined
that absent a reduction in ORF it may collect ORF Regulatory Revenue
which would exceed its ORF Regulatory Costs. Indeed, the Exchange notes
that when taking into account the lower cost resulting from the amended
FINRA RSA, it estimates the ORF may generate ORF Regulatory Revenue
that would cover more than the approximated Exchange's projected ORF
Regulatory Costs. As such, the Exchange believes it is reasonable and
appropriate to decrease the ORF rate.
The Exchange also believes that the fee change is equitable and not
unfairly discriminatory in that it will be charged to all Members on
all transactions that occur on MRX and clear in the Customer range at
OCC. The Exchange believes the ORF ensures fairness by assessing higher
fees to those Members that require more Exchange regulatory services
based on the amount of Customer options business they conduct. A large
portion of the Options Regulatory Cost relates to Customer allocation
because obtaining Customer information may be more time intensive. For
example, non-Customer market participants are subject to various
regulatory and reporting requirements which provides the Exchange
certain data with respect to these market participants. In contrast,
Customer information is known by Members of the Exchange and is not
readily available to MRX.\16\ The Exchange may have to take additional
steps to understand the facts surrounding particular trades involving a
Customer which may require requesting such information from a broker-
dealer. Further, Customers require more Exchange regulatory services
based on the amount of options business they conduct. For example,
there are Options Regulatory Costs associated with main office and
branch office examinations (e.g., staff expenses), as well as
investigations into Customer complaints and the terminations of
registered persons. As a result, the Options Regulatory Costs
associated with administering the Customer component of the Exchange's
overall regulatory program are materially higher than the Options
Regulatory Costs associated with administering the non-Customer
component when coupled with the amount of volume attributed to such
Customer transactions. Further, MRX's Customer regulation occurs to a
large extent on Exchange. The Exchange does not believe that
significant Options Regulatory Costs result from activity attributed to
Customers that may occur across options markets. To that end, the
amount of Options Regulatory Cost allocated to on-exchange Customer
transactions is significant. Also, with respect to Customer
transactions, options volume continues to surpass volume from other
options participants. Additionally, there are rules in the Exchange's
Rulebook that deal exclusively with Customer transactions, such as
rules involving doing business with a Customer, which would not apply
to non-Customer market participants. For these reasons, regulating
Customer trading activity is ``much more labor-intensive'' and
therefore, more costly.
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\16\ The Know Your Customer or ``KYC'' provision is the
obligation of the broker-dealer.
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Also, assessing ORF on Customer executions that occur on MRX is
reasonable, equitable and not unfairly discriminatory because it will
avoid overlapping ORFs that would otherwise be assessed by MRX and
other options exchanges that also assess an ORF. Further, the Exchange
believes that collecting 82% of Options Regulatory Cost is appropriate
and correlates to the degree of regulatory responsibility and Options
Regulatory Cost borne by the Exchange with respect to Customer
transactions. The Exchange's proposal continues to ensure that Options
Regulatory Revenue, in combination with other regulatory fees and
fines, does not exceed Options Regulatory Costs. Fines collected by the
Exchange in connection with a disciplinary matter will continue to
offset Options Regulatory Cost. The Exchange will review the ORF
Regulatory Revenue and would amend the ORF if it finds that its ORF
Regulatory Revenue exceeds its projections.\17\
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\17\ MRX would submit a rule change to the Commission to amend
ORF rates.
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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 intra-market competition not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
notes, however, the proposed change is not designed to address any
competitive issues. Indeed, this proposal does not create an
unnecessary or inappropriate inter-market burden on competition because
it is a regulatory fee that supports regulation in furtherance of the
purposes of the Act. The Exchange is obligated to ensure that the
amount of ORF Regulatory Revenue, in combination with its other
regulatory fees and fines, does not exceed ORF Regulatory Cost.
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.
[[Page 37912]]
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) of the Act \18\ and paragraph (f) of Rule 19b-4 \19\
thereunder. 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f).
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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#2153544d440c424e4c4c444f5552615244420f464e57"><span class="__cf_email__" data-cfemail="82f0f7eee7afe1edefefe7ecf6f1c2f1e7e1ace5edf4">[email protected]</span></a>. Please include
file number SR-MRX-2025-15 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-MRX-2025-15. 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 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-MRX-2025-15 and should be submitted on
or before August 27, 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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Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-14860 Filed 8-5-25; 8:45 am]
BILLING CODE 8011-01-P
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