Notice2025-18946
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the MRX Pricing Schedule at Options 7, Section 3
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Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 47080-47082]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18946]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104056; File No. SR-MRX-2025-21]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the MRX
Pricing Schedule at Options 7, Section 3
September 25, 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 September 11, 2025, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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 the Exchange's Pricing Schedule at
Options 7, Section 3, Table 1 to offer a rebate for eligible Members
that add liquidity in Penny Symbols, as described further below.
The Exchange initially filed the proposed pricing changes on
September 2, 2025 (SR-MRX-2025-18). On September 11, 2025, the Exchange
withdrew that filing and submitted this filing.
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
The purpose of the proposed rule change is to amend the Exchange's
Pricing Schedule at Options 7, Section 3, Table 1 to offer a rebate for
eligible Members that add liquidity in Penny Symbols. The Exchange
initially filed the proposed pricing changes on September 2, 2025 (SR-
MRX-2025-18). On September 11, 2025, the Exchange withdrew that filing
and submitted this filing.
Today, the Exchange assesses all Non-Priority Customers \3\ a $0.50
per contract Tier 4 maker fee in Penny Symbols, and all Priority
Customers \4\ a $0.47 per contract Tier 4 maker rebate in Penny
Symbols.\5\ The Exchange now proposes to offer Members in Tier 4 a
rebate if at least half of their trading volume adds liquidity in Penny
Symbols. Specifically, the Exchange proposes to amend note 2 in Options
7, Section 3, Table 1, which is currently reserved, to provide that
Members that add liquidity greater than or equal to 50% of their Total
Affiliated Member \6\ or Affiliated Entity \7\ Volume within a month
will
[[Page 47081]]
also be paid a rebate of $0.02 per contract on all their Penny Symbol
transactions for that month. For purposes of proposed note 2, ``Total
Affiliated Member or Affiliated Entity Volume'' will mean all volume
executed by the Member on the Exchange in all symbols and order types,
including volume executed by Affiliated Members or Affiliated Entities.
This note 2 incentive will be available to Members through December 31,
2025.
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\3\ ``Non-Priority Customers'' include Market Makers, Non-Nasdaq
MRX Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and
Professional Customers.
\4\ 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).
\5\ As set forth in Table 3 of Options 7, Section 3, the Tier 4
volume requirement is based on executing more than 0.70% of Total
Customer ADV. Total Customer ADV is Priority Customer Total
Consolidated Volume divided by Customer Total Consolidated Volume,
including volume executed by Affiliated Members or Affiliated
Entities. Priority Customer Total Consolidated Volume is a Member's
total Priority Customer volume executed on MRX in that month,
including volume executed by Affiliated Members or Affiliated
Entities. All eligible volume from Affiliated Members or an
Affiliated Entity will be aggregated in determining applicable
tiers.
\6\ An ``Affiliated Member'' is a Member that shares at least
75% common ownership with a particular Member as reflected on the
Member's Form BD, Schedule A.
\7\ An ``Affiliated Entity'' is a relationship between an
Appointed Market Maker and an Appointed OFP for purposes of
qualifying for certain pricing specified in the Pricing Schedule.
Market Makers and OFPs are required to send an email to the Exchange
to appoint their counterpart, at least 3 business days prior to the
last day of the month to qualify for the next month. The Exchange
will acknowledge receipt of the emails and specify the date the
Affiliated Entity is eligible for applicable pricing, as specified
in the Pricing Schedule. Each Affiliated Entity relationship will
commence on the 1st of a month and may not be terminated prior to
the end of any month. An Affiliated Entity relationship will
automatically renew each month until or unless either party
terminates earlier in writing by sending an email to the Exchange at
least 3 business days prior to the last day of the month to
terminate for the next month. Affiliated Members may not qualify as
a counterparty comprising an Affiliated Entity. Each Member may
qualify for only one (1) Affiliated Entity relationship at any given
time.
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As proposed, this note 2 incentive would only apply to Members that
achieve Tier 4 and meet the proposed qualifications in note 2.
Effectively, for example, a qualifying Non-Priority Customer under the
proposed note 2 incentive would pay $0.48 per contract for all their
Penny Symbol transactions adding liquidity for that month (i.e., $0.50
maker fee - $0.02 note 2 incentive). A Priority Customer qualifying for
the note 2 incentive would receive a higher maker rebate of $0.49 per
contract (i.e., $0.47 maker rebate + $0.02 note 2 incentive).
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\9\ 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposed changes to its Pricing Schedule are
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for options
securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, 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'. . . .'' \10\
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\10\ 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-NYSEArca-2006-
21)).
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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, while adopting a series of steps to improve the current market
model, 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\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
options security transaction services. The Exchange is only one of
eighteen options exchanges to which market participants may direct
their order flow. Within this environment, market participants can
freely and often do shift their order flow among the Exchange and
competing venues in response to changes in their respective pricing
schedules. As such, the proposal represents a reasonable attempt by the
Exchange to increase its liquidity and market share relative to its
competitors.
The Exchange believes that it is reasonable to provide Members in
Tier 4 the proposed $0.02 per contract Penny Symbol rebate if they add
liquidity greater than or equal to 50% of their Total Affiliated Member
or Affiliated Entity Volume because the Exchange seeks to incentivize
Members to add greater liquidity on the Exchange in Penny Symbols in
order to obtain the proposed rebate. By requiring Members to meet both
the highest Tier 4 volume requirement and a significant add liquidity
component (at least 50% of their Total Affiliated Member or Affiliated
Entity Volume), the proposed incentive could potentially encourage more
trading activity and additional liquidity on MRX. This, in turn, could
improve overall market quality for all market participants through more
trading opportunities and tighter spreads. The Exchange also believes
that setting the proposed threshold at 50%, as discussed above, is
reasonable because this could encourage Members to aggregate volume and
add liquidity as the majority of their overall activity in Penny
Symbols on the Exchange. The Exchange also believes it is reasonable to
have the note 2 incentive be available through December 31, 2025 so
that the Exchange can use the time period in between to consider the
benefits of the program and evaluate whether to extend. The Exchange
believes that this four month period will provide sufficient time for
the Exchange to evaluate the incentive and Members' responses to it.
The Exchange further believes that the proposed note 2 incentive is
equitable and not unfairly discriminatory because the proposed
incentive will be provided uniformly to all similarly situated market
participants. Any Member may qualify for Tier 4 by meeting the volume
requirements for that tier. The Exchange believes that requiring all
Members to add liquidity greater than or equal to 50% of their Total
Affiliated Member or Affiliated Entity Volume to receive the $0.02
rebate is equitable and not unfairly discriminatory because the
proposal applies a uniform percentage threshold across all Members.
While Members may begin from different absolute trading levels, each is
measured against its own Total Affiliated Member or Affiliated Entity
activity on the Exchange. This ensures that all Members are evaluated
by the same proportionate standard, rather than one group being held to
stricter or looser requirements based on absolute volume thresholds. By
applying a consistent percentage requirement, the proposal ensures that
every Member seeking the proposed note 2 incentive must demonstrate a
comparable level of commitment to add liquidity relative to its total
activity on the Exchange. Furthermore, the proposed incentive will be
temporary and will only be available through December 31, 2025, after
which the Exchange must come in with another rule filing if it wishes
to extend this incentive. To the extent the proposed incentive attracts
additional liquidity on the Exchange during this
[[Page 47082]]
time period, the Exchange believes it will benefit all market
participants by providing more trading opportunities, tighter spreads,
and increased order interaction.
The Exchange notes that Priority Customers will continue to receive
more favorable pricing under the proposal, as discussed above. The
Exchange does not believe its proposal is unfairly discriminatory as
the Exchange has historically provided more favorable pricing to
Priority Customers.\12\ Priority Customer order flow enhances liquidity
on the Exchange to the benefit of all market participants by providing
more trading opportunities, which in turn attracts Market Makers and
other market participants who may interact with this order flow.
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\12\ See e.g., maker/taker pricing for Priority Customers in
Options 7, Section 3, Table 1; and complex order fees for Priority
Customers in Options 7, Section 4.
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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 not necessary or appropriate in
furtherance of the purposes of the Act.
In terms of intra-market competition, the proposed changes to
provide the note 2 incentive to Tier 4 Members do not impose an undue
burden on competition because any Member may qualify for Tier 4 by
meeting the volume requirements for that tier. As discussed above, the
proposal applies a uniform percentage threshold across all Members,
which the Exchange believes will ensure that every Member seeking the
proposed note 2 incentive will demonstrate a comparable level of
commitment to add liquidity relative to its total activity on the
Exchange. While Priority Customers will continue to receive more
favorable pricing under the proposal, the Exchange does not believe
that this is unfairly discriminatory because the Exchange has
historically provided more favorable pricing to Priority Customers.\13\
Priority Customer order flow enhances liquidity on the Exchange to the
benefit of all market participants by providing more trading
opportunities, which in turn attracts Market Makers and other market
participants who may interact with this order flow.
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\13\ See supra note 12.
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In terms of inter-market competition, 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 options exchanges to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other options exchanges. 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. In sum, if the changes proposed
herein are unattractive to market participants, it is likely that the
Exchange will lose market share as a result. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.
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.\14\ 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.
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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#84f6f1e8e1a9e7ebe9e9e1eaf0f7c4f7e1e7aae3ebf2"><span class="__cf_email__" data-cfemail="7f0d0a131a521c1012121a110b0c3f0c1a1c51181009">[email protected]</span></a>. Please include
file number SR-MRX-2025-21 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-2025-21. 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-2025-21 and should be submitted on
or before October 21, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18946 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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