Notice2025-18966
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Set Fees for the Purchase of Field-Programmable Gate Array Technology
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 47082-47086]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18966]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104075; File No. SR-ISE-2025-28]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Set Fees for the
Purchase of Field-Programmable Gate Array Technology
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 22, 2025, Nasdaq ISE, LLC (``ISE'' 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
[[Page 47083]]
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to establish a fee schedule for the purchase
of field-programmable gate array (``FPGA'') technology as an optional
delivery mechanism for the ISE Real-time Depth of Market Raw Data Feed
(``Depth of Market Feed'').
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/ise/rulefilings">https://listingcenter.nasdaq.com/rulebook/ise/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 establish a fee
schedule for the purchase of field-programmable gate array (``FPGA'')
technology as an optional delivery mechanism for the ISE Real-time
Depth of Market Raw Data Feed (``Depth of Market Feed'').\3\ The same
FPGA technology has been offered on the Nasdaq Options Market for over
a decade,\4\ and is well-established in equity markets.\5\ Nasdaq is
expanding the availability of this optional delivery mechanism for
depth of market information among its options exchanges, and is
submitting proposals for Nasdaq MRX, LLC (``MRX'') and Nasdaq GEMX, LLC
(``GEMX''), along with ISE.\6\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 103035 (May 13,
2025), 90 FR 21364 (May 19, 2025) (SR-ISE-2025-14) (proposing to
offer FPGA technology as an optional delivery mechanism for the ISE
Depth of Market Feed).
\4\ See Securities Exchange Act Release Nol 67539 (July 30,
2012), 77 FR 46535 (August 3. 2012) (SR-Nasdaq-2012-088)
(establishing a fee for the use of field-programmable gate array
(``FPGA'') technology for the Nasdaq Options Market); Securities
Exchange Act release No 74745 (April 16, 2015), 80 FR 22588 (April
22, 2015) (SR-Nasdaq-2015-035) (amending fees for FPGA technology on
the Nasdaq Options Market).
\5\ See Securities Exchange Act Release No. 67297 (June 28,
2012), 77 FR 39752 (July 5, 2012) (SR-Nasdaq-2012-063) (introducing
FPGA technology); Securities Exchange Act Release No. 97541 (May 22,
2023), 88 FR 34201 (May 26, 2023) (SR-BX-2023-012) (introducing FPGA
technology for BX TotalView); Securities Exchange Act Release No.
98158 (August 17, 2023), 88 FR 57505 (August 23, 2023) (SR-BX-2023-
020) (establishing FPGA fees for BX TotalView); Securities Exchange
Act Release No. 97542 (May 22, 2023), 88 FR 34199 (May 26, 2023)
(SR-Phlx-2023-18) (introducing FPGA technology for PSX TotalView);
Securities Exchange Act Release No. 98185 (August 21, 2023), 88 FR
58324 (August 25, 2023) (SR-Phlx-2023-37) (SR-PHLX-2023-37)
(establishing FPGA fees for PSX TotalView).
\6\ See SR-MRX-2025-09 (April 30, 2025) (proposing to offer FPGA
technology as an optional delivery mechanism for the Nasdaq MRX
Depth of Market Data Feed.''), available at <a href="https://listingcenter.nasdaq.com/assets/rulebook/mrx/filings/SR-MRX-2025-09.pdf">https://listingcenter.nasdaq.com/assets/rulebook/mrx/filings/SR-MRX-2025-09.pdf</a>; SR-GEMX-2025-10 (April 30, 2025) (proposing to offer FPGA
technology as an optional delivery mechanism for the Nasdaq GEMX
Depth of Market Data Feed), available at <a href="https://listingcenter.nasdaq.com/assets/rulebook/gemx/filings/SR-GEMX-2025-10.pdf">https://listingcenter.nasdaq.com/assets/rulebook/gemx/filings/SR-GEMX-2025-10.pdf</a>.
---------------------------------------------------------------------------
FPGA
FPGA is a hardware-based delivery mechanism that utilizes an
integrated circuit that is programmed to reduce ``jitter''--a technical
term of art referring to the deviation in amplitude, phase timing or
width of a signal pulse in a digital signal--that will allow data to be
processed in a more predictable, or ``deterministic,'' fashion.
Reducing jitter can be useful for certain customers due to the
variability in the timing of market data packets transmitted by an
exchange over the course of the trading day. Orders, and therefore
market data packets, typically accumulate in larger numbers at the
beginning and end of the trading day, as well as during the peaks of
activity that occur at random intervals during the day. These bursts of
activity may alter the time interval between the delivery of data
packets because software processes information at variable rates
depending on load to the system. Processing times may increase at
higher loads, and decrease during periods of lesser activity. FPGA
technology processes data packets at a constant time interval, without
regard to the number of packets processed. Higher levels of determinism
means less variable queuing, which improves the predictability of data
transfer, particularly during times of peak market activity.
The benefits of determinism depend on the use case of the customer,
as well as the customer's specific system architecture.
Higher determinism does not necessarily mean lower latency. The
concepts of determinism and latency are related, but distinct.
Determinism refers to predictability in the rate of data transmission;
latency refers to the time required to process data or transport it
from one location to another. Low latency is not necessarily
deterministic, and higher determinism does not necessarily mean low
latency. As such, use of FPGA technology will increase determinism, but
does not guarantee lower latency.\7\
---------------------------------------------------------------------------
\7\ Because software can be impacted by workload, FPGA
technology in general can provide lower latency during periods of
peak activity. The same FPGA technology that will support the ISE
FPGA service is also broadly commercially available for purchase
from third-party sellers unrelated to the Exchange.
---------------------------------------------------------------------------
Among customers that seek a higher degree of determinism, the
benefits of FPGA technology vary, as FPGA technology is one possible
solution, among a catalog of possible solutions, for increasing the
consistency and predictability of message throughput over the course of
the trading day. Some customers are able to adequately control jitter
without using FPGA technology; other customers address jitter using
specialized software, coding or other design solutions in conjunction
with FPGA; still others use FPGA alone. The specific choice depends on
a complex analysis of the customer's information technology systems in
the context of their particular use cases.
FPGA is a broadly available, commonly used type of programmable
circuit that can be modified to suit different use cases. It is used in
a wide spectrum of industries, including consumer electronics,
automotive, and aerospace, as well as in a variety of industrial
applications. It is not unique to the financial services industry,\8\
or to the Exchange.
---------------------------------------------------------------------------
\8\ See Contrive Datum Insights, ``Field-Programmable Gate Array
(FPGA) Market is expected to reach around USD 22.10 Billion by 2030,
Grow at a CAGR of 15.12% during Forecast Period 2023 to 2030,''
(February 21, 2023), available at <a href="https://www.globenewswire.com/en/news-release/2023/02/21/2612772/0/en/Field-Programmable-Gate-Array-FPGA-Market-Is-Expected-To-Reach-around-USD-22-10-Billion-by-2030-Grow-at-a-CAGR-Of-15-12-during-Forecast-Period-2023-To-2030-Data-By-Contrive-Datum-I.html">https://www.globenewswire.com/en/news-release/2023/02/21/2612772/0/en/Field-Programmable-Gate-Array-FPGA-Market-Is-Expected-To-Reach-around-USD-22-10-Billion-by-2030-Grow-at-a-CAGR-Of-15-12-during-Forecast-Period-2023-To-2030-Data-By-Contrive-Datum-I.html</a> (describing the general size and state of the
FPGA market in 2023).
---------------------------------------------------------------------------
FPGA technology has been offered by both the Nasdaq Stock Exchange
and the Nasdaq Options Market for over a decade,\9\ and has been cited
by the SEC
[[Page 47084]]
as an example of a technology useful in the distribution of market data
products.\10\
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 67297 (June 28,
2012), 77 FR 39752 (July 5, 2012) (SR-Nasdaq-2012-063) (introducing
FPGA technology); see also Nasdaq Data News 2012-13, available at
<a href="http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13">http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13</a>
(introducing TotalView FPGA service as of August 1, 2012);
Securities Exchange Act Release No. 74745 (April 16, 2015), 80 FR
22588 (April 22, 2015) (SR-Nasdaq-2015-035) (establishing FPGA for
the Nasdaq Options Market); The Nasdaq Stock Market LLC Rules,
Equity 7, Section 126(c) (Hardware-Based Delivery of Nasdaq Depth
data).
\10\ See Securities Exchange Act Release No. 90610, 86 FR 18596,
18647 (April 9, 2021) (File No. S7-03-20) (listing field
programmable gate array services as an example of a technological
innovation that could be employed by competing consolidators as part
of the Market Data Infrastructure rule).
---------------------------------------------------------------------------
The Exchange proposes to offer the ISE FPGA service in conjunction
with the Exchange's Depth of Market Feed.\11\ The Depth of Market Feed
is a data feed that provides full order and quote depth information for
individual orders and quotes on the Exchange book and last sale
information for trades executed on the Exchange. The data provided for
each options series includes the symbols (series and underlying
security), put or call indicator, expiration date, the strike price of
the series, and whether the option series is available for trading on
ISE and identifies if the series is available for closing transactions
only. The feed also provides order imbalances on opening/reopening
(size of matched contracts and size of the imbalance).
---------------------------------------------------------------------------
\11\ See Equity 3, Section 23(a)(1).
---------------------------------------------------------------------------
Customers that choose to purchase the Depth of Market Feed without
the ISE FPGA service will receive the same data as customers that elect
to purchase the Depth of Market Feed with the ISE FPGA service.
The proposal to offer optional FPGA technology to customers of the
ISE Depth of Market Feed is in response to customer demand.
Proposed Fees
ISE proposes separate fees for internal and external distribution
for Hardware-Based Delivery of its Real-time Depth of Market Data Feed.
The term ``Hardware-Based Delivery'' means that a distributor is
processing data sourced from a hardware-coded market data format such
as FPGA technology. Proposed fees are $12,500 per month per distributor
for internal only distribution, $1,000 per month per distributor for
external only distribution, and the sum of those two fees, $13,500 per
month, for both internal and external distribution.\12\ These fees
would be in addition to any other fees that would apply to the Depth of
Market Feed.\13\
---------------------------------------------------------------------------
\12\ The difference in amount for external and external [sic]
distribution reflects Nasdaq's experience that the Exchange's FPGA
hardware is best employed at the point of ingestion, as the utility
of FPGA technology falls as the data moves farther from the source.
\13\ See Rules of Nasdaq ISE LLC Options, Options 7, Section
10(F) (Real-time Depth of Market Raw Data Feed).
---------------------------------------------------------------------------
Customers that elect to receive the Depth of Market Feed without
the FPGA service will pay no fee in addition to the underlying fees
listed above.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\14\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\15\ 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
Equitable Allocation of Reasonable Dues, Fees, and Other Charges
The proposal provides for the equitable allocation of reasonable
dues, fees, and other charges because: (i) FPGA technology will
facilitate the ingestion of information for some customers; (ii) the
proposed service is entirely optional and any customer can choose to
purchase or not for any reason, including the fees charged; and (iii)
the proposed fees are comparable to those charged by similarly situated
options exchanges.
Enhanced Service
As explained above, FPGA is a hardware-based delivery mechanism
that utilizes an integrated circuit that is programmed to reduce
jitter, allowing data to be processed in a more deterministic fashion.
This can be useful for certain customers, depending on the use case of
the customer and the customer's system architecture. This service is
not available today on the ISE exchange, and the proposal will
therefore enhance the service offerings for certain customers, as
described above. The Exchange is aware of a number of customers have
expressed interest in purchasing the FPGA service from this Exchange.
Optionality
The FPGA Service is optional for all categories of customers. No
customer and no category of customers (such as, for example,
proprietary trading firms, banks, or market makers) are required to
purchase the FPGA Service for either legal or technological reasons--
even a customer that seeks to reduce jitter.\16\
---------------------------------------------------------------------------
\16\ As explained below, customers have other options not
involving purchase of the ISE FPGA service to reduce jitter.
---------------------------------------------------------------------------
In the experience of the Nasdaq Options Market, the FPGA Service is
purchased by market makers, wholesalers, proprietary trading firms,
banks, and others. The Nasdaq exchange is aware of no systematic
differences within any of these categories among market participants
that choose to use or not to use the Nasdaq FPGA Service.
Customers may choose not to use FPGA technology at all. As noted
above, FPGA technology processes data at a consistently predictable
rate relative to software. This predictability in the rate of
processing may not be advantageous or optimal for all systems receiving
the exchange data feed.
The design of data processing architecture is complex. The
ingestion of data from an exchange is just one step in the lifecycle of
trading. Customers must generate and submit orders, evaluate trades,
and then generate new orders while interacting with multiple exchanges.
All of these steps are part of a single trading system. Changing any
one step in the process--by, for example, purchasing the Exchange's
FPGA Service when other exchanges may not offer FPGA--often results in
the need for changes to other aspects of the process. As such, the
decision to buy the Exchange's FPGA Service will be based on whether
the service is compatible with the customer's trading system as a
whole, not just on whether it may facilitate the processing of data
from a single exchange. The appropriateness of any particular solution
will depend on the customer's system architecture, and the specific use
cases for the market data consumed.
Even if a customer chooses to use FPGA technology, purchase from
the Exchange is only one of several options available, as such
technology is not unique to the Exchange or even the financial services
industry. Third-party data vendors offer FPGA technology services, or a
customer may purchase and deploy its own FPGA hardware, without
purchasing the proposed FPGA technology service from the Exchange,
after receiving data from the Exchange. All of these are viable
options; the benefits of any particular option will depend on the
particular customer's systems and use cases.
Over ten years of experience in selling the FPGA Service for the
Nasdaq Options Market (``NOM'') has shown that the majority of depth of
book
[[Page 47085]]
customers--over 80 percent--do not use Nasdaq's FPGA Service.
The NOM experience also shows that customer demand changes over
time, even for customers that continue to purchase depth of book
information. Of the firms that purchased but later cancelled the FPGA
service at NOM, approximately 66% continued to purchase depth of market
data even after they cancelled FPGA, demonstrating that customers can
discontinue the use of the FPGA Service at any time, for any reason.
Customers that choose to purchase the Depth of Market Feed without
the ISE FPGA service will receive the same data as customers that elect
to purchase the Depth of Market Feed with the ISE FPGA service.
Comparability
The proposed fees for the ISE FPGA service are comparable to those
currently charged for the use of FPGA technology in the Nasdaq Options
Market. No other options exchange currently offers FPGA technology as a
separate service.
The Exchange has assessed the market share \17\ for the options
markets utilizing total options contracts traded between May 2024 and
April 2025, as set forth in the following graph:
---------------------------------------------------------------------------
\17\ Market share is the percentage of volume on a particular
exchange relative to the total volume across all exchanges, and
indicates the amount of order flow directed to that exchange. High
levels of market share enhance the value of trading and ports. Total
contracts include both multi-list options and proprietary options
products. Proprietary options products are products with
intellectual property rights that are not multi-listed.
[GRAPHIC] [TIFF OMITTED] TN30SE25.005
FPGA fees for the Nasdaq Options Market are currently $10,530 for
internal only distribution, $1,000 for use in external only
distribution, and the sum of those two fees, $11,530, for both internal
and external distribution.\18\ As explained above, the proposed fees
for ISE are $12,500 per month per distributor for internal only
distribution, $1,000 per month per distributor for external only
distribution, and the sum of those two fees, $13,500 per month, for
both internal and external distribution.\19\
---------------------------------------------------------------------------
\18\ See Rules of the Nasdaq Stock Market LLC, Options 7,
Section 4 (Hardware-Based Delivery of NOM Depth data).
\19\ The difference in amount for external and external
distribution reflects Nasdaq's experience that the Exchange's FPGA
hardware is best employed at the point of ingestion, as the utility
of FPGA technology falls as the data moves farther from the source.
---------------------------------------------------------------------------
The difference in internal distribution fees reflect the underlying
difference in market share. While ISE is proposing fees of $12,500 per
month for internal distribution as compared to $10,530 for the Nasdaq
Options Market, ISE has a market share of 6.9% as compared to NOM's
market share of 5.3%. Because ISE has approximately one third more
liquidity than NOM, it charges somewhat more than NOM for FPGA hardware
to account for the larger number of transactions processed. Because the
differences between the ISE and NOM fees are reasonably related to
market share, the fees are comparable.
With respect to external only distribution, the proposed ISE fees
of $1,000 are the same as those charged for the Nasdaq Options Market,
and Nasdaq proposes that they remain consistent across all options
exchanges. This is because the external FPGA service is primarily used
to provide two or more firms with the option of sharing the benefits of
that technology. The external distribution fee allows them to do so,
providing more options for configuring this service. As such, it is
reasonable to charge a flat fee for this service without regard to
market share, and the proposed ISE fees are therefore comparable to the
fees currently charged by NOM.
[[Page 47086]]
The combined fees for both are the sum of the fees for internal and
external distribution, respectively. As both component fees are
comparable, the sum is also comparable.
No Unfair Discrimination
The Proposal is not unfairly discriminatory. The FPGA Service will
be available to all customers on a non-discriminatory basis, and
therefore the proposed fees are not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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.
Nothing in the Proposal burdens inter-market competition (the
competition among self-regulatory organizations) because approval of
the Proposal does not impose any burden on the ability of other
exchanges to compete. As noted above, FPGA technology is generally
available and any exchange has the ability to offer such technology if
it chooses.
Nothing in the Proposal burdens intra-market competition (the
competition among consumers of exchange data) because the FPGA Service
will be available to any customer under the same fee schedule as any
other customer, and any market participant that wishes to purchase the
FPGA Service can do so on a non-discriminatory basis.
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.\20\ 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.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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#d0a2a5bcb5fdb3bfbdbdb5bea4a390a3b5b3feb7bfa6"><span class="__cf_email__" data-cfemail="9fedeaf3fab2fcf0f2f2faf1ebecdfecfafcb1f8f0e9">[email protected]</span></a>. Please include
file number SR-ISE-2025-28 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-ISE-2025-28. 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-ISE-2025-28 and should be submitted on or
before October 21, 2025.
---------------------------------------------------------------------------
\21\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18966 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 30, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.