Notice2025-19352
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
October 2, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 189 (Thursday, October 2, 2025)</title>
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[Federal Register Volume 90, Number 189 (Thursday, October 2, 2025)]
[Notices]
[Pages 47844-47846]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19352]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104150; File No. SR-MRX-2025-25]
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 30, 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 29, 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 cap a rebate for eligible Members that
add liquidity in Penny Symbols.\3\
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\3\ On September 26, 2025, the Exchange filed SR-MRX-2025-24. On
September 29, 2025, the Exchange withdrew SR-MRX-2025-24 and filed
this proposal.
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While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on October 1,
2025.
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.
[[Page 47845]]
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 cap a rebate for
eligible Members that add liquidity in Penny Symbols.
Today, the Exchange assesses all Non-Priority Customers \4\ a $0.50
per contract Tier 4 maker fee in Penny Symbols, and all Priority
Customers \5\ a $0.47 per contract Tier 4 maker rebate in Penny
Symbols.\6\ Currently, the Exchange offers Members in Tier 4 a rebate
if at least half of their trading volume adds liquidity in Penny
Symbols. Specifically, note 2 of Options 7, Section 3, Table 1,
provides that Members that add liquidity greater than or equal to 50%
of their Total Affiliated Member \7\ or Affiliated Entity \8\ Volume
within a month will also be paid a rebate of $0.02 per contract on all
their Penny Symbol transactions for that month.\9\ 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 is available to
Members through December 31, 2025.
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\4\ ``Non-Priority Customers'' include Market Makers, Non-Nasdaq
MRX Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and
Professional Customers.
\5\ 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).
\6\ 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.
\7\ 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.
\8\ 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.
\9\ 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).
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Proposal
At this time, the Exchange proposes to cap the rebate incentive at
note 2 of Options 7, Section 3, Table 1. The Exchange proposes to cap
the additional rebate at $350,000 in a given month. The Exchange will
add the following sentence to note 2 of Options 7, Section 3, Table 1,
``This additional rebate will be capped at $350,000 in a given month.''
While the Exchange is capping the total amount of the rebate that a
Member may obtain in a given month, the Exchange continues to believe
that the rebate will incentivize Members to send additional order flow
to MRX in Penny Symbols.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ 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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\10\ 15 U.S.C. 78f(b).
\11\ 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'. . ..'' \12\
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\12\ 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.'' \13\
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\13\ 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's proposal to cap the $0.02 per contract rebate in
note 2 of Options 7, Section 3, Table 1 is reasonable because, despite
capping the rebate, Members should continue to be incentivized to add
greater liquidity on the Exchange in Penny Symbols in order to obtain
the rebate. Further, this increase in trading activity and liquidity on
MRX, in turn, could improve overall market quality for all market
participants through more trading opportunities and tighter spreads.
The Exchange's proposal to cap the $0.02 per contract rebate in
note 2 of Options 7, Section 3, Table 1 is equitable and not unfairly
[[Page 47846]]
discriminatory because the proposed cap would apply uniformly to all
similarly situated market participants. Further, any Member may qualify
for Tier 4 by meeting the volume requirements for that tier. To the
extent the proposed incentive attracts additional liquidity on the
Exchange through December 31, 2025, the Exchange believes it will
benefit all market participants by providing more trading
opportunities, tighter spreads, and increased order interaction.
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 Exchange's proposal to
cap the rebate incentive at note 2 of Options 7, Section 3, Table 1 up
to a maximum of $350,000 in a given month does not impose an undue
burden on competition because the proposed cap would apply uniformly to
all similarly situated market participants. Further, any Member may
qualify for Tier 4 by meeting the volume requirements for that tier. To
the extent the proposed incentive attracts additional liquidity on the
Exchange through December 31, 2025, the Exchange believes it will
benefit all market participants by providing more trading
opportunities, tighter spreads, and increased order interaction.
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#e391968f86ce808c8e8e868d9790a3908680cd848c95"><span class="__cf_email__" data-cfemail="81f3f4ede4ace2eeecece4eff5f2c1f2e4e2afe6eef7">[email protected]</span></a>. Please include
file number SR-MRX-2025-25 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-2025-25. 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-2025-25 and should be submitted on
or before October 23, 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. 2025-19352 Filed 10-1-25; 8:45 am]
BILLING CODE 8011-01-P
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