Notice2025-21633
Self-Regulatory Organizations; 24X National Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Dates in the Warrant Performance Incentive Program
Primary source
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Published
December 1, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 228 (Monday, December 1, 2025)</title>
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[Federal Register Volume 90, Number 228 (Monday, December 1, 2025)]
[Notices]
[Pages 55207-55209]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21633]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104257; File No. SR-24X-2025-12]
Self-Regulatory Organizations; 24X National Exchange LLC; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Certain Dates in the Warrant Performance Incentive Program
November 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 29, 2025, 24X National Exchange LLC (``24X'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. 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 certain dates in its warrant
performance incentive program. The proposed rule change is available on
the Exchange's website at <a href="https://equities.24exchange.com/regulation">https://equities.24exchange.com/regulation</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 those 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 parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange adopted a warrant performance incentive program
(``Program'') to allow Members of the Exchange who participate in the
Program (``Participants'') to earn the right to purchase Non-Voting
Common Units \3\ of 24X US Holdings LLC (``24X US Holdco''), the
Exchange's parent company.\4\ As described in the Warrant Program
Release, each Member of the Exchange may become a Participant in the
Program by prepaying $500,000 in Exchange fees (``Prepayment Fee'') and
satisfying the Program eligibility requirements. Upon joining the
Program, each Participant will receive a warrant that vests based on
the Participant's achievement of certain minimum trading volumes
(``Target Volume'') \5\ on the Exchange during each designated pre-
determined period in which the Program is in effect (``Measurement
Period'') \6\ and the Exchange's achievement of a minimum market share
during such Measurement Periods (``24X Minimum Overall Market
Share'').\7\ When the warrants vest, Participants will have the right
to exercise the warrants to purchase a certain number of 24X US Holdco
Non-Voting Common Units.
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\3\ 24X filed a proposed rule change for immediate effectiveness
to amend the Limited Liability Company Agreement of 24X US Holdings
LLC, as amended (``24X US Holdco LLC Agreement'') to accommodate
aspects of the proposal that affect the 24X US Holdco LLC Agreement.
The changes to the 24X Holdco LLC Agreement include amendments to
authorize the issuance of Non-Voting Common Units as well as the
implementation of the liquidity program related to the Program.
Securities Exchange Act Rel. No. 104098 (Sept. 26, 2025).
\4\ Securities Exchange Act. Rel. No. 104018 (Sept. 23, 2025)
(``Warrant Program Release'').
\5\ As discussed in more detail in the Warrant Program Release,
the ``Target Volume'' is 5% of the average daily trading volume on
the Exchange, where the daily trading volume is calculated based on
total aggregated average daily volume traded over each Measurement
Period.
\6\ As discussed in more detail in the Warrant Program Release,
the ``Measurement Period'' for Year 1 (2025) is September 29, 2025
through December 31, 2025 (subject to the Exchange commencing
trading on or prior to October 15, 2025); the Measurement Periods
for Year 2 (2026) are (1) January 1-March 31, 2026, (2) April 1-June
30, 2026, (3) July 1-September 30, 2026, and (4) October 1-December
31, 2026; and the Measurement Periods for Year 3 (2027) are (1)
January 1-March 31, 2027, (2) April 1-June 30, 2027, (3) July 1-
September 30, 2027, and (4) October 1-December 31, 2027.
\7\ As discussed in more detail in the Warrant Program Release,
the ``24X Minimum Overall Market Share'' is defined as follows: (1)
for each Measurement Period of Year 2, the 24X Minimum Overall
Market Share is 0.50% of the Consolidated Average Daily Volume
(``CADV'') for all NMS Stocks eligible for trading on 24X; and (2)
for each Measurement Period of Year 3, the 24X Minimum Overall
Market Share is 1.00% of the CADV for all NMS Stocks eligible for
trading on 24X.
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As described in the Warrant Program Release, it was anticipated
that the Program would commence on September 29, 2025, as the Exchange
anticipated commencing operations on September 29, 2025. However, the
Exchange has determined to commence operations on October 14, 2025 and
to commence the Program on October 14, 2025. In light of the later
launch date for the Exchange and the Program, the Exchange has
determined to amend certain dates in connection with the Program. All
other aspects of the Program would remain the same as described in the
Warrant Program Release.
a. Requirements for Participation in the Program
As described in the Warrant Program Release, to be eligible to be a
Participant, an applicant must (i) be a Member in good standing \8\ of
24X; (ii) be a registered broker-dealer pursuant to Section 15 of the
Exchange Act; \9\ (iii) qualify as an ``accredited investor'' as such
term is defined in Regulation D of the Securities Act of 1933; \10\
(iv) have executed the required documentation for participation in the
Program--the subscription agreement and confidentiality agreement; and
(v) tendered the Prepayment Fee no later than September 26, 2025 to
participate in the Program at its commencement, or by the first day of
each subsequent quarter of the Program Period to participate in the
Program as of such subsequent quarter until October 1, 2027. Once an
eligible applicant for the Program has executed all required
documentation for participation in the Program and has paid the
Prepayment Fee no later than September 26, 2025 (or by the first day of
subsequent quarters for the rolling application process as discussed
above), the applicant would be accepted into the Program as a
Participant and granted a warrant.
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\8\ For these purposes with regard to the Program, the term
``good standing'' means that a Member is not delinquent with respect
to Exchange fees or other charges and is not suspended or barred
from being a Member.
\9\ 15 U.S.C. 78o.
\10\ The purpose of this criterion relates to the ability of 24X
US Holdco to sell securities (in this case, Non-Voting Common Units)
pursuant to an exemption from registration under the Securities Act
of 1933. The definition of ``accredited investor'' under Rule
501(a)(1) of the Securities Act of 1933 includes any broker or
dealer registered pursuant to Section 15 of the Act. As noted above,
a Participant will be required to be registered as a broker or
dealer pursuant to Section 15 of the Exchange Act. Therefore, all
Participants will satisfy this criterion.
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The Exchange proposes to amend the Program to replace the September
26, 2025 date for the eligibility criteria with October 10, 2025.
Accordingly, with this change, an eligible applicant for the Program
would be required to have executed all required documentation for
participation in the Program and paid the Prepayment Fee no later than
October 10, 2025 in order to participate
[[Page 55208]]
in the Program at its commencement on October 14, 2025.
b. Measurement Period for Year 1
Warrants received by Participants when they join the Program vest
when (1) 24X has met any applicable 24X Minimum Overall Market Share,
and (2) a Participant has met the Target Volume for each relevant
Measurement Period. When the warrants vest for a Measurement Period,
Participants will have the right to exercise the warrants to purchase a
certain number of 24X US Holdco Non-Voting Common Units for that
Measurement Period. As described in the Warrant Program Release, the
number of Non-Voting Common Units that may be exercised for the
Measurement Period in Year 1 by each Participant would be determined as
follows. Provided that the Exchange commences trading on or prior to
October 15, 2025, an aggregate of 219,608 Non-Voting Common Units,
which represent 2% of the fully diluted outstanding Units of 24X US
Holdco as of September 29, 2025, would be available to be purchased
upon the exercise of warrants that vest in accordance with the Program
based on trading that occurred during the period from and including
September 29, 2025 (or such later date, if the date when trading
commences is after September 29, 2025) through and including December
31, 2025, which is the only Measurement Period for Year 1. Such
aggregate number of Non-Voting Common Units will be allocated among
Participants who qualify by meeting the Target Volume described in the
Warrant Program Release. If trading does not commence on the Exchange
by October 15, 2025, no warrants would vest in Year 1 and, therefore,
Participants would not have the right to purchase Non-Voting Common
Units via the Program in Year 1. If trading does not commence on the
Exchange by October 15, 2025, then such 219,608 Non-Voting Common Units
for Year 1 would be excluded from the Program entirely; they cannot be
earned at a later date under the Program. In addition, for purposes of
clarity, Year 1 is not subject to the 24X Minimum Overall Market Share
requirement.
The Exchange proposes to change the commencement date for the
Measurement Period for Year 1 from September 29, 2025 to October 14,
2025. With this change the Measurement Period for Year 1 would extend
from and including October 14, 2025 (or such later date, if the date
when trading commences after October 14, 2025) through and including
December 31, 2025.
c. Exercising Vested Warrants
As described in the Warrant Program Release, Participants would be
entitled to exercise their warrants for the number of Non-Voting Common
Units of 24X US Holdco that vested from the time of vesting until
September 29, 2032, the seventh anniversary of September 29, 2025. The
Exchange proposes to change the September 29, 2032 date to October 14,
2032, as it would be the seventh anniversary of the proposed October
14, 2025 start date for the Program
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Exchange Act \11\ in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act \12\ in particular,
in that it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) of the Exchange Act \13\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange also believes the
proposed rule change is consistent with Section 6(b)(4) of the Exchange
Act,\14\ which requires that Exchange rules provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(5).
\13\ See id.
\14\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed changes to certain dates
related to the Program are consistent with the Act. The proposed date
changes are intended to facilitate the Program as a result of the
change in the intended launch date for the Exchange. As described in
the Warrant Program Release,\15\ the Program would promote the long-
term interests of the Exchange by providing incentives designed to
encourage 24X market participants to contribute to the growth and
success of the Exchange via actively providing liquidity on the 24X
market, and to provide additional investment and funding which could be
used for the regulation and operation of the Exchange. Such additional
funds would enable the Exchange to be organized to have the capacity to
carry out the purposes of the Act and to comply with the provisions of
the Act, the rules and regulations thereunder, and the rules of the
Exchange, and, in turn, would protect investors and the public
interest. In addition, the Exchange does not believe that the proposed
rule change would be unfairly discriminatory as such date changes would
apply to all Participants in the same manner.
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\15\ See Warrant Program Release.
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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 that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act. The proposed rule
change would authorize changes to certain Program dates as set forth in
the Warrant Program Release in light of the new launch date for the
Exchange. Accordingly, the Exchange believes that the proposed rule
change would not raise any new issues related to burdens on competition
that were not contemplated in connection with the Warrant Program
Release.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
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) \16\ of the Act and subparagraph (f)(2) of Rule 19b-4
thereunder,\17\ because it establishes a due, fee, or other charge
imposed by the Exchange. 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 under Section 19(b)(2)(B) \18\ of the Act to
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determine whether the proposed rule change should be approved or
disapproved.
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\16\ 15 U.S.C. 78s(b)(3)(A)(ii).
\17\ 17 CFR 240.19b-4(f)(2).
\18\ 15 U.S.C. 78s(b)(2)(B).
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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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#3b494e575e16585456565e554f487b485e58155c544d"><span class="__cf_email__" data-cfemail="8bf9fee7eea6e8e4e6e6eee5fff8cbf8eee8a5ece4fd">[email protected]</span></a>. Please include
file number SR-24X-2025-12 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-24X-2025-12. 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 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-24X-2025-12 and
should be submitted on or before December 22, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-21633 Filed 11-28-25; 8:45 am]
BILLING CODE 8011-01-P
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