Notice2025-22301
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule at Options 7, Section 3
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
December 9, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 234 (Tuesday, December 9, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 234 (Tuesday, December 9, 2025)]
[Notices]
[Pages 57119-57122]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22301]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104306; File No. SR-GEMX-2025-32]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Pricing Schedule at Options 7, Section 3
December 4, 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 November 20, 2025, Nasdaq GEMX, LLC (``GEMX'' 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.
---------------------------------------------------------------------------
\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 amend GEMX's Pricing Schedule at Options
7, Section 3, ``Regular Order Fees and Rebates.'' \3\
---------------------------------------------------------------------------
\3\ On November 13, 2025, the Exchange filed SR-GEMX-2025-29. On
November 20, 2025, the Exchange withdrew SR-GEMX-2025-29 and filed
SR-GEMX-2025-31 Subsequently, on November 20, 2025, the Exchange
withdrew SR-GEMX-2025-31 and filed this proposal.
---------------------------------------------------------------------------
This fee change shall be effective on November 13, 2025.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/gemx/rulefilings">https://listingcenter.nasdaq.com/rulebook/gemx/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
GEMX proposes to amend its Pricing Schedule at Options 7, Section
3, ``Regular Order Fees and Rebates'' to: (1) increase the Tier 4 Penny
Symbol Maker Rebate for a Market Maker; \4\ and (2) add a new note 19.
A technical amendment is also proposed to current note numbering for a
duplicative note 18. Each change is described below.
---------------------------------------------------------------------------
\4\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See Options 1,
Section 1(a)(21).
---------------------------------------------------------------------------
Tier 4
Today, GEMX offers 4 tiers of Penny Symbol Maker Rebates. Market
Makers are paid the following Penny Symbol Maker Rebates: a Tier 1
Maker Rebate of $0.20 per contract; a Tier 2 Maker Rebate of $0.30 per
contract; a Tier 3 Maker Rebate of $0.37 per contract; and a Tier 4
Maker Rebate of $0.38 per contract. Non-Nasdaq GEMX Market Makers
(FarMM),\5\ Firm Proprietary \6\/Broker Dealers \7\ and Professional
Customers \8\ are paid the following Penny Symbol Maker Rebates: a Tier
1 Maker Rebate of $0.20 per contract. GEMX does not pay Non-Nasdaq GEMX
Market Makers (FarMM), Firm Proprietary/Broker Dealers and Professional
Customers Tier 2 through Tier 4 Penny Symbol Maker Rebates. Finally,
Priority Customers \9\ are paid the following Penny Symbol Maker
Rebates: a Tier 1 Maker Rebate of $0.35 per contract; a Tier 2 Maker
Rebate of $0.48 per contract; a Tier 3 Maker
[[Page 57120]]
Rebate of $0.53 per contract; and a Tier 4 Maker Rebate of $0.53 per
contract.
---------------------------------------------------------------------------
\5\ A ``Non-Nasdaq GEMX Market Maker'' is a market maker as
defined in Section 3(a)(38) of the Securities Exchange Act of 1934,
as amended, registered in the same options class on another options
exchange. See Options 7, Section 1(c).
\6\ A ``Firm Proprietary'' order is an order submitted by a
member for its own proprietary account. See Options 7, Section 1(c).
\7\ A ``Broker-Dealer'' order is an order submitted by a member
for a broker-dealer account that is not its own proprietary account.
See Options 7, Section 1(c).
\8\ A ``Professional Customer'' is a person or entity that is
not a broker/dealer and is not a Priority Customer. See Options 7,
Section 1(c).
\9\ 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 GEMX Options 1,
Section 1(a)(36). Unless otherwise noted, when used in this Pricing
Schedule the term ``Priority Customer'' includes ``Retail.'' A
``Retail'' order is a Priority Customer order that originates from a
natural person, provided that no change is made to the terms of the
order with respect to price or side of market and the order does not
originate from a trading algorithm or any other computerized
methodology. See Options 1, Section 1(c).
---------------------------------------------------------------------------
At this time, the Exchange proposes to amend the Tier 4 Penny
Symbol Maker Rebate for a Market Maker to increase the rebate from
$0.38 to $0.39 per contract. The Exchange believes that increasing the
Tier 4 Penny Symbol Maker Rebate for a Market Maker will encourage
Market Makers to bring additional order flow to GEMX to earn the
increased Maker Rebate. Further, other Members may interact with this
order flow.
Additionally, the Exchange proposes to offer a new note 19
incentive related to the Tier 4 Priority Customer Maker Rebate for
Penny Symbols. The Exchange proposes to pay an additional $0.01 per
contract Maker Rebate for each marginal contract of Customer add
liquidity volume that was executed above 2.00% of Customer Total
Consolidated Volume (``TCV'') to Members, Affiliated Members, and
Affiliated Entities that are eligible for the Tier 4 Priority Customer
Maker Rebate for Penny Symbols. For example, assuming 2.00% of
1,000,000,000 of Monthly Customer TCV (which results in 20,000,000
contracts), a Member would be paid additional rebates on executed
contracts above 20,000,000 contracts.
The Exchange believes that the new note 19 incentive will encourage
market participants to send additional Priority Customer order flow to
GEMX to earn an additional $0.01 per contract Maker Rebate. Further,
other Members may interact with this order flow.
Finally, the Exchange proposes to renumber current note 18 which
states, ``A surcharge for NDX of $1.50 per contract will be assessed to
regular Non-Priority Customer orders that remove liquidity'' to note
20. The Exchange inadvertently filed two separate rule changes that
were operative on the same date, both adopting a new note 18.\10\ At
this time, the Exchange proposes to change the numbering for note 18 to
note 20 for the rule text that states, ``A surcharge for NDX of $1.50
per contract will be assessed to regular Non-Priority Customer orders
that remove liquidity.'' This revision should clarify the Pricing
Schedule. The Exchange also amended all references to that note related
to Index Options to reflect the new numbering.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release Nos. 103300 (June 24,
2025), 90 FR 27686 (June 27, 2025) (SR-GEMX-2025-13); and 103264
(June 16,2025), 90 FR 26353 (June 20, 2025) (SR-GEMX-2025-12). There
are currently two note 18 in Options 7, Section 3.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
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'. . . .'' \13\
---------------------------------------------------------------------------
\13\ 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)).
---------------------------------------------------------------------------
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.'' \14\
---------------------------------------------------------------------------
\14\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
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 increase the Tier 4 Market Maker Penny
Symbol Maker Rebate from $0.38 to $0.39 per contract is reasonable
because the increased Tier 4 Penny Symbol Maker Rebate for a Market
Maker will encourage Market Makers to bring additional order flow to
GEMX to earn the increased Maker Rebate. Further, other Members may
interact with this order flow.
The Exchange's proposal to increase the Tier 4 Market Maker Penny
Symbol Maker Rebate from $0.38 to $0.39 per contract is equitable and
not unfairly discriminatory for various reasons. The Qualifying Tier
Thresholds will apply uniformly to all GEMX Members in determining the
applicable tier. Priority Customers will continue to receive higher
Penny Symbol Maker Rebates in each tier. Priority Customer liquidity
benefits all market participants by providing more trading
opportunities, which attracts market makers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants, to the benefit of all market
participants who may interact with the order flow. Market Makers will
also continue to be paid Penny Symbol Maker Rebates unlike Non-Nasdaq
GEMX Market Makers (FarMM), Firm Proprietary/Broker-Dealers and
Professional Customers because Market Makers have different
requirements and obligations to the Exchange that other market
participants do not (such as quoting requirements).\15\ Incentivizing
Market Makers to provide greater liquidity benefits all market
participants through the quality of order interaction.
---------------------------------------------------------------------------
\15\ See GEMX Options 2, Section 5.
---------------------------------------------------------------------------
The Exchange's proposal to offer a new note 19 incentive related to
the Tier 4 Priority Customer Maker Rebate for Penny Symbols is
reasonable because the new incentive should encourage market
participants to send additional Priority Customer order flow to GEMX to
earn an additional $0.01 per contract Maker Rebate. Further, other
Members may interact with this order flow.
[[Page 57121]]
The Exchange's proposal to offer a new note 19 incentive related to
the Tier 4 Priority Customer Maker Rebate for Penny Symbols is
equitable and not unfairly discriminatory because the Exchange would
uniformly pay the incentive to qualifying market participants. Paying
the incentive for Priority Customer liquidity is also equitable and not
unfairly discriminatory because Priority Customer liquidity benefits
all market participants by providing more trading opportunities, which
attracts market makers. An increase in the activity of these market
participants in turn facilitates tighter spreads, which may cause an
additional corresponding increase in order flow from other market
participants, to the benefit of all market participants who may
interact with the order flow.
The Exchange's proposal to renumber note 18 which states, ``A
surcharge for NDX of $1.50 per contract will be assessed to regular
Non-Priority Customer orders that remove liquidity'' to note 20 is
reasonable, equitable and not unfairly discriminatory because the
Exchange inadvertently filed two separate rule changes that were
operative on the same date, both adopting a new note 18 \16\ and this
revision should clarify the Pricing Schedule.
---------------------------------------------------------------------------
\16\ See Securities Exchange Act Release Nos. 103300 (June 24,
2025), 90 FR 27686 (June 27, 2025) (SR-GEMX-2025-13); and 103264
(June 16,2025), 90 FR 26353 (June 20, 2025) (SR-GEMX-2025-12).
---------------------------------------------------------------------------
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.
Intermarket Competition
The Exchange believes its proposal remains competitive with other
options markets, and will offer market participants with another choice
of venue to transact options. 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 venues to be
more favorable. 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.
Intramarket Competition
The Exchange's proposal to increase the Tier 4 Market Maker Penny
Symbol Maker Rebate from $0.38 to $0.39 per contract does not impose an
undue burden on competition. The Qualifying Tier Thresholds will apply
uniformly to all GEMX Members in determining the applicable tier.
Priority Customers will continue to receive higher Maker Rebates in
each tier. Priority Customer liquidity benefits all market participants
by providing more trading opportunities, which attracts market makers.
An increase in the activity of these market participants in turn
facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants, to
the benefit of all market participants who may interact with the order
flow. Market Makers will also continue to be paid Penny Symbol Maker
Rebates unlike Non-Nasdaq GEMX Market Makers (FarMM), Firm Proprietary/
Broker-Dealers and Professional Customers because Market Makers have
different requirements and obligations to the Exchange that other
market participants do not (such as quoting requirements).\17\
Incentivizing Market Makers to provide greater liquidity benefits all
market participants through the quality of order interaction.
---------------------------------------------------------------------------
\17\ See GEMX Options 2, Section 5.
---------------------------------------------------------------------------
The Exchange's proposal to offer a new note 19 incentive related to
the Tier 4 Priority Customer Maker Rebate for Penny Symbols does not
impose an undue burden on competition because the Exchange would
uniformly pay the incentive to qualifying market participants. Also,
paying the incentive for Priority Customer liquidity does not impose an
undue burden on competition because Priority Customer liquidity
benefits all market participants by providing more trading
opportunities, which attracts market makers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants, to the benefit of all market
participants who may interact with the order flow.
The Exchange's proposal to renumber note 18 which states, ``A
surcharge for NDX of $1.50 per contract will be assessed to regular
Non-Priority Customer orders that remove liquidity'' to note 20 does
not impose an undue burden on competition because the Exchange
inadvertently filed two separate rule changes that were operative on
the same date, both adopting a new note 18 \18\ and this revision
should clarify the Pricing Schedule.
---------------------------------------------------------------------------
\18\ See Securities Exchange Act Release Nos. 103300 (June 24,
2025), 90 FR 27686 (June 27, 2025) (SR-GEMX-2025-13); and 103264
(June 16,2025), 90 FR 26353 (June 20, 2025) (SR-GEMX-2025-12).
---------------------------------------------------------------------------
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.\19\ 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.
---------------------------------------------------------------------------
\19\ 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#97e5e2fbf2baf4f8fafaf2f9e3e4d7e4f2f4b9f0f8e1"><span class="__cf_email__" data-cfemail="6614130a034b05090b0b030812152615030548010910">[email protected]</span></a>. Please include
file number SR-GEMX-2025-32 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-GEMX-2025-32. 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
[[Page 57122]]
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-GEMX-2025-32 and should be submitted on or
before December 30, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22301 Filed 12-8-25; 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 December 9, 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.