Notice2025-23239
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 2
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Published
December 18, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 241 (Thursday, December 18, 2025)</title>
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[Federal Register Volume 90, Number 241 (Thursday, December 18, 2025)]
[Notices]
[Pages 59254-59256]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23239]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104402; File No. SR-NASDAQ-2025-096]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Options 7, Section 2
December 15, 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 December 1, 2025, The Nasdaq Stock Market LLC (``Nasdaq'' 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 Nasdaq Options Market LLC
(``NOM'') Rules at Options 7, Section 2, Nasdaq Options Market--Fees
and Rebates.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/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 Exchange proposes to amend NOM's Pricing Schedule at Options 7,
Section 2, Nasdaq Options Market--Fees and Rebates, with respect to a
NOM Market Maker rebate.
Pursuant to Options 7, Section 2(1), the Exchange currently
assesses NOM Market Makers a $0.35 per contract Fee to Add Liquidity in
Non-Penny Symbols. This fee applies unless Participants meet the volume
thresholds set forth in note 5. Note 5 currently stipulates that,
The NOM Market Maker Fee for Adding Liquidity in Non-Penny
Symbols will apply unless Participants meet the volume thresholds
set forth in this note. Participants that add NOM Market Maker
liquidity in Non-Penny Symbols of 0.03% to 0.07% of total industry
customer equity and ETF option ADV contracts per day in a month will
be assessed a $0.00 per contract Non-Penny Options Fee for Adding
Liquidity in that month. Participants that add NOM Market Maker
liquidity in Non-Penny Symbols of above 0.07% to 0.10% of total
industry customer equity and ETF option ADV contracts per day in a
month will receive a Non-Penny Rebate to Add Liquidity of $0.30 per
contract for that month instead of paying the Non-Penny Fee for
Adding Liquidity. Participants that add NOM Market Maker liquidity
in Non-Penny Symbols of above 0.10% of total industry customer
equity and ETF option ADV contracts per day in a month will receive
a Non-Penny Rebate to Add Liquidity of $0.40 per contract for that
month instead of paying the Non-Penny Fee for Adding Liquidity.
Accordingly, qualifying Participants are offered an opportunity to
reduce the $0.35 Fee to Add Liquidity in Non-Penny Symbols or earn a
rebate if they meet the volume-based requirements under note 5.
The Exchange now proposes to amend the thresholds in note 5.
Specifically, the Exchange proposes to provide that Participants that
add NOM Market Maker liquidity in Non-Penny Symbols of 0.025% to 0.035%
of total industry customer equity and ETF option ADV contracts per day
in a month will be assessed a $0.00 per contract Non-Penny Options Fee
for Adding Liquidity in that month. Further, the Exchange proposes that
Participants that add NOM Market Maker liquidity in Non-Penny Symbols
of above 0.035% to 0.075% of total industry customer equity and ETF
option ADV contracts per day in a month will receive a Non-Penny Rebate
to Add Liquidity of $0.30 per contract for that month instead of paying
the Non-Penny Fee for Adding Liquidity. Finally, the Exchange proposes
that Participants that add NOM Market Maker liquidity in Non-Penny
Symbols of above 0.075% of total industry customer equity and ETF
option ADV contracts per day in a month will receive a Non-Penny Rebate
to Add Liquidity of $0.40 per contract for that
[[Page 59255]]
month instead of paying the Non-Penny Fee for Adding Liquidity.
With this proposal, the Exchange is lowering the qualification
requirements such that NOM Market Makers would be eligible for no Fee
for Adding Liquidity in Non-Penny Symbols or a Non-Penny Rebate to Add
Liquidity of $0.30 or $0.40 per contract in lieu of the Non-Penny Fee
for Adding Liquidity. The Exchange believes that the note 5 incentives
will encourage NOM Market Makers to add additional Non-Penny Symbol
liquidity on NOM which in turn will benefit of all Participants.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\3\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\4\ 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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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5).
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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.'' \5\
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\5\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Likewise, in NetCoalition v. Securities and Exchange Commission \6\
(``NetCoalition'') the D.C. Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\7\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \8\
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\6\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\7\ See NetCoalition, at 534-535.
\8\ Id. at 537.
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Further, ``[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'. . . .'' \9\ Although the court and the
SEC were discussing the cash equities markets, the Exchange believes
that these views apply with equal force to the options markets.
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\9\ Id. at 539 (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 Exchange's proposal to amend the thresholds in note 5 is
reasonable because the proposal lowers the qualification requirements
such that NOM Market Makers would be eligible for no Fee for Adding
Liquidity in Non-Penny Symbols or a Non-Penny Rebate to Add Liquidity
of $0.30 or $0.40 per contract in lieu of the Non-Penny Fee for Adding
Liquidity. The Exchange believes that the note 5 incentives will
encourage NOM Market Makers to add additional Non-Penny Symbol
liquidity on NOM which in turn will benefit of all Participants.
The Exchange's proposal to amend the thresholds in note 5 is
equitable and not unfairly discriminatory because the Exchange will
uniformly apply the qualifying thresholds to NOM Market Makers. All NOM
Market Makers are eligible to receive the note 5 incentives for Non-
Penny Symbols. The Exchange does not believe that it is unfairly
discriminatory to offer the note 5 incentives to only NOM Market Makers
because these market participants add value through continuous quoting
and the commitment of capital.\10\ Because NOM Market Makers have these
obligations to the market and regulatory requirements that normally do
not apply to other market participants, the Exchange believes that
offering the note 5 incentives to only NOM Market Makers is equitable
and not unfairly discriminatory in light of their obligations. Finally,
encouraging NOM Market Makers to add greater liquidity benefits all
market participants in the quality of order interaction.
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\10\ See Options 2, Sections 4 and 5.
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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.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another venue in which to submit orders. 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. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
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.
Intra-Market Competition
The Exchange's proposal to amend the thresholds in note 5 does not
impose an undue burden on competition because the Exchange will
uniformly apply the qualifying thresholds to all NOM Market Makers. All
NOM Market Makers are eligible to receive the note 5 incentives for
Non-Penny Symbols. The Exchange does not believe the proposal will
impose an undue burden on competition by offering the note 5 incentives
to only NOM Market Makers because these market participants add value
through continuous quoting and the commitment of capital.\11\ Because
NOM Market Makers have these obligations to the market and regulatory
requirements that normally do not apply to other market participants,
the Exchange believes that offering the note 5 incentives to only NOM
Market Makers does not impose an undue burden on competition in light
of their obligations. Finally, encouraging NOM Market Makers to add
greater liquidity benefits all market participants in the quality of
order interaction.
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\11\ See Options 2, Sections 4 and 5.
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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.
[[Page 59256]]
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.\12\
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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.
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#6e1c1b020b430d0103030b001a1d2e1d0b0d40090118"><span class="__cf_email__" data-cfemail="e496918881c9878b8989818a9097a4978187ca838b92">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-096 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-NASDAQ-2025-096. 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-NASDAQ-2025-096 and should be submitted
on or before January 8, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23239 Filed 12-17-25; 8:45 am]
BILLING CODE 8011-01-P
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