Notice2025-23817
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 9, B, Port Fees
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Published
December 29, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 245 (Monday, December 29, 2025)</title>
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[Federal Register Volume 90, Number 245 (Monday, December 29, 2025)]
[Notices]
[Pages 60781-60783]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23817]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104473; File No. SR-Phlx-2025-76]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 7,
Section 9, B, Port Fees
December 19, 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 18, 2025, Nasdaq PHLX LLC (``Phlx'' 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 Phlx's Pricing Schedule at Options
7, Section 9, B, Port Fees.\3\
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\3\ On December 11, 2025 the Exchange filed SR-Phlx-2025-71. On
December 18, 2025, the Exchange withdrew SR-Phlx-2025-71 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 January 1,
2026.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/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 60782]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Phlx recently completed a technology migration to a new platform on
December 8, 2025. As part of the technology migration, Phlx members and
member organizations acquired new ports to connect to the new
technology platform to accommodate the symbol migration plan.
Specifically, members and member organizations utilized both existing
or ``legacy'' \4\ ports and ``new'' \5\ ports during the technology
migration rollout which occurred over a 5 week period on a symbol-by-
symbol basis. During the transition to the new platform, Phlx did not
assess the SQF Port,\6\ SQF Purge Port,\7\ and CTI Port \8\ fees in
Options 7, Section 9, B for any new SQF Ports, SQF Purge Ports, and CTI
Ports, which were duplicative of legacy SQF Ports, SQF Purge Ports, and
CTI Ports, acquired as part of the migration from November 1, 2025
through December 31, 2025 (``Transition Period'').\9\ Phlx did assess
the SQF Port, SQF Purge Port, and CTI Port fees in Options 7, Section
9, B for legacy SQF Ports, SQF Purge Ports, and CTI Ports during the
Transition Period, including new SQF Ports, SQF Purge Ports, and CTI
Ports. The prior Phlx rule change \10\ provided that, as of January 1,
2026, Phlx will assess the SQF Port, SQF Purge Port, and CTI Port fees
in Options 7, Section 9, B for all new and legacy SQF Ports, SQF Purge
Ports, and CTI Ports to which they subscribe. Phlx members and member
organizations may return legacy SQF Ports, SQF Purge Ports, and CTI
Ports in December 2025 to avoid any fees. Legacy SQF Ports, SQF Purge
Ports, and CTI Ports are no longer necessary since the Phlx migration
is complete and all trading is currently on the new platform.
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\4\ A ``legacy'' port refers to a port that was subscribed to by
a Phlx member or member organization prior to the technology
migration and connects to the existing technology platform.
\5\ A ``new'' port refers to a port acquired for the Phlx
technology migration and would connect to the new technology
migration.
\6\ ``Specialized Quote Feed'' or ``SQF'' is an interface that
allows Lead Market Makers, Streaming Quote Traders (``SQTs'') and
Remote Streaming Quote Traders (``RSQTs'') to connect, send, and
receive messages related to quotes, Immediate-or-Cancel Orders, and
auction responses into and from the Exchange. Features include the
following: (1) options symbol directory messages (e.g., underlying
and complex instruments); (2) system event messages (e.g., start of
trading hours messages and start of opening); (3) trading action
messages (e.g., halts and resumes); (4) execution messages; (5)
quote messages; (6) Immediate-or-Cancel Order messages; (7) risk
protection triggers and purge notifications; (8) opening imbalance
messages; (9) auction notifications; and (10) auction responses. The
SQF Purge Interface only receives and notifies of purge requests
from the Lead Market Maker, SQT or RSQT. Lead Market Makers, SQTs
and RSQTs may only enter interest into SQF in their assigned options
series. Immediate-or-Cancel Orders entered into SQF are not subject
to the Order Price Protection, the Market Order Spread Protection,
or Size Limitation in Options 3, Section 15(a)(1), (a)(2) and
(b)(2), respectively. See Options 3, Section 7(a)(i)(B).
\7\ An SQF Purge Interface only receives and notifies of purge
request from the Market Maker.
\8\ Clearing Trade Interface (``CTI'') is a real-time clearing
trade update message that is sent to a member after an execution has
occurred and contains trade details specific to that member. The
information includes, among other things, the following: (i) The
Clearing Member Trade Agreement or ``CMTA'' or ``OCC'' number; (ii)
Exchange badge or house number; (iii) the Exchange internal firm
identifier; (iv) an indicator which will distinguish electronic and
non-electronically delivered orders; (v) liquidity indicators and
transaction type for billing purposes; and (vi) capacity. See
Options 3, Section 23(b)(1).
\9\ The duplicate new SQF Ports, SQF Purge Ports, and CTI Ports
and duplicate mnemonics were offered at no cost will allow members
and member organizations time to test ports to the new environment
as well as provide continuous connection to the Exchange's match
engine during the migration. During the Transition Period, members
and member organizations will be required to utilize their new ports
on the new platform for symbols that have migrated to the new
platform, while continuing to leverage legacy ports for symbols that
have not yet migrated to the new platform. The technology migration
does not require Phlx members and member organizations to acquire
additional ports or any new ports that are being offered, rather the
technology migration requires a new port to connect to the new
environment. Phlx assessed port fees for December 2025 as of
December 1, 2025.
\10\ See Securities Exchange Act Release No. 103593 (July 30,
2025), 90 FR 36479 (August 4, 2025) (SR-Phlx-2025-32) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Options 7, Section 9, B, Port Fees).
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SR-Phlx-2025-32 also discussed fees for FIX Ports during the
Transition Period \11\ as well as new OTTO \12\ Port and new FIX Drop
\13\ Port Fees.\14\ Finally, Phlx provided that it planned to sunset
legacy FIX Ports, SQF Ports, SQF Purge Ports, and CTI Ports on February
27, 2026, after which time these ports will no longer be available.
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\11\ As of January 1, 2026, the Exchange will assess a FIX Port
Fee based on each mnemonic associated with new and legacy FIX Ports.
\12\ As proposed, ``Ouch to Trade Options'' or ``OTTO'' is an
interface that allows member organizations and their Sponsored
Customers to connect, send, and receive messages related to orders,
auction orders, and auction responses to the Exchange. Features
include the following: (1) options symbol directory messages (e.g.,
underlying and complex instruments); (2) system event messages
(e.g., start of trading hours messages and start of opening); (3)
trading action messages (e.g., halts and resumes); (4) execution
messages; (5) order messages; (6) risk protection triggers and
cancel notifications; (7) auction notifications; (8) auction
responses; and (9) post trade allocation messages. OTTO will be
located in the Exchange's revised rules at Supplementary Material
.03 of Options 3, Section 7. The Exchange will assess an OTTO Port
fee of $400 per port, per month, per mnemonic, subject to a monthly
cap of $4,000. See Securities Exchange Act Release No. 102337
(February 4, 2025), 90 FR 9267 (February 10, 2025) (SR-Phlx-2025-05)
(Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Adopt a New OTTO Protocol),
\13\ FIX DROP is a real-time order and execution update message
that is sent to a member after an order has been received/modified
or an execution has occurred and contains trade details specific to
that member. The information includes, among other things, the
following: (i) executions; (ii) cancellations; (iii) modifications
to an existing order; and (iv) busts or post-trade corrections. FIX
Drop will be located in the Exchange's rules at Options 3, Section
23(b)(3). The Exchange will assess a FIX Drop Fee of $500 per port,
per month, per account number. See Securities Exchange Act Release
No. 90 FR 8818 (February 3, 2025) (SR-Phlx-2025-04) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Adopt a FIX Drop Port and Related Fees).
\14\ On November 1, 2025, Phlx began assessing OTTO Port Fees
and FIX Drop Port Fees to any member or member organization that
subscribed to these new ports.
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Proposal
At this time, the Exchange proposes to expedite the sunset date for
SQF Ports, SQF Purge Ports, and CTI Ports from February 27, 2026 to
January 1, 2026. The Phlx migration was complete on December 8, 2025.
The Exchange believes that Phlx market participants have enough time to
return their SQF Ports, SQF Purge Ports, and CTI Ports in December 2025
to allow the Exchange to sunset these ports.
This proposal does not impact FIX Ports which would sunset on
February 27, 2026. As of January 1, 2026, Phlx will assess a FIX Port
Fee based on each mnemonic associated with new and legacy FIX Ports.
Phlx members and member organizations may return legacy FIX Ports in
December 2025 to avoid any fees or opt to return them any time prior to
February 27, 2026.
The Exchange notes that legacy FIX Ports currently provide data
from the new platform while legacy SQF Ports, SQF Purge Ports, and CTI
Ports do not currently provide any data.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\15\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\16\ 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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\15\ See 15 U.S.C. 78f(b).
\16\ See 15 U.S.C. 78f(b)(4) and (5).
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Phlx's proposal to expedite the sunset date for SQF Ports, SQF
Purge Ports,
[[Page 60783]]
and CTI Ports from February 27, 2026 to January 1, 2026 is reasonable
because the Phlx migration was complete on December 8, 2025 and the SQF
Ports, SQF Purge Ports, and CTI Ports are not functional at this time.
Also, the Exchange believes that Phlx market participants have enough
time to return these ports in December 2025 to allow the Exchange to
sunset these ports. This proposal does not impact FIX Ports which would
sunset on February 27, 2026. Unlike legacy SQF Ports, SQF Purge Ports,
and CTI Ports, legacy FIX Ports provide data from the new platform and
are still functional. As of January 1, 2026, Phlx will assess a FIX
Port Fee based on each mnemonic associated with new and legacy FIX
Ports. Phlx members and member organizations may return legacy FIX
Ports in December 2025 to avoid any fees. The Exchange notes that
Market Makers acquire SQF Ports and SQF Purge Ports to quote on the
Exchange. In contrast, all market participants utilize FIX Ports to
enter orders and may utilize CTI Ports for clearing information. The
Exchange believes that all members and member organizations would be
able to return all legacy ports prior to December 31, 2025.
Phlx's proposal to expedite the sunset date for SQF Ports, SQF
Purge Ports, and CTI Ports from February 27, 2026 to January 1, 2026 is
equitable and not unfairly discriminatory because no Phlx member or
member organization is able to utilize SQF Ports, SQF Purge Ports, and
CTI Ports today because they are not connected to a platform that is
active. Also, no Phlx member or member organization would be able to
log into their SQF Ports, SQF Purge Ports or CTI Ports after the sunset
date.
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 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
Phlx's proposal to expedite the sunset date for SQF Ports, SQF
Purge Ports, and CTI Ports from February 27, 2026 to January 1, 2026
does not impose an undue burden on competition because no Phlx member
or member organization is able to utilize SQF Ports, SQF Purge Ports or
CTI Ports today because they are not connected to a platform that is
active. Also, no Phlx member or member organization would be able to
log into their SQF Ports, SQF Purge Ports or CTI Ports after the sunset
date.
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.\17\
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\17\ 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#196b6c757c347a7674747c776d6a596a7c7a377e766f"><span class="__cf_email__" data-cfemail="2d5f584148004e4240404843595e6d5e484e034a425b">[email protected]</span></a>. Please include
file number SR-Phlx-2025-76 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-Phlx-2025-76. 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-Phlx-2025-76 and should be submitted on
or before January 20, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23817 Filed 12-23-25; 8:45 am]
BILLING CODE 8011-01-P
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