Notice2025-23930
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Rules Related to Round Lot and Normal Unit of Trading
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 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 246 (Tuesday, December 30, 2025)</title>
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[Federal Register Volume 90, Number 246 (Tuesday, December 30, 2025)]
[Notices]
[Pages 61190-61192]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23930]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104481; File No. SR-NASDAQ-2025-101]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the Exchange's Rules Related to Round Lot and Normal Unit of
Trading
December 22, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 11, 2025, The Nasdaq Stock Market LLC (the
``Exchange'' or ``Nasdaq'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. The Exchange filed the proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 rules related to
round lot and normal unit of trading, specifically, Nasdaq Rules
5005(a)(40) and 5720(c)(6), Nasdaq Equity Rule 2, Section 5(a)(1) and
Nasdaq Equity Rule 4, Section 4703(b)(1), to bring the rules into
compliance with Regulation National Market System Rule 600(b)(93).\5\
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\5\ 17 CFR 242.600(b)(93).
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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 purpose of the proposed rule change is to amend the amend the
Exchange's rules related to round lot and normal unit of trading,
specifically, Nasdaq Rules 5005(a)(40) and 5720(c)(6), Nasdaq Equity
Rule 2, Section 5(a)(1) and Nasdaq Equity Rule 4, Section 4703(b)(1),
to bring the rules into compliance with Regulation National Market
System (``Reg NMS'') Rule 600(b)(93).\6\
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\6\ 17 CFR 242.600(b)(93).
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On December 9, 2020, the Commission adopted amendments to Reg NMS,
specifically, the Market Data Infrastructure rules to modernize the NMS
information provided within the national market system for the benefit
of market participants and to better achieve Section 11A's goals of
assuring ``the availability to brokers, dealers, and investors of
information with respect to quotations for and transactions in
securities that is prompt, accurate, reliable, and fair'' (``MDI
Rules''). These changes included a definition of ``round lot'' which
assigns each NMS stock to a round lot size based on the stock's average
closing price.\7\ Prior to this change, a ``round lot'' was not defined
in the Act or Reg NMS. The definition of a ``round lot'' was included
in the rules of each exchange, including Nasdaq Rules 5005(a)(40) and
5720(c)(6), Nasdaq Equity Rule 2, Section 5(a)(1) and Nasdaq Equity
Rule 4, Section 4703(b)(1), which typically defined a ``round lot'' as
100 shares, but they also allow an exchange, or the primary listing
exchange for the security, discretion to define it otherwise.
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\7\ See Securities Exchange Act Release No. 90610 (Dec. 9,
2020), 86 FR 18596 (Apr. 9, 2021) (``MDI Adopting Release''). The
MDI Rules adopted the definition of round lot in Rule 600(b)(82).
This provision was subsequently renumbered to Rule 600(b)(93) by the
Rule 605 Amendments. See Securities Exchange Act Release No. 99679
(Mar. 6, 2024), 89 FR 26428, 26429 (Apr. 15, 2024) (``Rule 605
Amendments'') (adopting amendments to rule 605 under Reg NMS to
update reports on execution quality).
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In light of delays in the implementation of the MDI Rules,
including the definition of round lot, on September 18, 2024, the
Commission, among other things, accelerated the implementation of the
round lot definition. The Commission also revised the round lot
definition as set forth below.\8\ Rule 600(b)(93) of Reg NMS, as
adopted by the MDI Rules and as amended in 2024, defines a round lot
for NMS stocks \9\ that have an average closing price on the primary
listing exchange during the prior Evaluation Period \10\ of: (1)
$250.00 or less per share as 100 shares; (2) $250.01 to $1,000.00 per
share as 40 shares; (3) $1,000.01 to $10,000.00 per share as 10 shares;
and (4) $10,000.01 or more per share as one share. For any security
that becomes an NMS Stock during an operative period, as described in
Rule 600(b)(93)(iv),\11\ a round lot is 100 shares.
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\8\ See Securities Exchange Act Release No. 101070 (Sept. 18,
2024), 89 FR 81620 (Oct. 8, 2024).
\9\ ``NMS stock'' is defined under Reg NMS as any NMS security
other than an option. 17 CFR 242.600(b)(65).
\10\ Rule 600(b)(93)(iii) of Reg NMS defines the ``Evaluation
Period'' as (A) all trading days in March for the round lot assigned
on the first business day in May and (B) all trading days in
September for the round lot assigned on the first business day of
November during which the average closing price of an NMS stock on
the primary listing exchange shall be measured by the primary
listing exchange to determine the round lot for each NMS stock.
\11\ Pursuant to Rule 600(b)(93)(iv) of Reg NMS the round lot
assigned under this section shall be operative on: (A) The first
business day of May for the March Evaluation Period and continue
through the last business day of October of the calendar year; and
(B) The first business day of November for the September Evaluation
Period and continue through the last business day of April of the
next calendar year.
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The primary listing exchange is required to collect and calculate
information for an NMS stock and provide such information, including an
indicator of the applicable round lot size, to competing consolidators
and self-aggregators.\12\ Adjustments to the round lot size for a
security will occur on a semiannual basis and the calculation of the
average closing price on the primary listing exchange will be based on
a one month ``Evaluation Period.''
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\12\ 17 CFR 242.600(b)(89)(i)(E).
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In various sections of its rulebook, the Exchange currently defines
round lot and ``normal unit of trading'' as 100. Specifically, Nasdaq
Rule 5005(a)(40) defines round lot and ``normal unit of
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trading'' as 100 shares of a security unless, with respect to a
particular security, Nasdaq determines that a normal unit of trading
shall constitute other than 100 shares. The Exchange proposes to amend
the rule to define the terms pursuant to Rule 600(b)(93) of Reg NMS
under the Act. Additionally, the Exchange proposes to add language that
it shall publish semi-annual updates of the round lot unit for all
Nasdaq-listed securities.
The Exchange's rulebook also references 100 shares for round lot
and ``normal unit of trading'' in Nasdaq Rule 5720(c)(6), which
currently requires Trust Issued Receipts to only be made in round lots
of 100 receipts or round lot multiples. The Exchange proposes to remove
the reference to 100 receipts. ``Normal Unit of Trading'' is also
defined in Nasdaq Equity Rule 2, Section 5(a)(1) as 100 shares. The
Exchange proposes to remove the reference to 100 shares and add
language noting that the Exchange shall publish semi-annual updates of
the round lot unit for all Nasdaq-listed securities. Similarly, Nasdaq
Equity Rule 4, Section 4703(b)(1) defines round lot and ``normal unit
of trading'' as 100 shares in most instances. The Exchange proposes to
remove the reference to 100 shares.
These proposed changes will bring the rules discussed above into
compliance with Reg NMS Rule 600(b)(93) by eliminating references to
100 shares as the normal unit of trading.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\14\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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Generally speaking, it is consistent with the Act to amend the
Rulebook to comply with securities laws and regulations. The Exchange
believes that the proposed amendments made in this filing are
reasonable because they bring the rules into compliance with new Reg
NMS Rule 600(b)(93). In order to bring these existing rules into
compliance, the Exchange is modifying all references in the rulebook
that define round lot and ``normal unit of trading'' as 100. The
proposed changes remove any confusion that 100 is the default round lot
size for all securities. The proposal also perfects the mechanism of a
free and open market by making clear that the terms round lot and
``normal unit of trading'' are based on Rule 600(b)(93) of Reg NMS and
that the Exchange will publish the round lot unit for all of its listed
securities on a semi-annual basis.
The Exchange believes that the proposed updates will protect
investors and the public because it brings our rules into compliance
and aligns them with federal securities laws and regulations.
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.
The proposal does not impose any burden on competition. However,
even if these proposed amendments to the definition of round lot and
``normal unit of trading'' imposed a burden on competition, such a
burden would be necessary or appropriate in furtherance of the purposes
of the Act because these changes are being made to bring the Exchange's
rulebook into compliance with new Reg NMS Rule 600(b)(93).
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6)(iii) thereunder.\18\
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\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\20\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the Exchange
may promptly align its rules with current federal securities laws and
regulations, particularly Rule 600(b)(93) of Reg NMS, which took effect
in November 2025.\21\ For these reasons, and because the proposed rule
change does not raise any new or novel regulatory issues, the
Commission finds that waiving the 30-day operative delay is consistent
with the protection of investors and the public interest. Accordingly,
the Commission hereby waives the 30-day operative delay and designates
the proposed rule change as operative upon filing.\22\
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\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ See supra notes 6 and 8.
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 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 will institute proceedings under
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\23\ 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
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<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5220273e377f313d3f3f373c2621122137317c353d24"><span class="__cf_email__" data-cfemail="8ffdfae3eaa2ece0e2e2eae1fbfccffceaeca1e8e0f9">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-101 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-2025-101. 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-2025-101 and should be submitted
on or before January 20, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23930 Filed 12-29-25; 8:45 am]
BILLING CODE 8011-01-P
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