Notice2026-01631
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Fee Schedule To Modify the Liquidity Incentive Program
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Published
January 28, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 18 (Wednesday, January 28, 2026)</title>
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[Federal Register Volume 91, Number 18 (Wednesday, January 28, 2026)]
[Notices]
[Pages 3745-3748]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01631]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104679; File No. SR-LTSE-2026-01]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Fee Schedule To Modify the Liquidity Incentive Program
January 23, 2026.
Pursuant to the provisions of Section 19(b)(1) under the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on January 12, 2026, Long-Term Stock Exchange,
Inc. (``LTSE'' 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 is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend its Fee Schedule to
modify the
[[Page 3746]]
Liquidity Incentive Program (``LTSE LIP'' or ``Program''). The Exchange
proposes to implement the changes to the fee schedule pursuant to this
proposal on January 12, 2026.
The text of the proposed rule change is available at the Exchange's
website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a>, and at the principal
office of the Exchange.
II. Self-Regulatory Organization's Statement on 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 self-regulatory organization 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
On July 1, 2025, the Exchange implemented the LTSE LIP to enhance
liquidity and improve market quality in LIP Enhanced Securities \3\
traded on the Exchange by incentivizing Members to quote at or better
than the National Best Bid and Offer (``NBBO'') and provide liquidity
in both select securities, the LIP Enhanced Securities and more
generally in all other securities traded on LTSE, the LIP Standard
Securities.<SUP>4 5</SUP>
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\3\ LIP Enhanced Securities means a list of securities
designated as such, that are used for the purposes of qualifying for
the incentives within the LIP. The universe of these securities will
be determined by the Exchange and published on the Exchange's
website. See Definitions Section of the Fee Schedule.
\4\ LIP Standard Securities means a security not defined as a
``LIP Enhanced Security'' and traded on LTSE. See Definitions
Section of the Fee Schedule.
\5\ LTSE LIP was initially adopted in SR-LTSE-2025-13 on June
30, 2025, which was withdrawn and refiled on July 10, 2025, See
Securities Exchange Release No. 34-103517 (July 22, 2025), 90 FR
35325 (July 25, 2025) (SR-LTSE-2025-16). The Program includes three
key incentives: (1) a proportional share of 80% of LTSE's SIP Quote
Revenue for LIP Enhanced Securities, distributed among qualifying
Members based on quoting activity; (2) reduced taker fees for LIP
Enhanced Securities, available to all Members without quoting
obligations; and (3) for LIP Standard Securities, a choice between a
proportional share of 20% of LTSE's SIP Quote Revenue or a quarterly
credit, contingent on meeting specific quoting thresholds.
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The Exchange now proposes several additional changes to the Fee
Schedule to modify the LTSE LIP. The proposed amendments would (i)
amend the eligibility requirement period for both Incentive 1 and
Incentive 3 from quarterly to monthly; (ii) amend the distribution
calculation of LTSE's SIP Quote Revenue from quarterly to monthly;
(iii) remove transitional language that applied to the fourth quarter
of 2025; (iv) amend the optional credit in Incentive 3 to a monthly
credit of $25; and (v) make edits consistent with these changes to the
Notes to LIP section of the Fee Schedule.
Currently, the eligibility threshold for Incentive #1 requires a
Member to display a quote in a LIP Enhanced Security of a Minimum
Quoted Size (``MQS''), for at least 30% of the time at the NBBO of the
Regular Market Session in a calendar quarter, in order to share in SIP
Quote Revenue, which is distributed proportionally among eligible
Members based on quoting activity within the calendar quarter. In turn,
the eligibility threshold for Incentive #3 requires a Member to be
eligible for Incentive #1 in at least 50 LIP Enhanced Securities and
display a quote of at least one round lot in a LIP Standard Security of
a MQS, for at least 25% of the time at the NBBO of the Regular Market
Session in a calendar quarter, in order to share in SIP Quote Revenue,
which is distributed proportionally among eligible Members based on
quoting activity within the calendar quarter; or alternative to
receiving a share of the SIP Quote Revenue a Member can receive a
quarterly credit of $75 per LIP Standard Security per Market
Participant ID (``MPID'') to be used against fees for removing
liquidity. For both Incentive #1 and Incentive #3 the Exchange proposes
to amend both the eligibility requirement period and share of the LTSE
SIP Quote Revenue from quarterly to monthly. The Exchange also proposes
to amend the optional quarterly credit in Incentive #3 from a quarterly
credit of $75 per LIP Standard Security per MPID to a monthly credit of
$25 per LIP Standard Security per MPID.
The Exchange believes allowing Members to qualify and receive a
proportional amount of LTSE SIP Quote Revenue monthly, rather than a
quarterly basis, will encourage greater participation in the LIP. The
LIP is intended to encourage Members to promote price discovery and
market quality by quoting at the NBBO for a significant portion of each
day in a large number of securities generally, and in LIP Enhanced
Securities in particular, thereby benefiting the Exchange and other
investors by providing improved trading conditions for all market
participants through narrower bid-ask spreads and increasing the depth
of liquidity available at the NBBO in a broad base of securities,
including the LIP Enhanced Securities. Thus, the Exchange believes that
the proposed changes to the Program will promote price discovery and
market quality in LIP Enhanced Securities and more generally on the
Exchange, and, further, that the resulting tightened spreads and
increased displayed liquidity will benefit all investors by deepening
the Exchange's liquidity pool, supporting the quality of price
discovery, enhancing quoting competition across all exchanges, and
promoting market transparency.
The Exchange notes that it is not proposing any changes to the SIP
Quote Revenue distribution, which will continue to occur at the end of
each calendar quarter when the Exchange receives its MDR payment from
the SIPs.\6\
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\6\ The Securities Information Processors (``SIPs''), which
include the Unlisted Trading Privileges and Consolidated Tape
Association, collect fees from subscribers for trade and quote tape
data received from trading centers and reporting facilities, such as
the Exchange (collectively, ``SIP Participants''). After deducting
the cost of operating each tape, the profits are allocated among the
SIP Participants on a quarterly basis, according to a complex set of
calculations that consider estimates of anticipated Market Data
Revenue (``MDR''), adjustments to comport to actual MDR from
previous quarters and a non-linear aggregation of total trading and
quoting activity in Tape A, B and C securities in attributing MDR to
each SIP Participant. Based on these calculations, the SIPs provide
MDR payments to each SIP Participant during the second month of each
quarter for trade and quote data from the previous calendar quarter,
which are subject to adjustment through subsequent quarterly
payments. These payments can be divided into six pools (i.e., trade
and quote activity in Tape A, B, and C securities). To determine a
monthly SIP Quote Revenue allocation the Exchange uses a
corresponding monthly SIP report in conjunction with the quarterly
MDR payments to calculate the correct allocation of the MDR payment
in each symbol for each month of the quarter.
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The Exchange also proposes to amend the language regarding Minimum
Quoted Size in the Notes to the LIP section of the Fee Schedule.
Currently the language states that the MQS will be calculated for each
LIP Enhanced Security and published at least quarterly on the
Exchange's website. In line with the proposed changes above which
change all quarterly calculations to monthly calculations, the Exchange
proposes to change this to state that the MQS will now be published
monthly on the Exchange's website. The Exchange then proposes to delete
the sentence and related footnote that expands upon how the Exchange
will treat mid-quarter MQS changes as this detail is no longer relevant
now that the MQS will be
[[Page 3747]]
published monthly and the Exchange would not adjust the MQS mid-month.
The Exchange then proposes to make other conforming changes to the
Notes in the LIP Section. Specifically, the Exchange proposes to amend
the second bullet to state that Incentive #1 and Incentive #3 will be
calculated, and eligibility determined, on a monthly basis instead of
quarterly. Additionally, the Exchange proposes to amend the language in
the third bullet to state that all quoting requirements and incentives
reset each calendar month rather than each quarter. Revenue will
continue to be shared proportionally based on quoting activity.
Lastly, the Exchange also proposes to delete language from the Fee
Schedule that applied only to the fourth quarter of 2025. This
provision, adopted in SR-LTSE-2025-24,\7\ temporarily adjusted revenue-
sharing parameters that were specific to the fourth quarter of 2025 and
will not be needed going forward.
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\7\ See Securities Exchange Act Release No. 34-104353 (December
9, 2025), 90 FR 57800 (December 12, 2025) (SR-LTSE-2025-24).
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(b) Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(4) of the Act,\9\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
all of its Members and issuers and other persons using its facilities;
Section 6(b)(5) of the Act,\10\ which requires, among other things,
that the rules of the Exchange be 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
to protect investors and the public interest and are not designed to
permit unfair discrimination between customers, issuers, brokers or
dealers. The Exchange also believes that the proposed rule change is
reasonable, fair and equitable, and non-discriminatory.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue or reduce use of certain categories of
products, in response to new or different pricing structures being
introduced into the market. Accordingly, competitive forces constrain
the Exchange's transaction fees and rebates, and market participants
can readily trade on competing venues if they deem pricing levels at
those other venues to be more favorable.
The Exchange believes that amending the eligibility requirement
periods, as well as the distribution calculation from quarterly to
monthly is reasonable and equitable because it will encourage greater
participation in the LTSE LIP by allowing Members to receive the
incentive of the LTSE SIP Quote Revenue or credit for any month they
meet the month quoting requirement, rather than having the Member
commit to a quarterly quoting requirement. Thus the Exchange believes
the proposed changes will promote price discovery and market quality in
both LIP Enhanced and LIP Standard Securities and more generally on the
Exchange, and, in turn could result in tightened spreads and increased
displayed liquidity that will benefit all investors by deepening the
Exchange's liquidity pool, supporting the quality of price discovery,
enhancing quoting competition across all exchanges, and promoting
market transparency.
The proposed changes are not unfairly discriminatory, as all
Members that meet the same quoting criteria are eligible to receive the
increased revenue share on identical terms and it will enhance, rather
than burden, intermarket competition by encouraging additional
displayed liquidity on LTSE.
The Exchange believes that amending the Notes section and stating
that the MQS will be calculated for each LIP Enhanced Security and
published monthly on the Exchange's website is reasonable, equitable
and not unfairly discriminatory. The change conforms the MQS
calculation timeframe to be consistent with the new monthly timeframe
for both the eligibility requirements and LTSE SIP Revenue payment
distributions, which will reduce investor confusion on the Program.
The Exchange believes that deleting text that is no longer
applicable and adding clarifying text is consistent with Section
6(b)(5) and 6(b)(1) of the Act because it enhances transparency and
clarity in the Fee Schedule. The removal is administrative, eliminates
obsolete provisions and ensures that the rule text accurately reflects
the Program currently in effect. It does not modify incentives or alter
Member obligations and therefore imposes no burden on competition.
Taken together, these amendments are designed to increase
participation in the LTSE LIP by lowering participation thresholds,
aligning Program parameters with market realities, and maintaining
clear and transparent rule text. The Exchange believes the proposal
supports the objectives of Section 6(b)(5) of the Act by fostering fair
competition, encouraging displayed liquidity, and promoting a more
efficient and transparent market environment for investors. The
Exchange believes that its transaction pricing is subject to
significant competitive forces and that proposed changes to the fees
and rebates described herein are appropriate to address such forces.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. Instead, as discussed above, the proposal
is intended to enhance market quality on the Exchange by encouraging
additional quoting activity on LTSE and promoting more competitive
displayed markets. The proposed amendments are designed to make the
LTSE LIP more accessible and attractive to a broader range of Members.
As a result, the Exchange believes the proposal would enhance its
competitiveness as a market that attracts actionable orders, thereby
making it a more desirable destination venue for its customers. For
these reasons, the Exchange believes that the proposal furthers the
Commission's goal in efficient pricing of individual stocks for all
types of orders, large and small.'' \11\
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\11\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 47396 (June 29, 2005).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
This proposed rule change establishes dues, fees or other charges
among its members and, as such, may take effect upon filing with the
Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and
paragraph (f)(2) of Rule 19b-4 thereunder.\13\ Accordingly, the
proposed rule change would take effect upon filing with the Commission.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the
[[Page 3748]]
action is necessary or appropriate in the public interest, for the
protection of investors, or would otherwise further 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#bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca"><span class="__cf_email__" data-cfemail="84f6f1e8e1a9e7ebe9e9e1eaf0f7c4f7e1e7aae3ebf2">[email protected]</span></a>. Please include
file number SR-LTSE-2026-01 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-LTSE-2026-01. 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-LTSE-2026-01 and should be submitted on
or before February 18, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-01631 Filed 1-27-26; 8:45 am]
BILLING CODE 8011-01-P
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