Notice2026-01978
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a New Methodology for Assessment and Collection of the Options Regulatory Fee (ORF)
Primary source
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Published
February 2, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 21 (Monday, February 2, 2026)</title>
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[Federal Register Volume 91, Number 21 (Monday, February 2, 2026)]
[Notices]
[Pages 4653-4656]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01978]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104709; File No. SR-EMERALD-2026-01]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a
New Methodology for Assessment and Collection of the Options Regulatory
Fee (ORF)
January 28, 2026.
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 January 20, 2026, MIAX Emerald, LLC (``MIAX Emerald'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') a proposed rule change as described in Items I and II
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 MIAX Emerald Options Exchange
Fee Schedule (the ``Fee Schedule'') relating to the Options Regulatory
Fee (``ORF'') to adopt a new methodology for assessment and collection
of ORF for transactions that occur on the Exchange (``On-Exchange
ORF'').
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings">https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings</a> and at the Exchange's principal office.
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 its current methodology for
assessment and collection of a regulatory fee to assess On-Exchange ORF
only for options transactions that occur on the Exchange that would
clear in the ``customer'' \3\ range at The Options Clearing Corporation
(``OCC''). The Exchange would no longer assess a regulatory fee for
options transactions that occur on other exchanges. This proposal only
proposes to amend the method of assessment and collection of the fee. A
future rule filing would be filed to set the applicable On-Exchange ORF
rate in advance of assessing and collecting it under the proposed
method. The following provides more detail regarding the proposal.
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\3\ Currently, the ORF is assessed by the Exchange and collected
via OCC on behalf of the Exchange from either: (1) a Member that was
the ultimate clearing firm for the transaction; or (2) a non-Member
that was the ultimate clearing firm where a Member was the executing
clearing firm for the transaction. The Exchange uses reports from
the OCC to determine the identity of the executing clearing firm and
ultimate clearing firm.
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Background
The ORF is designed to cover a material portion of the costs to the
Exchange of the supervision and regulation of Members' \4\ customer
options business, including performing routine surveillances and
investigations, as well as policy, rulemaking, interpretive and
enforcement activities. The Exchange believes that revenue generated
from the ORF, when combined with all of the Exchange's other regulatory
fees and fines, will cover a material portion, but not all, of the
Exchange's regulatory costs.
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\4\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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Collection of ORF
The Exchange assesses the per-contract ORF to each Member for all
options transactions cleared or ultimately cleared by the Member, which
are cleared by the OCC in the ``customer'' range,\5\ regardless of the
exchange on which the transaction occurs. The ORF is collected by OCC
on behalf of the Exchange from either: (1) a Member that was the
ultimate clearing firm \6\ for the transaction; or (2) a non-Member
that was the ultimate clearing firm where a Member was the executing
clearing firm \7\ for the transaction. The
[[Page 4654]]
Exchange uses reports from OCC to determine the identity of the
executing clearing firm and ultimate clearing firm.
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\5\ Exchange participants must record the appropriate account
origin code on all orders at the time of entry in order. The
Exchange represents that it has surveillances in place to verify
that Members mark orders with the correct account origin code.
\6\ The Exchange takes into account any Clearing Member Trade
Assignment (``CMTA'') transfers when determining the ultimate
clearing firm for a transaction. CMTA is a form of ``give up''
whereby the position will be assigned to a specific clearing firm at
the OCC.
\7\ Throughout this filing, ``executing clearing firm'' means
the clearing firm through which the entering broker indicated that
the transaction would be cleared at the time it entered the original
order which executed, and that clearing firm could be a designated
``give up'', if applicable. The executing clearing firm may be the
ultimate clearing firm if no CMTA transfer occurs. If a CMTA
transfer occurs, however, the ultimate clearing firm would be the
clearing firm that the position was transferred to for clearing via
CMTA.
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To illustrate how the ORF is assessed and collected, the Exchange
provides the following set of examples. If the transaction is executed
on the Exchange and the ORF is assessed, if there is no change to the
clearing account of the original transaction, then the ORF is collected
from the Member that is the executing clearing firm for the
transaction. (The Exchange notes that, for purposes of the Fee
Schedule, when there is no change to the clearing account of the
original transaction, the executing clearing firm is deemed to be the
ultimate clearing firm.) If there is a change to the clearing account
of the original transaction (i.e., the executing clearing firm ``gives-
up'' or ``CMTAs'' the transaction to another clearing firm), then the
ORF is collected from the clearing firm that ultimately clears the
transaction--the ultimate clearing firm. The ultimate clearing firm may
be either a Member or non-Member of the Exchange. If the transaction is
executed on an away exchange and the ORF is assessed, then the ORF is
collected from the ultimate clearing firm for the transaction. Again,
the ultimate clearing firm may be either a Member or non-Member of the
Exchange. The Exchange notes, however, that when the transaction is
executed on an away exchange, the Exchange does not assess the ORF when
neither the executing clearing firm nor the ultimate clearing firm is a
Member (even if a Member is ``given-up'' or ``CMTAed'' and then such
Member subsequently ``gives-up'' or ``CMTAs'' the transaction to
another non-Member via a CMTA reversal). Finally, the Exchange does not
assess the ORF on outbound linkage trades, whether executed at the
Exchange or an away exchange. ``Linkage trades'' are tagged in the
Exchange's system, so the Exchange can readily tell them apart from
other trades.
ORF Revenue and Monitoring of ORF
The Exchange monitors the amount of revenue collected from the ORF
to ensure that it, in combination with other regulatory fees and fines,
does not exceed regulatory costs. In determining whether an expense is
considered a regulatory cost, the Exchange reviews all costs and makes
determinations if there is a nexus between the expense and a regulatory
function. The Exchange notes that fines collected by the Exchange in
connection with a disciplinary matter offset ORF.
The Exchange believes that its broad regulatory responsibilities
with respect to a Member's activities supports applying the ORF to
transactions cleared but not executed by a Member. The Exchange's
regulatory responsibilities are the same regardless of whether a Member
enters a transaction or clears a transaction executed on its behalf.
The Exchange regularly reviews all such activities, including
performing surveillance for position limit violations, manipulation,
front-running, contrary exercise advice violations and insider trading.
Revenue generated from ORF, when combined with all of the
Exchange's other regulatory fees and fines, is designed to cover a
material portion of the regulatory costs to the Exchange of the
supervision and regulation of Members' customer options business
including performing routine surveillances, investigations,
examinations, financial monitoring, and policy, rulemaking,
interpretive, and enforcement activities. Regulatory costs include
direct regulatory expenses and certain indirect expenses in support of
the regulatory function. The direct expenses include in-house and third
party service provider costs to support the day-to-day regulatory work
such as surveillances, investigations and examinations. The indirect
expenses are only those expenses that are in support of the regulatory
functions, such areas include Office of the General Counsel,
technology, finance, and internal audit.
Proposal
The Exchange appreciates the evolving changes in the market and
regulatory environment and has been evaluating its current
methodologies and practices for the assessment and collection of ORF
while considering industry and the Securities and Exchange Commission
(the ``Commission'') feedback. As a result of this review, the Exchange
proposes to modify its current ORF to continue to assess ORF for
options transactions cleared by OCC in the ``customer'' range, however
ORF would be assessed on each side of an options transaction cleared by
the OCC in the ``customer'' range for executions that occur on the
Exchange. Specifically, the ORF would continue to be collected by OCC
on behalf of the Exchange from Members and non-Members for all
``customer'' transactions executed on the Exchange. ORF would be
assessed and collected on all ultimately cleared ``customer''
contracts, taking into account adjustments for CMTA that were provided
to the Exchange the same day as the trade.\8\
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\8\ Adjustments to CMTA that occur at OCC would not be taken
into account.
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Further, the Exchange would bill ORF according to the clearing
instructions provided on the execution. More specifically, the Exchange
proposes to assess ORF based on the clearing instruction provided on
the execution on trade date and would not take into consideration CMTA
changes or transfers that occur at OCC.\9\ As a result of this proposed
rule change, if a Member executes a customer transaction on the
Exchange and is the Clearing Member \10\ on record on the transaction
on the Exchange, the ORF will be assessed to that Member. With this
proposal, in the case where a Member executes a customer transaction on
the Exchange and a different Member is the Clearing Member on record on
the transaction on the Exchange, the ORF will be assessed to and
collected from the Member who is the Clearing Member on record on the
transaction and not the Member who executes the transaction.
Additionally, in the case where a Member executes a customer
transaction on the Exchange and a non-Member is the Clearing Member on
record on the transaction on the Exchange, the ORF will be assessed to
the non-Member who is the Clearing Member on record on the transaction
and not the Member who executes the transaction. With this proposal, in
the case where a Member executes a customer transaction not on the
Exchange, the Exchange will not assess an ORF, regardless of how the
transaction is cleared. As is the case today, OCC will collect ORF from
OCC clearing members on behalf of the Exchange based on the Exchange's
instructions.
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\9\ Adjustments that were made the same day as the trade on the
Exchange will be taken into account.
\10\ Clearing Member means a Member that has been admitted to
membership in the Clearing Corporation pursuant to the provisions of
the rules of the Clearing Corporation. See Exchange Rule 100.
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With this proposal, the Exchange intends to collect ORF under its
current methodology for assessment and collection of ORF until at least
June 30, 2026. The Exchange is prepared to implement On-Exchange ORF
effective July 1, 2026 if by April 1, 2026 all U.S. options exchanges
charging an ORF have filed to modify their current methodologies of
assessment of the fee to limit the fee to transactions occurring on
their respective exchange.\11\ However, if all other options exchanges
have not filed to adopt a similar methodology by April 1, the Exchange
will delay implementation commensurate with the additional time
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required for other options exchanges to adopt a similar method for
collection and assessment of ORF. The Exchange will at that time file a
separate rule filing with the amount of the On-Exchange ORF in advance
of assessing and collecting the fee under the proposed method. As is
the case today, the Exchange will notify Members via Regulatory
Circular of the applicable On-Exchange ORF rate at least 30 calendar
days prior to the effective date of the change. The Exchange believes a
fee to cover a material portion of costs for regulatory programs
associated with monitoring activities is reasonable; however, the
Exchange would consider alternative approaches for assessment and
collection of the fee in order to achieve consistency across the
industry.
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\11\ The Exchange estimates it will take approximately three
months to implement the system changes associated with On-Exchange
ORF.
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The Exchange will continue to monitor the amount of revenue
collected from the ORF to ensure that it, in combination with its other
regulatory fees and fines, does not exceed the Exchange's total
regulatory costs.
The Exchange will monitor its regulatory costs and revenues at a
minimum on a semi-annual basis. If the Exchange determines regulatory
revenues exceed or are insufficient to cover a material portion of its
regulatory costs in a given year, the Exchange will adjust the On-
Exchange ORF by submitting a fee change filing to the Commission. The
Exchange will notify Members of adjustments to the On-Exchange ORF via
a Regulatory Circular in advance of any change.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \12\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \13\ in
particular, in that it is an equitable allocation of reasonable dues,
fees, and other charges among its members and issuers and other persons
using its facilities. The Exchange also believes the proposal furthers
the objectives of Section 6(b)(5) of the Act \14\ 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 and is not designed to permit unfair discrimination
between customers, issuers, brokers and dealers.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
\14\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change to assess and
collect an On-Exchange ORF is reasonable, equitable and not unfairly
discriminatory for various reasons. First, On-Exchange ORF is
reasonable, equitable and not unfairly discriminatory in that it is
charged to all Exchange transactions that clear in the ``customer''
range at the OCC. Similar to ORF today, the Exchange believes On-
Exchange ORF ensures fairness by assessing a specific fee to those
Members that require more Exchange regulatory services based on the
amount of customer options business they conduct. Over recent years,
options trading volume has increased with a growing percentage of the
volume applicable to customer transactions. Customers trading on the
Exchange (through a Member) benefit from the protections of a robust
regulatory program including the maintenance of fair and orderly
markets and protections against fraud and other manipulation. The
Exchange believes it is equitable and not unfairly discriminatory to
assess a regulatory fee to transactions that clear in the ``customer''
range to cover regulatory costs, but not to transactions clearing in
the ``firm'' or ``market maker'' range because Clearing Members and
Market Makers \15\ (who clear in the Firm and Market Maker range), as
those market participants are generally subject to other Exchange fees,
fines and obligations. For example, Clearing Members and Market Makers
are required to pay Exchange application fees, permit fees, and
connectivity fees, amongst others. In addition, all fines issued by the
Exchange for regulatory infractions are assessed only to Members and
would be applied to regulatory revenues. As with today's ORF, the
Exchange expects that Clearing Members from whom On-Exchange ORF is
collected will pass through the fee to their customers (as the Exchange
understands occurs today). In addition, Market Makers in particular are
subject to various quoting and other obligations to ensure that they
provide stable and liquid markets, which benefit all market
participants including customers. Excluding Market Maker transactions
from On-Exchange ORF will allow Market Makers to better manage their
costs more effectively thus enabling them to better allocate resources
toward technology, risk management, and capacity to ensure continued
liquidity provision.
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\15\ Market Makers refers to ``Lead Market Makers,'' ``Primary
Lead Market Makers,'' and ``Registered Market Makers'' collectively.
Lead Market Maker means a Member registered with the Exchange for
the purpose of making markets in securities traded on the Exchange
and that is vested with the rights and responsibilities specified in
Chapter VI of these Rules with respect to Lead Market Makers.
Primary Lead Market Maker means a Lead Market Maker appointed by the
Exchange to act as the Primary Lead Market Maker for the purpose of
making markets in securities traded on the Exchange. Registered
Market Maker means a Member registered with the Exchange for the
purpose of making markets in securities traded on the Exchange, who
is not a Lead Market Maker and is vested with the rights and
responsibilities specified in Chapter VI of these Rules with respect
to Registered Market Makers. See Exchange Rule 100.
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In addition to the overall increase in ``customer'' range volume
generally, regulating customer trading activity is more labor intensive
and requires greater expenditure of human and technical resources than
regulating non-customer trading activity, which tends to be more
automated and less labor-intensive. For example, there are costs
associated with main office and branch office examinations (e.g., staff
and travel expenses), as well as investigations into customer
complaints and terminations of registered persons. As a result, the
costs associated with administering the customer component of the
Exchange's overall regulatory program are materially higher than the
costs associated with administering the non-customer component (e.g.,
Clearing Member proprietary transactions) of its regulatory
program.\16\ While the Exchange notes that it has broad regulatory
responsibilities with respect to its Member's activities, irrespective
of where their transactions take place, the Exchange believes it is
reasonable to assess the proposed fee to only those transactions
occurring on the Exchange. The proposed change more narrowly tailors
the fee to products and transactions with a direct connection to the
Exchange. With this proposal, transactions that would clear in the
``customer'' range occurring on other exchanges would no longer be
subject to an ORF assessed by the Exchange.
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\16\ If the Exchange changes its method of funding regulation or
if circumstances otherwise change in the future, the Exchange may
decide to modify On-Exchange ORF or assess a separate regulatory fee
on Member proprietary transactions if the Exchange deems it
advisable.
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The Exchange believes it is equitable and not unduly discriminatory
to modify the method of collecting the fee such that On-Exchange ORF
will not consider CMTAs reported directly to OCC as is done in today's
method of ORF. CMTA transfers are considered today under the current
collection methodology for ORF as a convenience to industry members in
administering a pass through of the fee to their customers. Limiting
the On-Exchange ORF to transactions on the Exchange poses a limitation
in the use of CMTA for this purpose. The Exchange understands that a
CMTA may be added at order entry, via post-trade edit on the
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Exchange, or post-trade at OCC. CMTA transfers that occur at OCC do not
necessarily contain reliable information regarding the Exchange on
which the original transaction occurred.\17\ Without specific
information as to where the original transaction occurred, the Exchange
would not be able to accurately account for CMTA transfers that occur
at OCC.
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\17\ Under the current methodology for assessing ORF, the
Exchange on which the transaction occurred is irrelevant.
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The Exchange further believes that the proposed change to the
method for assessment and collection of the fee is reasonable because
it would help ensure that revenue collected from the On-Exchange ORF,
in combination with other regulatory fees and fines, would cover a
material portion of the Exchange's regulatory costs.
As noted above, the Exchange will also continue to monitor on at
least a semiannual basis the amount of revenue collected from the On-
Exchange ORF, even as amended, to ensure that it, in combination with
its other regulatory fees and fines, would cover a material portion of
the Exchange's regulatory costs and not exceed it.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. This proposal does not
create an unnecessary or inappropriate intra-market burden on
competition because On-Exchange ORF applies to all customer activity on
the Exchange, thereby raising regulatory revenue to offset regulatory
expenses. It also supplements the regulatory revenue derived from non-
customer activity. The Exchange notes, however, the proposed change is
not designed to address any competitive issues. Indeed, this proposal
does not create an unnecessary or inappropriate inter-market burden on
competition because it is a regulatory fee that supports regulation in
furtherance of the purposes of the Act. The Exchange is obligated to
ensure that the amount of regulatory revenue collected from the On-
Exchange ORF, in combination with its other regulatory fees and fines,
does not exceed regulatory costs. In addition, the Exchange will not
implement the On-Exchange ORF until all other options exchanges are
prepared to adopt a similar model to avoid overlapping ORFs.
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) of the Act \18\ and paragraph (f) of Rule 19b-4 \19\
thereunder. 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 shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f).
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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
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ec9e998089c18f8381818982989fac9f898fc28b839a"><span class="__cf_email__" data-cfemail="2f5d5a434a024c4042424a415b5c6f5c4a4c01484059">[email protected]</span></a>. Please include
file number SR-EMERALD-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-EMERALD-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-EMERALD-2026-01 and should be submitted
on or before February 23, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-01978 Filed 1-30-26; 8:45 am]
BILLING CODE 8011-01-P
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