Notice2026-02804
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Schedule of Fees and Rebates To Bring It Into Compliance With New Reg NMS Rule 610(d)
Primary source
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Published
February 12, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 29 (Thursday, February 12, 2026)</title>
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[Federal Register Volume 91, Number 29 (Thursday, February 12, 2026)]
[Notices]
[Pages 6687-6689]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-02804]
[[Page 6687]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104789; File No. SR-PHLX-2026-06]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Schedule of Fees and Rebates To Bring It Into Compliance
With New Reg NMS Rule 610(d)
February 9, 2026.
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 January 30, 2026, 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 the Exchange's transaction fees at
PHLX Rule Equity 7, Section 3, to bring the Exchange's schedule of fees
and rebates into compliance with Reg NMS Rule 610(d), which becomes
effective on February 2, 2026.
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on February 2,
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.
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 Exchange's
transaction fees at PHLX Rule Equity 7, Section 3, to bring the
Exchange schedule of equities transaction fees and rebates into
compliance with Reg NMS Rule 610(d), which becomes effective on
February 2, 2026.
On September 18, 2024, the Commission adopted several amendments to
Reg NMS in order to increase the transparency of exchange fees and
rebates.\3\ New Reg NMS Rule 610(d) provides that ``[a] national
securities exchange shall not impose, nor permit to be imposed, any fee
or fees, or provide, or permit to be provided, any rebate or other
remuneration, for the execution of an order in an NMS stock that cannot
be determined at the time of execution.'' \4\ The original compliance
date for new Reg NMS Rule 610(d) was the first business day of November
2025, which was Monday, November 3, 2025.\5\ However, on October 31,
2025, the Commission granted temporary exemptive relief to delay the
implementation date until the first business day of February 2026,
which is Monday, February 2, 2026.\6\
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\3\ See Securities Exchange Act Release No. 101070 (Sept. 18,
2024), 89 FR 81620 (Oct. 8, 2024) (File No. S7-30-22) (Regulation
NMS: Minimum Pricing Increments, Access Fees, and Transparency of
Better Priced Orders.) (``Rule 610(d) Adopting Release'').
\4\ 17 CFR 242.610(d).
\5\ See Rule 610(d) Adopting Release, 89 FR at 81680.
\6\ See Securities Exchange Act No. 104172 (Oct. 31, 2025), 90
FR 51418 (Nov. 17, 2025) (Order Granting Temporary Exemptive Relief,
Pursuant to Section 36(a)(1) of the Securities Exchange Act of 1934
and Rules 610(f) and 612(d) of Regulation NMS, From Compliance With
Rule 600(b)(89)(i)(F), Rule 610(c), Rule 610(d) and Rule 612 of
Regulation NMS, as Amended).
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Currently, the Exchange establishes certain transaction fees and
rebates for equities executions that are based on tiers calculated
using volume figures from trading or quoting activity in the current
month. This means that the fees and rebates at the Exchange associated
with a given equities execution often cannot be determined at the time
of execution, but only retroactively at the end of the month in which
the execution occurred. In order to ensure that its transaction fees
and rebates for equities executions are compliant with new Reg NMS Rule
610(d), the Exchange is adding the following text to PHLX Rule Equity
7, Section 3:
Rule of Interpretation: In compliance with Reg NMS Rule 610(d),
effective February 2, 2026, for purposes of determining quoting or
transaction volumes for fees and rebates qualifications under this
section, all volume figures will be derived from quoting or trading
activity in the prior month. Consequently, new members will receive
the base rates in their first month of trading.
This change will ensure that all Exchange participants will be able
to ascertain at the time of execution all the transactions fees and
rebates associated with an execution of an order in an NMS stock at the
Exchange.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\8\ 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposed changes to its schedule of credits are
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for equity
securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[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\
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\9\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (Dec. 2, 2008),
73 FR 74770, 74782-83 (Dec. 9, 2008) (SR-NYSEArca-2006-21)).
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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
[[Page 6688]]
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.'' \10\
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\10\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
equity security transaction services. The Exchange is only one of
several equity venues to which market participants may direct their
order flow. Competing equity exchanges offer similar tiered pricing
structures to that of the Exchange, including schedules of rebates and
fees that apply based upon members achieving certain volume thresholds.
Within this environment, market participants can freely and often
do shift their order flow among the Exchange and competing venues in
response to changes in their respective pricing schedules. As such, the
proposal represents a reasonable attempt by the Exchange to increase
its liquidity and market share relative to its competitors.
The Exchange believes that the modification made in this filing to
the schedule of transaction fees and rebates is reasonable because it
attempts to preserve the current quoting and trading incentives, while
bringing them into compliance with the requirements of new Reg NMS Rule
610(d). Currently, members are assessed certain execution fees, and
paid certain execution rebates, based on tiers calculated using volume
figures from trading and quoting activity in the current month. In
order to bring these existing fees and rebates into compliance with new
Reg NMS Rule 610(d), the Exchange is modifying the criteria for these
fees and rebates so that they are based on tiers calculated using
volume figures from trading and quoting activity in the prior month.
This way all fees and rebates associated with the execution of an order
in an NMS stock at the Exchange can be determined at the time of
execution of said order. All existing fees and rebates remain otherwise
unchanged.
The Exchange believes that the modified schedule of transaction
fees and rebates is an equitable allocation and is not unfairly
discriminatory because the Exchange will apply the same fees and
rebates to all similarly situated members.
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. In terms of inter-market
competition, 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 and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to 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.
In this instance, the proposed changes to the fees assessed and
rebates available to member firms for execution of securities in
securities of all three Tapes do not impose a burden on competition
because the Exchange's execution services are completely voluntary and
subject to extensive competition both from other exchanges and from
off-exchange venues.
The proposed fees and rebates are identical to the Exchange's
existing fees and rebates, except that in order to comply with new Reg
NMS Rule 610(d), all transaction fees and rebates that are based on
tiers of transaction or quoting volumes will now be calculated using
volume figures derived from trading and quoting activity in the prior
month.
In sum, if the change proposed herein is unattractive to market
participants, it is likely that the Exchange will lose market share as
a result. Accordingly, the Exchange does not believe that the proposed
change will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
In terms of intra-market competition, the modified transaction fees and
rebates will apply equally to all members of the Exchange. Therefore,
the proposed changes do not impose any burden on competition. However,
even if these fees and rebates 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
schedule of transactions of fees and rebates into compliance with new
Reg NMS Rule 610(d).
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.\11\
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\11\ 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#f082859c95dd939f9d9d959e8483b0839593de979f86"><span class="__cf_email__" data-cfemail="5c2e293039713f3331313932282f1c2f393f723b332a">[email protected]</span></a>. Please include
file number SR-PHLX-2026-06 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-2026-06. 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.
[[Page 6689]]
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-2026-06 and should
be submitted on or before March 5, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-02804 Filed 2-11-26; 8:45 am]
BILLING CODE 8011-01-P
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