Notice2026-03018
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 2
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Published
February 17, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 31 (Tuesday, February 17, 2026)</title>
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[Federal Register Volume 91, Number 31 (Tuesday, February 17, 2026)]
[Notices]
[Pages 7336-7338]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03018]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104818; File No. SR-NASDAQ-2026-006]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Options 7, Section 2
February 11, 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, The Nasdaq Stock Market LLC (``Nasdaq'' 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 Nasdaq Options Market LLC
(``NOM'') Rules at Options 7, Section 2, Nasdaq Options Market--Fees
and Rebates. Specifically, the Exchange proposes to modify the Tier 5
and Tier 6 rebates paid to NOM Market Makers for adding liquidity in
Penny Symbols.\3\
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\3\ The term ``NOM Market Maker'' is a Participant that has
registered as a Market Maker on NOM pursuant to Options 2, Section
1, and must also remain in good standing pursuant to Options 2,
Section 9. In order to receive NOM Market Maker pricing in all
securities, the Participant must be registered as a NOM Market Maker
in at least one security. See Options 7, Section 1(a). The term
``Options Participant'' or ``Participant'' means a firm, or
organization that is registered with the Exchange pursuant to
Options 2A of the NOM Rules for purposes of participating in options
trading on NOM as a ``Nasdaq Options Order Entry Firm'' or ``Nasdaq
Options Market Maker''. See Options 1, Section 1(39).
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While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be 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/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 Exchange proposes to amend NOM's Pricing Schedule at Options 7,
Section 2, Nasdaq Options Market--Fees and Rebates.
Currently, the Exchange pays Customers,\4\ Professionals,\5\
Broker-Dealers,\6\ Firms,\7\ Non-NOM Market Makers,\8\ and NOM Market
Makers a rebate to add liquidity in Penny Symbols, on a per contract
basis. This rebate is paid to NOM Market Makers according to the
following schedule:
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\4\ The term ``Customer'' applies to any transaction that is
identified by a Participant for clearing in the Customer range at
The Options Clearing Corporation (``OCC'') which is not for the
account of broker or dealer or for the account of a ``Professional''
(as that term is defined in Options 1, Section 1(a)(47)). See
Options 7, Section 1(a).
\5\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s) pursuant to Options
1, Section 1(a)(47). All Professional orders shall be appropriately
marked by Participants. See Options 7, Section 1(a).
\6\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category. See Options 7, Section 1(a).
\7\ The term ``Firm'' applies to any transaction that is
identified by a Participant for clearing in the Firm range at OCC.
See Options 7, Section 1(a).
\8\ The term ``Non-NOM Market Maker'' is a registered market
maker on another options exchange that is not a NOM Market Maker. A
Non-NOM Market Maker must append the proper Non-NOM Market Maker
designation to orders routed to NOM. See Options 7, Section 1(a).
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Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6
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NOM Market Maker.................................. ($0.20) ($0.25) ($0.30) ($0.32) ($0.46) ($0.48)
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NOM Market Makers are paid this rebate per the highest tier
achieved according to the following schedule of tiers:
Monthly Volume
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Tier 1..................... Participant adds NOM Market Maker liquidity
in Penny Symbols and/or Non-Penny Symbols
of up to 0.10% of total industry customer
equity and ETF option average daily volume
(``ADV'') contracts per day in a month.
[[Page 7337]]
Tier 2..................... Participant adds NOM Market Maker liquidity
in Penny Symbols and/or Non-Penny Symbols
above 0.10% of total industry customer
equity and ETF option ADV contracts per
day in a month.
Tier 3..................... Participant: (a) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-
Penny Symbols above 0.20% of total
industry customer equity and ETF option
ADV contracts per day in a month; or
(b)(1) adds NOM Market Maker liquidity in
Penny Symbols and/or Non-Penny Symbols
above 0.15% of total industry customer
equity and ETF option ADV contracts per
day in a month, (2) transacts in all
securities through one or more of its
Nasdaq Market Center MPIDs that represent
(i) 0.50% or more of Consolidated Volume
(``CV'') which adds liquidity in the same
month on The Nasdaq Stock Market or (ii)
50 million shares or more ADV which adds
liquidity in the same month on The Nasdaq
Stock Market, and (3) executes 1.5 million
shares or more ADV in the same month
utilizing the M-ELO order type on The
Nasdaq Stock Market.
Tier 4..................... Participant adds NOM Market Maker liquidity
in Penny Symbols and/or Non-Penny Symbols
of above 0.60% of total industry customer
equity and ETF option ADV contracts per
day in a month.
Tier 5..................... Participant: (a) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-
Penny Symbols above 1.25% of total
industry customer equity and ETF option
ADV contracts per day in a month; or (b)
adds NOM Market Maker liquidity in Penny
Symbols and/or Non-Penny Symbols of above
0.40% of total industry customer equity
and ETF option ADV contracts per day in a
month and transacts in all securities
through one or more of its Nasdaq Market
Center MPIDs that represent 0.40% or more
of Consolidated Volume (``CV'') which adds
liquidity in the same month on The Nasdaq
Stock Market.
Tier 6..................... Participant: (a)(1) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-
Penny Symbols above 0.95% of total
industry customer equity and ETF option
ADV contracts per day in a month, (2)
executes Total Volume \9\ of 250,000 or
more contracts per day in a month, of
which 30,000 or more contracts per day in
a month must be removing liquidity, and
(3) adds Firm, Broker-Dealer and Non-NOM
Market Maker liquidity in Non-Penny
Symbols of 10,000 or more contracts per
day in a month; or (b)(1) adds NOM Market
Maker liquidity in Penny Symbols and/or
Non-Penny Symbols above 1.40% of total
industry customer equity and ETF option
ADV contracts per day in a month, and (2)
executes Total Volume of 250,000 or more
contracts per day in a month, of which
15,000 or more contracts per day in a
month must be removing liquidity.
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The Exchange proposes to modify this schedule of rebates to add
liquidity in Penny Symbols as it applies to NOM Market Makers, so that
the Tier 5 rebate would be $0.45 per contract (instead of $0.46), and
the Tier 6 rebate would be $0.47 per contract (instead of $0.48).
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\9\ ``Total Volume'' is defined as Customer, Professional, Firm,
Broker-Dealer, Non-NOM Market Maker and NOM Market Maker volume in
Penny Symbols and/or Non-Penny Symbols which either adds or removes
liquidity on NOM. See Options 7, Section 2.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ 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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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
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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 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.'' \12\
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\12\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005).
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Likewise, in NetCoalition v. Securities and Exchange Commission
\13\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\14\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \15\
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\13\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\14\ See NetCoalition, at 534-535.
\15\ Id. at 537.
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Further, ``[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'. . . .'' \16\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
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\16\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (Dec. 2, 2008), 73 FR 74770, 74782-83 (Dec. 9, 2008) (File No.
SR-NYSEArca-2006-21)).
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The proposed amended rebates to add liquidity in Penny Symbols are
equitable and not unfairly discriminatory because the Exchange would
uniformly apply the new fees and rebates to any member or member
organization that meets the criteria for these rebates. Furthermore,
the amended schedule of rebates is equitable and not unfairly
discriminatory because it is intended to attract more order flow to the
Exchange. All members and member organizations would benefit from the
opportunity to interact with such increased order flow.
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.
Inter-market Competition
The proposal does not impose an undue burden on inter-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes its proposal remains
competitive with other options markets and will offer market
participants with another choice of where 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. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other 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.
[[Page 7338]]
Intra-market Competition
The Exchange's proposed amendments to the Tier 5 and Tier 6 rebates
paid to NOM Market Makers for adding liquidity in Penny Symbols would
not impose an undue burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act,
because the Exchange would uniformly apply the new schedule of rebates
to all NOM Market Makers. Also, the revised schedule of rebates paid to
NOM Market Makers for adding liquidity in Penny Symbols is part of an
overall effort to help attract more order flow to the Exchange. All
members and member organizations would benefit from the opportunity to
interact with such increased order flow.
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="1062657c753d737f7d7d757e6463506375733e777f66">[email protected]</span></a>. Please include
file number SR-NASDAQ-2026-006 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-2026-006. 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-2026-006 and should be submitted
on or before March 10, 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. 2026-03018 Filed 2-13-26; 8:45 am]
BILLING CODE 8011-01-P
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