Notice2026-05945
Self-Regulatory Organizations; 24X National Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 11.6 to Clarify the Handling of Certain Orders and Update References to Regulation NMS
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
March 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 59 (Friday, March 27, 2026)</title>
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[Federal Register Volume 91, Number 59 (Friday, March 27, 2026)]
[Notices]
[Pages 14897-14899]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05945]
[[Page 14897]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105073; File No. SR-24X-2026-08]
Self-Regulatory Organizations; 24X National Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 11.6 to Clarify the Handling of Certain Orders and
Update References to Regulation NMS
March 24, 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 March 16, 2026, 24X National Exchange LLC (``24X'' or the
``Exchange'') 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).
\4\ 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 24X Rule 11.6 to update references
to Regulation NMS and to clarify the handling of orders that contain
both a Post Only order handling instruction and either (i) no
additional instruction or (ii) an additional Display-Price Sliding or
Cancel Back instruction to facilitate compliance with Rule 610(e) of
Regulation NMS. The proposed rule change is available on the Exchange's
website at <a href="https://equities.24exchange.com/regulation">https://equities.24exchange.com/regulation</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 self-regulatory organization
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 those 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 parts 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 24X Rule 11.6
to update references to Regulation NMS and to clarify the handling of
orders that contain both a Post Only order handling instruction and
either (i) no additional instruction or (ii) an additional Display-
Price Sliding or Cancel Back instruction to facilitate compliance with
Rule 610(e) of Regulation NMS.
As background, the current rules state that an order entered with a
Post Only instruction does not remove liquidity, except when the order
is an order to buy or sell a security priced below $1.00, or when
executing as the taker of liquidity would be economically beneficial to
the firm entering the order--i.e., if the value of such execution when
removing liquidity equals or exceeds the value of such execution if the
order instead posted to the 24X Book and subsequently provided
liquidity, including the applicable fees charged or rebates
provided.\5\ Today, the Exchange's rules state that this handling
applies to Post Only orders entered with a Display-Price Sliding \6\
instruction, which is a re-pricing instruction used for compliance with
Regulation NMS. Thus, an executable order entered with a Post Only
instruction is eligible to remove liquidity in the circumstances
described in Rule 11.6(l)(2) instead of having its ranked price or
display price adjusted pursuant to those order handling instruction.
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\5\ See 24X Rule 11.6(l)(2). To determine at the time of a
potential execution whether the value of such execution when
removing liquidity equals or exceeds the value of such execution if
the order instead posted to the 24X book and subsequently provided
liquidity, the Exchange uses the highest possible rebate paid and
the highest possible fee charged for such executions on the
Exchange.
\6\ ``Display-Price Sliding'' is an order instruction requiring
that where an order would be a Locking Quotation or Crossing
Quotation of an external market if displayed by the System on the
24X Book at the time of entry, will be ranked at the Locking Price
in the 24X Book and displayed by the System at one Minimum Price
Variation lower (higher) than the Locking Price for orders to buy
(sell). See 24X Rule 11.6(j)(1)(A).
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However, the Exchange also offers a Cancel Back instruction that is
not covered by 24X Rule 11.6(l)(2). An order entered with a Cancel Back
instruction is immediately cancelled instead of re-priced when
displaying the order at its limit price would create a violation of
Regulation NMS, or if the order could not otherwise be executed or
posted at its limit price.\7\ Even if Users select the Cancel Back
instruction, however, orders entered with a Post Only instruction are
handled in the same manner regardless of whether the Display-Price
Sliding or Cancel Back instruction is selected.\8\ The Exchange
therefore proposes to amend 24X Rule 11.6(l)(2) to eliminate the
reference to Display-Price Sliding, given that such an instruction is
not required for a Post Only instruction to remove liquidity under the
noted circumstances.\9\
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\7\ ``Cancel Back'' is an instruction the User may attach to an
order instructing the System to immediately cancel the order when,
if displayed by the System on the 24X Book at the time of entry, or
upon return to the System after being routed away, would create a
violation of Rule 610(e) of Regulation NMS or Rule 201 of Regulation
SHO, or the order cannot otherwise be executed or posted by the
System to the 24X Book at its limit price. See 24X Rule 11.6(a).
\8\ Rule 11.6(j)(1)(A)(iv) states that any display-eligible
order with a Post Only instruction that would be a Locking Quotation
or Crossing Quotation of the Exchange upon entry will be cancelled.
In the event the NBBO changes such that an order with a Post Only
instruction subject to Display-Price Sliding instruction would be
ranked at a price at which it could remove displayed liquidity from
the 24X Book, the order will be cancelled.
\9\ MEMX and Cboe EDGX Exchange, Inc. similarly filed to remove
the reference to Display Price Sliding from their rule text, and
allow all Post Only orders to remove liquidity if economically
beneficial to the firm entering the order. See Securities Exchange
Act Release No. 103968 (September 15, 2025), 90 FR 45069 (September
18, 2025) (SR-MEMX-2025-29); Securities Exchange Release No. 88515
(April 4, 2019), 84 FR 14427 (April 10, 2019) (SR-CboeEDGX-2019-
014).
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The Exchange believes that removing the reference to this
instruction in the rule would reduce potential confusion as the order
handling described in the rule today applies to all orders entered with
a Post Only instruction, and not a specific subset of those orders. No
changes to the Exchange's trading or other systems are contemplated by
the proposed rule change, which is instead designed to increase
transparency around the Exchange's process. This proposed change is
based on the rules of MEMX LLC (``MEMX'').\10\
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\10\ The proposed rule text is substantially similar to MEMX
Rule 11.6(l)(2).
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In addition, the Exchange proposes to amend the references to Rule
610(d) of Regulation NMS that appear in 24X Rule 11.6(a), (b), (e), and
(j) to reflect the fact that on September 18, 2024, the Commission
adopted several amendments to Regulation NMS \11\
[[Page 14898]]
which became effective on February 2, 2026.\12\ These amendments
resulted in the renumbering of former Rule 610(d) (``Locking or
crossing quotations'') as Rule 610(e). The Exchange proposes to
correspondingly amend its rules so that all references to former Rule
610(d) now correctly refer to Rule 610(e).
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\11\ 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'').
\12\ 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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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b) of the Act,\13\ in general, and
Section 6(b)(5) of the Act,\14\ in particular, in that it is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, to promote just and equitable
principles of trade, 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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Specifically, the Exchange believes that the proposed rule change
is consistent with the public interest and the protection of investors
as it would avoid potential confusion about how an order is handled if
entered with both a Post Only and Cancel Back instruction or no
additional instruction at all. Today, the Exchange's rules provide that
an order entered into the 24X Book with a Post Only instruction would
remove liquidity in certain circumstances, such as when economically
beneficial for the firm entering the order. In addition, the rules
specify that this handling applies to orders entered with a Post Only
and a Display-Price Sliding instruction. The rules, however, are silent
as to the handling applied if an order with a Post Only instruction
contains a Cancel Back instruction or no additional instruction at all.
The Exchange's order handling is, in fact, the same regardless of which
of these instructions are chosen by the member. As such, the Exchange
believes that it is appropriate to amend 24X Rule 11.6(l)(2) to
eliminate the reference to the Display-Price Sliding instruction,
thereby making clear that this handling applies to all orders entered
with a Post Only instruction and not only those that also contain a
Display-Price Sliding instruction.
The Exchange believes that this order handling is appropriate
regardless of whether an order entered with a Post Only instruction
also contains a Display-Price Sliding, Cancel Back, or no additional
instruction. Specifically, the Exchange believes that it is consistent
with just and equitable principles of trade to permit an order entered
with a Post Only instruction to remove liquidity when the order is an
order to buy or sell a security priced below $1.00, or when executing
as the taker of liquidity would be economically beneficial to the firm
entering the order. This handling is designed to ensure that orders
entered with a Post Only instruction are eligible to trade in certain
circumstances where the entering firm may have an interest in securing
an execution on entry--i.e., as the taker of liquidity--notwithstanding
the member's use of the Post Only instruction. Although the Exchange's
rules currently mention order handling for the Display-Price Sliding
instruction specifically, this functionality should be applied equally
to any order entered with a Post Only instruction. Thus, amending the
rule as proposed would provide additional transparency into a feature
offered by the Exchange that is potentially beneficial to members that
utilize the Post Only instruction.
The Exchange also believes that the proposed change to update
references to Rule 610(e) of Regulation NMS is consistent with the Act
because it will update references that are currently out of date and
reduce confusion surrounding such references, thereby removing
impediments to and perfecting the mechanism of a free and open market
and a national market system.
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. Rather, the proposed rule
change would remove ambiguity and outdated references in the 24X rules.
No change to the Exchange's order handling is contemplated by this
proposed rule change. The Exchange therefore believes that the proposed
rule change would increase transparency around the operation of the
Exchange to the benefit of members and investors without imposing any
significant burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
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) of the Act \15\ and Rule 19b-4(f)(6) \16\ thereunder.
Because the foregoing 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 for
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) \18\ thereunder.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\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)(iii)
requires the Exchange 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 requested
that the Commission waive the 30-day operative delay so that the
proposed rule change may become operative immediately upon filing. The
Exchange states that waiver of the operative delay is consistent with
the protection of investors and the public interest because it would
allow the Exchange to immediately amend its rules to avoid potential
confusion around the operation of the Post Only instruction. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal will clarify the current handling of orders
entered with a Post Only instruction and does not raise any novel
regulatory
[[Page 14899]]
issues and will allow the Exchange to immediately update outdated
references. Accordingly, the Commission hereby waives the operative
delay and designates the proposed rule change to be operative upon
filing.\21\
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\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ For purposes only of waiving the 30-day operative delay,
the Commission also has 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 shall institute proceedings to
determine whether the proposed rule change 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#6012150c054d030f0d0d050e1413201305034e070f16"><span class="__cf_email__" data-cfemail="95e7e0f9f0b8f6faf8f8f0fbe1e6d5e6f0f6bbf2fae3">[email protected]</span></a>. Please include
file number SR-24X-2026-08 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-24X-2026-08. 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-24X-2026-08 and
should be submitted on or before April 17, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-05945 Filed 3-26-26; 8:45 am]
BILLING CODE 8011-01-P
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