Notice2026-11146
Self-Regulatory Organizations; 24X National Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Limited Liability Agreement of 24X US Holdings LLC in Connection With a Transaction
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
June 4, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 107 (Thursday, June 4, 2026)</title>
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[Federal Register Volume 91, Number 107 (Thursday, June 4, 2026)]
[Notices]
[Pages 33836-33839]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11146]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105595; File No. SR-24X-2026-18]
Self-Regulatory Organizations; 24X National Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Limited Liability Agreement of 24X US Holdings LLC in
Connection With a Transaction
June 1, 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 May 27, 2026, 24X National Exchange LLC (``24X'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``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 limited liability agreement for
24X US Holdings LLC, the parent company of the Exchange, in connection
with the issuance of additional Voting Common Units of 24X US Holdings
LLC upon the conversion of a convertible promissory note. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is filing with the Commission a proposed rule change
to amend the Fourth Amended and Restated Limited Liability Company
Agreement (the ``24X US Holdco LLC Agreement'') of 24X US Holdings LLC
(``24X US Holdco'') to include amendments related to the issuance of
Voting Common Units of 24X US Holdco to Shinhan Securities Co., Ltd.
(``Shinhan'') upon the conversion of a convertible promissory note as
part of a capital raise (the ``Transaction''). The proposed amendments
are discussed below.
(a) Shinhan Transaction
On November 24, 2025, 24X issued to Shinhan a convertible
promissory note in exchange for certain consideration, and, on April
15, 2026, 24X and Shinhan agreed to convert the convertible promissory
note into 840,000 Voting Common Units of 24X US Holdco, subject to the
effectiveness of this filing.
The Exchange proposes to amend the 24X US Holdco LLC Agreement to
facilitate the Transaction, including authorizing the issuance of
additional Voting Common Units. The Voting Common Units are the same
type of membership interest (i.e., have the same privileges,
preference, duties, liabilities, obligations and rights) as the
existing interest held by current Members of 24X US Holdco: 24X Bermuda
Holdings LLC (``24X Bermuda Holdco'') and Rakuten Securities Holdings,
Inc. (``Rakuten''). With the completion of the Transaction, 24X Bermuda
Holdco's proportionate ownership of 24X US Holdco would be reduced by
approximately 0.78% from 84.41% to approximately 83.75%. Accordingly,
24X Bermuda Holdco will continue to own its ownership interest
[[Page 33837]]
in 24X US Holdco pursuant to the existing exceptions to the ownership
and voting limitation provisions for 24X Bermuda Holdco in the 24X US
Holdco LLC Agreement after giving effect to the Transaction and the
proposed amendments to the 24X US Holdco LLC Agreement.\3\ 24X believes
that the exceptions to the ownership and voting limitations provisions
for 24X Bermuda Holdco remain appropriate because the governance and
oversight of the Exchange would not change with the proposed amendments
to the 24X US Holdco LLC Agreement.\4\ 24X Bermuda Holdco would remain
the Manager of 24X US Holdco, and would continue to have control over
decision making for 24X US Holdco.\5\ In addition, with the completion
of the Transaction, Rakuten's proportionate ownership of 24X US Holdco
would be reduced by approximately 0.82% from 8.50% to approximately
8.43%. Correspondingly, Shinhan would own approximately 7.82% of 24X US
Holdco. Accordingly, Shinhan would not exceed any ownership or voting
limitations applicable to the Members set forth in the 24X US Holdco
LLC Agreement after giving effect to the Transaction and the proposed
amendments to the 24X US Holdco LLC Agreement. The proceeds from the
Transaction could be used by 24X US Holdco and its subsidiary, the
Exchange, for regulation and operation of the Exchange.
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\3\ See Section III(c)(ii)(A) of 24X US Holdco LLC Agreement.
\4\ With the completion of this Transaction, subject to any
applicable regulatory requirements, 24X anticipates that Shinhan
will participate as an observer on the Board of Managers of 24X
Bermuda Holdco.
\5\ See Section IV(a) of 24X US Holdco LLC Agreement.
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(b) Issuance of Additional Voting Common Units
To facilitate the Transaction, the Exchange proposes to amend the
24X US Holdco LLC Agreement to allow 24X US Holdco to issue additional
Voting Common Units. The first sentence of paragraph (a) of Section III
of the 24X US Holdco LLC Agreement currently states that ``[t]he
Company \6\ is authorized to issue 12,380,914 Common Units as follows:
(1) 11,280,914 Voting Common Units, and (2) 1,100,000 Non-Voting Common
Units.'' The Exchange proposes to revise this sentence to increase the
total number of Common Units that the Company is authorized to issue
from 12,380,914 Common Units to 12,465,282 Common Units, by increasing
the total number of Voting Common Units from 11,280,914 Voting Common
Units to 11,365,282 Voting Common Units.\7\ Accordingly, the first
sentence of paragraph (a) of Section III of the 24X US Holdco LLC
Agreement would read as follows: ``The Company is authorized to issue
12,465,282 Common Units as follows: (1) 11,365,282 Voting Common Units,
and (2) 1,100,000 Non-Voting Common Units.''
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\6\ ``The Company,'' as used herein, means 24X US Holdco, unless
otherwise noted.
\7\ 24X US Holdco would be authorized to issue 11,365,282 Voting
Common Units. 10,746,335 Voting Common Units would be owned by 24X
Bermuda Holdco, Rakuten and Shinhan, collectively. The additional
618,947 Voting Common Units would be reserved for use under the 24X
US Holdco Equity Incentive Plan.
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(c) Revised Exhibit A of the 24X US Holdco LLC Agreement
The Exchange also proposes to amend Exhibit A of the 24X US Holdco
LLC Agreement to include the updated ownership interests of 24X Bermuda
Holdco, Rakuten and Shinhan. Specifically, the chart in Exhibit A would
be revised to indicate that (1) 24X Bermuda Holdco would own 83.75% of
the Voting Common Units and 9,000,000 Voting Common Units, (2) Rakuten
would own 8.43% of the Voting Common Units and 906,335 Voting Common
Units, and (3) Shinhan would own 7.82% of the Voting Common Units and
840,000 Voting Common Units. In addition, Exhibit A would be revised to
indicate that the total number of Voting Common Units is 10,746,335.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act \8\ in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act \9\ in particular, in
that it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with
Section 6(b)(5) of the Exchange Act \10\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange also believes
that the proposed rule change would further the objectives of Section
6(b)(1) of the Act,\11\ in particular, in that such amendments enable
the Exchange to be so organized as to have the capacity to be able to
carry out the purposes of the Act and to comply with the provisions of
the Act, the rules and regulations thereunder, and the rules of the
Exchange.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
\10\ See id.
\11\ 15 U.S.C. 78f(b)(1).
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The Exchange believes that the proposed amendments to the 24X US
Holdco LLC Agreement related to the Transaction, including the issuance
of additional Voting Common Units, are consistent with the Act. Such
proposed changes to the 24X US Holdco LLC Agreement would facilitate
additional investment and funding into 24X US Holdco resulting from the
conversion of the convertible promissory note into Voting Common Units
pursuant to the Transaction, and such proceeds could be used by 24X US
Holdco and its subsidiary, the Exchange, for the regulation and the
operation of the Exchange, which, in turn, would enable the Exchange to
be so organized as to have the capacity to carry out the purposes of
the Act and to comply with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange, and, in turn,
would protect investors and the public interest.
The Exchange also believes that the proposal for the Voting Common
Units to be the same type of membership interest as the existing
interest held by 24X Bermuda Holdco and Rakuten is consistent with the
Act because, as described above, the Voting Common Units would have the
same privileges, preference, duties, liabilities, obligations and
rights, and be subject to the same voting construct, as ownership
interests under the current 24X US Holdco LLC Agreement. This would
provide for a governance structure of 24X US Holdco that is consistent
with the structure currently in place, which was previously approved by
the Commission.\12\ As the Voting Common Units are the same type of
membership interest as the existing ownership interest of 24X Bermuda
Holdco and do not otherwise impact the governance of 24X US Holdco or
the Exchange, the Exchange believes that the additional Voting Common
Units and related amendments to the 24X US Holdco LLC Agreement
associated with the additional Voting Common Units relate solely to the
administration of 24X US Holdco and the Transaction, and that such
amendments would not impact the governance or operations of the
Exchange. Accordingly, the Exchange
[[Page 33838]]
does not believe the issuance of the additional Voting Common Units or
the Transaction would in any way restrict the Exchange's ability to be
so organized as to have the capacity to carry out the purposes of the
Act and to comply with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange, nor does the
Exchange believe that the additional Voting Common Units or the
Transaction would be unfairly discriminatory. As noted above, the
governance and oversight of the Exchange would not change with the
proposed amendments to the 24X US Holdco LLC Agreement. 24X Bermuda
Holdco would remain the Manager of 24X US Holdco, and would continue to
have control over decision making for 24X US Holdco.\13\ Shinhan would
not have decision making authority with regard to the governance and
operation of the Exchange. For example, Shinhan would not have the
right to choose members of the Exchange Board or its officers.\14\
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\12\ See Securities Exchange Act Rel. No. 101777 (Nov. 27,
2024), 89 FR 97092 (Dec. 6, 2024).
\13\ See Section IV(a) of 24X US Holdco LLC Agreement.
\14\ See, e.g., Sections 6.1 and 8.1 of the Exchange LLC
Agreement.
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As noted above, 24X Bermuda Holdco's proportionate ownership of 24X
US Holdco will be reduced by approximately 0.78% as a result of the
Transaction, from 84.41% to approximately 83.75%. Accordingly, 24X
Bermuda Holdco will continue to own its ownership interest in 24X US
Holdco pursuant to the existing exceptions to the ownership and
limitation provisions in 24X US Holdco. Correspondingly, Shinhan would
own about 7.82% of 24X US Holdco, and Rakuten would own about 8.43% of
24X US Holdco. Accordingly, neither Shinhan nor Rakuten would exceed
any ownership or voting limitations applicable to the Members set forth
in the 24X US Holdco LLC Agreement after giving effect to the
Transaction and the proposed amendments to the 24X US Holdco LLC
Agreement.
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 Exchange Act. The Exchange
believes that the proposed rule change regarding the Transaction will
enhance the diversity of ownership of the Exchange. Upon the issuance
of the Voting Common Units pursuant to the Transaction, the ownership
of 24X US Holdco will be distributed among more holders. In addition,
the Exchange believes that, by providing the additional funding for the
Exchange, the Transaction will allow for enhanced competition in the
equities markets.
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
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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) \16\ thereunder.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4. In addition, Rule 19b-4(f)(6) requires a
self-regulatory organization 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) \17\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\18\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Exchange
states that waiver of the operative delay would permit the Exchange to
amend the Holdco LLC Agreement to allow for the Voting Common Units in
order to facilitate the closing of the Transaction. The Exchange also
states that waiver of the 30-day operative delay would allow the
Transaction to move forward, thereby allowing additional funding to 24X
US Holdco and its subsidiary, the Exchange. For these reasons, and
because the proposal raises no new or novel legal or regulatory issues,
the Commission finds that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change to be operative upon filing.\19\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ 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#0a787f666f27696567676f647e794a796f69246d657c"><span class="__cf_email__" data-cfemail="3745425b521a54585a5a525943447744525419505841">[email protected]</span></a>. Please include
file number SR-24X-2026-18 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-2026-18. 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-2026-18 and should be submitted on
or before June 25, 2026.
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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. 2026-11146 Filed 6-3-26; 8:45 am]
BILLING CODE 8011-01-P
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