Notice2026-15927
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule To Implement a Market Maker/Lead Market Maker Posting Incentive Program for Certain Non-Penny Issues
Primary source
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Published
August 6, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 150 (Thursday, August 6, 2026)</title>
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[Federal Register Volume 91, Number 150 (Thursday, August 6, 2026)]
[Notices]
[Pages 50902-50905]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-15927]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106029; File No. SR-NYSEARCA-2026-80]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Modify the
NYSE Arca Options Fee Schedule To Implement a Market Maker/Lead Market
Maker Posting Incentive Program for Certain Non-Penny Issues
August 3, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on July 28, 2026, NYSE Arca, Inc. (``NYSE Arca'' 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 self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 modify the NYSE Arca Options Fee Schedule
(``Fee Schedule'') to implement a Market Maker (``MM'')/Lead Market
Maker (``LMM'') (collectively ``Market Makers'') Posting Incentive
Program for certain non-Penny Issues. In addition, the Exchange
proposes to eliminate the Customer Against LMM Non-Penny Take Discount
on electronic transactions and remove MSCI related Index Options from
certain tier discounts and incentive programs.\4\ The Exchange proposes
to implement the fee changes effective July 28, 2026. The proposed rule
change is available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at
the principal office of the Exchange.
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\4\ In addition, the Exchange proposes non-substantive changes
to: (i) remove reference to Endnote 14 on the section title ``NYSE
Arca OPTIONS: TRADE-RELATED CHARGES FOR STANDARD OPTIONS;'' and (ii)
amend Endnote 8 to include the definition of ``Exchange System
Disruption,'' which is being deleted as a result of the elimination
of the Customer Against LMM Non-Penny Take Discount.
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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 proposes to modify the Fee Schedule to: (i) implement
a Market Maker Posting Incentive Program for electronic non-Penny
Issues; (ii) eliminate the Customer Against LMM Non-Penny Take Discount
for electronic transactions; and (iii) remove MSCI related Index
Options from certain tier discounts and incentive programs.
The Exchange proposes to implement the fee changes effective July
28, 2026.\5\
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\5\ The Exchange originally filed to amend the Fee Schedule on
July 1, 2026 (SR-NYSEARCA-2026-74). SR-NYSEARCA-2026-74 was
withdrawn on July 14, 2026 and replaced by SR-NYSEARCA-2026-78. SR-
NYSEARCA-2026-78 was withdrawn on July 28, 2026, and replaced by
this filing.
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Market Maker Posting Incentive Program
Currently, LMMs and MMs receive a credit of $0.40 and $0.05,
respectively, for posting liquidity in non-penny issues.\6\ In
addition, OTP Holders and OTP Firms receive a credit on all executions
of non-customer posted interest in non-penny issues. The amount of such
credit is outlined in a tier table ($0.32 to $0.82) based on the
average number of electronic executions per day.\7\
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\6\ See Fee Schedule, ``NYSE Arca Options: Trade-Related Charges
For Standard Options, Transaction Fee For Electronic Executions--Per
Contract.''
\7\ See Fee Schedule, ``NYSE Arca Options: Trade-Related Charges
For Standard Options, Non-Customer, Non-Penny Posting Credit
Tiers.''
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The Exchange proposes to enhance these credits by adopting the
``Market Maker Posting Incentive Program for Designated Non-Penny
Issues.'' \8\ Under the program, the Exchange proposes to provide OTP
Holders and OTP Firms, acting as a Market Maker, an additional credit
on executions on their posted interest in each Designated Non-Penny
Issue. The credit will be $0.40 per contract if, when added to the
credits received for posting liquidity in non-penny issues, noted
above, it exceeds the applicable per contract credit it would receive
as an OTP Holder or OTP Firm under the Non-Customer, Non-Penny Posting
Credit Tiers. If not, Market Makers will receive a credit equal to the
latter. The credit will be in effect until the Designated Non-Penny
Issue is added to the Penny Interval Program. The Exchange will provide
advance notice to Market Makers of additions to the Penny Interval
Program via Trader Update.
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\8\ See Fee Schedule, proposed Market Maker Posting Incentive
Program for Designated Non-Penny Issues. Per proposed Endnote 14,
``Designated Non-Penny Issues'' include all non-penny issues that
trade greater than 1 million contracts in industry volume, as
reported by the Options Clearing Corporation (``OCC'') on their
first day of listing. For example, Space Exploration Technologies
Corp. (symbol: SPCX) would be eligible for the program, having
traded 1,727,086 contracts on June 16, 2026, its first day of
listing.
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The credit is intended to address the fact that, while there will
be Market Maker engagement in eligible Designated Non-Penny Issues,
that engagement is not evenly distributed across trading venues. The
Exchange has experienced instances in which its share of trading in a
Designated Non-Penny Issue was significantly lower than its overall
market share calling into question its competitiveness with rebates and
credits offered by other exchanges in newly listed, non-Penny symbols.
The proposed program is intended to address this disparity and
encourage tighter markets and greater trading interest on the Exchange
during this period. The credit will no longer be necessary once the
Designated Non-Penny Issue has been moved to the Penny Interval
Program, since the
[[Page 50903]]
Exchange has found that its existing pricing structure has proven
effective in attracting order flow. The incentive is designed
specifically to address the competitive disparity that exists during
the non-Penny interval timespan, prior to the narrowing of the tick
size.
The Exchange is adopting this incentive program to encourage Market
Makers to provide robust liquidity in high volume new listings. The aim
is to ensure that new issues experiencing significant volume on their
first day of trading benefit from Market Maker participation and
tighter markets until they transition to the Penny Interval Program.
Customer Against LMM Non-Penny Take Discount
As set forth in the Fee Schedule, there is an $0.85 fee for
Customer electronic executions in non-penny issues.\9\ For Customer
executions that take liquidity in a non-Penny class from the trading
interest of an LMM (including orders and quotes) a $0.67 fee is charged
if the OTP Holder or OTP Firm entering the Customer's order during the
month, (i) executes an average daily volume (``ADV'') on the Exchange
of at least 15,000 contracts from electronic Customer orders that take
liquidity in non-Penny classes or (ii) executes a combined ADV on the
Exchange of at least 30,000 contracts in non-Penny classes from
electronic Customer orders that take liquidity and affiliated
electronic Market Maker orders and quotes that post liquidity in non-
Penny classes.\10\ In essence, the disparate pricing provides an $0.18
discount for Customer transactions against an LMM.
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\9\ See Fee Schedule, ``NYSE Arca Options: Trade-Related Charges
For Standard Options, Transaction Fee For Electronic Executions--Per
Contract.''
\10\ Id.
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The Exchange proposes to remove the separate pricing for Customer
electronic transactions against an LMM and its related discount. The
purpose of the disparate pricing and discount was to attract additional
Customer order flow to the Exchange. However, the discount has not
proved effective and has not been achieved by any participants in over
two years. Accordingly, the Exchange is removing it and simplifying the
Non-Penny Fee schedule.
MSCI Tier Discounts
Currently, the Exchange lists a number of index options for which
an MSCI index is the underlying security (i.e., MSCI EAFE Index (MXEA),
MSCI Emerging Markets Index (MXEF), MSCI World Index (MXWLD), MSCI ACWI
Index (MXACW) add MSCI USA Index (MXUSA)) (collectively the ``MSCI
Index Options''). The Exchange has initiated a plan to remove MSCI
products from the multiply-listed Arca tier treatment to ultimately
create MSCI-specific tiers consistent with Index product-specific tier
structures employed at other exchanges, such as CBOE's fee structure
regarding Indexes (SPX, VIX, etc.).\11\
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\11\ See CBOE Fee Schedule at Cboe_FeeSchedule.pdf.
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As an initial step in this process, the Exchange proposes to amend
Endnote 19 to explicitly exclude transactions in MSCI Index Options
from applicable credit tiers and incentive programs (i.e., Non-
Customer, Non-Penny Posting Credit Tiers, Customer Incentive Program,
Customer Posting Credit Tiers in Non-Penny Issues, Customer Take Fee
Discount Tiers, Discount in Take Liquidity Fees For Professional
Customer and Non-Customer Liquidity Removing Interest, Discount on Non-
Customer Complex Surcharge and Customer Complex Credit Tiers).\12\
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\12\ See Fee Schedule proposed Endnote 19.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\14\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4) and (5).
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As a threshold matter, the Exchange is subject to significant
competitive forces in the market for options securities transaction
services that constrain its pricing determinations in that market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, 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.'' \15\
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\15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS
Adopting Release'').
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There are currently 18 registered options exchanges competing for
order flow. Based on publicly available information and, excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\16\ Therefore, currently no exchange possesses significant
pricing power in the execution of multiply-listed equity and ETF
options order flow. More specifically, in May 2026, the Exchange had
10.64% market share of executed volume of multiply-listed equity and
ETF options order flow. In such a low concentrated and highly
competitive market, no single options exchange possesses significant
pricing power in the execution of option order flow.
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\16\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available at: <a href="https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics">https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics</a>.
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The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. In response to this
competitive marketplace, the Exchange has established incentives, such
as the Market Maker Posting Incentive Program for Designated Non-Penny
Issues, to encourage market maker participation and tighter markets to
induce participants to direct order flow in certain products to the
Exchange.
The Exchange also believes the proposed Market Maker Posting
Incentive Program is an equitable allocation of its fees and credits
because the proposed credit is based on the amount and type of business
transacted on the Exchange and all Market Makers can try to earn the
proposed credit, or not. The Program is intended to encourage Market
Makers to provide robust liquidity in high volume new listings so as to
ensure that new issues experiencing significant volume on their first
day of trading and thereafter to benefit from Market Maker
participation and tighter markets until they transition to the Penny
Interval Program.
To the extent that the proposed change provides tighter spreads and
attracts more activity to the Exchange, this increased order flow would
continue to make the Exchange a more competitive venue. Thus, the
Exchange believes the proposed rule change would improve market quality
for all market participants on the Exchange and, accordingly, attract
more order flow to the Exchange thereby improving
[[Page 50904]]
market-wide quality and price discovery.
Additionally, the modifications continue the equitable allocation
of reasonable dues, fees, and other charges among its members, issuers
and other persons using its facilities and does not unfairly
discriminate between market participants. The proposed changes take
into account that the Exchange operates in a highly competitive market
and that it must, therefore, continually adjust its fees and rebates to
remain competitive with other exchanges and to attract order flow to
the Exchange. The Exchange believes that the proposed rule change
reflects this competitive environment.
The Exchange also believes that the Market Maker Posting Incentive
Program is not unfairly discriminatory, as it would apply equally to
all Market Makers. The Exchange further believes that the proposed
incentive available to Market Makers is not unfairly discriminatory to
other market participants because it is intended to encourage the role
performed by Market Makers in providing robust liquidity and encourage
tighter spreads on the Exchange to the benefit of all market
participants.
The Exchange also believes that the elimination of the Customer
Against LMM Non-Penny Take Discount and removal of MSCI Index Options
from certain credit tiers and incentive programs is reasonable,
equitable, and not unfairly discriminatory. Their elimination and
removal provide for the equitable allocation of reasonable dues, fees,
and other charges among its members, issuers and other persons using
its facilities and does not unfairly discriminate between OTP Holders
and OTP Firms.
Finally, their elimination and removal will apply equally to all
affected market participants because it would impact all market
participants equally. Moreover, removal from the tiers is designed to
facilitate trading and to promote continuity for market participants in
MSCI Options. The proposed changes would apply to all similarly
situated market participants that trade MSCI Options, and, accordingly,
the proposed changes would not impose a disparate burden on competition
among market participants on the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act, the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
Intramarket Competition. The increase in credits under the proposed
Market Maker Posting Incentive Program for Designated Non-Penny Issues
are designed to continue to attract order flow to the Exchange by
offering Market Makers an incentive to continue to provide robust
liquidity in certain products to the benefit of all market
participants. The proposed credit enhancement would apply equally to
all similarly situated market participants and encourage the important
function that market makers serve in providing liquidity and price
discovery for all market participants.
In addition, the Exchange believes that the proposed elimination of
the Customer Against LMM Non-Penny Take Discount and removal of MSCI
Index Options from certain credit tiers and incentive programs would
not affect intramarket competition because, as noted above, the
Discount has not effectively encouraged increased Customer order flow
to the Exchange and both would impact all market participants equally
and, therefore, would not impose a disparate burden on competition
among market participants on the Exchange.
Finally, the Exchange believes that the proposed alignment of the
Fee Schedule with the removal of MSCI Options from the Exchange's tier
treatment would not affect intramarket competition because, as noted
above, it would impact all market participants equally. Moreover, this
change is designed to facilitate trading and to promote continuity for
market participants in MSCI Options. The proposed changes would apply
to all similarly situated market participants that trade MSCI Options,
and, accordingly, the proposed changes would not impose a disparate
burden on competition among market participants on the Exchange.
Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily favor one
of the other 17 competing option exchanges if they deem fee levels at a
particular venue to be excessive. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges and to attract order flow to the Exchange. Based on publicly
available information, and excluding index-based options, no single
exchange has more than 16% of the market share of executed volume of
multiply listed equity and ETF options trades. Therefore, currently no
exchange possesses significant pricing power in the execution of
multiply listed equity and ETF options order flow. More specifically,
in May 2026, the Exchange had 10.64% market share of executed volume of
multiply listed equity and ETF options order flow.
The proposed credit under the Market Maker Posting Incentive
Program for Designated Non-Penny Issues is designed to encourage Market
Makers to provide robust liquidity in high volume new listings. The aim
is to ensure that new issues experiencing significant volume on their
first day of trading benefit from Market Maker participation and
tighter markets. To the extent it achieves this and attracts more
orders to the Exchange, this increased order flow would continue to
make the Exchange a more competitive venue for, among other things,
order execution. Thus, the Exchange believes the proposed rule change
would improve market quality for all market participants on the
Exchange and, as a consequence, improve market-wide quality and price
discovery.
In addition, the Exchange believes that the elimination of the
Customer Against LMM Non-Penny Take Discount and the removal of the
MSCI Index Options from certain tier credits and incentive programs
would not affect intermarket competition. As noted above, the Exchange
operates in a highly competitive market in which the Exchange must
continually adjust its fees and rebates to remain competitive with
other exchanges and to attract order flow to the Exchange. The Exchange
believes that the proposed rule change reflects this competitive
environment because it removes an underutilized program that did not
achieve its intended purpose.
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 foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \17\ of the Act and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if
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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 under
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\19\ 15 U.S.C. 78s(b)(2)(B).
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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#aedcdbc2cb83cdc1c3c3cbc0daddeeddcbcd80c9c1d8"><span class="__cf_email__" data-cfemail="deacabb2bbf3bdb1b3b3bbb0aaad9eadbbbdf0b9b1a8">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-80 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-NYSEARCA-2026-80. 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-NYSEARCA-2026-80 and should be submitted
on or before August 27, 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. 2026-15927 Filed 8-5-26; 8:45 am]
BILLING CODE 8011-01-P
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