Notice2026-17464
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Warrant Performance Incentive Program To Add ETPs to the Definition of Liquidity Improvement Symbols and High-Volume Symbols
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
August 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 165 (Thursday, August 27, 2026)</title>
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[Federal Register Volume 91, Number 165 (Thursday, August 27, 2026)]
[Notices]
[Pages 55374-55377]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17464]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106181; File No. SR-TXSE-2026-021]
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Exchange's Warrant Performance Incentive Program To Add ETPs
to the Definition of Liquidity Improvement Symbols and High-Volume
Symbols
August 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 August 14, 2026, Texas Stock Exchange LLC (the ``Exchange'' or
``TXSE'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Exchange's warrant
performance incentive program (the ``Rodeo Program'' or the
``Program'') \3\ to add ETPs \4\ to the definition of Liquidity
Improvement Symbols and High-Volume Symbols.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 105090 (March 26, 2026),
91 FR 16044 (March 31, 2026) (SR-TXSE-2026-003) (the ``Rodeo Program
Release'').
\4\ For purposes of this proposal, the term ETP shall mean any
security described in Chapter 17 of the Exchange's rulebook.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Rodeo Program to
add ETPs to the definition of Liquidity Improvement Symbols and High-
Volume Symbols. The text of the proposed rule change is available on
the Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>) at the
Exchange's website (<a href="https://www.txse.com/regulations/rules-filings">https://www.txse.com/regulations/rules-filings</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 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 Exchange proposes to add exchange traded funds to the
definition of Liquidity Improvement Symbols \5\ and High-Volume Symbols
\6\ for purposes of calculating the Enhanced Liquidity Symbol
Multiplier as part of the Program.
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\5\ As provided in the Rodeo Program Release, Liquidity
Improvement Symbols are symbols that the Exchange believes could
benefit from tighter spreads and price improvement opportunities and
deeper liquidity.
\6\ As provided in the Rodeo Program Release, High-Volume
Symbols are generally high-volume symbols that have an average
spread of greater than $0.01 and/or trade on away markets more
intraday than on their primary listing market.
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The Exchange previously adopted the Rodeo Program to provide
Members \7\ of the Exchange that submit an initial prepayment fee (the
``Prepayment Fee'') with a ticket redeemable for warrants that provide
the right to purchase equity in the Exchange's parent holding company,
TXSE Group Inc. (``TXSE Group''). As described in the Rodeo Program
Release, such warrants vest upon the achievement of certain liquidity
volume thresholds on the Exchange. The Rodeo Program commences on
September 1, 2026, and runs for one year, concluding at the end of the
business day on August 31, 2027 (the ``Rodeo Period''), subject to
Exchange notice.\8\
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\7\ As defined in TXSE Rule 1.005(q), the term ``Member'' means
any registered broker or dealer that has been admitted to membership
in the Exchange. A Member has the status of a ``member'' of the
Exchange as that term is defined in Section 3(a)(3) of the Act.
\8\ As provided in the Rodeo Program Release, the Exchange may,
in its sole discretion, delay the beginning of the Rodeo Period by
issuing a circular to Participants notifying them of such delay at
least two weeks in advance of September 1, 2026. Any such delay
would push back the dates of the beginning and end of each of the
Measurement Periods by the amount of the delay. Each Measurement
Period would continue to be a three-month period and the Rodeo
Period would remain a one-year period. The Exchange will not delay
the beginning of the Rodeo Period by more than six months. See Rodeo
Program Release at 16045.
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Each Member of the Exchange was eligible to become a Participant on
a first-come first-served basis by submitting all required
documentation for participation by May 1, 2026 and paying a $250,000
Prepayment Fee by May 15, 2026.\9\ In order to be a Participant, a
Member was required to: (i) be an approved Member of the Exchange in
good standing; \10\ (ii) be a registered broker-dealer pursuant to
Section 15 of the Exchange Act; (iii) qualify as an ``accredited
investor'' as that term is defined in Regulation D under the Securities
Act of 1933; (iv) have executed all required documentation for
participation in the Rodeo Program by May 1, 2026, i.e., the warrant
agreement and confidentiality agreement; and (v) have tendered the
Prepayment Fee no later than May 15, 2026. A Participant is issued a
``ticket,'' which is redeemable in exchange for warrants representing
100,000 shares of TXSE Group Voting Common Stock (``TXSE Group
Stock''),\11\ a portion of which is eligible to vest at the end of
[[Page 55375]]
each three-month period during the Rodeo Period (each, a ``Measurement
Period'') based on the Participant's achievement of a specified
percentage of Total Consolidated Volume \12\ (``TCV'') on the Exchange
(the ``Target Performance''). As provided in the Rodeo Program Release,
the vesting requirements are as follows: \13\
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\9\ The Exchange subsequently submitted a proposal to re-open
the application window for the Program and to make the Program
available to Sponsored Participants. See Securities Exchange Act
Release No. 106044 (August 6, 2026), 91 FR 51756 (August 11, 2026)
(SR-TXSE-2026-018) (the ``Rodeo Re-Opening Release'').
\10\ For purposes of the Program, the term ``good standing''
means that a Member is not delinquent with respect to Exchange fees
or other charges and is not suspended or barred from being a Member.
\11\ Shares are subject to the Eighth Amended and Restated
Stockholders' Agreement of TXSE Group Inc. as amended and of the
Certificate of Formation of TXSE Group Inc.
\12\ As described in the Rodeo Program Release, ``Total
Consolidated Volume'' or ``TCV'' is calculated as the volume
reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan during the applicable
Measurement Period, subject to certain exclusions. See Rodeo Program
Release at 16046.
\13\ See Rodeo Program Release at 16047.
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Shares available
Measurement period Target performance for vesting
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1 (9/1/26-11/30/26)............. 0.025% TCV......... 10,000
2 (12/1/26-2/26/27)............. 0.05% TCV.......... 20,000
3 (3/1/27-5/31/27).............. 0.075% TCV......... 30,000
4 (6/1/27-8/31/27).............. 0.125% TCV......... 40,000
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The warrants of Participants that achieve Target Performance for a
Measurement Period will be assigned an exercise price through the
Exercise Price Competition which is based on the Participant's
Multiplier Adjusted Volume during the Measurement Period.\14\
Participants that do not achieve the Target Performance but achieve at
least 50% of the Target Performance are eligible for partial vesting,
as described in the Rodeo Program Release.\15\ The total number of
tickets available under the Program was originally between three and 20
among all Participants and each Participant may receive up to three
tickets, in each case subject to the Exchange's discretion to allocate
tickets as described in the Rodeo Program Release.\16\ As provided in
the Rodeo Re-Opening Release, there are currently up to four tickets
available for both Members and Sponsored Participants that meet all
necessary requirements.
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\14\ See Rodeo Program Release at 16047-16048.
\15\ See Rodeo Program Release at 16045.
\16\ Id.
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For each Measurement Period, all Participants that meet the Target
Performance for a ticket (``Fully Vesting Participants'') will also be
assigned the exercise price of their warrants based on the
Participant's ranking in total adjusted volume (``Multiplier Adjusted
Volume''), calculated as total shares traded on the Exchange with
certain types of transactions being subject to volume multipliers and
thus counted as a multiple of the shares actually traded, as
applicable, among other Fully Vesting Participants during that
Measurement Period. The higher the rank of a Fully Vesting
Participant's Multiplier Adjusted Volume, the lower their exercise
price will be. Fully Vesting Participants will be assigned an exercise
price for their warrants based on the Fully Vesting Participant's
ranking in the Multiplier Adjusted Volume among all Fully Vesting
Participants during a Measurement Period. Multiplier Adjusted Volume
applies only to exercise price assignment and does not have any impact
on vesting or the Target Performance for any Measurement Period.
Multiplier Adjusted Volume
In calculating each Fully Vesting Participant's Multiplier Adjusted
Volume,\17\ the volume multipliers are:
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\17\ Multiplier Adjusted Volume is calculated as follows:
((number of shares in transactions that do not qualify for a
multiplier) + (number of shares in transactions that qualify for
Intraspread Multiplier x 2) + (number of shares in transactions
eligible for the Auction Multiplier x 10) + (number of shares in
transactions that qualify for the Add Displayed Volume Multiplier x
1.2) + (number of shares in transactions that qualify for the ELS
Multiplier x 2))/(number of tickets issued to the Fully Vesting
Participant). Transactions may qualify for more than one multiplier
except that a transaction that is eligible for the Auction
Multiplier is not eligible for other multipliers. For example, a
transaction that would qualify for the ELS Multiplier and the
Intraspread Multiplier will receive both the ELS Multiplier of 2x
and the Intraspread Multiplier of 2x, as further explained in the
example below.
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(i) Intraspread Multiplier: transactions for which the adding order
added non-displayed liquidity and the execution occurs within the NBBO
\18\ are subject to a 2x multiplier;
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\18\ As provided in Rule 1.005(r), the term ``NBBO'' means the
national best bid or offer.
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(ii) Auction Multiplier: transactions in Opening Auctions \19\ and
Closing Auctions \20\ for which the order is an Eligible Auction Order
\21\ in securities for which TXSE is the primary listing market are
subject to a 10x multiplier;
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\19\ Opening Auction functionality is described in Rule
11.022(b).
\20\ Closing Auction functionality is described in Rule
11.022(c).
\21\ As provided in Rule 11.022(a)(8), the term ``Eligible
Auction Order'' means any MOO, LOO, LLOO, MOC, LOC or LLOC order
(each as defined below) that is entered in compliance with its
respective cutoff for an Opening Auction (as defined below) or
Closing Auction (as defined below), any RHO order prior to the
Opening Auction, any limit or market order not designated to
exclusively participate in the Closing Auction entered during the
Quote-Only Period (as defined below) of an IPO Auction subject to
the below restrictions, and any limit or market order not designated
to exclusively participate in the Opening Auction or Closing Auction
entered during the Quote-Only Period of a Halt Auction (as defined
below).
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(iii) Add Displayed Volume Multiplier: transactions for which the
order adds displayed liquidity to the Exchange are subject to a 1.2x
multiplier; and
(iv) Enhanced Liquidity Symbol (``ELS'') Multiplier: transactions
in securities that are included in a list of securities which the
Exchange believes could benefit from enhanced liquidity are subject to
a 2x multiplier, including Liquidity Improvement Symbols and High-
Volume Symbols (collectively ``ELSM Securities''),\22\ both defined
below. The Exchange will apply several objective factors related to
each security's trading characteristics and designate the securities
that meet certain thresholds with respect to these factors as Liquidity
Improvement Symbols \23\ or High-Volume Symbols.\24\
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\22\ The Exchange will publish the list of ELSM Securities on
its website at least 15 calendar days prior to the start of the
Rodeo Program Period. The Exchange will also publish the list of
ELSM Securities for a new Measurement Period on its website at least
15 calendar days prior to the beginning of the Measurement Period.
The Exchange does not generally expect to change the list of ELSM
Securities within a Measurement Period, but where it does make
changes within a Measurement Period (e.g. new listings on TXSE), it
will post notice of any changes to its website along with an updated
list of ELSM Securities at least one day prior to such changes going
into effect.
\23\ The factors for Liquidity Improvement Symbols are average
daily volume, off-exchange volume, auction dislocation, quoted and
effective spreads, and whether a symbol trades on away markets more
intraday than on their primary listing market.
\24\ The factors for determining High-Volume Symbols include
trading volume, average spread, and whether a symbol trades on away
markets more intraday than on their primary listing market.
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Currently, to be considered as Liquidity Improvement Symbols or
High-Volume Symbols, a security must satisfy TXSE's initial listing
standards under Rule 16.310, which relate to the Exchange's listing
requirements for common stock of domestic companies.\25\ Similarly, the
Rodeo Program Release provides that all TXSE-listed corporate
securities will also be ELSM Securities
[[Page 55376]]
(including both primary and dual-listings) in addition to the universe
of securities selected as Liquidity Improvement Symbols and High-Volume
Symbols.
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\25\ See Rule 16.310.
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Proposed Changes
The Exchange is proposing to expand the definition of Liquidity
Improvement Symbols and High-Volume Symbols to include ETPs and to
provide that all TXSE-listed securities, including ETPs listed on TXSE,
will be considered ELSM Securities. Specifically, the Exchange is
proposing: (i) that all Liquidity Improvement Symbols and High-Volume
Symbols must either meet the initial listing requirements for common
stock of domestic companies under Rule 16.310 or be an ETP; and (ii)
that all TXSE-listed corporate securities and ETPs will also be ELSM
Securities, including both primary and dual-listings in addition to the
Liquidity Improvement Symbols and High-Volume Symbols. The Exchange is
not proposing to make any additional changes to the Program and all
calculations related to the Program will otherwise remain the same as
described in the Rodeo Program Release.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\26\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\27\ 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 the
requirement in Section 6(b)(5) of the Act \28\ that the rules of an
exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange also believes the
proposed rule change is consistent with Section 6(b)(4) of the Act,\29\
which requires that Exchange rules provide for the equitable allocation
of reasonable dues, fees, and other charges among its members and other
persons using its facilities.
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\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(5).
\28\ 15 U.S.C. 78f(b)(5).
\29\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that including ETPs as ELSM Securities for
purposes of the Exercise Price Competition, both by adding ETPs to the
definition of Liquidity Improvement Symbols and High-Volume Symbols and
providing that all TXSE-listed corporate securities and ETPs will also
be ELSM Securities, is consistent with the Act for the same reasons
that including securities meeting the requirements of Rule 16.310 is
consistent with the Act as provided in the Rodeo Program Release. The
proposed change would provide Participants an additional incentive to
provide liquidity in ETPs on the Exchange, which the Exchange believes
may promote tighter spreads, price improvement opportunities, and
execution quality for investors. The proposed change would also create
additional competition among Participants to provide qualifying
liquidity in ETPs during each Measurement Period. By applying the ELS
Multiplier to qualifying ETP transactions, the Exchange seeks to
encourage trading behavior that may improve market quality in ETPs
without changing the Program's Target Performance requirements or the
vesting criteria for any Participant. The Exchange believes that the
benefits associated with increased liquidity in eligible corporate
securities, including improved quoting and execution opportunities,
would similarly accrue to ETPs. Further, by adding TXSE-listed ETPs to
the definition of ELSM Securities, the Exchange believes that the
proposal will further enhance liquidity in ETPs listed on the Exchange
to the benefit of its ETP listing program. Accordingly, the Exchange
believes that expanding ELSM Securities to include ETPs would benefit
investors, the Exchange, and the broader market.
As such, the Exchange believes that the Program, as amended by the
proposed rule change, would promote the long-term interests of the
Exchange by providing incentives designed to encourage market
participants to contribute to the growth and success of the Exchange by
actively providing liquidity on the Exchange in both corporate
securities and ETPs.
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 proposed rule
change would expand the universe of securities eligible for the
Enhanced Liquidity Symbol Multiplier to include ETPs, thereby
permitting Participants to receive multiplier credit for qualifying
transactions in ETPs in the same manner as qualifying transactions in
eligible corporate securities.
The Exchange believes that the proposed rule change would enhance
intramarket competition by providing Participants an additional
incentive to compete to provide liquidity in ETPs on the Exchange. Any
resulting increase in liquidity, tighter spreads, and price-improvement
opportunities in ETPs would benefit market participants trading on the
Exchange. The proposed rule change would apply uniformly to all
Participants in the Rodeo Program and would not alter the Target
Performance requirements or the manner in which Multiplier Adjusted
Volume is used to assign exercise prices.
The Exchange also believes that the proposed rule change may
enhance intermarket competition by enabling the Exchange to compete
more effectively for ETP order flow. As a new exchange, the Exchange
seeks to encourage liquidity provision and improve market quality
through the Rodeo Program. The proposed rule change provides an
additional incentive for Participants to direct qualifying ETP order
flow to the Exchange, while leaving market participants free to execute
orders on other trading venues. Accordingly, the Exchange does not
believe that the proposed rule change will impose any significant
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange neither solicited nor received written comments on the
proposed rule change.
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) of the Act \30\ and Rule 19b-4(f)(2) \31\ thereunder. 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 will institute proceedings to determine whether
the proposed rule
[[Page 55377]]
change should be approved or disapproved.
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\30\ 15 U.S.C. 78s(b)(3)(A).
\31\ 17 CFR 240.19b-4(f)(2).
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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 proposal 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#0c7e796069216f6361616962787f4c7f696f226b637a"><span class="__cf_email__" data-cfemail="2b595e474e06484446464e455f586b584e48054c445d">[email protected]</span></a>. Please include
File No. SR-TXSE-2026-021 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 No. SR-TXSE-2026-021. 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-TXSE-2026-021 and should be submitted on
or before September 17, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
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\32\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-17464 Filed 8-26-26; 8:45 am]
BILLING CODE 8011-01-P
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