Notice2026-18207
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Implement a Lead Market Maker Program on the Exchange
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
September 8, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 172 (Tuesday, September 8, 2026)</title>
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[Federal Register Volume 91, Number 172 (Tuesday, September 8, 2026)]
[Notices]
[Pages 57180-57182]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18207]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106260; File No. SR-TXSE-2026-026]
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Implement a Lead Market Maker Program on the Exchange
September 2, 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 September 1, 2026, Texas Stock Exchange LLC (the ``Exchange'' or
``TXSE'') filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
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 is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to implement an LMM Program on
the Exchange. 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
[[Page 57181]]
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 adopt rules related to its Lead Market
Maker Program under Rule 11.024, which is currently reserved. The
proposed rules are substantively very similar to the equivalent rules
of another exchange.\3\
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\3\ See Cboe BZX Exchange, Inc. Rule 11.8(e). See Securities
Exchange Act Release No. 72020 (Apr. 25, 2014), 79 FR 24807 (May 1,
2014) (SR-BATS-2014-015) (the ``BATS Filing'').
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Proposed Rule 11.024 would provide the framework for an LMM Program
designed to encourage selected registered Market Makers \4\ to make
additional, measurable market-quality commitments in exchange-traded
products (``ETPs'') listed by TXSE. The proposal establishes the
program's governance and participation framework. LMM incentives and
performance thresholds and objective Minimum Performance Standards will
be set forth in a separate filing before the program is implemented.
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\4\ As defined in Rule 16.002(a)(15), the term ``Market Maker''
means a dealer that, with respect to a security, holds itself out
(by entering quotations into the Exchange) as being willing to buy
and sell such security for its own account on a regular and
continuous basis and that is registered as such.
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Definitions
Proposed Rule 11.024(a) would define an ``ETP'' as a security
listed pursuant to Chapter 17. An ``LMM'' would be a Market Maker
registered with the Exchange for a particular LMM Security that has
committed to maintain the applicable Minimum Performance Standards. An
``LMM Security'' would be an ETP that has an LMM. ``Minimum Performance
Standards'' would mean a set of standards applicable to an LMM that may
be determined from time to time by the Exchange. Such standards will
vary between LMM Securities depending on the applicable listing tier,
liquidity, and volatility of the LMM Security in which the LMM is
registered. The Minimum Performance Standards are memorialized in the
Exchange's fee schedule.
Lead Market Makers
Under proposed Rule 11.024(b)(1), the Exchange would select LMMs
using factors including experience making markets in the applicable
security type, adequacy of capital, willingness to promote the Exchange
as a marketplace, issuer preference, operational capacity, support
personnel, and adherence to Exchange rules and the federal securities
laws. These are non-exclusive factors and no single factor would be
dispositive. The Exchange would apply the factors in a manner
consistent with the Act and the Exchange's rules. Proposed Rule
11.024(b)(2) would permit the Exchange to limit the number of LMMs in a
security and to modify a previously established limit upon prior
written notice to Members.
Minimum Performance Standards are provided in the Exchange's fee
schedule and any applicable fees and rebates will be calculated based
on the Exchange's fee schedule. If an LMM fails the Minimum Performance
Standards for two consecutive months, the LMM would be subject, in the
Exchange's discretion, to forfeiture of its LMM status in that LMM
Security. For purposes of the proposed rule, failure of the Minimum
Performance Standards occurs when an LMM fails to meet at least half of
the applicable Minimum Performance Standards for a calendar month. The
two-consecutive-month standard is shorter than the three-out-of-four-
month standard in the original BATS program and is intended to prevent
a persistently underperforming LMM from retaining a preferred
designation.
An LMM seeking to withdraw from an LMM Security would provide 30
days' written notice, unless it is also withdrawing its Market Maker
registration in the security. This separate notice period is designed
to allow the Exchange to manage reassignment and reduce the risk of a
gap in LMM coverage, while existing Rule 11.017 would continue to
govern withdrawal of the underlying Market Maker security registration.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act, in general, and furthers the objectives
of Section 6(b)(5) of the Act, in particular, in that it is designed to
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, protect investors and the public interest, and avoid
unfair discrimination among customers, issuers, brokers, and dealers.
The proposed LMM Program is designed to improve quoting and
displayed liquidity in TXSE-listed ETPs by linking any LMM pricing
benefit to measurable standards that will be publicly filed.
Registration as a Market Maker is available to Members satisfying the
Exchange's existing qualification requirements, and eligible Market
Makers may become an LMM and seek LMM assignments. The selection
factors are reasonably related to the ability to make markets reliably
and comply with regulatory obligations. These are non-exclusive factors
and no single factor would be dispositive.
The proposal also includes safeguards against preferential
treatment without performance. An LMM that fails the Minimum
Performance Standards for two months may result in loss of LMM status.
The 30-day withdrawal notice requirement supports continuity in
liquidity provisioning on the Exchange. The separate fee filing will
address the reasonable and equitable allocation of any LMM fees,
credits, or rebates and will specify the performance measures needed to
evaluate whether an LMM qualifies for those economics.
For these reasons, the Exchange believes that the proposed changes
do not raise any new or novel material issues that have not already
been considered by the Commission in connection with the LMM Program
offered by the Exchange and comparable liquidity provisioning programs
on other national securities exchanges.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposal will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the proposal
is a competitive response to similar programs on other exchanges. Any
Member that satisfies the Exchange's Market Maker requirements may seek
an LMM assignment. The Exchange will select LMMs using disclosed
factors tied to capacity, experience, compliance, issuer preference,
and the needs of the market. Although the Exchange may limit the number
of LMMs in a security, a limit is reasonably designed to maintain
meaningful responsibility and will be subject to prior written notice.
The applicable Minimum Performance Standards and economics will be
filed publicly and will apply on the same terms to similarly situated
LMMs.
The Exchange does not believe the proposal will impose an
unnecessary or
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inappropriate burden on intermarket competition. The proposal is a
competitive response to liquidity provisioning programs at other
listing exchanges and is designed to improve TXSE's ability to compete
for ETP listings and order flow. Competing exchanges may maintain or
adopt comparable programs. To the extent the proposal improves market
quality in TXSE-listed ETPs, the resulting competition among listing
venues may benefit issuers and investors.
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
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)(iii) of the Act \5\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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\5\ 15 U.S.C. 78s(b)(3)(A)(iii).
\6\ 17 CFR 240.19b-4(f)(6). 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 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) \7\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b 4(f)(6)(iii),\8\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing. The Exchange notes that the upcoming
launch of its ETP listing business and the associated LMM Program are
widely known to be occurring among the industry and market maker
community and that participation in the LMM Program is open to all
Members. The Exchange states that waiver of the 30-day operative delay
would allow the Exchange to adopt its LMM Program and to submit the
associated fee filing as soon as possible, allowing the Exchange to
have the LMM Program in place for the launch of its ETP listing
business in September. In addition, the proposed rule change is
substantively similar to the rules of another national securities
exchange.\9\ For these foregoing reasons the Commission believes that
waiver of the operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the 30-day operative delay and designates the proposed rule
change operative upon filing.\10\
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\7\ 17 CFR 240.19b-4(f)(6).
\8\ 17 CFR 240.19b-4(f)(6)(iii).
\9\ See supra note 3.
\10\ For purposes only of waiver the 30-day operative delay, the
Commission has also 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 the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b6c4c3dad39bd5d9dbdbd3d8c2c5f6c5d3d598d1d9c0"><span class="__cf_email__" data-cfemail="becccbd2db93ddd1d3d3dbd0cacdfecddbdd90d9d1c8">[email protected]</span></a>. Please include
file number SR-TXSE-2026-026 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-TXSE-2026-026. 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-2026-026 and should be submitted on
or before September 29, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-18207 Filed 9-4-26; 8:45 am]
BILLING CODE 8011-01-P
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