Notice2026-18209
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Permit the Exchange To Conduct Opening and Closing Auctions in UTP Securities Designated by 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
<html>
<head>
<title>Federal Register, Volume 91 Issue 172 (Tuesday, September 8, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 172 (Tuesday, September 8, 2026)]
[Notices]
[Pages 57176-57178]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18209]
[[Page 57176]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106262; File No. SR-TXSE-2026-025]
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Permit the Exchange To Conduct Opening and Closing Auctions in UTP
Securities Designated by the Exchange
September 2, 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 31, 2026, Texas Stock Exchange LLC (the ``Exchange'' or
``TXSE'') filed with the Securities and Exchange Commission
(``Commission'') a 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 its rules to permit
the Exchange to conduct its Opening Auction and its Closing Auction in
UTP Securities designated by the Exchange in its discretion for the
applicable auction. 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 amend Rules 11.006, 11.022, and 11.023 to
permit the Exchange to conduct an Opening Auction at 9:30 a.m. ET and a
Closing Auction at 4:00 p.m. ET in UTP securities \3\ designated by the
Exchange in its discretion for the applicable auction. Current Exchange
Rules provide that the Exchange will only conduct Opening and Closing
Auctions in TXSE-Listed Securities \4\ and that non-TXSE Listed
Securities will start trading on the Exchange subject to an Opening
Process. The Exchange is making this proposed rule change in order to
allow it to conduct auctions in certain UTP securities that are not
currently listed on the Exchange. This proposal is substantially
similar to the existing functionality of NYSE Arca, Inc. (``Arca'').
The Exchange is not proposing to allow for IPO, Halt, or Volatility
Closing Auctions in UTP securities.
---------------------------------------------------------------------------
\3\ As provided in Rule 1.005(oo), the term ``UTP security''
``UTP security'' is a security that is not listed on the Exchange
but is traded on the Exchange pursuant to unlisted trading
privileges.
\4\ See Rule 11.022(b)(2) and (c)(2).
---------------------------------------------------------------------------
Conducting Opening and Closing Auctions in Auction-Eligible Securities
The Exchange therefore proposes to amend Rule 11.022(b)(2) to
provide that it will conduct an Opening Auction for all Auction-
Eligible Securities \5\ and Rule 11.022(c)(2) to provide that it will
conduct a Closing Auction for all Auction-Eligible Securities. A UTP
security designated by the Exchange for the Opening Auction, the
Closing Auction, or both would participate in the Exchange's existing
scheduled auction or auctions for which it is designated, meaning at
9:30 a.m. ET for the Opening Auction and at 4:00 p.m. ET for the
Closing Auction.\6\
---------------------------------------------------------------------------
\5\ As provided in proposed new Rule 11.022(a)(28), the term
``Auction-Eligible Security'' means all TXSE-Listed Securities and
UTP securities designated by the Exchange for the applicable
auction.
\6\ The proposal would not alter the times at which auction
orders may be entered or cancelled, or the Exchange's dissemination
of information related to the auctions and the Exchange's existing
price collars, price-determination procedures, order-ranking and
allocation rules, order types, handling of unexecuted interest, and
transition to continuous trading would apply to a designated UTP
security in the same manner as they apply to a TXSE-Listed Security.
See TXSE Rule 11.022(b)(1) and (c)(1) and 11.022(b)(2)(A)-(C) and
(c)(2)(A)-(C).
---------------------------------------------------------------------------
Official Prices and Reference Prices
Under Rule 11.022(a)(5), the TXSE Official Opening Price is the
price disseminated to the consolidated tape as the market center
opening trade. Accordingly, under the proposal, if an Opening Auction
in a designated UTP security results in an execution, the Opening
Auction price would be the TXSE Official Opening Price for TXSE as a
market center. With respect to a designate UTP security, that price
would not displace or alter the official opening price established by
the security's primary listing market.
Similarly, Rule 11.022(a)(3) defines the TXSE Official Closing
Price as the price disseminated to the consolidated tape as the market
center closing trade. The Exchange therefore proposes conforming
changes to Rule 11.022(c)(2)(B) so that the Closing Auction price and
existing closing-price fallbacks apply to each Auction-Eligible
Security. A TXSE Official Closing Price established for a UTP security
would be TXSE's market-center closing price and would not displace or
alter the official closing price established by the primary listing
market.
The Exchange also proposes to amend the definition of ``Final Last
Sale Eligible Trade'' in Rule 11.022(a)(9) to account for Auction-
Eligible Securities. If there is no qualifying trade for the current
day, the prior trading day's TXSE Official Closing Price would continue
to be used for a TXSE-Listed Security. For a UTP security, however, the
official closing price disseminated by the primary listing market for
the prior trading day would be used. This distinction follows the Arca
approach of using a market-center auction close for a UTP security as
its official closing price while using the primary listing market's
official close for specified reference-price purposes.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 78357 (July 19,
2016), 81 FR 48484, 48485-86 (July 25, 2016) (SR-NYSEArca-2016-94)
(describing NYSE Arca's use of a market-center official closing
price for an Auction-Eligible UTP security and the primary listing
market's official closing price for specified reference-price
purposes).
---------------------------------------------------------------------------
Auction-Eligible Securities
The Exchange proposes to add paragraph (a)(28) to Rule 11.022 to
define an ``Auction-Eligible Security,'' for purposes of the Opening
Auction and Closing Auction, as all TXSE-Listed Securities and UTP
securities designated by the Exchange for the applicable auction.\8\
The Exchange
[[Page 57177]]
would provide reasonable advance notice to Members of the UTP
securities designated for the Opening Auction, the Closing Auction, or
both, and of additions to or removals from those designations, through
a circular or other publicly available notice, consistent with the
practice of NYSE Arca.\9\
---------------------------------------------------------------------------
\8\ The proposed definition is based on the NYSE Arca auction
framework, under which auction eligibility for auctions includes
securities for which NYSE Arca is the primary listing market and UTP
securities designated by NYSE Arca. See Securities Exchange Act
Release No. 76869 (January 11, 2016), 81 FR 2276 (January 15, 2016)
(SR-NYSEArca-2015-86) (``Arca Approval Order''); see also NYSE Arca
Rule 7.35-E(a)(1).
\9\ See Arca Approval Order, 81 FR at 2278 n.26 and 2288
(describing NYSE Arca's representation that it would provide prior
notice to ETP Holders if additional UTP securities were designated
as Auction-Eligible Securities).
---------------------------------------------------------------------------
Conforming Changes
Rule 11.006(o)(5) describes the Exchange processes included in the
operation of a Regular Hours Only Order. The Exchange proposes to make
conforming changes to the Rule so that it refers to the Opening Auction
and Closing Auction for Auction-Eligible Securities, IPO/Halt Auctions
for TXSE-Listed Securities, and the Rule 11.023 Opening Process for
non-TXSE-Listed Securities that have not been designated for the
Opening Auction.
The Exchange also proposes to amend Rule 11.023(a) to make clear
that a non-TXSE-Listed Security that has not been designated as an
Auction-Eligible Security for the Opening Auction would be subject to
the Opening Process for Non-TXSE-Listed Securities provided in the
Rule. In addition, the Exchange is proposing to change the title of
Rule 11.023 to ``Opening Process for Non-Auction Eligible Securities.
The Exchange is also proposing to make a conforming change to Rule
11.022(e) related to the Volatility Closing Auction in order to make
clear that the Volatility Closing Auction would continue to only be
available for TXSE-Listed Securities. In addition, Rule 11.022(g)
already provides that the Exchange's single-priced Opening Auction and
Closing Auction transactions qualify for the exception from Rule 611 of
Regulation NMS set forth in Rule 611(b)(3). That provision would apply
to an Opening Auction or Closing Auction in a designated UTP security
without a separate change to Rule 11.022(g).\10\
---------------------------------------------------------------------------
\10\ See TXSE Rule 11.022(g); 17 CFR 242.611(b)(3).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\11\ Specifically, the Exchange believes the proposed rule change
is consistent with the objectives of Section 6(b)(5) \12\ requirements
that the rules of an exchange be 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism 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 Section
6(b)(5) requirement that the rules of an exchange not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Specifically, the proposal would be consistent with the Act by
allowing the Exchange to make its existing scheduled Opening Auction
and Closing Auction processes available for designated UTP securities.
Members would gain an additional venue for price discovery and single-
price executions in those securities. Participation would remain
voluntary, and all Members would have access to the same auction order
types, information, pricing protections, and allocation procedures.
The proposal is designed to protect investors and the public
interest because the Exchange would use the auction safeguards already
contained in Rule 11.022. The proposal would not alter the Exchange's
auction collars, priority rules, or disseminated information. It also
would preserve the primary listing market's official opening and
closing prices and would use the primary listing market's prior
official close for a UTP security when a prior-day reference price is
required.
The Commission previously approved NYSE Arca's authority to
designate UTP securities as Auction-Eligible Securities for specified
auctions. In approving that authority, the Commission considered NYSE
Arca's explanation that allowing the Exchange to conduct auctions in
designated UTP securities could enhance market resiliency by providing
an additional auction venue if a primary listing market or other market
were unable to conduct an auction. The proposed rule change would
permit the Exchange to apply its existing scheduled Opening Auction and
Closing Auction processes to designated UTP securities which will
enhance market resiliency, while preserving the primary listing
market's official opening and closing prices.\13\
---------------------------------------------------------------------------
\13\ See NYSE Arca Rule 7.35-E(a)(1) and Arca Approval Order at
2283-84.
---------------------------------------------------------------------------
The Exchange believes that the proposal is also not unfairly
discriminatory. All TXSE-Listed Securities would remain Auction-
Eligible Securities. The Exchange would provide reasonable advance
public notice of its UTP security designations and any changes to them.
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. To the contrary, the
proposal would enhance intermarket competition by permitting the
Exchange to offer scheduled auction functionality in designated UTP
securities in a manner substantially similar to NYSE Arca. The proposal
would not restrict the ability of any other exchange to conduct an
auction, would not require an issuer or Member to participate in a TXSE
auction, and would not affect the primary listing market's authority to
establish its official opening and closing prices.
The proposal would not impose an inappropriate burden on
intramarket competition because the same eligibility, order-entry,
pricing, priority, allocation, and execution rules would apply to all
Members participating in an auction. The Exchange would announce the
designated UTP securities and applicable auction types in advance so
that all Members could prepare for and participate in the functionality
on equal terms.
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)(iii) \14\ of the Act and Rule 19b-4(f)(6) \15\ thereunder
in that it
[[Page 57178]]
effects a change that: (i) does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6). 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii),\16\ permits the Commission to 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. The Exchange states
that waiver of the operative delay would permit the Exchange to
implement the functionality promptly, after providing reasonable
advance notice of the designated securities, and to compete on equal
terms with an exchange that already has substantially similar
authority. For the foregoing reasons, the Commission finds that waiver
of the operative delay is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\17\
---------------------------------------------------------------------------
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 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 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#691b1c050c440a0604040c071d1a291a0c0a470e061f"><span class="__cf_email__" data-cfemail="344641585119575b5959515a4047744751571a535b42">[email protected]</span></a>. Please include
File No. SR-TXSE-2026-025 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-2026-025. 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-2026-025 and should be submitted on
or before September 29, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-18209 Filed 9-4-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 8, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.