Notice2026-19119
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Rules at Options 7, Sections 1 and 2
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 18, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 180 (Friday, September 18, 2026)</title>
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[Federal Register Volume 91, Number 180 (Friday, September 18, 2026)]
[Notices]
[Pages 59283-59289]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19119]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106374; File No. SR-NASDAQ-2026-074]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange's Rules at Options 7, Sections 1 and 2
September 15, 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, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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 Nasdaq Options Market LLC
(``NOM'') Rules at Options 7, Section 1, General Provisions, and
Options 7, Section 2, Nasdaq Options Market--Fees and Rebates.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</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 aspects 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 make several changes to NOM's Pricing
Schedule at Options 7. Specifically, the Exchange proposes to make
changes to Options 7, Section 2(1), and add a defined term to Options
7, Section 1(a).
Under Options 7, Section 2(1), the Exchange currently pays
Customers,\3\ Professionals,\4\ Broker-Dealers,\5\ Firms,\6\ Non-NOM
Market Makers,\7\ and NOM Market Makers \8\ a rebate to add liquidity
in Penny Symbols, on a per contract basis. This rebate is paid
according to the following schedule:
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\3\ The term ``Customer'' applies to any transaction that is
identified by a Participant for clearing in the Customer range at
The Options Clearing Corporation (``OCC'') which is not for the
account of broker or dealer or for the account of a ``Professional''
(as that term is defined in Options 1, Section 1(a)(48)). See
Options 7, Section 1(a).
\4\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s) pursuant to Options
1, Section 1(a)(48). All Professional orders shall be appropriately
marked by Participants. See Options 7, Section 1(a).
\5\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category. See Options 7, Section 1(a).
\6\ The term ``Firm'' applies to any transaction that is
identified by a Participant for clearing in the Firm range at OCC.
See Options 7, Section 1(a).
\7\ The term ``Non-NOM Market Maker'' is a registered market
maker on another options exchange that is not a NOM Market Maker. A
Non-NOM Market Maker must append the proper Non-NOM Market Maker
designation to orders routed to NOM. See Options 7, Section 1(a).
\8\ The term ``NOM Market Maker'' is a Participant that has
registered as a Market Maker on NOM pursuant to Options 2, Section
1, and must also remain in good standing pursuant to Options 2,
Section 9. In order to receive NOM Market Maker pricing in all
securities, the Participant must be registered as a NOM Market Maker
in at least one security. See Options 7, Section 1(a). The term
``Options Participant'' or ``Participant'' means a firm, or
organization that is registered with the Exchange pursuant to
Options 2A of the NOM Rules for purposes of participating in options
trading on NOM as a ``Nasdaq Options Order Entry Firm'' or ``Nasdaq
Options Market Maker''. See Options 1, Section 1(a)(40).
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Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6
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Customer................................................ ($0.20) ($0.25) ($0.43) ($0.44) ($0.45) ($0.48)
Professional............................................ (0.20) (0.25) (0.43) (0.44) (0.45) (0.47)
Broker-Dealer........................................... (0.10) (0.10) (0.10) (0.10) (0.10) (0.10)
Firm.................................................... (0.10) (0.10) (0.10) (0.10) (0.10) (0.10)
Non-NOM Market Maker.................................... (0.10) (0.10) (0.10) (0.10) (0.10) (0.10)
NOM Market Maker........................................ (0.20) (0.25) (0.30) (0.32) (0.45) (0.47)
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[[Page 59284]]
Currently, Participants are assessed certain fees and rebates to
add liquidity in Non-Penny Symbols, on a per contract basis, according
to the following schedule:
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Customer................................... ($0.80)
Professional............................... (0.80)
Broker-Dealer.............................. 0.45
Firm....................................... 0.45
Non-NOM Market Maker....................... 0.45
NOM Market Maker........................... 0.35/0.00/(0.30)/(0.40)
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Currently, Participants are charged fees to remove liquidity in
both Penny and Non-Penny Symbols, on a per contract basis, according to
the following schedule:
------------------------------------------------------------------------
Penny symbols Non-penny symbols
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Customer........................ $0.49 $0.85
Professional.................... 0.49 0.85
Broker-Dealer................... 0.50 1.25
Firm............................ 0.50 1.25
Non-NOM Market Maker............ 0.50 1.25
NOM Market Maker................ 0.50 1.25
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Currently, the Customer and Professional rebate to add liquidity in
Penny Symbols is paid per the highest tier achieved below:
Tier 1: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols of up to 0.10% of total industry customer equity and
ETF option average daily volume (``ADV'') contracts per day in a month.
Tier 2: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.10% of total industry customer equity and ETF
option ADV contracts per day in a month.
Tier 3: Participant: (a) adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.20% of total industry customer equity and ETF
option ADV contracts per day in a month; or (b) adds Customer and/or
Professional liquidity in Penny Symbols and/or Non-Penny Symbols above
0.05% of total industry customer equity and ETF option ADV contracts
per day in a month and qualifies for MARS.\9\
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\9\ The Market Access and Routing Subsidy (``MARS'') is a rebate
program set out in Nasdaq Options 7, Section 2(4), under which NOM
pays participating firms a per-contract subsidy for routing eligible
options order flow to NOM through the participant's own order-
routing system.
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Tier 4: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.30% of total industry customer equity and ETF
option ADV contracts per day in a month.
Tier 5: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.40% of total industry customer equity and ETF
option ADV contracts per day in a month.
Tier 6: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.70% or more of total industry customer equity
and ETF option ADV contracts per day in a month, or Participant : (1)
adds Customer and/or Professional liquidity in Penny Symbols and/or
Non-Penny Symbols of 0.10% or more of total industry customer equity
and ETF option ADV contracts per day in a month, and (2) has added
liquidity in all securities through one or more of its Nasdaq Market
Center MPIDs that represent 1.00% or more of Consolidated Volume in a
month or qualifies for MARS.
Currently, the fees to remove liquidity in Penny and Non-Penny
Symbols for Non-NOM Market Makers and NOM Market Makers are modified
according to note 2, which states as follows:
Participants that add 1.10% of Customer, Professional, Firm,
Broker-Dealer or Non-NOM Market Maker liquidity in Penny Symbols
and/or Non-Penny Symbols of total industry customer equity and ETF
option ADV contracts per day in a month will be subject to the
following pricing applicable to executions: a $0.48 per contract
Penny Symbols Fee for Removing Liquidity when the Participant is (i)
both the buyer and the seller or (ii) the Participant removes
liquidity from another Participant under Common Ownership.
Participants that add 1.55% of Customer, Professional, Firm,
Broker-Dealer or Non-NOM Market Maker liquidity in Penny Symbols
and/or Non-Penny Symbols of total industry customer equity and ETF
option ADV contracts per day in a month will be subject to the
following pricing applicable to executions less than 10,000
contracts: a $0.38 per contract Penny Symbols Fee for Removing
Liquidity when the Participant is (i) both the buyer and seller or
(ii) the Participant removes liquidity from another Participant
under Common Ownership.
Currently, the Tier 6 rebate to add liquidity in Penny Symbols that
is paid to Customers is modified according to note 7, which states as
follows:
Participants that: (1) add Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non- Penny Symbols of 1.15% or more of total industry customer
equity and ETF option ADV contracts per day in a month will receive
an additional $0.02 per contract Penny Symbol Customer Rebate to Add
Liquidity for each transaction which adds liquidity in Penny Symbol
in that month; or (2) add Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols of 1.30% or more of total industry customer equity
and ETF option ADV contracts per day in a month will receive an
additional $0.05 per contract Penny Symbol Customer Rebate to Add
Liquidity for each transaction which adds liquidity in Penny Symbols
in that month; or (3) (a) add Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker- Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.80% of total industry customer equity and
ETF option ADV contracts per day in a month, (b) add Customer,
Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer
liquidity
[[Page 59285]]
in Non-Penny Symbols above 0.12% of total industry customer equity
and ETF option ADV contracts per day in a month, and (c) execute
greater than 0.04% of Consolidated Volume (``CV'') via Market-on-
Close/Limit-on- Close (``MOC/LOC'') volume within The Nasdaq Stock
Market Closing Cross within a month will receive an additional $0.05
per contract Penny Symbol Customer Rebate to Add Liquidity for each
transaction which adds liquidity in Penny Symbols in a month.
Consolidated Volume shall mean the total consolidated volume
reported to all consolidated transaction reporting plans by all
exchanges and trade reporting facilities during a month in equity
securities, excluding executed orders with a size of less than one
round lot. For purposes of calculating Consolidated Volume and the
extent of an equity member's trading activity, expressed as a
percentage of or ratio to Consolidated Volume, the date of the
annual reconstitution of the Russell Investments Indexes shall be
excluded from both total Consolidated Volume and the member's
trading activity.
Currently, the Customer and Professional rebates to add liquidity
in both Penny Symbols and Non-Penny Symbols are modified according to
note 10, which states as follows:
NOM Participants that (a) add Customer, Professional, Firm, Non-
NOM Market Maker and/or Broker-Dealer liquidity in Penny Symbols
and/or Non-Penny Symbols above 1.50% of total industry customer
equity and ETF option ADV contracts per day in a month, (b) execute
greater than 0.04% of Consolidated Volume (``CV'') via Market-on-
Close/Limit-on-Close (``MOC/LOC'') volume within The Nasdaq Stock
Market Closing Cross within a month, and (c) add greater than 1.5
million shares per day of non-displayed volume within The Nasdaq
Stock Market within a month will receive a $0.55 per contract Rebate
to Add Liquidity in Penny Symbols as Customer, a $0.48 per contract
Rebate to Add Liquidity in Penny Symbols as Professional, and a
$1.15 per contract Rebate to Add Liquidity in Non-Penny Symbols as
Customer, and a $0.90 per contract Rebate to Add Liquidity in Non-
Penny Symbols as Professional. Participants that qualify for this
rebate would not be eligible for any other rebates in Tiers 1-6 or
other rebate incentives on NOM for Customer and Professional order
flow in Options 7, Section 2(1).
The Exchange proposes to make seven changes to these provisions of
the Exchange fee schedule:
First Change
The Exchange proposes to increase the Tier 6 Customer rebate to add
liquidity in Penny Symbols from $0.48 to $0.49. Therefore, the new
schedule of this rebate for Customers will be as follows:
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Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6
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Customer.......................................... ($0.20) ($0.25) ($0.43) ($0.44) ($0.45) ($0.49)
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Second Change
The Exchange proposes to lower the Tier 6 NOM Market Maker rebate
to add liquidity in Penny Symbols from $0.47 to $0.45. Therefore, the
new schedule of this rebate for NOM Market Makers will be as follows:
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Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6
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NOM Market Maker.................................. ($0.20) ($0.25) ($0.30) ($0.32) ($0.45) ($0.45)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Third Change
The Exchange proposes to modify the schedule of fees to remove
liquidity in Penny and Non-Penny Symbols by eliminating and reserving
note 2, which until now had modified the fees paid by Non-NOM Market
Makers and NOM Market Makers to remove liquidity in Penny Symbols.
Fourth Change
The Exchange proposes to modify the Customer and Professional
rebate to add liquidity in Penny Symbols by streamlining the criteria
to qualify for Tier 6.\10\ Specifically, the Exchange would modify the
second of the two alternative paths to qualify for Tier 6.\11\ This
second alternative path, in turn, contains two separate requirements
that must both be met. The second of these requirements, in turn, is
composed of two alternatives.\12\ The Exchange proposes to eliminate
the first of these two alternatives.\13\ Therefore, the revised
criteria to qualify for Tier 6 would be as follows:
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\10\ As mentioned above, the current criteria to qualify for
Tier 6 are the following: ``Participant adds Customer, Professional,
Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Penny
Symbols and/or Non-Penny Symbols above 0.70% or more of total
industry customer equity and ETF option ADV contracts per day in a
month, or Participant: (1) adds Customer and/or Professional
liquidity in Penny Symbols and/or Non-Penny Symbols of 0.10% or more
of total industry customer equity and ETF option ADV contracts per
day in a month, and (2) has added liquidity in all securities
through one or more of its Nasdaq Market Center MPIDs that represent
1.00% or more of Consolidated Volume in a month or qualifies for
MARS.''
\11\ As seen in the immediately preceding footnote, the two
conditions to satisfy this second path are currently as follows:
``Participant: (1) adds Customer and/or Professional liquidity in
Penny Symbols and/or Non-Penny Symbols of 0.10% or more of total
industry customer equity and ETF option ADV contracts per day in a
month, and (2) has added liquidity in all securities through one or
more of its Nasdaq Market Center MPIDs that represent 1.00% or more
of Consolidated Volume in a month or qualifies for MARS.''
\12\ As seen in the immediately preceding footnote, the two
alternatives to satisfy this second requirement are currently that
the Participant ``(2) has added to liquidity in all securities
through one or more of its Nasdaq Market Center MPIDs that represent
1.00% or more of Consolidated Volume in a month or qualifies for
MARS.''
\13\ As seen in the immediately preceding footnote, the first of
these two current alternative requirements is that the Participant
``has added to liquidity in all securities through one or more of
its Nasdaq Market Center MPIDs that represent 1.00% or more of
Consolidated Volume in a month.'' This is the provision of the Tier
6 criteria for the Customer and Professional rebate to add liquidity
in Penny Symbols that the Exchange proposes to delete through this
filing.
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Tier 6: Participant adds Customer, Professional, Firm, Non-NOM
Market Maker and/or Broker-Dealer liquidity in Penny Symbols and/or
Non-Penny Symbols above 0.70% or more of total industry customer equity
and ETF option ADV contracts per day in a month, or Participant: (1)
adds Customer and/or Professional liquidity in Penny Symbols and/or
Non-Penny Symbols of 0.10% or more of total industry customer equity
and ETF option ADV contracts per day in a month, and (2) qualifies for
MARS.
Fifth Change
The Exchange proposes to modify the schedule of rebates to add
liquidity in Penny Symbols by eliminating and reserving note 7, which
until now had modified the Tier 6 rebate paid to Customers.
Sixth Change
The only definition of ``Consolidated Volume'' that is currently in
Options 7 is contained in note 7, which is being deleted in this
filing. The Exchange proposes to relocate this same definition,
verbatim, to Options 7,
[[Page 59286]]
Section 1(a), which contains several other defined terms. The
``Consolidated Volume'' defined term in Options 7, Section 1(a) would
read as follows:
The term ``Consolidated Volume'' shall mean the total
consolidated volume reported to all consolidated transaction
reporting plans by all exchanges and trade reporting facilities
during a month in equity securities, excluding executed orders with
a size of less than one round lot. For purposes of calculating
Consolidated Volume and the extent of an equity member's trading
activity, expressed as a percentage of or ratio to Consolidated
Volume, the date of the annual reconstitution of the Russell
Investments Indexes shall be excluded from both total Consolidated
Volume and the member's trading activity.
Seventh Change
The Exchange proposes to modify the rebates to add liquidity in
Penny Symbols and the schedule of fees and rebates to add liquidity in
Non-Penny Symbols by eliminating and reserving note 10, which until now
had modified the rebates paid to Customers and Professionals to add
liquidity in Penny Symbols, as well as the rebates paid to Customers
and Professionals to add liquidity in Non-Penny Symbols.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\14\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\15\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and (5).
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The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, 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.'' \16\
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\16\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005).
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Likewise, in NetCoalition v. Securities and Exchange Commission
\17\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\18\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \19\
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\17\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\18\ See NetCoalition, at 534-535.
\19\ Id. at 537.
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Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \20\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
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\20\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (Dec. 2, 2008), 73 FR 74770, 74782-83 (Dec. 9, 2008) (File No.
SR-NYSEArca-2006-21)).
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The Exchange's proposed changes to Options 7 are reasonable in
several respects. As a threshold matter, the Exchange is subject to
significant competitive forces in the market for options transaction
services that constrain its pricing determinations in that market.
Within this environment, the Exchange must continually adjust the fees
and rebates set forth in its Pricing Schedule to remain competitive
with the other national securities exchanges to which market
participants may direct their options order flow. Each of the seven
proposed changes is discussed in turn below.
First Change
The proposed amendment to the Tier 6 Customer rebate to add
liquidity in Penny Symbols from $0.48 per contract to $0.49 per
contract is reasonable because it modestly increases the top-tier
Customer Penny Symbol rebate paid on NOM, which is designed to attract
additional Customer order flow to the Exchange. As the Exchange has
previously observed, Customer liquidity offers benefits to the market
that ultimately benefit all Participants: it provides more trading
opportunities, which attracts market makers, and an increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow. The proposed higher Tier 6 rebate is therefore intended to
improve overall market quality on the Exchange by incentivizing
Participants to bring additional Customer order flow to NOM and, in
turn, provide more trading opportunities to the benefit of all market
participants. The amendment is part of an overall effort to
appropriately calibrate rebates in a manner that helps attract order
flow to NOM, from which all Participants benefit through increased
trading opportunities and greater interaction with liquidity.
The proposed amendment is equitable and not unfairly discriminatory
because the Exchange would uniformly apply the revised Tier 6 rebate to
every Participant that satisfies the qualifying criteria for that Tier
through Customer liquidity-adding order flow. Continuing to provide
more favorable pricing on Customer liquidity than on liquidity from
other categories of market participants is consistent with the
Exchange's long-standing practice throughout its Pricing Schedule and
is justified because Customer liquidity offers benefits that ultimately
flow through to all market participants, as described above. Similar
upward adjustments to individual Customer and NOM Market Maker Penny
Symbol and Non-Penny Symbol liquidity-adding rebates have previously
been effected by the Exchange on the same basis.\21\
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\21\ See, e.g., Securities Exchange Act Release No. 103339 (June
27, 2025), 90 FR 29082 (July 2, 2025) (File No. SR-NASDAQ-2025-045)
(increasing the Tier 5 NOM Market Maker Rebate to Add Liquidity in
Penny Symbols from $0.44 to $0.46 per contract); Securities Exchange
Act Release No. 98934 (Nov. 15, 2023), 88 FR 81166 (Nov. 21, 2023)
(File No. SR-NASDAQ-2023-044) (increasing the note 9 Customer Rebate
to Add Liquidity in Non-Penny Symbols from $1.00 to $1.10 per
contract, and increasing the note 10 Customer Rebate to Add
Liquidity in Non-Penny Symbols from $1.05 to $1.15 per contract).
---------------------------------------------------------------------------
Second Change
The proposed amendment to the Tier 6 NOM Market Maker rebate to add
liquidity in Penny Symbols from $0.47 per contract to $0.45 per
contract is reasonable because NOM Market Makers would continue to
receive substantial rebates for adding Penny Symbol liquidity across
all six volume tiers, and the Tier 6 rebate would remain among the
highest of those tiers, tied with the Tier 5 rebate at $0.45 per
contract. The amendment is part of an overall effort to appropriately
calibrate rebates in a manner that helps attract order flow to NOM,
from which all Participants benefit through increased trading
[[Page 59287]]
opportunities and greater interaction with liquidity.
The proposed amendment is equitable and not unfairly discriminatory
because the Exchange would uniformly apply the revised Tier 6 rebate to
every NOM Market Maker that satisfies the qualifying criteria for that
Tier. Similar downward adjustments to individual NOM Market Maker Penny
Symbol rebate tiers have previously been effected by the Exchange on
the same basis.\22\
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\22\ See Securities Exchange Act Release No. 104818 (Feb. 11,
2026), 91 FR 7336 (Feb. 17, 2026) (File No. SR-NASDAQ-2026-006)
(reducing the Tier 5 NOM Market Maker Rebate to Add Liquidity in
Penny Symbols from $0.46 to $0.45 per contract and the Tier 6 NOM
Market Maker Rebate to Add Liquidity in Penny Symbols from $0.48 to
$0.47 per contract).
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Third Change
The proposed elimination and reservation of note 2 in Options 7,
Section 2(1) is reasonable. Note 2 currently offers Non-NOM Market
Makers and NOM Market Makers reduced fees for removing liquidity in
Penny Symbols of $0.48 and $0.38 per contract in narrowly defined
transactions in which the Participant is (i) both the buyer and the
seller or (ii) removes liquidity from another Participant under Common
Ownership, and only where the Participant has separately added 1.10% or
1.55% of total industry customer equity and ETF option ADV. Following
the proposed elimination, Non-NOM Market Makers and NOM Market Makers
would be assessed the same standard $0.50 per contract Penny Symbols
fee for removing liquidity that is applicable to Broker-Dealers and
Firms. The Exchange believes that eliminating this narrow incentive,
which today applies only where the Participant is on both sides of the
trade or removes liquidity from an affiliate under Common Ownership,
produces a more uniform Penny Symbols removal fee structure across Non-
NOM Market Makers, NOM Market Makers, Broker-Dealers and Firms and
simplifies the Pricing Schedule.
The proposed elimination is equitable and not unfairly
discriminatory because, upon its effectiveness, no Participant would be
able to qualify for the eliminated note 2 incentives, and the Exchange
would uniformly apply the standard fees to remove liquidity in Penny
Symbols to all Non-NOM Market Makers and NOM Market Makers.
Fourth Change
The proposed modification to the Tier 6 criteria for the Customer
and Professional rebate to add liquidity in Penny Symbols is
reasonable. Tier 6 is presently available under two alternative
qualification paths, and the proposal streamlines only the second of
those paths. Following the proposed change, that second path will
continue to require the Participant to add at least 0.10% of total
industry customer equity and ETF option ADV in Customer and/or
Professional volume, and to qualify for MARS. The primary qualification
path (adding at least 0.70% of total industry customer equity and ETF
option ADV in Penny Symbol and/or Non-Penny Symbol liquidity) is not
affected by the proposal, and neither is the requirement that the
Participant reach 0.10% of total industry customer equity and ETF
option ADV in Customer and/or Professional volume under the second
path. The Exchange has previously observed, in adding an alternative
MARS-tied route to Tier 3 of the Customer and Professional rebate
program,\23\ that tying rebate qualification to MARS is designed to
incentivize Participants to increase their liquidity adding activity on
NOM and thereby improve the quality of the market for all Participants.
The Exchange believes that the same reasoning supports focusing the
second Tier 6 qualification path on the MARS-tied requirement alone.
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\23\ See Securities Exchange Act Release No. 92974 (Sept. 14,
2021), 86 FR 52273 (Sept. 20, 2021) (File No. SR-NASDAQ-2021-069)
(adding an alternative MARS-tied route to qualify for the Tier 3
Customer and Professional Rebate to Add Liquidity in Penny Symbols).
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The proposed modification is equitable and not unfairly
discriminatory because the Exchange would uniformly apply the
streamlined Tier 6 criteria to every Participant that seeks to earn the
Customer and Professional rebate to add liquidity in Penny Symbols at
Tier 6. Participants that previously could have qualified for Tier 6
through the deleted alternative (adding liquidity in all securities
through one or more of their Nasdaq Market Center MPIDs representing
1.00% or more of Consolidated Volume in a month) may still qualify for
Tier 6 either by satisfying the unmodified primary volume threshold or
by satisfying the retained MARS-tied requirement of the second path, on
the same terms as every other Participant. The Exchange acknowledges
that a Participant whose Tier 6 eligibility currently rests solely on
the deleted MPID/Consolidated Volume alternative--that is, a
Participant that does not meet either the unmodified primary volume
threshold or the retained MARS-tied requirement of the second path--
would no longer qualify for Tier 6 following the proposed change. The
Exchange believes this outcome is appropriate because it aligns Tier 6
eligibility with volume-based and MARS-linked criteria that more
directly incentivize the addition of Customer and Professional order
flow to NOM.
Fifth Change
The proposed elimination and reservation of note 7 in Options 7,
Section 2(1) is reasonable. Note 7 currently modifies the Tier 6
Customer rebate to add liquidity in Penny Symbols by providing
additional $0.02, $0.05, or $0.05 per contract enhancements upon
satisfaction of substantial volume and cross-market conditions. The
Exchange has observed that these layered volume-based and cross-market
enhancements have not attracted incremental Customer order flow at
levels commensurate with the complexity that they add to the Pricing
Schedule. Following the proposed elimination, Participants that qualify
for the Tier 6 Customer rebate to add liquidity in Penny Symbols would
continue to receive that rebate at its established level. The Exchange
believes that consolidating the Tier 6 Customer rebate at its
established, uniform level, without the additional volume-based and
cross-market enhancements currently in note 7, produces a simpler and
more transparent Tier 6 Customer rebate structure.
The proposed elimination is equitable and not unfairly
discriminatory because, upon its effectiveness, no Participant would be
able to qualify for the eliminated note 7 enhancements, and the
Exchange would uniformly apply the standard Tier 6 Customer rebate to
every Participant that qualifies for that Tier.
Sixth Change
The proposed relocation of the ``Consolidated Volume'' defined term
from note 7 of Options 7, Section 2(1) to Options 7, Section 1(a),
which houses the defined terms applicable throughout the Pricing
Schedule, is reasonable. The proposed relocation is a non-substantive
change that reproduces the ``Consolidated Volume'' definition verbatim
in a new location and, in itself, does not modify any fee, rebate,
threshold, or qualification criterion under Options 7. Because notes 3,
4, 9 and the note designated by ``##'' within Options 7, Section 2(1)
each use the term ``Consolidated Volume'' without themselves defining
it, and because the concurrent elimination of note 7 (the sole current
location of the defined term) would otherwise leave
[[Page 59288]]
``Consolidated Volume'' undefined within Options 7, the proposed
relocation preserves an accurate and clearly identifiable definition of
``Consolidated Volume'' for all remaining references to that term
within Options 7. Placing the ``Consolidated Volume'' defined term
alongside the other defined terms in Section 1(a) also makes the
Pricing Schedule easier to read and more accessible to Participants and
other market participants that consult it.
The proposed relocation is equitable and not unfairly
discriminatory because it applies uniformly across all Participants.
The definition of ``Consolidated Volume'' proposed for Options 7,
Section 1(a) is identical to the definition that currently appears in
note 7, and its relocation does not alter how ``Consolidated Volume,''
or activity for any fee or rebate tier that references ``Consolidated
Volume,'' is calculated. The Exchange will therefore continue to apply
the same measure of ``Consolidated Volume,'' in the same manner, to
every Participant that seeks to qualify under any fee or rebate
provision of Options 7 that references that term.
Seventh Change
The proposed elimination and reservation of note 10 in Options 7,
Section 2(1) is reasonable. Note 10 currently provides an alternative,
exclusive rebate schedule to Participants that satisfy a demanding
combination of NOM add-liquidity volume above 1.50% of total industry
customer equity and ETF option ADV, MOC/LOC Consolidated Volume greater
than 0.04% executed within The Nasdaq Stock Market Closing Cross, and
non-displayed volume within The Nasdaq Stock Market greater than 1.5
million shares per day. Participants that qualified for the note 10
rebate schedule were excluded from receiving any of the six tiered
Customer and Professional rebates to add liquidity, and from any other
Customer and Professional rebate incentive on NOM. With the proposed
elimination, all Participants, including any Participant that
previously qualified for the note 10 rebate schedule, would be eligible
to earn the tiered Customer and Professional rebates to add liquidity
in Penny Symbols and Non-Penny Symbols on the same basis as every other
Participant.
The proposed elimination is equitable and not unfairly
discriminatory because, upon its effectiveness, no Participant would be
able to qualify for the eliminated note 10 rebate schedule, and the
Exchange would uniformly apply to all Participants the tiered Customer
and Professional rebates to add liquidity.
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 not necessary or appropriate in
furtherance of the purposes of the Act.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes its proposal remains
competitive with other options markets and will offer market
participants with another choice of where to transact options. The
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges. Because competitors are free to modify their own
fees in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee changes in this market may impose any burden on competition
is extremely limited.
Intra-Market Competition
The Exchange does not believe that its proposal would impose an
undue burden on intra-market competition. Each of the seven proposed
changes would apply uniformly across all Participants, or uniformly
within an identifiable class of Participants to which the corresponding
pricing provision applies.
First Change
The proposed increase of the Tier 6 Customer rebate to add
liquidity in Penny Symbols from $0.48 per contract to $0.49 per
contract does not impose an undue burden on intra-market competition,
because the revised Tier 6 rebate would apply uniformly to every
Participant that satisfies the Tier 6 qualification criteria through
Customer liquidity-adding order flow. The Exchange's long-standing
practice of providing more favorable pricing on Customer liquidity than
on liquidity from other categories of market participants does not
impose an undue burden on intra-market competition because, as
described above, Customer liquidity offers benefits that ultimately
flow through to all Participants.
Second Change
The proposed reduction of the Tier 6 NOM Market Maker rebate to add
liquidity in Penny Symbols from $0.47 per contract to $0.45 per
contract does not impose an undue burden on intra-market competition,
because the revised rebate would apply uniformly to every NOM Market
Maker that satisfies the Tier 6 qualification criteria, and NOM Market
Makers would continue to receive substantial rebates for adding Penny
Symbol liquidity across all six volume tiers.
Third Change
The proposed elimination and reservation of note 2 in Options 7,
Section 2(1) does not impose an undue burden on intra-market
competition, because, upon its effectiveness, no Participant would be
able to qualify for the eliminated note 2 incentives, and Non-NOM
Market Makers and NOM Market Makers would be assessed the same $0.50
per contract Penny Symbol fee for removing liquidity as Broker-Dealers
and Firms.
Fourth Change
The proposed modification of the Tier 6 criteria for the Customer
and Professional rebate to add liquidity in Penny Symbols does not
impose an undue burden on intra-market competition, because the
streamlined Tier 6 criteria would apply uniformly to every Participant
that seeks the Tier 6 rebate. The primary qualification path (adding at
least 0.70% of total industry customer equity and ETF option ADV in
Penny Symbol and/or Non-Penny Symbol liquidity) is unchanged by the
proposal, and the MARS-tied requirement of the second qualification
path is retained without modification. The proposal narrows only one of
two alternative requirements within the second qualification path, and
it does so on terms that apply identically to every Participant.
Fifth Change
The proposed elimination and reservation of note 7 in Options 7,
Section 2(1) does not impose an undue burden on intra-market
competition, because, upon its effectiveness, no Participant would be
able to qualify for the eliminated note 7 enhancements, and the Tier 6
Customer rebate to add liquidity in Penny Symbols would continue to be
paid at its established level to every Participant that satisfies the
Tier 6 criteria.
[[Page 59289]]
Sixth Change
The proposed relocation of the ``Consolidated Volume'' defined term
from note 7 of Options 7, Section 2(1) to Options 7, Section 1(a) does
not impose an undue burden on intra-market competition. The relocation
is a non-substantive change that reproduces the definition verbatim in
a new location, does not modify any fee, rebate, threshold or
qualification criterion, and does not alter how ``Consolidated Volume''
is calculated or applied to any Participant. The same measure of
``Consolidated Volume'' will continue to apply to all Participants that
seek to qualify under any fee or rebate provision of Options 7 that
references the term and, accordingly, the proposed relocation applies
uniformly across all Participants.
Seventh Change
The proposed elimination and reservation of note 10 in Options 7,
Section 2(1) does not impose an undue burden on intra-market
competition. Upon its effectiveness, no Participant would be able to
qualify for the eliminated note 10 rebate schedule, and, importantly,
Participants that previously would have been excluded from the tiered
Customer and Professional rebates to add liquidity by virtue of
qualifying for note 10 would once again be eligible to earn those
tiered rebates on the same basis as every other Participant. The
Exchange therefore believes that this change furthers intra-market
competition by allowing all Participants, including any Participants
that previously qualified for the note 10 rebate schedule, to be
eligible to qualify and earn the tiered Customer and Professional
rebates to add liquidity in Penny Symbols and Non-Penny Symbols on the
same basis as every other Participant.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
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)(ii) of the Act.\24\
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\24\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 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#ec9e998089c18f8381818982989fac9f898fc28b839a"><span class="__cf_email__" data-cfemail="f684839a93db95999b9b93988285b6859395d8919980">[email protected]</span></a>. Please include
file number SR-NASDAQ-2026-074 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-NASDAQ-2026-074. 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-NASDAQ-2026-074 and should be submitted
on or before October 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19119 Filed 9-17-26; 8:45 am]
BILLING CODE 8011-01-P
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