Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update the LTSE Market Maker Rules To Provide Mechanisms That Would Allow the Exchange To Initiate and Operate a Market Maker Program

Issuing agencies

Full Text

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<title>Federal Register, Volume 91 Issue 190 (Friday, October 2, 2026)</title>
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[Federal Register Volume 91, Number 190 (Friday, October 2, 2026)]
[Notices]
[Pages 62767-62773]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20200]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106529; File No. SR-LTSE-2026-21]


Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Update the LTSE Market Maker Rules To Provide Mechanisms That Would 
Allow the Exchange To Initiate and Operate a Market Maker Program

September 29, 2026.
    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on September 21, 2026, Long-Term Stock Exchange, 
Inc. (``LTSE'' or the ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the self-regulatory organization. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 Commission a proposed rule change 
to: (1) add definitions for ``Market Maker'' and ``Market Maker 
Authorized Trader'' or ``MMAT'' to Rule 1.160; (2) restate Rule 11.150 
(Registration as a Market Maker) to create a comprehensive, practical 
registration framework; (3) amend Rule 11.151 (Market Maker 
Obligations) to establish new obligations not related to performance of 
Market Makers and provide exceptions to the existing Two-Sided Quote 
Obligation; (4) adopt a new Rule 11.152 (Obligations of Market Maker 
Authorized Traders), which governs the obligations of Market Maker 
Authorized Traders (``MMATs''); (5) adopt new Rule 11.153 (Registration 
of Market Makers in Securities); and (6) delete current Rule 11.153 
(Voluntary Termination of Registration), which would be replaced by 
proposed Rule 11.153(b).
    The text of the proposed rule change is available at the Exchange's 
website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a>, and at the principal 
office of the Exchange.

II. Self-Regulatory Organization's Statement on 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 self-regulatory organization 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
Background and Overview of the Proposal
    LTSE has never registered a Market Maker. To improve market quality 
in Dually-Listed Securities \3\ and securities traded on the Exchange 
pursuant to unlisted trading privileges, the Exchange seeks to 
encourage market making activity. The proposed rule modifications 
establish practical mechanisms designed to allow LTSE to initiate, 
operate, and monitor market making in Non-LTSE-Primary-Listed 
Securities traded on the Exchange.\4\ For example, the proposed rule 
change would fortify the Exchange's market maker registration 
framework, establish a means for Exchange oversight over authorized 
traders who perform market making activities on behalf of registered 
Market Makers, and institute processes for registering in a security 
and, if necessary, suspending or terminating registrations in a 
security or securities.\5\ As discussed in greater detail below, these 
updates to LTSE's Market Maker rules are substantially similar to rules 
of another national securities exchange.
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    \3\ See Rule 14.210(a) (defining ``Dually-Listed Securities'').
    \4\ See Rule 1.160z) (defining ``Non-LTSE-Primary-Listed 
Securities''). Currently, only Non-LTSE-Primary -Listed Securities 
are traded on the Exchange. Before allowing for market making in 
LTSE-Primary-Listed Securities (as defined in Rule 1.160s), LTSE 
will file another proposed rule change to adopt a second class for 
Market Makers in those securities.
    \5\ In a separate proposed rule change, LTSE intends to 
introduce incentives for Market Makers that satisfy certain quoting 
thresholds, but those incentives would not constitute performance 
obligations. In the event a Market Maker fails to meet any of those 
heightened thresholds in a security it simply would not receive an 
incentive payment for that security; failure would not trigger 
suspension or termination of the Market Maker's registration in the 
security or subject the Market Maker to disciplinary action.
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Proposed Changes
    In summary, the Exchange proposes to: (1) add definitions for 
``Market Maker'' and ``Market Maker Authorized Trader'' or ``MMAT'' to 
Rule 1.160; (2) restate Rule 11.150 (Registration as a Market Maker) to 
create a comprehensive, practical registration framework; (3) amend 
Rule 11.151 (Market Maker Obligations) to establish new obligations not 
related to performance of Market Makers and provide exceptions to the 
existing Two-Sided Quote Obligation; (4) adopt a new Rule 11.152 
(Obligations of Market Maker Authorized Traders), which governs the 
obligations of Market Maker Authorized Traders (``MMATs''); (5) adopt 
new Rule 11.153 (Registration of Market Makers in Securities); and (6) 
delete current Rule 11.153 (Voluntary Termination of Registration), 
which would be replaced by proposed Rule 11.153(b).
Proposed Amendments to Rule 1.160 (Definitions)
    The Exchange is proposing to add two new definitions to Rule 1.160, 
the Exchange's central definitions rule. These new definitions anchor 
the proposed market maker framework in the Exchange's definitions rule 
and are consistent with the approach taken by other national securities 
exchanges.
    First, the Exchange proposes to add the definition of ``Market 
Maker'' in new Rule 1.160(ww). The proposed definition provides that 
``Market Maker'' means a Member that acts as a Market Maker pursuant to 
Chapter 11 of the LTSE Rules. The term currently appears throughout 
Chapter 11 without a formal definitional anchor in Rule 1.160. The 
proposed addition clarifies that Market Maker status is a distinct role 
conferred through Chapter 11 registration, separate from general 
Exchange membership.\6\
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    \6\ The proposed definition is substantially similar to the 
definition of ``Market Maker'' in Cboe BZX Exchange, Inc. (``Cboe 
BZX'') Rule 1.5(l).
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    Second, the Exchange proposes to add the definition of ``Market 
Maker Authorized Trader'' or ``MMAT'' in new Rule 1.160xx). The 
proposed definition provides that ``MMAT'' means an

[[Page 62768]]

authorized trader who performs market making activities pursuant to 
Chapter 11 on behalf of a Market Maker. This definition is new to the 
LTSE rulebook. It is consistent with the definition of ``Market Maker 
Authorized Trader'' in Cboe BZX Rule 1.5(m), which similarly defines 
the term as ``an authorized trader who performs market making 
activities pursuant to Chapter XI on behalf of a Market Maker.'' \7\ 
Both definitions anchor individual market making authorization to the 
firm-level market maker registration framework. The MMAT concept in the 
LTSE Rules is also an extension of the Exchange's existing Authorized 
Trader framework under Rule 11.140 and Rule 1.160(d), applied 
specifically to the market making context. The MMAT definition in 
proposed Rule 1.160(xx) anchors the comprehensive individual-level 
registration and oversight framework set forth in proposed Rule 11.152, 
discussed below.
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    \7\ The proposed definition is substantially similar to the 
definition of ``Market Maker Authorized Trader'' in Cboe BZX Rule 
1.5(m).
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Proposed Amendment to Rule 9.218 (Violations Appropriate for 
Disposition Under Plan Pursuant to Exchange Act Rule 19d-1(c)(2))
    The Exchange is proposing to update a cross-reference in paragraph 
(f) to reflect the renumbering of the paragraphs of Rule 11.151.
Proposed Amendments to Rule 11.150 (Registration as a Market Maker)
    The Exchange proposes to delete the existing text of Rule 11.150 in 
its entirety and replace it with a comprehensive Market Maker 
registration framework consisting of six new provisions, as described 
below.\8\
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    \8\ This proposed rule is substantially similar to the 
``Registration of Market Makers'' rule in Cboe BZX Rule 11.5.
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    Proposed Rule 11.150(a) requires any applicant for registration as 
a Market Maker to file a written application on a form prescribed by 
the Exchange. Applications are to be reviewed by the Exchange based on 
factors including, but not limited to, capital, operations, personnel, 
technical resources, and disciplinary history. The rule also codifies a 
minimum net capital requirement: each Market Maker must have and 
maintain minimum net capital of at least the amount required under Rule 
15c3-1 under the Act.
    Proposed Rule 11.150(b) provides that an applicant's registration 
as a Market Maker becomes effective upon receipt by the Member of 
notice of the Exchange's approval of registration. This provision would 
replace the existing Rule 11.150(b)'s same-day, submission-based 
effectiveness with an approval-based model, which provides the Exchange 
with the ability to evaluate applicant qualifications before granting 
Market Maker status.\9\
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    \9\ This approval-based effectiveness model is identical to Cboe 
BZX Rule 11.5(b) and MEMX Rule 11.17(b), and differs from existing 
LTSE Rule 11.150(b), under which registration becomes effective on 
the day the request was entered.
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    Proposed Rule 11.150(c) codifies the grounds on which the Exchange 
may suspend or terminate a Market Maker's registration. The Exchange 
may take such action if it determines that: (1) the Market Maker has 
substantially or continually failed to engage in dealings in accordance 
with Rule 11.151 or elsewhere in the LTSE Rules; (2) the Market Maker 
has failed to meet the minimum net capital conditions in paragraph (a); 
(3) the Market Maker has failed to maintain fair and orderly markets; 
or (4) the Market Maker does not have at least one registered MMAT 
qualified to perform market making activities as set forth in Rule 
11.152(b)(5), with the clarification that a MMAT whose registration is 
itself suspended under this paragraph shall not be deemed qualified.
    Proposed Rule 11.150(d) provides that any registered Market Maker 
may withdraw its registration by giving written notice to the Exchange. 
The Exchange may require a minimum prior notice period and may impose 
conditions on withdrawal and re-registration as it deems appropriate in 
the interest of maintaining fair and orderly markets.\10\
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    \10\ The Exchange will notify Market Makers of the minimum prior 
notice period required for withdrawal as well as any conditions on 
withdrawal and re-registration via Information Circular.
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    Proposed Rule 11.150(e) provides that any person aggrieved by any 
determination under Rules 11.150, 11.152, or 11.153 may seek review 
under Chapter 9 of the Exchange Rules governing adverse action. The 
provision consolidates the appeal right for determinations across the 
three rules governing Market Maker and MMAT registration as well as 
suspensions and terminations of registrations in a security in a single 
location.
    Proposed Rule 11.150(f) provides that registered Market Makers are 
designated as dealers on the Exchange for all purposes under the Act 
and the rules and regulations thereunder.
Proposed Amendments to Rule 11.151 (Market Maker Obligations)
    The Exchange would retain the existing provisions of the rule 
governing the Two-Sided Obligation, pricing obligations, bid and offer 
quotation requirements, the Designated Percentage and Defined Limit 
framework, MPID provisions, firm quotations, impaired quotation 
ability, and locked and crossed markets and renumber those paragraphs 
to accommodate several new provisions. The proposed new provisions are: 
(a) a general obligations preamble enumerating specific Market Maker 
duties; (b) a provision establishing Market Maker responsibility for 
its MMAT's acts and omissions; and (c) a provision addressing 
disciplinary consequences for failure to engage in a course of 
dealings. Each new provision is discussed below.
    Proposed Rule 11.151(a) provides that a member registered as a 
Market Maker in one or more Non-LTSE-Primary-Listed Securities traded 
on the Exchange shall engage in a course of dealings for its own 
account to assist in the maintenance, insofar as reasonably 
practicable, of fair and orderly markets. The proposed rule enumerates 
five specific responsibilities that flow from this obligation: (1) 
maintaining continuous two-sided quotations consistent with the 
requirements of Rule 11.151(d); (2) remaining in good standing with the 
Exchange and in compliance with all applicable Exchange Rules; (3) 
informing the Exchange of any material change in financial or 
operational condition or personnel; (4) maintaining a current list of 
MMATs who are permitted to enter orders on behalf of the Market Maker 
and providing updated versions to the Exchange upon any change; and (5) 
clearing and settling transactions through the facilities of a 
registered clearing agency, whether by direct participation, direct 
clearing services, or correspondent clearing arrangement.\11\
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    \11\ Cboe BZX Rule 11.8(a) (Obligations of Market Makers) is 
substantially similar to this rule, except that LTSE's proposed rule 
is limited to the Member being registered as a Market Maker in one 
or more Non-LTSE-Primary-Listed Securities traded on the Exchange 
and Cboe BZX's rule applies to all securities traded on the 
exchange.
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    Proposed Rule 11.151(b) provides that a Market Maker shall be 
responsible for the acts and omissions of its MMATs.\12\ The proposed 
provision makes that accountability explicit in the LTSE Rules: because 
individual MMATs are authorized to enter orders on behalf of a Market 
Maker, the Market Maker firm retains supervisory responsibility and 
legal accountability for those individuals' conduct. This 
accountability is consistent with general supervisory responsibility 
principles

[[Page 62769]]

applicable to broker-dealers under the Act and reflects the Exchange's 
codification of that responsibility rather than relying solely on 
general supervisory rules.\13\
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    \12\ This is identical to Cboe BZX 11.8(b). See also MEMX Rule 
11.20(b).
    \13\ See, e.g., Sections 15(b)(4)(E) and 15(b)(6) of the Act.
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    Proposed Rule 11.151(c) provides that if the Exchange finds any 
substantial or continued failure by a Market Maker to engage in a 
course of dealings as specified in Rule 11.151(a), such Market Maker 
will be subject to disciplinary action, including, without limitation, 
suspension or revocation of registration in one or more securities. The 
provision also preserves all Exchange powers under the By-Laws, Rules, 
and procedures of the Exchange and provides that any Member aggrieved 
by a determination under Rule 11.151 may seek review under Chapter 9 of 
the Exchange Rules.\14\
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    \14\ This provision is consistent with Cboe BZX Rule 11.8(c), 
which similarly provides for Exchange action against market makers 
that fail to meet their obligations; the LTSE proposed provision 
differs only with respect to specific cross-references to rules.
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    Proposed Rules 11.151(d) through 11.151(h) carry forward the 
substantive content of existing Rules 11.151(a) through 11.151(e), 
respectively, renumbered to accommodate the new provisions described 
above. No changes are made to the substance of the Two-Sided 
Obligation, pricing obligations (except as discussed below), bid and 
offer quotation requirements, the Designated Percentage and Defined 
Limit framework, MPID provisions, firm quotation requirements (except 
as discussed in the footnote),\15\ impaired quotation provisions, or 
locked and crossed market provisions. The renumbering updates all 
internal cross-references within Rule 11.151 to conform to the new 
paragraph structure and updates to outdated terms and cross-references 
to other rules in the rulebook. Three new sub-provisions are added to 
the Two-Sided Obligation section in proposed Rule 11.151(d)(1): 
subparagraph (A) provides that the duration of an Exchange system 
failure shall not be counted against the Market Maker's compliance with 
the quoting standard; subparagraph (B) provides that the continuous 
quoting obligation is suspended during trading halts, suspensions, or 
pauses (and shall not recommence until after the first regular-way 
transaction on the primary listing market), and is also suspended for 
the duration of any Limit State \16\ or Straddle State; \17\ and 
subparagraph (C) provides that the Exchange may consider other 
exceptions to the Two-Sided Obligation based on demonstrated legal or 
regulatory requirements or other mitigating circumstances. Sub-
provisions (A), (B), and (C) are consistent with corresponding 
provisions in Cboe BZX Rules 11.8(d)(1)(A)-(C).\18\ The Designated 
Percentage and Defined Limit thresholds carried forward in proposed 
Rule 11.151(d)(6) and (7) are unchanged from the thresholds in current 
LTSE Rule 11.151.\19\
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    \15\ In proposed Rule 11.151(e), the Exchange proposes an 
updating change, replacing the term Anti- Internalization Group 
Identifier (``AGID'') modifier with Self Trade Protection (``STP'') 
modifier. This update corresponds to a change in self trade 
functionality used by the Exchange. See Securities Exchange Act 
Release Nos. 100783 (August 20, 2024), 89 FR 68481 (August 26, 2024) 
(SR-LTSE-2024-03) (order approving the proposal); and 100205 (May 
21, 2024), 89 FR 46225, 46235 (May 28, 2024) (SR-LTSE-2024-03) 
(notice of, among other changes, the proposal to replace the AGID 
modifier with the STP modifier).
    \16\ The term ``Limit State'' is defined in the Plan to Address 
Extraordinary Market Volatility Pursuant to Rule 608 of Regulation 
NMS under the Act.
    \17\ The term ``Straddle State'' is defined in the Plan to 
Address Extraordinary Market Volatility Pursuant to Rule 608 of 
Regulation NMS under the Act.
    \18\ See also Cboe EDGA Exchange, Inc. Rules 11.20(d)(1)(A)-(C); 
Cboe EDGX Exchange, Inc. Rules 11.20(d)(1)(A)-(C); Cboe BYX 
Exchange, Inc. Rules 11.8(d)(1)(A)-(C).
    \19\ The thresholds under BZX's rules differ, reflecting BZX's 
own market structure calibration.
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Proposed New Rule 11.152 (Obligations of Market Maker Authorized 
Traders)
    To operationalize LTSE's Market Maker rules, the Exchange proposes 
to add new Rule 11.152, which governs the registration and obligations 
of MMATs.\20\ This rule is substantially similar to Cboe BZX Rule 11.6 
(Obligations of Market Maker Authorized Traders), differing only with 
respect to cross-references to other LTSE Rules, including the 
reference in proposed Rule 11.152(b)(2) to the proficiency and 
continuing education requirements applicable to Authorized Traders 
under LTSE Rule 2.160. The Exchange's current rules do not expressly 
provide for MMATs.\21\ In contrast, proposed Rule 11.152 expressly 
permits Market Makers to trade via MMATs and establishes registration 
procedures, eligibility requirements, and delineates suspension and 
withdrawal criteria and procedures.
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    \20\ This rule is substantially similar to Cboe BZX Rule 11.6 
(Obligations of Market Maker Authorized Traders), differing only 
with respect to LTSE-specific cross-references. Additionally, the 
Exchange proposes to renumber current Rules 11.152 and 11.154 as 
proposed Rules 11.154 and 11.155, respectively, to accommodate the 
addition of 2 new proposed rules and the proposed deletion of 
current Rule 11.153.
    \21\ Arguably, MMATs may be permitted implicitly under LTSE Rule 
11.150(a), which allows the entry of quotations and quotation sizes 
by an ``entity approved by LTSE to function in a market-making 
capacity.''
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    Proposed Rule 11.152(a) provides that MMATs are permitted to enter 
orders only for the account of the Market Maker for which they are 
registered, establishing that the MMAT role is a principal account 
trading function. Rule 11.152(b) provides that the Exchange may, upon 
receiving a written application from a Market Maker on a prescribed 
form, register a person as a MMAT. MMATs may be officers, partners, 
employees, or other associated persons of Members registered with the 
Exchange as Market Makers. To be eligible for registration, a person 
must successfully complete proficiency examinations and continuing 
education requirements applicable to Authorized Traders under Rule 
2.160 and any additional training and certification programs required 
by the Exchange. The Exchange may require a Market Maker to provide 
additional information it deems necessary to evaluate whether 
registration should be granted and may grant conditional registration 
subject to conditions it considers appropriate in the interest of 
maintaining a fair and orderly market. Rule 11.152(b)(5) places an 
affirmative obligation on the Market Maker firm to ensure that each 
MMAT is properly qualified to perform market making activities.
    Proposed Rule 11.152(c) provides that the Exchange may suspend or 
withdraw MMAT registration if it determines that: (A) the MMAT has 
caused the Market Maker to fail to comply with applicable securities 
laws or Exchange Rules; (B) the MMAT is not properly performing MMAT 
responsibilities; (C) the MMAT has failed to meet registration 
conditions; or (D) the MMAT has failed to maintain fair and orderly 
markets. If the Exchange suspends MMAT registration, the Market Maker 
must not allow the MMAT to submit orders into the System. MMAT 
registration is withdrawn upon the written request of the sponsoring 
Market Maker Member submitted on the Exchange's prescribed form.
Proposed New Rule 11.153 (Registration of Market Makers in a Security)
    The Exchange proposes to adopt new Rule 11.153 governing the 
security-level registration of Market Makers.\22\ This rule addresses 
how a Member, once registered as a Market Maker at the firm level under 
Rule 11.150, becomes

[[Page 62770]]

authorized to make markets in specific securities.
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    \22\ This proposed rule is substantially similar to Cboe BZX 
Rule 11.7 (Registration of Market Makers in a Security), differing 
only with respect to LTSE-specific cross-references.
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    Proposed Rule 11.153(a) provides that a Market Maker may become 
registered in a newly authorized security or in a security already 
admitted to dealings on the Exchange by filing a security registration 
form with the Exchange. Registration in the security becomes effective 
on the same day as the Exchange's approval, unless otherwise provided 
by the Exchange. In considering approval, the Exchange may take into 
account: (1) the financial resources available to the Market Maker; (2) 
the Market Maker's experience, expertise, and past performance in 
making markets, including its performance in other securities; (3) 
operational capability; (4) the maintenance and enhancement of 
competition among Market Makers in each security; (5) the existence of 
satisfactory clearing arrangements; and (6) the character of the market 
for the security, including price, volatility, and relative liquidity.
    Proposed Rule 11.153(b) provides that a Market Maker may 
voluntarily terminate its registration in a security by providing 
written notice of termination to the Exchange, subject to any minimum 
prior notice period or other conditions the Exchange may require in the 
interest of maintaining fair and orderly markets. A Market Maker that 
fails to provide advance written notice may be subject to formal 
disciplinary action under Chapter 9 of the LTSE Rules.
    Proposed Rule 11.153(c) provides that the Exchange may suspend or 
terminate any Market Maker's registration in a security whenever it 
determines that: (1) the Market Maker has not met any of its 
obligations as set forth in the LTSE Rules; or (2) the Market Maker has 
failed to maintain fair and orderly markets.\23\
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    \23\ In addition to suspending a Market Maker's registration in 
a security, under current Rule 11.154 (proposed Rule 11.155), LTSE 
may suspend, condition, limit, prohibit, or terminate the authority 
of a Market Maker (or Member) to enter quotations in one or more 
authorized securities for violations of applicable requirements or 
prohibitions. These two available remedies are distinct.
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    Proposed Rule 11.153(d) preserves all other powers of the Exchange 
under the By-Laws, Rules, and procedures of the Exchange with respect 
to the registration of a Market Maker and with respect to any violation 
by a Market Maker of the provisions of the Rule. These provisions are 
consistent with the corresponding review and reservation-of-authority 
provisions in Cboe BZX Rule 11.7(d), and parallel the analogous 
provisions the Exchange proposed at the firm level in Rules 11.150(e) 
and 11.151(c).
Amendments to Proposed Rule 11.154 (Withdrawal of Quotations)
    The Exchange proposes to update cross-references in paragraphs (d) 
and (g) to reflect the proposed renumbering discussed above and the 
proposed deletion of current Rule 11.153 discussed below.
Deletion of Current Rule 11.153 (Voluntary Termination of Registration)
    Current Rule 11.153 sets forth the procedures for a Market Maker to 
voluntarily terminate its registration in a security,\24\ provides for 
the Exchange to reinstate a registration where withdrawal was 
accidental,\25\ and specifies a Market Maker's avenue for review of its 
reinstatement denial.\26\ The Exchange proposes to delete this rule 
because, as discussed above, proposed Rule 11.153(b) governs the 
voluntary termination of a Market Maker's registration in a 
security.\27\
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    \24\ See LTSE Rules 11.153(a) and (d).
    \25\ See LTSE Rules 11.153(b) and (c). LTSE Rule 11.153(b) 
specifies certain reinstatement eligibility requirements. See LTSE 
Rule 11.153(b)(3)-(5). LTSE Rule 11.153(c) enumerates the factors 
that the Exchange will consider in granting reinstatement.
    \26\ See LTSE Rule 11.153(e).
    \27\ Unlike current Rules 11.153(b) and (c), proposed Rule 
11.153(b) does not contemplate accidental withdrawal. Accidental 
withdrawal was reasonably foreseeable under the current rule, which 
provided for withdrawal simply by a Market Maker withdrawing its 
two-sided quote. See Rule 11.153(a). In contrast, the method of 
voluntary withdrawal under proposed Rule 11.153(b) is mindful: 
written notice is required. Accordingly, the Exchange believes that 
a process for reinstatement after accidental withdrawal is 
unnecessary.
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(b) Statutory Basis
    The proposed rule change is consistent with the provisions of 
Sections 6 and 19 of the Act \28\ generally, and is consistent with the 
particular provisions of the Act discussed below. Before analyzing the 
proposed rules specifically, the Exchange makes four general points 
about the proposed rule change's consistency with the Act.
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    \28\ 15 U.S.C. 78f and 15 U.S.C. 78s, respectively.
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    First, the proposed rule change creates a workable framework that 
will allow the Exchange to attract and monitor Market Makers who 
promote additional displayed liquidity on the Exchange. More 
specifically, the proposed rule change establishes a comprehensive, 
transparent framework for registering and overseeing Market Makers and 
MMATs and allowing Market Makers to register in particular securities. 
Because Market Makers are--and would be--required to maintain two-sided 
quotations that facilitate continuous trading and improve execution 
quality and, as dedicated liquidity providers Market Makers may help 
absorb market imbalances and reduce extreme price volatility, the 
proposed rule change advances the objectives of Section 6(b)(5) of the 
Act \29\ to remove impediments to and perfect the mechanism of a free 
and open market and a national market system and protect investors and 
the public interest.
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    \29\ 15 U.S.C. 78f(b)(5).
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    Second, the Exchange believes that the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market and 
a national market system, and fosters cooperation and coordination with 
persons engaged in facilitating transactions in securities, by 
harmonizing the Exchange's market maker framework with the 
substantially similar, previously approved framework of another 
national securities exchange. Harmonization reduces regulatory 
divergence across exchanges and the associated compliance burden for 
Members that conduct market making activity on multiple venues, and 
provides Members with a familiar framework based on rules that have 
already been approved by the Commission and have been operating within 
the national market system.\30\
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    \30\ In the ways discussed above, the proposed rule change is 
consistent with the rules of other national securities exchanges, 
including Cboe BZX and MEMX.
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    Third, the proposed rule change is consistent with Section 6(b)(5) 
of the Act in that it is not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers. The proposed rule 
change would not change the scope of securities eligible for market 
making, and therefore does not discriminate among issuers: a Market 
Maker may register in one or more Non-LTSE- Primary-Listed 
Securities,\31\ and all securities traded on the Exchange are Non-LTSE-
Primary-Listed Securities.\32\ The proposed rule change does not 
unfairly discriminate among brokers or dealers.\33\ The proposed 
criteria for registering as a Market Maker apply equally to all 
Members, and the Exchange would

[[Page 62771]]

apply the factors in a manner consistent with the Act and the 
Exchange's rules.
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    \31\ See proposed Rule 11.151(a).
    \32\ See supra note 4.
    \33\ See proposed Rule 11.150(f) (designating all registered 
Market Makers as dealers on the Exchange for all purposes under the 
Act and the rules and regulations thereunder). This provision is 
found in the rulebooks of many national securities exchanges. See, 
e.g., NYSE American Rule 7.20E(a); MIAX Pearl Rule 600(i).
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    Fourth, aspects of the proposed rule change are consistent with 
Sections 6(b)(1) and 19(g) of the Act in that they will assist the 
Exchange in complying with its rules. For example, the proposal 
includes updating cross-references (proposed Rules 9.218(f)), 
11.151(d)(12), 11.151(d)(13), and 11.154(g)). In addition, the proposed 
new definitions in Rule 1.160 will provide clarity that will facilitate 
consistent interpretation of the proposed rules in LTSE Rule Series 
11.100.
    Proposed Rule 11.150 (Registration as a Market Maker).\34\ The 
proposed framework for registering Market Makers set forth in proposed 
Rule 11.150 protects investors and the public interest and promotes 
just and equitable principles of trade, consistent with Section 6(b)(5) 
of the Act, by ensuring that only qualified Members are authorized to 
perform market making activities on the Exchange. In particular, the 
application and review requirements of proposed Rule 11.150(a), the 
minimum net capital requirement that conforms to Rule 15c3-1 under the 
Act, the approval-based effectiveness model of Rule 11.150(b), and the 
suspension and termination grounds of Rule 11.150(c) are each designed 
to ensure that a Member granted Market Maker status has the capital, 
operational capability, personnel, and regulatory history necessary to 
perform a market making function consistent with the maintenance of 
fair and orderly markets.
---------------------------------------------------------------------------

    \34\ Proposed Rule 11.150 is substantially similar to Cboe BZX 
Rule 11.5.
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    Additionally, the right of review under Chapter 9 of the Exchange 
Rules provided for in proposed Rule 11.150(e) ensures that Market 
Makers have a fair process for challenging adverse Exchange 
determinations. This proposed provision is consistent with Section 
6(b)(7) of the Act, which requires (in pertinent part) that the rules 
of an exchange provide a fair procedure for the disciplining of members 
and persons associated with members.
    Proposed Rule 11.151 (Market Maker Obligations).\35\ Consistent 
with Section 6(b)(5) of the Act, the proposed Market Maker obligations 
framework set forth in proposed Rule 11.151 protects investors and the 
public interest by codifying the affirmative obligations of Market 
Makers, including the general course-of-dealings obligation in proposed 
Rule 11.151(a), the firm-level supervisory responsibility for MMATs in 
proposed Rule 11.151(b), and the disciplinary consequences for failure 
to engage in a course of dealings in proposed Rule 11.151(c). Proposed 
Rule 11.151(b), which provides that a Market Maker shall be responsible 
for the acts and omissions of its MMATs, is consistent with consistent 
with general supervisory responsibility principles applicable to 
broker-dealers under Sections 15(b)(4)(E) and 15(b)(6) of the Act. The 
three new sub-provisions to the Two-Sided Obligation in proposed Rule 
11.151(d)(1)(A), (B), and (C) are substantially similar to rules of 
other national securities exchanges that have been previously approved 
by the Commission.\36\
---------------------------------------------------------------------------

    \35\ Proposed Rule 11.151 is substantially similar to Cboe BZX 
Rule 11.8
    \36\ See supra note 18 and accompanying text.
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    In addition, proposed Rule 11.151(c) ensures that Market Makers 
have a fair process for challenging adverse Exchange determinations, 
and therefore is consistent with Section 6(b)(7) of the Act, which 
requires (in pertinent part) that the rules of an exchange provide a 
fair procedure for the disciplining of members and persons associated 
with members.
    Proposed Rule 11.152 (Obligations of MMATs).\37\ The proposed 
framework for registering MMATs set forth in proposed Rule 11.152 
protects investors and the public interest and promotes just and 
equitable principles of trade consistent with Section 6(b)(5) of the 
Act by ensuring that only qualified persons may effect market making 
activity on behalf of Market Makers. Additionally, the proposed 
individual-level registration framework for MMATs protects investors 
and the public interest by ensuring that persons authorized to enter 
orders on behalf of Market Makers meet minimum qualification standards. 
The proficiency examination and continuing education requirements of 
proposed Rule 11.152(b)(2), which apply the requirements applicable to 
Authorized Traders under LTSE Rule 2.160, the conditional registration 
authority of Rule 11.152(b)(4), and the suspension and withdrawal 
standards in proposed Rule 11.152(c) are each designed to ensure that 
individual market making activity on the Exchange is performed by 
qualified personnel and to provide the Exchange with appropriate 
authority to address conduct that poses a risk to fair and orderly 
markets.
---------------------------------------------------------------------------

    \37\ Proposed Rule 11.152 is substantially similar to Cboe BZX 
Rule 11.6.
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    Proposed Rule 11.153 (Registration of Market Makers in a 
Security).\38\ The Exchange believes that the proposed security-level 
registration framework set forth in Rule 11.153 protects investors and 
the public interest and promotes just and equitable principles of trade 
by establishing a clear process for a Market Maker to become registered 
in specific securities, by enumerating the factors the Exchange may 
consider in reviewing such registration, and by establishing express 
grounds for voluntary termination and Exchange-initiated suspension or 
termination of security-level registration. The right of review under 
Chapter 9 of the Exchange Rules provided for in Rule 11.150(e) ensures 
that Market Makers have a fair process for challenging adverse Exchange 
determinations, consistent with Section 6(b)(7) of the Act, which 
requires (in pertinent part) that the rules of an exchange provide a 
fair procedure for the disciplining of members and persons associated 
with members.
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    \38\ Proposed Rule 11.153 is substantially similar to Cboe BZX 
Rule 11.7.
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    Proposed Deletion of Current Rule 11.153 (Voluntary Termination of 
Registration). The proposed deletion of current Rule 11.153 is 
consistent with Sections 6(b)(1) and 19(g) of the Act in that it will 
assist the Exchange in complying with its rules. As discussed above, 
proposed Rule 11.153(b), which is substantively identical to the rule 
of another national securities exchange,\39\ governs the voluntary 
termination of security registration and thus deleting current Rule 
11.153 would prevent confusion arising out of contradictory provisions.
---------------------------------------------------------------------------

    \39\ See Cboe BZX Rule 11.7(b).
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    For these reasons, the Exchange believes that the proposed rule 
change is consistent with the Act and does not raise any new or novel 
material issues that have not already been considered by the 
Commission.\40\
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    \40\ The proposed rule change is consistent with Section 6(b)(4) 
of the Act, which requires that the Exchange's rules provide for the 
equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other persons using its 
facilities. No new benefits are being proposed for Market Makers.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change is designed to establish a comprehensive, 
transparent framework for registering and overseeing Market Makers and 
MMATs. As described in Items 3(a) and 3(b) above, the proposed rules 
are in large part similar to previously approved rules of other 
national securities exchanges.
    The Exchange does not believe that the proposed rule change imposes 
any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
Market Maker registration

[[Page 62772]]

requirements of Rule 11.150, the Market Maker obligations of Rule 
11.151, the MMAT registration requirements of Rule 11.152, and the 
security-level registration requirements of Rule 11.153 apply on a 
uniform, non-discriminatory basis to all Members that seek to become 
Market Makers, to all individuals that seek to register as MMATs, and 
to all Members that seek to register in particular securities.
    The Exchange operates in a highly competitive environment and 
competes with other national securities exchanges and other trading 
venues for order flow in the securities it trades.\41\ The Exchange 
does not believe that the proposed rule change imposes any burden on 
intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, by harmonizing 
the Exchange's market maker framework with the substantially similar, 
previously approved framework of another national securities exchange, 
the proposed rule change reduces regulatory divergence across exchanges 
and the associated compliance burden for Members that conduct market 
making activity on multiple venues. Adoption of a framework based on 
familiar rules that have already been approved by the Commission \42\ 
allows the Exchange to compete more effectively with other trading 
venues in attracting Members willing to perform market making 
functions. To the extent the Market Maker program enables the Exchange 
to enhance the market quality of Non-LTSE-Primary-Listed Securities 
traded on the Exchange, the proposed rule change is procompetitive: it 
equips the Exchange to compete more effectively with other trading 
venues that trade those same securities by improving the quality of 
executions available to investors on the Exchange.
---------------------------------------------------------------------------

    \41\ As noted above, see supra note 4, only Non-LTSE-Primary-
Listed Securities are traded on the Exchange.
    \42\ See supra note 30, and accompanying text.
---------------------------------------------------------------------------

    For the foregoing reasons, the Exchange does not believe that the 
proposed rule change raises any substantial competitive issues, and the 
Exchange does not believe the proposed rule change imposes any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act.

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 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 \43\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\44\
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    \43\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \44\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \45\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \46\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
requested that the Commission waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
states that it plans to launch its Market Maker program on October 1, 
2026 and that waiver of the operative delay would permit timely 
commencement of this initiative, which is designed to improve quoting 
and displayed liquidity on the Exchange. In addition, the Exchange's 
proposed rules are substantially similar to the rules of other national 
securities exchanges.\47\ For these reasons, and because the proposed 
rule change raises no new or novel legal or regulatory issues, the 
Commission finds that waiver of the operative delay is consistent with 
the protection of investors and the public interest. Accordingly, the 
Commission waives the 30-day operative delay and designates the 
proposed rule change to be operative upon filing.\48\
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    \45\ 17 CFR 240.19b-4(f)(6).
    \46\ 17 CFR 240.19b-4(f)(6)(iii).
    \47\ See e.g., supra notes 34-38 and accompanying text.
    \48\ For purposes only of waiving 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 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 
would otherwise further the purposes of the Act.

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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#80f2f5ece5ade3efedede5eef4f3c0f3e5e3aee7eff6"><span class="__cf_email__" data-cfemail="344641585119575b5959515a4047744751571a535b42">[email&#160;protected]</span></a>. Please include 
File Number SR-LTSE-2026-21 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-LTSE-2026-21. 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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>). 
Copies of the filing will be available for inspection and copying at 
the principal office of LTSE and on its internet website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a>. 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-LTSE-2026-21 and should be submitted on or before October 23, 2026.


[[Page 62773]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\49\
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    \49\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20200 Filed 10-1-26; 8:45 am]
BILLING CODE 8011-01-P


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