Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Implement a Restricted Stock Units Incentive Program

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<title>Federal Register, Volume 91 Issue 197 (Wednesday, October 14, 2026)</title>
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[Federal Register Volume 91, Number 197 (Wednesday, October 14, 2026)]
[Notices]
[Pages 65279-65282]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20921]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106637; File No. SR-TXSE-2026-039]


Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Implement a Restricted Stock Units Incentive Program

October 8, 2026.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 7, 2026, Texas Stock Exchange LLC (the ``Exchange'' or 
``TXSE'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, 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 is filing with the Securities and Exchange Commission 
(``Commission'') a proposal to adopt Rodeo II on the Exchange. The text 
of the proposed rule change is available on the Commission's website 
(<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>) at the Exchange's website 
(https://

[[Page 65280]]

www.txse.com/regulations/rules-filings), and at the principal office of 
the Exchange.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to implement Rodeo II to provide the first 
ten issuers of corporate securities that on or before December 31, 2026 
either transfer their primary listing to TXSE or dually list on TXSE 
(the ``Founding Partners''), subject to certain requirements below, 
with restricted stock units of the Exchange's parent holding company, 
TXSE Group Inc. (``TXSE Group''), that will vest over the course of two 
years.\3\ Qualifying listings completed beginning on October 5, 
including those completed before the commencement of the Program, are 
eligible to participate.\4\ Rodeo II will commence on October 7, 2026 
and run until the earliest of: (i) the allocation of all available 
awards; (ii) December 31, 2026; or (iii) the Exchange, in its sole 
discretion, terminates the Program. If there are more than ten Founding 
Partners on or before December 31, 2026, TXSE may, in its sole 
discretion, increase the total number of restricted share awards to 15 
upon providing notice on its website. Any such increase would be 
subject to the same requirements applicable to the first 10 awards. 
Founding Partners may be, but are not required to be, current investors 
in TXSE Group, and the Exchange anticipates both current investors and 
new participants participating in the Program. The total equity 
ownership of TXSE Group Stock shall be subject to the ownership 
limitations of the Eighth Amended and Restated Stockholders' Agreement 
of TXSE Group Inc. as amended (the ``TXSE Group Stockholders' 
Agreement'') and of the Certificate of Formation of TXSE Group Inc. 
(the ``TXSE Group Certificate of Formation'').\5\
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    \3\ The Exchange notes that it launched its corporate listing 
business on October 5, 2026, and currently has five issuers that 
would satisfy qualifications (i), (ii), (iii), and (v) below to 
receive restricted stock units under the Program. Their 
participation remains subject to execution of all required Program 
documentation.
    \4\ Each award would consist of 100,000 restricted stock units 
in TXSE Group, in total representing 2.94% of the fully diluted 
outstanding shares of TXSE Group as of June 30, 2026.
    \5\ See, e.g., Section 14 of the TXSE Group Stockholders' 
Agreement, which states that ``any Stockholder, either alone or 
together with its Related Persons (as defined in the Certificate of 
Formation), that is also a member of the Texas Stock Exchange (or 
its successor), may not beneficially own directly or indirectly 
shares of stock of the Company representing in the aggregate more 
than 20% of the then-outstanding shares of stock of the Company.''; 
Article SEVENTH(b)(1)(A) and (B) of the TXSE Group Certificate of 
Formation, which states that ``no Person, either alone or together 
with its Related Persons, shall be permitted at any time to 
beneficially own, directly or indirectly, shares of stock of the 
Corporation representing in the aggregate more than 40% of the then-
outstanding shares of stock of the Corporation; and no Member, 
either alone or together with its Related Persons, may beneficially 
own, directly or indirectly, shares of stock of the Corporation 
representing in the aggregate more than 20% of the then-outstanding 
shares of stock of the Corporation.''
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    The purpose of Rodeo II is to promote the long-term interests of 
the Exchange by providing incentives designed to recognize the 
contribution of qualifying issuers that transferred their listings to 
TXSE at the launch of its corporate listing business, attract 
additional qualifying primary and dual listings, and encourage all 
Founding Partners to retain their listings on TXSE for at least two 
years, as further described below. Founding Partners' equity interest 
in TXSE Group will also help to align long-term incentives among 
corporate issuers more broadly, the Exchange, and its parent company by 
adding more corporate issuers to TXSE Group's ownership group and more 
specifically for the Founding Partners by providing issuers with the 
opportunity to share in the benefits of TXSE's increased enterprise 
value.
    To be eligible to be a Founding Partner, a company must: (i) be a 
United States domiciled issuer whose primary listing consist solely of 
either: (a) common stock issued by a corporation (including an 
operating company or a business development company regulated under the 
Investment Company Act of 1940); (b) master limited partnership units; 
or (c) common shares of a real estate investment trust (``REIT''); \6\ 
(ii) satisfy, or have satisfied at the time of listing, the Exchange's 
quantitative listing standards applicable to the transfer of a primary 
listing or addition of a dual listing of such securities to TXSE, and 
receive, or have received, approval to list from TXSE Regulation; (iii) 
(a) for primary listings, have a trailing 90-trading day average market 
capitalization of at least $3.5 billion at the time of the primary 
listing transfer or at the end of the first trading day that the 
applicant is primarily listed on TXSE; or (b) for dual listings, have a 
market cap of at least $100 billion; (iv) execute all required Program 
documentation, including a subscription agreement, listing application, 
and confidentiality agreement; (v) complete or have completed the 
transfer of a primary listing or a dual listing, as applicable, of a 
qualifying class of equity securities to the Exchange which shall be 
deemed completed upon the first Opening Auction in the equity security 
on the Exchange.
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    \6\ For the avoidance of doubt the following are not eligible: 
special purpose acquisition companies (SPACs), exchange traded 
products & funds, closed-end funds (other than BDCs), structured 
products, royalty trusts, or issuers domiciled outside of the United 
States.
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    Where an issuer satisfies the above conditions, they will receive 
100,000 restricted stock units (the ``Rodeo Units'') within sixty days 
following completion of the listing. Rodeo Units will vest in two 
tranches subject to the maintenance of the applicable continued listing 
standards on the Exchange as follows:
    <bullet> For primary listings:
    [cir] Fifty percent of the Rodeo Units will vest upon the first 
anniversary of the issuer's continuous primary listing on the Texas 
Stock Exchange, provided that the issuer remains primarily listed on 
the Exchange as of such date; and
    [cir] Fifty percent of the Rodeo Units will vest on the second 
anniversary of the issuer's continuous primary listing on the Texas 
Stock Exchange, provided that the issuer remains primarily listed on 
the Exchange as of such date.
    <bullet> For dual listings:
    [cir] Fifty percent of the Rodeo Units will vest upon the first 
anniversary of the issuer's continuous listing (whether a dual listing 
or a primary listing) on the Texas Stock Exchange, provided that the 
issuer remains listed on the Exchange as of such date; and
    [cir] Fifty percent of the Rodeo Units will vest on the second 
anniversary of the issuer's continuous listing (whether a dual listing 
or a primary listing) on the Texas Stock Exchange, provided that the 
issuer remains listed on the Exchange as of such date.

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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanisms of a free and open market and a national market system and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
requirement in Section 6(b)(5) of the Act \9\ that the rules of an 
exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. The Exchange also believes the 
proposed rule change is consistent with Section 6(b)(4) of the Act,\10\ 
which requires that Exchange rules provide for the equitable allocation 
of reasonable dues, fees, and other charges among its members and other 
persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78f(b)(4).
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    TXSE notes that the Exchange operates in a highly competitive 
marketplace for the listing of companies.\11\ The Commission has 
repeatedly expressed its preference for competition over regulatory 
intervention in determining prices, products, and services in the 
securities markets. The Exchange believes that the ever-shifting market 
share among exchanges with respect to new listings and the transfer of 
existing listings between competitor exchanges demonstrates that 
issuers can choose different listing markets in response to fee changes 
and this proposal is designed to help the Exchange both compete for new 
listings and retain existing listings. Moreover, new competitors, such 
as the Exchange, can enter the space, as well as existing exchanges 
currently without listing programs and new fee arrangements, such as 
Rodeo II, act to further enhance new entrants' ability to compete in 
the listings business. Accordingly, competitive forces constrain the 
Exchange's listing fees and incentive programs like Rodeo II can have a 
direct effect on the ability of TXSE to compete for new listings and 
retain existing listings.
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    \11\ The Justice Department has noted the intense competitive 
environment for exchange listings. See ``NASDAQ OMX Group Inc. and 
Intercontinental Exchange Inc. Abandon Their Proposed Acquisition Of 
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16, 
2011), available at <a href="http://www.justice.gov/atr/public/press_releases/2011/271214.htm">http://www.justice.gov/atr/public/press_releases/2011/271214.htm</a>.
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    The Exchange believes that the proposal is equitable and not 
unfairly discriminatory because participation is available on the same 
terms to qualifying issuers that have already transferred their 
listings to TXSE and to qualifying issuers that subsequently transfer 
their primary listings or dually list on the Exchange, subject to the 
Program's eligibility criteria and award limits. Including the five 
issuers that transferred their listings at the launch of the Exchange's 
corporate listing business recognizes their contribution to 
establishing TXSE as a corporate listing venue and provides an 
incentive for them to maintain their listings through the applicable 
vesting dates. Providing the same award and applying the same listing-
based vesting conditions to existing and subsequent qualifying 
participants supports the Program's objectives of attracting and 
retaining an initial group of corporate issuers and aligning their 
long-term interests with the growth of the Exchange. The eligibility 
criteria are objective and apply equally to existing and subsequent 
qualifying participants. The eligibility criteria are equitable and not 
unfairly discriminatory in that the Exchange is trying to attract 
companies of a particular type (U.S. domiciled corporations, MLPs, and 
REITs) and size (greater than $3.5 billion market cap for primary 
listing and $100 billion for dual listing) to list on the Exchange in 
order to help establish its corporate listing business. The Exchange 
believes that these are reasonable and not unfairly discriminatory 
because they represent the types of companies that the Exchange wants 
to attract and retain and it wants to provide additional incentives for 
such companies to list and remain listed on the Exchange. The Exchange 
has focused the Program on these types of companies because it believes 
attracting and retaining an initial group of these issuers will help 
establish TXSE as a competitive corporate listing venue and encourage 
additional issuers to list on the Exchange. As noted above, the 
competition for listings is robust and the Exchange believes that Rodeo 
II will enhance competition between the exchanges for listings.
    Further to this point, an equity interest in TXSE Group is intended 
to align participating issuers' long-term interests with the 
development of the Exchange's listing business. The Exchange intends to 
develop separate incentive programs for other security types, tailored 
to their respective characteristics and the Exchange's objectives in 
attracting those listings. The Exchange believes that attracting 
companies that meet these criteria will bring greater future value to 
TXSE as a listing venue than companies that do not meet these criteria.
    The Exchange believes that having higher standards for 
participation for dual-listings is reasonable and not unfairly 
discriminatory because the Exchange wants to incentivize primary 
listings on TXSE. The Exchange prioritizes primary listings because 
they establish TXSE as an issuer's principal listing venue and provide 
the foundation for a durable corporate listing franchise. Attracting 
primary listings across a broader range of eligible issuers can help 
demonstrate the Exchange's capabilities and encourage subsequent 
listings. The Exchange therefore believes broader eligibility for 
primary listings is consistent with the Program's objective of 
developing its corporate listing business.
    For dual listings, the Exchange has established a higher market 
capitalization threshold because the issuer retains its primary listing 
on another exchange. The Exchange believes that attracting issuers with 
a market capitalization of at least $100 billion can provide particular 
visibility and recognition for TXSE among other prospective issuers. 
The threshold is intended to focus the Program's equity incentives on 
dual listings that the Exchange believes can make a substantial 
contribution to establishing its corporate listing franchise.
    The Exchange also believes that Founding Partners' equity interest 
in TXSE Group will help to align long-term incentives among corporate 
issuers more broadly, the Exchange, and its parent company by adding 
more corporate issuers to TXSE Group's ownership group and more 
specifically for the Founding Partners by providing issuers with the 
opportunity to share in the benefits of TXSE's increased enterprise 
value.
    The Exchange believes that the vesting period is equitable and 
reasonable because it ensures that only issuers that transfer to the 
Exchange and remain listed on the Exchange for at least one year will 
partially vest and for two years will fully vest. The Exchange believes 
that requiring Founding Partners to remain listed for a period of two 
years in order to fully vest will further help establish the Exchange 
as a

[[Page 65282]]

listing venue.\12\ As noted above, Founding Partners may be, but are 
not required to be, current investors in TXSE Group, and the Exchange 
anticipates both current and potential new investors to participate in 
the Program. The total equity ownership of TXSE Group Stock shall be 
subject to the ownership limitations of the TXSE Group Stockholders' 
Agreement and the TXSE Group Certificate of Formation.\13\
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    \12\ As noted above, if ten awards are granted and fully vest, 
the Founding Partners ownership stake as part of Rodeo II would 
represent 2.94% of the fully diluted outstanding shares of TXSE 
Group.
    \13\ See, e.g., Section 14 of the TXSE Group Stockholders' 
Agreement, which states that ``any Stockholder, either alone or 
together with its Related Persons (as defined in the Certificate of 
Formation), that is also a member of the Texas Stock Exchange (or 
its successor), may not beneficially own directly or indirectly 
shares of stock of the Company representing in the aggregate more 
than 20% of the then-outstanding shares of stock of the Company.''; 
Article SEVENTH(b)(1)(A) and (B) of the TXSE Group Certificate of 
Formation, which states that ``no Person, either alone or together 
with its Related Persons, shall be permitted at any time to 
beneficially own, directly or indirectly, shares of stock of the 
Corporation representing in the aggregate more than 40% of the then-
outstanding shares of stock of the Corporation; and no Member, 
either alone or together with its Related Persons, may beneficially 
own, directly or indirectly, shares of stock of the Corporation 
representing in the aggregate more than 20% of the then-outstanding 
shares of stock of the Corporation.''
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    The Exchange believes the Rodeo II Program is equitable and 
reasonable because attracting and retaining listings from the type and 
size of companies that the Program is intended to attract will, in 
addition to benefitting the Exchange's listing business, also help to 
attract and retain additional liquidity and transaction volume on the 
Exchange. Such additional liquidity will benefit all market 
participants by providing tighter quoting and better prices on the 
Exchange, all of which works to perfect the mechanism for a free and 
open market and national market system.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on
    competition that is not necessary or appropriate in furtherance of 
the purposes of the Exchange Act. The Exchange believes that the 
proposed rule change will improve competition by aligning long-term 
incentives among corporate issuers with the Exchange's parent company 
and providing qualifying existing issuers with an incentive to remain 
listed on the Exchange and additional qualifying issuers with an 
incentive to list and remain listed on the Exchange.
    The Exchange believes that the proposed rule change would increase 
both intermarket and intramarket competition by encouraging qualifying 
issuers already listed on TXSE to maintain their listings and 
encouraging additional qualifying issuers to transfer their primary 
listings or dually list on the Exchange. The five issuers that 
transferred their listings at the launch of the Exchange's corporate 
listing business have contributed to establishing TXSE as a listing 
venue. Their continued listing, together with additional qualifying 
listings, would help develop the Exchange's corporate listing business 
and encourage other issuers to consider TXSE as their listing venue. To 
the extent that there is an additional competitive burden on non-
Founding Partners, the Exchange believes that this is appropriate 
because the development of an additional competitive listing venue 
would benefit all issuers.
    Although five issuers have already transferred their listings to 
TXSE, retaining those issuers and attracting additional qualifying 
issuers remain important to developing a durable corporate listing 
business. Rodeo II is limited to an initial group of ten qualifying 
issuers, subject to the potential increase to fifteen described above. 
The Exchange believes that a program of this limited scope would 
enhance its ability to compete for and retain listings without imposing 
an inappropriate burden on competition. Additional primary listing 
transfers would increase TXSE's listings and reduce listings on 
competing venues, while retention of existing listings and additional 
dual listings would support the development of TXSE's listing business. 
The Program would also provide qualifying issuers with an additional 
factor to consider when choosing whether to list or remain listed on 
TXSE.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(2) \15\ thereunder. At 
any time within 60 days of the filing of the proposed rule change, the 
Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission will institute proceedings to determine whether 
the proposed rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Comments may be submitted by any of the 
following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#6f1d1a030a420c0002020a011b1c2f1c0a0c41080019"><span class="__cf_email__" data-cfemail="eb999e878ec6888486868e859f98ab988e88c58c849d">[email&#160;protected]</span></a>. Please include 
File No. SR-TXSE-2026-039 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File No. SR-TXSE-2026-039. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and 
copying at the principal office of the Exchange. Do not include 
personal identifiable information in submissions; you should submit 
only information that you wish to make available publicly. We may 
redact in part or withhold entirely from publication submitted material 
that is obscene or subject to copyright protection. All submissions 
should refer to file number SR-TXSE-2026-039 and should be submitted on 
or before November 4, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20921 Filed 10-13-26; 8:45 am]
BILLING CODE 8011-01-P


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