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Notice2026-21246

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, Section 2

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Published

October 19, 2026

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 91 Issue 200 (Monday, October 19, 2026)</title>
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[Federal Register Volume 91, Number 200 (Monday, October 19, 2026)]
[Notices]
[Pages 66179-66182]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21246]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106665; File No. SR-NASDAQ-2026-087]

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, Section 2

October 14, 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 October 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 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 a change to NOM's Pricing Schedule at
Options 7, Section 2(1).
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).

[[Page 66180]]

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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)
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) (0.45)
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Currently, the NOM Market Maker rebate to add liquidity in Penny
Symbols is paid per the highest tier achieved below:

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Tier 1................. Participant adds NOM Market Maker 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 NOM Market Maker 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 NOM Market Maker
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)(1) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-Penny
Symbols above 0.15% of total industry customer
equity and ETF option ADV contracts per day in
a month, (2) transacts in all securities
through one or more of its Nasdaq Market
Center MPIDs that represent (i) 0.50% or more
of Consolidated Volume (``CV'') which adds
liquidity in the same month on The Nasdaq
Stock Market or (ii) 50 million shares or more
ADV which adds liquidity in the same month on
The Nasdaq Stock Market, and (3) executes 1.5
million shares or more ADV in the same month
utilizing the M-ELO order type on The Nasdaq
Stock Market.
Tier 4................. Participant adds NOM Market Maker liquidity in
Penny Symbols and/or Non-Penny Symbols of
above 0.60% of total industry customer equity
and ETF option ADV contracts per day in a
month.
Tier 5................. Participant: (a) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-Penny
Symbols above 0.85% of total industry customer
equity and ETF option ADV contracts per day in
a month; or (b) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-Penny
Symbols of above 0.40% of total industry
customer equity and ETF option ADV contracts
per day in a month and transacts in all
securities through one or more of its Nasdaq
Market Center MPIDs that represent 0.40% or
more of Consolidated Volume (``CV'') which
adds liquidity in the same month on The Nasdaq
Stock Market.
Tier 6................. Participant: (a)(1) adds NOM Market Maker
liquidity in Penny Symbols and/or Non-Penny
Symbols above 0.95% of total industry customer
equity and ETF option ADV contracts per day in
a month, (2) executes Total Volume of 250,000
or more contracts per day in a month, of which
30,000 or more contracts per day in a month
must be removing liquidity, and (3) adds Firm,
Broker-Dealer and Non-NOM Market Maker
liquidity in Non-Penny Symbols of 10,000 or
more contracts per day in a month; or (b)(1)
adds NOM Market Maker liquidity in Penny
Symbols and/or Non-Penny Symbols above 1.40%
of total industry customer equity and ETF
option ADV contracts per day in a month, and
(2) executes Total Volume of 250,000 or more
contracts per day in a month, of which 15,000
or more contracts per day in a month must be
removing liquidity.
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The Exchange proposes to lower by $0.01, across all six tiers, the
rebate it pays to NOM Market Makers to add liquidity in Penny Symbols.
Therefore, as it pertains to NOM Market Makers, the schedule of these
rebates will be as follows:

2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 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.'' \11\
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\11\ 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
\12\ (``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.\13\ 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.'' \14\
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\12\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\13\ See NetCoalition, at 534-535.
\14\ 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

[[Page 66181]]

monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers' . . . .'' \15\ 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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\15\ 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 change to Options 7 is 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.
The Exchange's proposal to reduce the rebate paid to NOM Market
Makers to add liquidity in Penny Symbols by $0.01 per contract across
each of the six existing tiers is reasonable because it represents a
modest recalibration of the Exchange's Pricing Schedule that reflects
the Exchange's ongoing efforts to balance the incentives it offers to
NOM Market Makers against the costs and business considerations
attendant to operating an options exchange in a highly competitive
market. Even after the proposed reduction, NOM Market Makers will
continue to receive meaningful rebates for adding liquidity in Penny
Symbols, ranging from ($0.19) per contract at Tier 1 to ($0.44) per
contract at Tier 6, and NOM Market Makers will retain the ability to
increase the rebate they receive by adding greater volumes of
qualifying liquidity in Penny Symbols on the Exchange. The Exchange
believes that the amended rebates will remain competitive with rebates
offered on other options exchanges for adding market maker liquidity in
penny-quoted classes, and will continue to incentivize NOM Market
Makers to direct liquidity-providing order flow to the Exchange.
The proposed amended rebates to add liquidity in Penny Symbols are
equitable and not unfairly discriminatory because the Exchange would
uniformly apply the amended schedule of rebates to any NOM Market Maker
that meets the criteria for these rebates. The proposal does not create
any new distinction between NOM Market Makers and other market
participants, nor between one NOM Market Maker and another; it merely
reduces, by a uniform $0.01 per contract, the rebate paid at each of
the six tiers. The criteria that a NOM Market Maker must satisfy to
qualify for each tier remain unchanged, so a NOM Market Maker that
qualifies for a particular tier today will continue to qualify for the
same tier under the amended schedule. Furthermore, the amended schedule
of rebates is equitable and not unfairly discriminatory because it
remains designed to attract order flow to the Exchange by rewarding NOM
Market Makers that contribute liquidity in Penny Symbols. All members
and member organizations would benefit from the opportunity to interact
with the liquidity that these rebates continue to incentivize.

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's proposed amendments to the rebates paid to NOM
Market Makers for adding liquidity in Penny Symbols would not impose an
undue burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act, because the
Exchange would uniformly apply the new schedule of rebates to all NOM
Market Makers. Every NOM Market Maker will continue to be eligible to
earn the amended rebates on identical terms at each of the six tiers,
and each NOM Market Maker's tier assignment will continue to be
determined solely by its own level of qualifying activity on the
Exchange. The proposal does not modify the qualifying criteria for any
tier, nor does it alter the rebates paid to Customers, Professionals,
Broker-Dealers, Firms, or Non-NOM Market Makers. Also, the revised
schedule of rebates paid to NOM Market Makers for adding liquidity in
Penny Symbols is part of the Exchange's overall effort to remain
competitive with other options venues and to continue to attract order
flow to the Exchange. All members and member organizations would
benefit from the opportunity to interact with the liquidity that these
rebates continue to incentivize.

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.\16\
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\16\ 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#146661787139777b7979717a6067546771773a737b62"><span class="__cf_email__" data-cfemail="483a3d242d652b2725252d263c3b083b2d2b662f273e">[email&#160;protected]</span></a>. Please include
file number SR-NASDAQ-2026-087 on the subject line.

[[Page 66182]]

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-2026-087. 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-2026-087 and should be submitted
on or before November 9, 2026.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21246 Filed 10-16-26; 8:45 am]
BILLING CODE 8011-01-P

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