Notice2026-22452
Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend LTSE Rule 3.291
Primary source
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Published
November 4, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 212 (Wednesday, November 4, 2026)</title>
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[Federal Register Volume 91, Number 212 (Wednesday, November 4, 2026)]
[Notices]
[Pages 69593-69596]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22452]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106779; File No. SR-LTSE-2026-25]
Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend LTSE Rule 3.291
October 30, 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 October 20, 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, II and III 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 amend LTSE Rule 3.291, Influencing or Rewarding Employees of Others;
Gratuities, to conform to the rules of the Financial Industry
Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement
between the Exchange and FINRA pursuant to Rule 17d-2 under the Act.\3\
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\3\ 17 CFR 240.19b-4(f)(6)(iii).
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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
The Exchange proposes to amend LTSE Rule 3.291, Influencing or
Rewarding Employees of Others; Gratuities, to conform the rule so that
it is substantially similar to FINRA Rule 3220. The Exchange notes that
this filing is based on a proposal recently submitted by FINRA, and
approved by the Commission, to amend FINRA Rule 3220 (Influencing or
Rewarding Employees of Others).\4\
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\4\ See Securities Exchange Act Release No. 104830 (February 12,
2026), 91 FR 7570 (February 18, 2026) (Order Approving File No. SR-
FINRA-2025-003) (``FINRA Approval Order'').
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Pursuant to Rule 17d-2 under the Act,\5\ the Exchange and FINRA
entered into an agreement to allocate regulatory responsibility for
common rules (the ``17d-2 Agreement''). The 17d-2 Agreement covers
common members of the Exchange and FINRA and allocates to FINRA
regulatory responsibility, with respect to common members, for the
following: (i) examination of common members of the Exchange and FINRA
for compliance with certain federal securities laws, rules and
regulations and rules of the Exchange that the Exchange has certified
as identical or substantially similar to FINRA rules; (ii)
investigation of common members of the Exchange and FINRA for
violations of certain federal securities laws, rules or regulations, or
Exchange rules that the Exchange has certified as identical or
substantially similar to a FINRA rule; and (iii) enforcement of
compliance by common members with certain federal securities laws,
rules and regulations, and the rules of the Exchange that the Exchange
has certified as identical or substantially similar to FINRA rules.\6\
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\5\ 17 CFR 240.17d-2.
\6\ See Securities and Exchange Release No. 86587 (August 7,
2019), 84 FR 39883 (August 12, 2019) (approving File No. 4-747).
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The 17d-2 Agreement included a certification by the Exchange that
states that the requirements contained in certain Exchange rules are
identical to, or substantially similar to, certain FINRA rules that
have been identified as comparable. To conform to comparable FINRA
rules for purposes of the 17d-2 Agreement, the Exchange proposes
conforming the text of LTSE Rule 3.291 so that it is substantially
similar to FINRA Rule 3220.
Currently, LTSE Rule 3.291 is excluded from the 17d-2 Agreement
because it is not identical, or substantially similar, to FINRA Rule
[[Page 69594]]
3220. Current LTSE Rule 3.291 prohibits a Member or person associated
with a Member from directly or indirectly, giving or permitting to be
given anything of value, including gratuities, in excess of one hundred
dollars per individual per year to any person, principal, proprietor,
employee, agent or representative of another person where such payment
or gratuity is in relation to the business of the employer of the
recipient of the payment or gratuity. FINRA Rule 3220 currently
prohibits gifts in excess of $300.00, where the gift or gratuity is in
relation to the business of the employer of the recipient. Unlike FINRA
Rule 3220, current LTSE Rule 3.291 does not include provisions
covering: supervision and record keeping requirements; an exclusion for
payments made pursuant to bona fide, written employment contracts;
gifts incidental to business entertainment; valuation of gifts;
aggregation of gifts; personal gifts; bereavement gifts; de minimis
gifts and promotional or commemorative items; donations due to
federally declared major disasters; or gifts to a Member's associated
persons or individual retail customers. LTSE Rule 3.291 was, therefore,
excluded from the 17d-2 Agreement because it was not identical or
substantially similar to FINRA Rule 3220. To harmonize its rules with
FINRA, the Exchange proposes to conform the rule text of LTSE Rule
3.291 to text that is substantially similar to FINRA Rule 3220 so that
it may be incorporated into the 17d-2 Agreement in its entirety.
The Exchange believes that these changes will help to avoid
confusion among Members of the Exchange that are also members of FINRA
by harmonizing LTSE Rule 3.291 with FINRA Rule 3220. The proposed
changes to LTSE Rule 3.291 are designed to enable the Exchange to
incorporate LTSE Rule 3.291 into the 17d-2 Agreement, further reducing
duplicative regulation of Members that are also members of FINRA. For
the avoidance of doubt, LTSE Rule 3.291 would equally apply to
Exchange-only Members as the Exchange believes it appropriately
protects against improprieties, such as conflicts of interest, that
might arise when a Member or person associated with a Member gives
items of value to an employee of another person, such as an
institutional customer, vendor or counterparty with the hope of
strengthening the relationship with the customer.
First, the Exchange proposes to amend LTSE Rule 3.291(a) to
increase the gift limit from $100 to $300 per individual per year.
FINRA stated that the current gift limit of $100 has been in place
since 1992.\7\ FINRA increased the gift limit from $100 to $300 to
account for past inflation since 1992 and to account for expected
future inflation for approximately ten years, thereby reducing the
frequency of future upward adjustments to account for inflation.\8\
Consistent with FINRA's determination, the Exchange believes that a
$300 gift limit would continue to permit the exchange of business
courtesies while helping to guard against excessiveness, and reasonably
reflects changes to purchasing power due to inflation since the gift
limit was last raised in 1992 as well as approximately ten years of
expected future inflation.
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\7\ See supra note 4.
\8\ See id.
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Second, the Exchange proposes to add a new paragraph (d) to LTSE
Rule 3.291 that would authorize FINRA staff to conditionally or
unconditionally grant an exemption from any provision of LTSE Rule
3.291 for good cause shown, provided that such exemption is consistent
with the purpose of the Rule, the protection of investors, and the
public interest. Specifically, the Exchange proposes that pursuant to
LTSE Rule Series 9.600 (Procedures for Exemptions), FINRA staff, for
good cause shown after taking into consideration all relevant factors,
may conditionally or unconditionally grant an exemption from any
provision of this Rule to the extent that such exemption is consistent
with the purpose of the Rule, the protection of investors, and the
public interest. This proposed provision mirrors the exemptive relief
authority added by FINRA in new Rule 3220(d).\9\ Given the scope of
LTSE Rule 3.291, which applies to gifts given to a wide range of
recipients where the payment is in relation to the business of the
employer of the recipient, and given the diversity of Member sizes,
structures, businesses, and distribution models, the Exchange believes
it would be useful and appropriate to have the ability to provide
relief from a particular provision of the Rule under specific factual
circumstances.
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\9\ See id.
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Third, FINRA Rule 3220 incorporated published guidance interpreting
FINRA Rule 3220, including NASD Notice to Members 06-69,\10\ FINRA's
Frequently Asked Questions on Gifts, Business Entertainment, and Non-
Cash Compensation,\11\ as well as an interpretive letter regarding
bereavement gifts (the ``Aly Letter'').\12\ To maintain substantive
alignment with FINRA Rule 3220, the Exchange proposes to adopt
corresponding Supplementary Material .01 through .09 to LTSE Rule
3.291. Each proposed Supplementary Material section is described below.
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\10\ NASD Notice to Members 06-69 (Dec. 2006) (``NTM 06-69'').
\11\ Gifts/Business Entertainment/Non-Cash Compensation FAQs,
<a href="https://www.finra.org/rules-guidance/key-topics/gifts-gratuities-and-non-cash-compensation/faqs">https://www.finra.org/rules-guidance/key-topics/gifts-gratuities-and-non-cash-compensation/faqs</a> (``FAQs'').
\12\ Letter from Gary L. Goldsholle, Vice President & Associate
General Counsel, FINRA, to Amal Aly, Managing Director & Associate
General Counsel, SIFMA, dated December 17, 2007 (``Aly Letter'').
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Proposed Supplementary Material .01 (Gifts Incidental to Business
Entertainment) would state that a gift given during the course of a
business entertainment event is subject to LTSE Rule 3.291 unless it is
consistent with the requirements of proposed Supplementary Material .04
(Personal Gifts) or .06 (De Minimis Gifts and Promotional or
Commemorative Items) which is substantially similar to FINRA Rule 3220
Supplementary Material .04 and .06. For the purpose of the $300 limit,
the cost of the business entertainment event itself would not be
included in the value of the gift.
Proposed Supplementary Material .02 (Valuation of Gifts) would
require Members to value gifts (other than tickets for sporting or
other events) at cost, exclusive of tax and delivery charges, and would
require Members to value tickets for sporting or other events at the
higher of cost or face value. If gifts are given to multiple
recipients, Members must record the names of each recipient and
calculate and record the value of the gift on a pro rata, per-recipient
basis, for purposes of ensuring compliance with the $300 limit in LTSE
Rule 3.291(a). FINRA Rule 3220 at Supplementary Material .02 requires
Members to value gifts (other than tickets for sporting or other
events) at cost rather than at the higher of cost or market value
reduces complexity and subjectivity because market value can be
difficult and burdensome to determine, while distinguishing tickets for
sporting or other events accounts for the fact that such tickets are
commonly purchased on secondary markets at costs that differ from face
value.
Proposed Supplementary Material .03 (Aggregation of Gifts) would
require Members to aggregate all gifts given by the Member and each
associated person of the Member to a particular recipient over the
course of the year for purposes of ensuring compliance with the $300
limit in LTSE Rule 3.291(a), and would require each Member to state in
its procedures whether it is aggregating all gifts given by the Member
and its
[[Page 69595]]
associated persons on a calendar year, fiscal year, or on a rolling
basis beginning with the first gift to any particular recipient. The
aggregation requirement would not apply to personal gifts under
proposed Supplementary Material .04 or to gifts of de minimis value or
promotional or commemorative items under proposed Supplementary
Material .06 as they are already not subject to the gift limit. This
proposed provision which is substantially similar to FINRA Rule 3220.03
would help ensure that persons who give multiple gifts in a year to the
same recipient do not circumvent the gift limit.
Proposed Supplementary Material .04 (Personal Gifts) would state
that gifts that are given for infrequent life events (e.g., a wedding
gift or a congratulatory gift for the birth of a child) are not subject
to the restrictions in LTSE Rule 3.291(a) or the recordkeeping
requirements in LTSE Rule 3.291(c), provided the gifts are customary
and reasonable, personal in nature, and not in relation to the business
of the employer of the recipient. In determining whether a gift is
``personal in nature and not in relation to the business of the
employer of the recipient,'' Members should consider a number of
factors, including the nature of any pre-existing personal or family
relationship between the person giving the gift and the recipient and
whether the associated person paid for the gift. When the Member bears
the cost of the gift, either directly or by reimbursing an associated
person, the Exchange will presume that such gift is not personal in
nature and instead is in relation to the business of the employer of
the recipient. This provision is substantially similar to FINRA Rule
3220 at Supplementary Material .04.
Consistent with FINRA Rule 3220 at Supplementary Material .05
(Bereavement Gifts), LTSE Rule 3.291 at proposed Supplementary .05
separates bereavement gifts from personal gifts. Proposed Supplementary
Material .05 would state that bereavement gifts that are customary and
reasonable are not considered to be in relation to the business of the
employer of the recipient and, therefore, are not subject to the
restrictions in LTSE Rule 3.291(a) or the recordkeeping requirements in
LTSE Rule 3.291(c). This provision is substantially similar to FINRA
Rule 3220 at Supplementary Material .05.
Proposed Supplementary Material .06 (De Minimis Gifts and
Promotional or Commemorative Items), at paragraph (a), would state that
gifts of a de minimis value (e.g., pens, notepads, or modest desk
ornaments) or promotional items of nominal value that display the
Member's logo (e.g., umbrellas, tote bags, or shirts) are not subject
to the restrictions in LTSE Rule 3.291(a) or the recordkeeping
requirements in LTSE Rule 3.291(c), provided that the value of the gift
or promotional item is substantially below the $300 limit. Proposed
Supplementary Material .06(b) would state that customary and reasonable
solely decorative items commemorating a business transaction are not
subject to the restrictions in LTSE Rule 3.291 or the recordkeeping
requirements in LTSE Rule 3.291. These provisions are substantially
similar to FINRA Rule 3220 at Supplementary Material .06.
Proposed Supplementary Material .07 (Donations Due to Federally
Declared Major Disasters) would state that donations by a Member or an
associated person to any person, principal, proprietor, employee, agent
or representative of another person to provide assistance to the
individual for losses sustained in a natural event that the President
has declared to be a major disaster, such as a wildfire, hurricane,
tornado, earthquake, or flood, are not considered ``in relation to the
business of the employer of the recipient'' for purposes of LTSE Rule
3.291(a) and are not subject to the restrictions in LTSE Rule 3.291(a)
or the recordkeeping requirements of LTSE Rule 3.291(c). This provision
is substantially similar to FINRA Rule 3220 at Supplementary Material
.07 which recognizes that the nature of such disasters is unpredictable
and catastrophic.
Proposed Supplementary Material .08 (Supervision and Recordkeeping)
would state that the Exchange's supervision rules at LTSE Rule 5.110
require a Member to have a supervisory system reasonably designed to
achieve compliance with LTSE Rule 3.291.\13\ To meet these standards,
Members would be required to have systems and procedures reasonably
designed to ensure that payments and gratuities in relation to the
business of the employer of the recipient given by the Member and its
associated persons to employees of another person are (a) reported to
the Member; (b) reviewed for compliance with LTSE Rule 3.291; and (c)
maintained in the Member's records. Such procedures must be reasonably
designed to ensure that an associated person who is giving a payment or
gratuity is not responsible for determining whether such payment or
gratuity is in relation to the business of the recipient's employer.
Members are not required to maintain records of gifts that are
consistent with the requirements of proposed Supplementary Material .04
through .07. Requiring a person other than the associated person giving
the gift to assess the nature of the gift is intended to encourage
objectivity in making such determinations and is substantially similar
to FINRA Rule 3220 at Supplementary Material .08.
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\13\ The Exchange's supervision requirements for Members are set
forth in LTSE Rule 5.110 (Supervision). To the extent applicable,
Members would look to the applicable supervision rules of the
Exchange to establish and maintain a supervisory system reasonably
designed to achieve compliance with LTSE Rule 3.291.
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Proposed Supplementary Material .09 (Gifts to a Member's Associated
Persons or Individual Retail Customers) would state that LTSE Rule
3.291 does not apply to gifts from a Member to its own associated
persons, or to gifts from a Member or an associated person to
individual retail customers. The Exchange believes that proposed
Supplementary Material .09 would clarify, and improve awareness and
understanding of, the scope of LTSE Rule 3.291 and is substantially
similar to FINRA Rule 3220 at Supplementary Material .09.
The Exchange believes the proposed rule change would promote
efficiency without reducing protection for investors and the public
interest. The proposed changes to LTSE Rule 3.291 to conform to the
rules of FINRA improve transparency, awareness, and understanding of
the rule's requirements. The Exchange believes these proposed changes
would also help facilitate compliance with LTSE Rule 3.291 and would
provide regulatory certainty to Members. Because the Exchange proposes
to make conforming amendments that are substantially similar to FINRA's
amendments to FINRA Rule 3220, Members that are also FINRA members
would continue to be subject to a substantially similar rule when
conducting business on the Exchange. In addition, Members that are not
FINRA members would continue to be subject to LTSE Rule 3.291 to the
extent that such Members conduct business with the public.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\15\ in
particular, in that it is designed to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in
[[Page 69596]]
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(5).
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As noted above, the proposed rule change conforms LTSE Rule 3.291
to FINRA Rule 3220 so that it is substantially similar to FINRA's rule,
thereby promoting uniform standards across the securities industry. The
Exchange also notes the changes proposed herein align LTSE Rule 3.291
with a recent filing submitted by FINRA and approved by the
Commission.\16\ The Exchange believes further that these changes will
help to reduce and avoid potential confusion among Members of the
Exchange that are also members of FINRA by harmonizing LTSE Rule 3.291
with FINRA Rule 3220. The proposed rule change is designed to enable
the Exchange to incorporate LTSE Rule 3.291 into the 17d-2 Agreement,
further reducing duplicative regulation of Members that are also
members of FINRA. For the avoidance of doubt, LTSE Rule 3.291 would
equally apply to Exchange-only Members as the Exchange believes it
appropriately protects against improprieties that might arise when
substantial gifts or monetary payments are given to certain persons.
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\16\ See supra note 4.
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The Exchange believes the proposed rule change would promote
efficiency without reducing protection for investors and the public
interest. The proposed changes to LTSE Rule 3.291 to conform to the
rules of FINRA improve transparency, awareness, and understanding of
the Rule's requirements. The Exchange believes these proposed changes
would also help facilitate compliance with LTSE Rule 3.291.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues but rather to provide
greater harmonization among Exchange and FINRA rules of similar
purpose, resulting in less burdensome and more efficient regulatory
compliance for common members and facilitating FINRA's performance of
its regulatory functions under the 17d-2 Agreement. As such, 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.
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
The proposed rule change is effective upon filing pursuant to
Section 19(b)(3) of the Exchange Act \17\ and paragraph (f)(6) of Rule
19b-4 thereunder,\18\ in that the proposed rule change does not
significantly affect the protection of investors or the public
interest; does not impose any significant burden on competition; and
does not become operative for 30 days after filing or such shorter time
as the Commission may designate.
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\17\ 15 U.S.C. 78s(b)(3).
\18\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further 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="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#1664637a733b75797b7b737862655665737538717960"><span class="__cf_email__" data-cfemail="e290978e87cf818d8f8f878c9691a2918781cc858d94">[email protected]</span></a>. Please include
file number SR-LTSE-2026-25 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-2026-25. 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-2026-25 and should be submitted on or before November 25, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22452 Filed 11-3-26; 8:45 am]
BILLING CODE 8011-01-P
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