Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Transaction Fees at Equity 7, Section 3, To Delete Obsolete References to the CORE FIX Order Entry Protocol

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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 69587-69589]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22454]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106781; File No. SR-PHLX-2026-66]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the 
Exchange's Transaction Fees at Equity 7, Section 3, To Delete Obsolete 
References to the CORE FIX Order Entry Protocol

October 30, 2026.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on October 22, 2026, Nasdaq PHLX LLC (``PHLX'' or ``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 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\ 15 U.S.C. 78a.
    \3\ 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 amend the Exchange's transaction fees at PHLX 
Equity 7, Section 3, to delete obsolete references to the CORE FIX 
order entry protocol.
    The text of the proposed rule change is available on the Exchange's 
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/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.

[[Page 69588]]

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

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's 
transaction fees at PHLX Equity 7, Section 3, to remove obsolete 
references to the CORE FIX order entry protocol.
    On October 22, 2026, the Exchange filed with the Commission a 
proposal, with immediate effectiveness, to abandon plans to deploy the 
CORE FIX order entry protocol. The Exchange now proposes to delete from 
its equities fee schedule (PHLX Equity 7) all references to CORE FIX, 
which had been added to the fee schedule in anticipation of testing and 
deploying CORE FIX.
    Specifically, the Exchange proposes to make the following changes:
    1. In Equity 7, Section 3, under Port Fees, remove the reference 
and associated price for CORE FIX, including the tag to note ``1'' 
(which was incorrectly attached to the price for OUCH, another order 
entry protocol offered by the Exchange), as well as the corresponding 
note ``1''. This rule established, in relevant part, a fee for CORE FIX 
of $400, per month, per port. Note ``1'' read ``Temporary 30-Day Fee 
Waiver for CORE FIX Ports. The Exchange shall offer users a 30-day 
waiver of the CORE FIX port fee for up to five newly added CORE FIX 
ports. This fee waiver shall be offered for a three-month period, 
beginning on October 10, 2022.''
    2. In Equity 7, Section 3, under Port Fees, remove the reference to 
CORE FIX in the line-item concerning ``Disaster recovery port.'' This 
rule established, in relevant part, a fee of $25, per month, per port, 
for a CORE FIX disaster recovery port.
    3. In Equity 7, Section 3, under Testing Facilities, remove the tag 
to note ``1'', as well as the corresponding note ``1''. This rule 
establishes, in relevant part, a fee of $300 per port, per month, for 
subscribers that conduct tests of their access protocol connections 
through the Exchange Testing Facility. Note ``1'' read ``Temporary 30-
Day Fee Waiver for CORE FIX Testing Facility Ports. The Exchange shall 
offer subscribers a 30-day waiver of the $300 Testing Facility fee in 
this paragraph (a) for up to five newly added CORE FIX Testing Facility 
ports. This fee waiver shall be offered for a three-month period, 
beginning on September 22, 2022.''
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\4\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\5\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposed changes to its schedule of credits are 
reasonable in several respects. As a threshold matter, the Exchange is 
subject to significant competitive forces in the market for equity 
securities transaction services that constrain its pricing 
determinations in that market. The fact that this market is competitive 
has long been recognized by the courts. In NetCoalition v. Securities 
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one 
disputes that competition for order flow is `fierce.' . . . As the SEC 
explained, `[i]n the U.S. national market system, buyers and sellers of 
securities, and the broker-dealers that act as their order-routing 
agents, have a wide range of choices of where to route orders for 
execution'; [and] `no exchange can afford to take its market share 
percentages for granted' because `no exchange possesses a monopoly, 
regulatory or otherwise, in the execution of order flow from broker 
dealers'. . . .'' \6\
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    \6\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (Dec. 2, 2008), 
73 FR 74770, 74782-83 (Dec. 9, 2008) (SR-NYSEArca-2006-21)).
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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.'' \7\
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    \7\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70 
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Numerous indicia demonstrate the competitive nature of this market. 
For example, clear substitutes to the Exchange exist in the market for 
equity security transaction services. The Exchange is only one of 
several equity venues to which market participants may direct their 
order flow. Competing equity exchanges offer similar tiered pricing 
structures to that of the Exchange, including schedules of rebates and 
fees that apply based upon members achieving certain volume thresholds.
    Within this environment, market participants can freely and often 
do shift their order flow among the Exchange and competing venues in 
response to changes in their respective pricing schedules. As such, the 
proposal represents a reasonable attempt by the Exchange to increase 
its liquidity and market share relative to its competitors.
    The Exchange's proposal is also reasonable, equitable and not 
unfairly discriminatory because it removes obsolete references to CORE 
FIX and related temporary waiver language from the fee schedule. The 
Exchange has determined not to deploy CORE FIX, and the provisions 
proposed for deletion therefore would not govern an active protocol or 
an active fee offering. Removing references to the CORE FIX production 
port fee, CORE FIX disaster recovery port fee, CORE FIX Testing 
Facility ports, and related temporary waiver language will not change 
the availability, pricing, or functionality of any service currently 
used by members, and will apply equally to all market participants. 
Instead, the proposal will make Equity 7, Section 3 easier to navigate, 
understand, and administer by eliminating text that could otherwise 
create confusion regarding unavailable protocol functionality, obsolete 
fees, and waiver language that will not apply. For these reasons, the 
Exchange believes that the proposal is consistent with an equitable 
allocation of reasonable dues, fees, and other charges and is not 
designed to permit unfair discrimination.

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. In terms of inter-market 
competition, 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 and with 
alternative trading systems that

[[Page 69589]]

have been exempted from compliance with the statutory standards 
applicable to 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.
    The proposal will not impose an undue burden on inter-market or 
intra-market competition. The proposed deletions are not designed to 
address a competitive issue, but rather to ensure that the Exchange's 
fee schedule accurately reflects the protocols and fees currently 
available to market participants. Because CORE FIX will not be 
deployed, no market participant will lose access to an available 
protocol, lose an applicable waiver, or become subject to a new or 
changed fee as a result of deleting the obsolete CORE FIX production, 
disaster recovery, Testing Facility, and waiver references. The 
deletions will apply uniformly to all members and other market 
participants and will not disadvantage any category of Exchange 
participant. To the contrary, removing obsolete and inapplicable text 
will promote a clearer and more transparent fee schedule for all 
participants.

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.\8\
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    \8\ 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#a5d7d0c9c088c6cac8c8c0cbd1d6e5d6c0c68bc2cad3"><span class="__cf_email__" data-cfemail="6a181f060f47090507070f041e192a190f09440d051c">[email&#160;protected]</span></a>. Please include 
file number SR-PHLX-2026-66 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-PHLX-2026-66. 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-PHLX-2026-66 and should be submitted on 
or before November 25, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22454 Filed 11-3-26; 8:45 am]
BILLING CODE 8011-01-P


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