Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fees for Nasdaq 100 Index Options in Options 7, Section 5.A, 26380-26382 [2025-11293]

Download as PDF 26380 Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices promote the prompt and accurate clearance and settlement of securities transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, and, in general, to protect investors and the public interest in accordance with Section 17A(b)(3)(F) of the Act.13 Rule 17Ad–22(e)(20) 14 requires that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to identify, monitor, and manage risks related to any link the covered clearing agency establishes with one or more other clearing agencies, financial market utilities, or trading markets.15 OCC believes that the proposed rule change is consistent with Rule 17Ad– 22(e)(20) 16 because the proposed Clearing Agreement is designed to help OCC identify, monitor, and manage the risks associated with providing clearance and settlement services for MIAX, which is a trading market registered as a DCO with the CFTC. The Clearing Agreement would set certain rights and obligations on MIAX, and for example would require MIAX, to report financial information to OCC, which would enable OCC to monitor for changes in MIAX’s financial condition. It also would require MIAX to maintain sufficient financial resources or arrangements with another DCM to mitigate the impact to the marketplace should MIAX become unavailable as a trading venue for its Cleared Contracts. ddrumheller on DSK120RN23PROD with NOTICES1 (B) Clearing Agency’s Statement on Burden on Competition Section 17A(b)(3)(I) of the Act 17 requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. OCC does not believe that the proposed rule change would impose any burden on competition. The purpose of the proposed rule change is to adopt a Clearing Agreement between OCC and MIAX. The adoption of such an agreement would not affect Clearing Members’ access to OCC’s services, nor would it disadvantage or favor any particular user with respect to another user. As such, OCC believes that the proposed rule change would not impose any burden on competition. 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 18 and paragraph (f) of Rule 19b–4 19 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. The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.20 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 U.S.C. 78q–1(b)(3)(I). VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–11299 Filed 6–18–25; 8:45 am] Paper Comments [Release No. 34–103263; File No. SR–ISE– 2025–17] • 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–OCC–2025–008. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 20 Notwithstanding its immediate effectiveness, implementation of this rule change will be delayed until this change is deemed certified under CFTC Regulation 40.6. 16 Id. amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of OCC and on OCC’s website at https:// www.theocc.com/CompanyInformation/Documents-and-Archives/ By-Laws-and-Rules. 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–OCC–2025–008 and should be submitted on or before July 11, 2025. • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– OCC–2025–008 on the subject line. 19 17 CFR 240.17Ad–22(e)(20). 15 Id. 17 15 Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. 18 15 13 Id. 14 17 (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fees for Nasdaq 100 Index Options in Options 7, Section 5.A June 16, 2025. 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 June 2, 2025, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and 21 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\20JNN1.SGM 20JNN1 Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the fees for Nasdaq 100 Index options in the Exchange’s Pricing Schedule at Options 7, Section 5.A to adopt a new surcharge for removing liquidity. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/ise/rulefilings, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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 ddrumheller on DSK120RN23PROD with NOTICES1 Options 7, Section 5.A. Today, the Exchange assesses transaction fees of $0.75 per contract for all Non-Priority Customer 3 regular NDX orders, and $0.25 per contract for all Priority Customer 4 regular NDX orders. The Exchange now proposes to assess a surcharge of $1.50 per contract to all regular Non-Priority Customer orders that remove liquidity.5 Priority Customer NDX fees will remain unchanged under this proposal. The proposed surcharge is aimed at encouraging Non-Priority Customers to add more liquidity and reduce ‘‘take’’ 3 ‘‘Non-Priority Customers’’ include Market Makers, Non-Nasdaq ISE Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and Professional Customers. 4 A ‘‘Priority Customer’’ is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in Nasdaq ISE Options 1, Section 1(a)(37). 5 See proposed note 4 in Options 7, Section 5.A. VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 behavior that removes liquidity from the order book. The Exchange notes that the proposed surcharge amount is within the range of surcharges assessed for transactions in other proprietary products at another options exchange.6 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,8 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. The Exchange believes that its proposal to add a $1.50 per contract surcharge to all regular Non-Priority Customer orders that remove liquidity is reasonable because the proposed pricing reflects the proprietary nature of this product. Similar to other proprietary products like options overlying the Nasdaq 100 Micro Index (‘‘XND’’), the Exchange seeks to recoup the operational costs of listing proprietary products.9 Also, pricing by symbol is a common practice on many U.S. options exchanges as a means to incentivize order flow to be sent to an exchange for execution in particular products. As noted above, another options exchange assesses surcharges for its proprietary index options products that are within the range (or higher) of what the Exchange is proposing herein.10 Further, the Exchange notes that market participants are offered different ways to gain exposure to the Nasdaq 100 Index, whether through the Exchange’s proprietary products like options overlying NDX or XND, or separately through multi-listed options overlying Invesco QQQ Trust (‘‘QQQ’’).11 Offering such products provides market participants with a variety of choices in selecting the product they desire to utilize in order to gain exposure to the Nasdaq 100 Index. When exchanges are 6 For example, Cboe Options (‘‘Cboe’’) currently assesses market participants LEAPS surcharge fees for SPX ranging from $1.00 to $2.50 per contract. See Cboe Fees Schedule. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4) and (5). 9 By way of example, in analyzing an obvious error, the Exchange would have additional data points available in establishing a theoretical price for a multiply listed option as compared to a proprietary product, which requires additional analysis and administrative time to comply with Exchange rules to resolve an obvious error. 10 See supra note 6. 11 QQQ is an exchange-traded fund based on the same Nasdaq 100 Index as NDX and XND. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 26381 able to recoup costs associated with offering proprietary products, it incentivizes growth and competition for the innovation of additional products. The Exchange believes that its proposal is equitable and not unfairly discriminatory because it will be applied uniformly to all regular NonPriority Customer NDX orders that remove liquidity. Assessing this surcharge only to Non-Priority Customers is equitable and not unfairly discriminatory because Priority Customers have historically been assessed more favorable pricing on the Exchange, including on NDX orders where they will continue to be assessed the lowest transaction fee of $0.25 per contract under this proposal. Priority Customer order flow benefits all market participants by providing more trading opportunities, which attracts market makers. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants, to the benefit of all market participants who may interact with this order flow. Further, the proposed surcharge is aimed at encouraging NonPriority Customers to add more liquidity and reduce ‘‘take’’ behavior that removes liquidity from the order book. To the extent the Exchange is successful in incentivizing this behavior, the additional liquidity on the Exchange will benefit all market participants through more trading opportunities, tighter spreads, and added price discovery. 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 intra-market competition, the Exchange will apply the proposed surcharge uniformly to all Non-Priority Customers. As discussed above, the proposed change is aimed at encouraging Non-Priority Customers to add more liquidity and reduce ‘‘take’’ behavior that removes liquidity from the order book. To the extent the Exchange is successful in incentivizing this behavior, the additional liquidity on the Exchange will benefit all market participants through more trading opportunities, tighter spreads, and added price discovery. 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 E:\FR\FM\20JNN1.SGM 20JNN1 26382 Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices 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 options 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. As noted above, market participants are offered an opportunity to transact in NDX or XND, or separately execute options overlying QQQ. Offering these products provides market participants with a variety of choices in selecting the product they desire to use to gain exposure to the Nasdaq 100 Index. Furthermore, the proposed surcharge is in line with surcharges assessed on other proprietary products at another options exchange.12 In addition to the Exchange, market participants have alternative options exchanges that they may participate on and direct their order flow, which list proprietary products that compete with NDX.13 In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing options exchanges to maintain their competitive standing in the financial markets. ddrumheller on DSK120RN23PROD with NOTICES1 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.14 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 12 See supra note 6. e.g., pricing for Russell 2000 Index (‘‘RUT’’) on Cboe’s Fees Schedule and Cboe C2 Exchange, Inc.’s (‘‘C2’’) Fees Schedule. See also SPX pricing on Cboe’s Fees Schedule. Both RUT and SPX are proprietary products on the Cboe markets that are broad-based index options, like NDX. 14 15 U.S.C. 78s(b)(3)(A)(ii). 13 See VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 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 SR–ISE–2025–17 and should be submitted on or before July 11, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–11293 Filed 6–18–25; 8:45 am] 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: BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–103270; File No. SR– FINRA–2025–008] • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– ISE–2025–17 on the subject line. Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend FINRA Rule 6730 (Transaction Reporting) Paper Comments • 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–ISE–2025–17. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also 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 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 June 16, 2025. 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 June 10, 2025, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) 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 FINRA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend FINRA Rule 6730 (Transaction Reporting) to maintain the currently effective 15minute outer limit timeframe for reporting TRACE-eligible securities covered by File No. SR–FINRA–2024– 004 and to provide a streamlined alternative for reporting and dissemination in connection with specified allocations of an aggregate order in a TRACE-eligible security to multiple managed customer accounts. The text of the proposed rule change is available on FINRA’s website at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\20JNN1.SGM 20JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 90, Number 117 (Friday, June 20, 2025)]
[Notices]
[Pages 26380-26382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-11293]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103263; File No. SR-ISE-2025-17]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the Fees 
for Nasdaq 100 Index Options in Options 7, Section 5.A

June 16, 2025.
    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 June 2, 2025, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and

[[Page 26381]]

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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the fees for Nasdaq 100 Index 
options in the Exchange's Pricing Schedule at Options 7, Section 5.A to 
adopt a new surcharge for removing liquidity.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/ise/rulefilings, 
at the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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
    Options 7, Section 5.A.
    Today, the Exchange assesses transaction fees of $0.75 per contract 
for all Non-Priority Customer \3\ regular NDX orders, and $0.25 per 
contract for all Priority Customer \4\ regular NDX orders. The Exchange 
now proposes to assess a surcharge of $1.50 per contract to all regular 
Non-Priority Customer orders that remove liquidity.\5\ Priority 
Customer NDX fees will remain unchanged under this proposal. The 
proposed surcharge is aimed at encouraging Non-Priority Customers to 
add more liquidity and reduce ``take'' behavior that removes liquidity 
from the order book. The Exchange notes that the proposed surcharge 
amount is within the range of surcharges assessed for transactions in 
other proprietary products at another options exchange.\6\
---------------------------------------------------------------------------

    \3\ ``Non-Priority Customers'' include Market Makers, Non-Nasdaq 
ISE Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and 
Professional Customers.
    \4\ A ``Priority Customer'' is a person or entity that is not a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s), as defined in Nasdaq ISE Options 1, 
Section 1(a)(37).
    \5\ See proposed note 4 in Options 7, Section 5.A.
    \6\ For example, Cboe Options (``Cboe'') currently assesses 
market participants LEAPS surcharge fees for SPX ranging from $1.00 
to $2.50 per contract. See Cboe Fees Schedule.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\8\ 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to add a $1.50 per contract 
surcharge to all regular Non-Priority Customer orders that remove 
liquidity is reasonable because the proposed pricing reflects the 
proprietary nature of this product. Similar to other proprietary 
products like options overlying the Nasdaq 100 Micro Index (``XND''), 
the Exchange seeks to recoup the operational costs of listing 
proprietary products.\9\ Also, pricing by symbol is a common practice 
on many U.S. options exchanges as a means to incentivize order flow to 
be sent to an exchange for execution in particular products. As noted 
above, another options exchange assesses surcharges for its proprietary 
index options products that are within the range (or higher) of what 
the Exchange is proposing herein.\10\ Further, the Exchange notes that 
market participants are offered different ways to gain exposure to the 
Nasdaq 100 Index, whether through the Exchange's proprietary products 
like options overlying NDX or XND, or separately through multi-listed 
options overlying Invesco QQQ Trust (``QQQ'').\11\ Offering such 
products provides market participants with a variety of choices in 
selecting the product they desire to utilize in order to gain exposure 
to the Nasdaq 100 Index. When exchanges are able to recoup costs 
associated with offering proprietary products, it incentivizes growth 
and competition for the innovation of additional products.
---------------------------------------------------------------------------

    \9\ By way of example, in analyzing an obvious error, the 
Exchange would have additional data points available in establishing 
a theoretical price for a multiply listed option as compared to a 
proprietary product, which requires additional analysis and 
administrative time to comply with Exchange rules to resolve an 
obvious error.
    \10\ See supra note 6.
    \11\ QQQ is an exchange-traded fund based on the same Nasdaq 100 
Index as NDX and XND.
---------------------------------------------------------------------------

    The Exchange believes that its proposal is equitable and not 
unfairly discriminatory because it will be applied uniformly to all 
regular Non-Priority Customer NDX orders that remove liquidity. 
Assessing this surcharge only to Non-Priority Customers is equitable 
and not unfairly discriminatory because Priority Customers have 
historically been assessed more favorable pricing on the Exchange, 
including on NDX orders where they will continue to be assessed the 
lowest transaction fee of $0.25 per contract under this proposal. 
Priority Customer order flow benefits all market participants by 
providing more trading opportunities, which attracts market makers. An 
increase in the activity of these market participants in turn 
facilitates tighter spreads, which may cause an additional 
corresponding increase in order flow from other market participants, to 
the benefit of all market participants who may interact with this order 
flow. Further, the proposed surcharge is aimed at encouraging Non-
Priority Customers to add more liquidity and reduce ``take'' behavior 
that removes liquidity from the order book. To the extent the Exchange 
is successful in incentivizing this behavior, the additional liquidity 
on the Exchange will benefit all market participants through more 
trading opportunities, tighter spreads, and added price discovery.

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 intra-market competition, the Exchange will apply the 
proposed surcharge uniformly to all Non-Priority Customers. As 
discussed above, the proposed change is aimed at encouraging Non-
Priority Customers to add more liquidity and reduce ``take'' behavior 
that removes liquidity from the order book. To the extent the Exchange 
is successful in incentivizing this behavior, the additional liquidity 
on the Exchange will benefit all market participants through more 
trading opportunities, tighter spreads, and added price discovery.
    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

[[Page 26382]]

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 options 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. As noted above, market participants 
are offered an opportunity to transact in NDX or XND, or separately 
execute options overlying QQQ. Offering these products provides market 
participants with a variety of choices in selecting the product they 
desire to use to gain exposure to the Nasdaq 100 Index. Furthermore, 
the proposed surcharge is in line with surcharges assessed on other 
proprietary products at another options exchange.\12\
---------------------------------------------------------------------------

    \12\ See supra note 6.
---------------------------------------------------------------------------

    In addition to the Exchange, market participants have alternative 
options exchanges that they may participate on and direct their order 
flow, which list proprietary products that compete with NDX.\13\ In 
sum, if the changes proposed herein are unattractive to market 
participants, it is likely that the Exchange will lose market share as 
a result. Accordingly, the Exchange does not believe that the proposed 
changes will impair the ability of members or competing options 
exchanges to maintain their competitive standing in the financial 
markets.
---------------------------------------------------------------------------

    \13\ See e.g., pricing for Russell 2000 Index (``RUT'') on 
Cboe's Fees Schedule and Cboe C2 Exchange, Inc.'s (``C2'') Fees 
Schedule. See also SPX pricing on Cboe's Fees Schedule. Both RUT and 
SPX are proprietary products on the Cboe markets that are broad-
based index options, like NDX.
---------------------------------------------------------------------------

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.\14\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-ISE-2025-17 on the subject line.

Paper Comments

     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-ISE-2025-17. 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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also 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-ISE-2025-17 and should be 
submitted on or before July 11, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-11293 Filed 6-18-25; 8:45 am]
BILLING CODE 8011-01-P

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