Self-Regulatory Organizations; Nasdaq PHLX 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, 26387-26389 [2025-11297]

Download as PDF Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices securities were allocated provides useful insight that is more comparable to the information reported and disseminated today, without adding undue complexity to the aggregate reporting framework. As such, FINRA believes the proposed aggregate allocation report indicating the number of allocations is preferable. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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: ddrumheller on DSK120RN23PROD with NOTICES1 Electronic Comments • 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– FINRA–2025–008 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–FINRA–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 VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 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 FINRA. 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–FINRA–2025–008 and should be submitted on or before July 11, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Sherry R. Haywood, Assistant Secretary. 26387 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/phlx/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. BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 1. Purpose [FR Doc. 2025–11298 Filed 6–18–25; 8:45 am] [Release No. 34–103268; File No. SR–Phlx– 2025–22] Self-Regulatory Organizations; Nasdaq PHLX 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 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 20 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 The purpose of the proposed rule change is to amend the fees for NDX 3 and NDXP.4 As set forth in Options 7, Section 5.A, the Exchange currently charges all NonCustomer 5 orders in NDX and NDXP a $0.75 per contract transaction fee. Customer 6 orders are currently assessed a $0.25 per contract transaction fee in NDX and NDXP. These transaction fees apply to electronic simple and complex executions as well as floor transactions. 3 NDX represents A.M.-settled options on the full value of the Nasdaq 100 Index traded under the symbol NDX. 4 NDXP represents P.M.-settled options on the full value of the Nasdaq 100 Index traded under the symbol NDXP. 5 The term ‘‘Non-Customer’’ applies to transactions for the accounts of Lead Market Makers, Market Makers, Firms, Professionals, Broker-Dealers and JBOs. 6 The term ‘‘Customer’’ applies to any transaction that is identified by a member or member organization for clearing in the Customer range at The Options Clearing Corporation (‘‘OCC’’) which is not for the account of a broker or dealer or for the account of a ‘‘Professional’’ (as that term is defined in Options 1, Section 1(b)(45)). E:\FR\FM\20JNN1.SGM 20JNN1 26388 Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices The Exchange now proposes to assess a surcharge of $1.50 per contract to all electronic simple Non-Customer orders that remove liquidity.7 Customer NDX and NDXP fees will remain unchanged under this proposal. The proposed surcharge is aimed at encouraging NonCustomers 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.8 Lastly, the Exchange proposes a nonsubstantive change in the Section 5.A pricing schedule. Specifically, the Exchange proposes to relocate the note 1 references currently appended to NDX, NDXP, and EXGN under the ‘‘Symbol’’ column to the relevant transaction fees under the columns for ‘‘Professional,’’ ‘‘Lead Market Maker and Market Maker,’’ ‘‘Broker-Dealer,’’ and ‘‘Firm.’’ Note 1 currently sets forth the $0.25 per contract surcharge for NDX, NDXP and EXGN assessed to NonCustomers. The Exchange seeks to promote clarity in its Section 5.A pricing schedule by relocating the note 1 references so that they are appended to the respective transaction fees for Non-Customers. ddrumheller on DSK120RN23PROD with NOTICES1 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. The Exchange believes that its proposal to add a $1.50 per contract surcharge to all electronic simple NonCustomer 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.11 Also, pricing by symbol is a proposed note 3 in Options 7, Section 5.A. 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. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4) and (5). 11 By way of example, in analyzing an obvious error, the Exchange would have additional data 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.12 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, NDXP, or XND, or separately through multi-listed options overlying Invesco QQQ Trust (‘‘QQQ’’).13 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. The Exchange believes that its proposal is equitable and not unfairly discriminatory because it will be applied uniformly to all electronic simple Non-Customer NDX and NDXP orders that remove liquidity. Assessing this surcharge only to Non-Customers is equitable and not unfairly discriminatory because Customers have historically been assessed more favorable pricing on the Exchange, including on NDX and NDXP orders where they will continue to be assessed the lowest transaction fee of $0.25 per contract under this proposal. 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 NonCustomers 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 7 See 8 For VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 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. 12 See supra note 8. 13 QQQ is an exchange-traded fund based on the same Nasdaq 100 Index as NDX, NDXP, and XND. PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 through more trading opportunities, tighter spreads, and added price discovery. Lastly, the Exchange believes that the non-substantive changes to relocate the note 1 references in the Section 5.A pricing schedule as described above are reasonable, equitable, and not unfairly discriminatory because they will promote clarity in the Exchange’s pricing schedule and make it easier to follow, to the benefit of all market participants. 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 NonCustomers. As discussed above, the proposed change is aimed at encouraging Non-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 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, NDXP, 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.14 14 See E:\FR\FM\20JNN1.SGM supra note 8. 20JNN1 Federal Register / Vol. 90, No. 117 / Friday, June 20, 2025 / Notices 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 and NDXP.15 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. 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 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: ddrumheller on DSK120RN23PROD with NOTICES1 Electronic Comments • 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– Phlx–2025–22 on the subject line. Commission, 100 F Street NE, Washington, DC 20549–1090. VerDate Sep<11>2014 20:05 Jun 18, 2025 Jkt 265001 SECURITIES AND EXCHANGE COMMISSION All submissions should refer to file number SR–Phlx–2025–22. 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–Phlx–2025–22 and should be submitted on or before July 11, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–11297 Filed 6–18–25; 8:45 am] [Release No. 34–103260; File No. SR– CboeBZX–2025–035] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the Rules Governing the Listing and Trading of Shares of the Invesco Galaxy Bitcoin ETF and the Invesco Galaxy Ethereum ETF To Permit In-Kind Creations and Redemptions Under Rule 14.11(e)(4) (Commodity-Based Trust Shares) June 16, 2025. I. Introduction On March 10, 2025, Cboe BZX Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend the rules governing the listing and trading of shares (‘‘Shares’’) of the Invesco Galaxy Bitcoin ETF (‘‘Bitcoin Trust’’) and the Invesco Galaxy Ethereum ETF (‘‘ETH Trust’’ and, together with the Bitcoin Trust, the ‘‘Trusts’’) under BZX Rule 14.11(e)(4). The proposed rule change was published for comment in the Federal Register on March 18, 2025.3 On April 29, 2025, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 This order institutes proceedings under Section 19(b)(2)(B) of the Act 6 to determine whether to approve or disapprove the proposed rule change. II. Summary of the Proposal BILLING CODE 8011–01–P As described in more detail in the Notice,7 the Exchange proposes to amend the rules governing the listing and trading of the Shares of the Trusts 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 102645 (Mar. 12, 2025), 90 FR 12602 (‘‘Notice’’). 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 102949, 90 FR 19039 (May 5, 2025). The Commission designated June 16, 2025, as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. 6 15 U.S.C. 78s(b)(2)(B). 7 See Notice, supra note 3. 2 17 Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 15 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 and NDXP. 16 15 U.S.C. 78s(b)(3)(A)(ii). 26389 17 17 PO 00000 CFR 200.30–3(a)(12). Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\20JNN1.SGM 20JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 90, Number 117 (Friday, June 20, 2025)]
[Notices]
[Pages 26387-26389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-11297]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103268; File No. SR-Phlx-2025-22]


Self-Regulatory Organizations; Nasdaq PHLX 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 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.
---------------------------------------------------------------------------

    \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 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/phlx/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
    The purpose of the proposed rule change is to amend the fees for 
NDX \3\ and NDXP.\4\
---------------------------------------------------------------------------

    \3\ NDX represents A.M.-settled options on the full value of the 
Nasdaq 100 Index traded under the symbol NDX.
    \4\ NDXP represents P.M.-settled options on the full value of 
the Nasdaq 100 Index traded under the symbol NDXP.
---------------------------------------------------------------------------

    As set forth in Options 7, Section 5.A, the Exchange currently 
charges all Non-Customer \5\ orders in NDX and NDXP a $0.75 per 
contract transaction fee. Customer \6\ orders are currently assessed a 
$0.25 per contract transaction fee in NDX and NDXP. These transaction 
fees apply to electronic simple and complex executions as well as floor 
transactions.
---------------------------------------------------------------------------

    \5\ The term ``Non-Customer'' applies to transactions for the 
accounts of Lead Market Makers, Market Makers, Firms, Professionals, 
Broker-Dealers and JBOs.
    \6\ The term ``Customer'' applies to any transaction that is 
identified by a member or member organization for clearing in the 
Customer range at The Options Clearing Corporation (``OCC'') which 
is not for the account of a broker or dealer or for the account of a 
``Professional'' (as that term is defined in Options 1, Section 
1(b)(45)).

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[[Page 26388]]

    The Exchange now proposes to assess a surcharge of $1.50 per 
contract to all electronic simple Non-Customer orders that remove 
liquidity.\7\ Customer NDX and NDXP fees will remain unchanged under 
this proposal. The proposed surcharge is aimed at encouraging Non-
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.\8\
---------------------------------------------------------------------------

    \7\ See proposed note 3 in Options 7, Section 5.A.
    \8\ 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.
---------------------------------------------------------------------------

    Lastly, the Exchange proposes a non-substantive change in the 
Section 5.A pricing schedule. Specifically, the Exchange proposes to 
relocate the note 1 references currently appended to NDX, NDXP, and 
EXGN under the ``Symbol'' column to the relevant transaction fees under 
the columns for ``Professional,'' ``Lead Market Maker and Market 
Maker,'' ``Broker-Dealer,'' and ``Firm.'' Note 1 currently sets forth 
the $0.25 per contract surcharge for NDX, NDXP and EXGN assessed to 
Non-Customers. The Exchange seeks to promote clarity in its Section 5.A 
pricing schedule by relocating the note 1 references so that they are 
appended to the respective transaction fees for Non-Customers.
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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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 electronic simple Non-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.\11\ 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.\12\ 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, NDXP, or XND, or separately through multi-
listed options overlying Invesco QQQ Trust (``QQQ'').\13\ 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.
---------------------------------------------------------------------------

    \11\ 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.
    \12\ See supra note 8.
    \13\ QQQ is an exchange-traded fund based on the same Nasdaq 100 
Index as NDX, NDXP, and XND.
---------------------------------------------------------------------------

    The Exchange believes that its proposal is equitable and not 
unfairly discriminatory because it will be applied uniformly to all 
electronic simple Non-Customer NDX and NDXP orders that remove 
liquidity. Assessing this surcharge only to Non-Customers is equitable 
and not unfairly discriminatory because Customers have historically 
been assessed more favorable pricing on the Exchange, including on NDX 
and NDXP orders where they will continue to be assessed the lowest 
transaction fee of $0.25 per contract under this proposal. 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-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.
    Lastly, the Exchange believes that the non-substantive changes to 
relocate the note 1 references in the Section 5.A pricing schedule as 
described above are reasonable, equitable, and not unfairly 
discriminatory because they will promote clarity in the Exchange's 
pricing schedule and make it easier to follow, to the benefit of all 
market participants.

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-Customers. As discussed above, 
the proposed change is aimed at encouraging Non-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 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, NDXP, 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.\14\
---------------------------------------------------------------------------

    \14\ See supra note 8.

---------------------------------------------------------------------------

[[Page 26389]]

    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 and 
NDXP.\15\ 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.
---------------------------------------------------------------------------

    \15\ 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 and NDXP.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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

     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-Phlx-2025-22 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-Phlx-2025-22. 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-Phlx-2025-22 and should be 
submitted on or before July 11, 2025.

    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. 2025-11297 Filed 6-18-25; 8:45 am]
BILLING CODE 8011-01-P

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