[Federal Register Volume 91, Number 37 (Wednesday, February 25, 2026)]
[Notices]
[Pages 9318-9320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-03700]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104873; File No. SR-MRX-2026-03]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend an Add
Liquidity Order
February 20, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on February 12, 2026, Nasdaq MRX, LLC (``MRX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Add Liquidity Orders.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/mrx/rulefilings,
and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange's proposal amends Options 3, Section 7, Types of Order
and Quote Protocols. Specifically, the Exchange proposes to amend Add
Liquidity Orders at Options 3, Section 7(n) which currently states,
An Add Liquidity Order is a limit order that is to be executed
in whole or in part on the Exchange (i) only after being displayed
on the Exchange's limit order book; and (ii) without routing any
portion of the order to another market center. Members may specify
whether an Add Liquidity Order shall be cancelled or re-priced to
the minimum price variation above the national best bid price (for
sell orders) or below the national best offer price (for buy orders)
if, at the time of entry, the order (i) is executable on the
Exchange; or (ii) the order is not executable on the Exchange, but
would lock or cross the national best bid or offer. If at the time
of entry, an Add Liquidity Order would lock or cross one or more
non-displayed orders or quotes on the Exchange, the Add Liquidity
Order shall be cancelled or re-priced to the minimum price variation
above the best non-displayed bid price (for sell orders) or below
the best non-displayed offer price (for buy orders). Notwithstanding
the aforementioned, if an Add Liquidity Order would not lock or
cross an order or quote on the System but would lock or cross the
NBBO, the order will be handled pursuant to Options 3, Section 5(d).
An Add Liquidity Order will be ranked in the Exchange's limit order
book in accordance with Options 3, Section 10. Add Liquidity Orders
may only be submitted when an options series is open for trading.
The Exchange proposes to add the following sentence to the end of
the order type description: ``Add Liquidity Orders may only have a
time-in-force designation of Day.'' The proposed text represents
current System functionality.
Today, Add Liquidity Orders may only have a time-in-force
designation of Day,\3\ so they would rest on the order book in the
event that the order could not execute. An Add Liquidity Order may not
remove liquidity from the order book. The Add Liquidity Order is
designed to encourage displayed liquidity and offer Members greater
flexibility to post liquidity on the Exchange, as a result, an Add
Liquidity Order may not have a Time-in-Force of Immediate-or-Cancel.\4\
Additionally, Options 3, Section 7(n) states that Add Liquidity Orders
may only be submitted when an options series is open for trading.\5\
Add Liquidity Orders may not have a Time-in-Force of Good-Till-Date \6\
or Good-Till-Cancel \7\ because these
[[Page 9319]]
designations persist into the next trading day and participate in the
Opening Process if the orders do not execute. The Exchange's proposal
adds clarity and transparency to the Exchange's rules and is a non-
substantive amendment.
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\3\ A Time in Force designation of Day is described as an order
to buy or sell entered with a TIF of ``DAY,'' which, if not
executed, expires at the end of the day on which it was entered. All
orders by their terms are Day orders unless otherwise specified. Day
orders may be entered through FIX or OTTO. See Supplementary
Material .02(a) to Options 3, Section 7.
\4\ A Time in Force designation of Immediate-or-Cancel is
described as an order entered with a TIF of ``IOC'' that is to be
executed in whole or in part upon receipt. Any portion not so
executed is to be treated as cancelled. See Supplementary Material
.02(d) to Options 3, Section 7.
\5\ A Time-In-Force of ``OPG'' is not permissible. An Opening
Only (``OPG'') order is entered with a TIF of ``OPG.'' This order
can only be executed in the Opening Process pursuant to Options 3,
Section 8. This order type is not subject to any protections listed
in Options 3, Section 15, except Size Limitation and Market Wide
Risk Protection. Any portion of the order that is not executed
during the Opening Process is cancelled. OPG Orders may not route.
See Supplementary Material .02(e) to Options 3, Section 7.
\6\ An order to buy or sell entered with a TIF of ``GTD,''
which, if not executed, will be cancelled at the sooner of the end
of the expiration date assigned to the order, or the expiration of
the series; provided, however, that GTD orders will be canceled in
the event of a corporate action that results in an adjustment to the
terms of an option contract. GTD orders may be entered through FIX.
See Supplementary Material .02(c) to Options 3, Section 7.
\7\ An order to buy or sell entered with a TIF of ``GTC'' that
remains in force until the order is filled, canceled or the option
contract expires; provided, however, that GTC orders will be
canceled in the event of a corporate action that results in an
adjustment to the terms of an option contract. GTC orders may be
entered through FIX. See Supplementary Material .02(b) to Options 3,
Section 7.
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Removal of Obsolete Pricing
MRX proposes to remove an obsolete incentive at note 2 of Options
7, Section 3, Table 1. The Exchange previously offered Members in Penny
Symbol Tier 4 a rebate if at least half of their trading volume added
liquidity in Penny Symbols.\8\ This note 2 incentive was available to
Members through December 31, 2025. At this time, the Exchange proposes
to remove the obsolete rebate incentive at note 2 of Options 7, Section
3, Table 1, which expired on December 31, 2025, to clean-up MRX's
Rulebook and bring clarity to its rules.
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\8\ Specifically, note 2 of Options 7, Section 3, Table 1,
provides that Members that add liquidity greater than or equal to
50% of their Total Affiliated Member or Affiliated Entity Volume
within a month are paid a rebate of $0.02 per contract on all their
Penny Symbol transactions for that month. An ``Affiliated Member''
is a Member that shares at least 75% common ownership with a
particular Member as reflected on the Member's Form BD, Schedule A.
An ``Affiliated Entity'' is a relationship between an Appointed
Market Maker and an Appointed OFP for purposes of qualifying for
certain pricing specified in the Pricing Schedule. Market Makers and
OFPs are required to send an email to the Exchange to appoint their
counterpart, at least 3 business days prior to the last day of the
month to qualify for the next month. The Exchange will acknowledge
receipt of the emails and specify the date the Affiliated Entity is
eligible for applicable pricing, as specified in the Pricing
Schedule. Each Affiliated Entity relationship will commence on the
1st of a month and may not be terminated prior to the end of any
month. An Affiliated Entity relationship will automatically renew
each month until or unless either party terminates earlier in
writing by sending an email to the Exchange at least 3 business days
prior to the last day of the month to terminate for the next month.
Affiliated Members may not qualify as a counterparty comprising an
Affiliated Entity. Each Member may qualify for only one (1)
Affiliated Entity relationship at any given time. For purposes of
note 2, ``Total Affiliated Member or Affiliated Entity Volume''
means all volume executed by the Member on the Exchange in all
symbols and order types, including volume executed by Affiliated
Members or Affiliated Entities.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to promote just and equitable principles of trade, 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal, which specifies that Add Liquidity Orders
may only be entered as Day Orders, is consistent with the Act because
the Exchange's proposal brings clarity, transparency, and readability
to its rules without making any substantive changes.
Removal of Obsolete Pricing
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to remove the obsolete rebate incentive in
note 2 of Options 7, Section 3, Table 1, which expired on December 31,
2025, is reasonable because it cleans-up the MRX Rulebook by bringing
clarity to its rules. Further, the proposal is equitable and not
unfairly discriminatory because the obsolete incentive is not available
to any Member.
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 Exchange's proposal to restrict the Add Liquidity Order to a
Time-in-Force of Day does not impose an intra-market burden on
competition because no Member will be able to enter an Add Liquidity
Order with a Time-in-Force other than Day.
The Exchange's proposal to restrict the Add Liquidity Order to a
Time-in-Force of Day does not impose an inter-market burden on
competition because the proposal is non-substantive.
Removal of Obsolete Pricing
In terms of intra-market competition, the Exchange's proposal to
remove the obsolete rebate incentive in note 2 of Options 7, Section 3,
Table 1, which expired on December 31, 2025, does not impose an undue
burden on competition because the proposed incentive is not available
to any Member. In terms of inter-market competition, the proposed
change represents a non-substantive amendment.
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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 necessary or
appropriate in the public interest, for the protection of investors, or
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-MRX-2026-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 9320]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-MRX-2026-03. 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 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-MRX-2026-03 and should be submitted on
or before March 18, 2026.
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. 2026-03700 Filed 2-24-26; 8:45 am]
BILLING CODE 8011-01-P