Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Phlx Options 7, Section 9

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103889; File No. SR-Phlx-2025-40]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Phlx Options 7, Section 9</SUBJECT> <DATE>September 5, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on August 26, 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. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange proposes to amend its Specialized Quote Feed  <SU>3</SU> <FTREF/> or “SQF” Port and SQF Purge Port pricing at Options 7, Section 9, B, “Port Fees.” <FTNT> <SU>3</SU>  “Specialized Quote Feed” or “SQF” is an interface that allows Lead Market Makers, Streaming Quote Traders (“SQTs”) and Remote Streaming Quote Traders (“RSQTs”) to connect, send, and receive messages related to quotes, Immediate-or-Cancel Orders, and auction responses into and from the Exchange. Features include the following: (1) options symbol directory messages ( <E T="03">e.g.,</E> underlying and complex instruments); (2) system event messages ( <E T="03">e.g.,</E> start of trading hours messages and start of opening); (3) trading action messages ( <E T="03">e.g.,</E> halts and resumes); (4) execution messages; (5) quote messages; (6) Immediate-or-Cancel Order messages; (7) risk protection triggers and purge notifications; (8) opening imbalance messages; (9) auction notifications; and (10) auction responses. The SQF Purge Interface only receives and notifies of purge requests from the Lead Market Maker, SQT or RSQT. Lead Market Makers, SQTs and RSQTs may only enter interest into SQF in their assigned options series. Immediate-or-Cancel Orders entered into SQF are not subject to the Order Price Protection, the Market Order Spread Protection, or Size Limitation in Options 3, Section 15(a)(1), (a)(2) and (b)(2), respectively. <E T="03">See</E> Options 3, Section 7(a)(i)(B). </FTNT> While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on January 1, 2026. The text of the proposed rule change is available on the Exchange's website at <E T="03">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings,</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> Phlx proposes to amend its SQF Port and SQF Purge Port pricing at Options 7, Section 9, B, “Port Fees.” Phlx currently assesses an SQF Port fee of $1,375 per port, per month, for active ports, <SU>4</SU> <FTREF/> up to a maximum of $46,200 per month. Additionally, Phlx currently assesses an SQF Purge Port fee of $550 per port, per month for each of the first 5 SQF Purge Ports, and $110 per port, per month for each port thereafter to $1,185 per port, per month. <FTNT> <SU>4</SU>  An active port means that the port was utilized to submit a quote to the System during a given month. Today, Market Makers are not assessed an active SQF Port fee for additional ports acquired for ten business days for the purpose of transitioning technology. The member organization is required to provide the Exchange with written notification of the transition and all additional ports, provided at no cost, will be removed at the end of the ten business days. <E T="03">See</E> Options 7, Section 9, B. </FTNT> Phlx proposes to amend its SQF Port fee to $1,185 per port, per month. Additionally, Phlx proposes to amend its SQF Purge Port fee to $1,185 per port, per month. The proposed Phlx SQF Port fee and SQF Purge Port fee are identical to ISE's SQF Purge Port fee and ISE's SQF Purge Port fee. <SU>5</SU> <FTREF/> With this proposal, Phlx would no longer cap the SQF Port fee and SQF Purge Port fee. <FTNT> <SU>5</SU>   <E T="03">See</E> Options 7, Section 7C. </FTNT> Only Market Makers  <SU>6</SU> <FTREF/> utilize SQF Ports and SQF Purge Ports for quoting purposes. A Phlx Market Maker requires only one SQF Port to submit quotes in its assigned options series into Phlx. A Phlx Market Maker may submit all quotes through one SQF Port. While a Phlx Market Maker may elect to obtain multiple SQF Ports to organize its business, <SU>7</SU> <FTREF/> only one SQF Port is necessary for a Phlx Market Maker to fulfill its regulatory quoting obligations. <SU>8</SU> <FTREF/> <FTNT> <SU>6</SU>  The term “Market Maker” is defined in Options 1, Section 1(b)(28) as a member of the Exchange who is registered as an options Market Maker pursuant to Options 2, Section 12(a). A Market Maker includes SQTs and RSQTs as well as Floor Market Makers. <E T="03">See</E> Options 7, Section 1(c). The term “Floor Market Maker” is a Market Maker who is neither an SQT or an RSQT. A Floor Market Maker may provide a quote in open outcry. <E T="03">See</E> Options 8, Section 2(a)(4). </FTNT> <FTNT> <SU>7</SU>  For example, a Phlx Market Maker may desire to utilize multiple SQF Ports for accounting purposes, to measure performance, for regulatory reasons or other determinations that are specific to that member organization. </FTNT> <FTNT> <SU>8</SU>  Phlx Market Makers have various regulatory requirements as provided for in Options 2, Section 4. Additionally, Phlx Market Makers have certain quoting requirements with respect to their assigned options series as provided in Options 2, Section 5. SQF Ports are the only quoting protocol available on Phlx and only Market Makers may utilize SQF Ports. </FTNT> <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes that its proposal is consistent with Section 6(b) of the Act, <SU>9</SU> <FTREF/> in general, and furthers the objectives of Section 6(b)(5) of the Act, <SU>10</SU> <FTREF/> 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. Additionally, the Exchange believes that its proposal furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act, <SU>11</SU> <FTREF/> 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. <FTNT> <SU>9</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>10</SU>  15 U.S.C. 78f(b)(5). </FTNT> <FTNT> <SU>11</SU>   <E T="03">See</E> 15 U.S.C. 78f(b)(4) and (5). </FTNT> <HD SOURCE="HD3">Pricing</HD> <HD SOURCE="HD3">Proposed Port Fees Are Reasonable, Equitable and Not Unfairly Discriminatory</HD> The Exchange believes that its proposal furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act, <SU>12</SU> <FTREF/> 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. This belief is based on comparability, the proposed fees are comparable to, and in some cases less than, those of similarly situated exchanges. <FTNT> <SU>12</SU>   <E T="03">See</E> 15 U.S.C. 78f(b)(4) and (5). </FTNT> The proposed fees for Phlx SQF Ports and Phlx SQF Purge Ports are identical to ISE SQF Ports and ISE SQF Purge Ports Fees. <SU>13</SU> <FTREF/> Further, ISE has identical SQF Port and SQF Purge Port protocols. <SU>14</SU> <FTREF/> Additionally, the proposed fees for Phlx SQF Ports and Phlx SQF Purge Ports are comparable to those of its closest competitors, BOX Exchange, LLC (“BOX”);  <SU>15</SU> <FTREF/> Miami International Securities Exchange, LLC (“MIAX”);  <SU>16</SU> <FTREF/> NYSE Arca, Inc. (“Arca”);  <SU>17</SU> <FTREF/> NYSE American LLC (“Amex”);  <SU>18</SU> <FTREF/> and Cboe EDGX Exchange, Inc. (“EDGX”), <SU>19</SU> <FTREF/> based on market share. <FTNT> <SU>13</SU>  ISE assesses an SQF Port fee and an SQF Purge Port fee of $1,185 per port, per month. <E T="03">See</E> Options 7, Section 7C. </FTNT> <FTNT> <SU>14</SU>   <E T="03">See</E> Options 3, Section 7(a)(i)(B). </FTNT> <FTNT> <SU>15</SU>  SOLA® Access Information Language or “SAIL” Market Making Ports are connections to BOX systems that enable Market Makers to continuously quote on BOX. For quote submission, BOX assesses a fee of $1,000 per month for all ports. BOX will assess monthly SAIL Port Fees on all Participa ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 27k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━