Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 4

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104034; File No. SR-Phlx-2025-49]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 4</SUBJECT> <DATE>September 24, 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 September 18, 2025, Nasdaq PHLX LLC (“Phlx” 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. <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 various transaction fees in Options 7, Section 4, Multiply Listed Options Fees (Includes options overlying equities, ETFs, ETNs and indexes which are Multiply Listed) (Excludes SPY and broad-based index options symbols listed within Options 7, Section 5.A). <SU>3</SU> <FTREF/> <FTNT> <SU>3</SU>  SR-Phlx-2025-41 was filed on September 2, 2025. On September 10, 2025, the Exchange withdrew SR-Phlx-2025-41 and filed SR-Phlx-2025-45. On September 18, 2025, SR-Phlx-2025-45 was withdrawn and this proposal was filed. </FTNT> 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 pricing within Options 7, Section 4 to: (1) remove the current BD-Customer Facilitation waiver and replace it with a Broker-Dealer Transaction Cap; (2) amend the Floor Broker Incentive Program; and (3) amend the strategy caps for Floor Originated Strategy Executions. Each change will be described below. <HD SOURCE="HD3">BD-Customer Facilitation Waiver</HD> Today, the Exchange waives the Broker-Dealer  <SU>4</SU> <FTREF/> Floor Options Transaction Charge  <SU>5</SU> <FTREF/> (including Cabinet Options Transaction Charges)  <SU>6</SU> <FTREF/> for members executing facilitation orders pursuant to Options 8, Section 30  <SU>7</SU> <FTREF/> when such members would otherwise incur this charge for trading in their own proprietary account contra to a Customer  <SU>8</SU> <FTREF/> (“BD-Customer Facilitation”), if the member's BD-Customer Facilitation average daily volume (including both FLEX  <SU>9</SU> <FTREF/> and non-FLEX transactions) exceeds 10,000 contracts per day in a given month. <FTREF/> <SU>10</SU> The Exchange proposes to no longer offer this waiver. <FTNT> <SU>4</SU>  The term “Broker-Dealer” applies to any transaction which is not subject to any of the other transaction fees applicable within a particular category. <E T="03">See</E> Options 7, Section 1(c). </FTNT> <FTNT> <SU>5</SU>  The Exchange assesses a Broker-Dealer Floor Options Transaction Charge of $0.25 per contract in Penny and Non-Penny Symbols. </FTNT> <FTNT> <SU>6</SU>  Cabinet Options Transaction may only be executed as a floor transaction; they are not executed electronically. A floor transaction is a transaction that is effected in open outcry on the Exchange's Trading Floor. <E T="03">See</E> Options 7, Section 1(c). The Exchange assesses Customers no Cabinet Options Transaction Charge. The Exchange assesses Non-Customers a $0.10 per contract Cabinet Options Transaction Charge. The term “Non-Customer” applies to transactions for the accounts of Lead Market Makers, Market Makers, Firms, Professionals, Broker-Dealers and JBOs. <E T="03">See</E> Options 7, Section 1(c). </FTNT> <FTNT> <SU>7</SU>  Options 8, Section 30, Crossing, Facilitation and Solicited Orders, describes the manner in which orders may be crossed in open outcry on the Exchange's trading floor. Facilitation orders are among the types of orders described in Options 8, Section 30. </FTNT> <FTNT> <SU>8</SU>  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 T="03">See</E> Options 7, Section 1(c). </FTNT> <FTNT> <SU>9</SU>  FLEX transactions may only be executed as a floor transaction pursuant to Options 8, Section 34; they are not executed electronically. </FTNT> <FTNT> <SU>10</SU>  Transactions in broad-based index options symbols listed within Options 7, Section 5.A. are excluded from waiver. </FTNT> In lieu of this waiver, the Exchange proposes a Broker-Dealer Transaction Cap whereby each Broker-Dealer Floor Options Transaction Charge will be capped at $15,000 per transaction (including FLEX and Cabinet Options Transaction Charges). The Exchange believes that this proposed new cap will incentivize Broker-Dealers to submit larger-sized orders for execution to Phlx. Other market participants will be able to interact with those larger-sized orders. The Exchange also proposes to amend language in the existing text for Firm Facilitation to modify the rule text to refer to one waiver only. <HD SOURCE="HD3">Floor Broker Incentive Program</HD> The Exchange proposes to amend its Floor Transaction (Open Outcry) Floor Broker Incentive Program at Options 7, Section 4. This incentive program for Floor Brokers  <SU>11</SU> <FTREF/> is designed to attract order flow to Phlx's trading floor for execution in open outcry. Currently, the Exchange pays Floor Brokers certain rebates for transaction they execute on Phlx's trading floor in open outcry. Today, Floor Brokers are paid rebates for transactions executed on the trading floor in open outcry. The below transactions are not considered qualifying volume for purposes of the rebates:(1) dividend, merger, short stock interest, reversal and conversion, jelly roll, and box spread strategy executions as defined in this Options 7, Section 4; (2) Firm Floor Options Transactions for members executing facilitation orders pursuant to Options 8, Section 30 when such members are trading in their own proprietary account (including Cabinet Options Transaction Charges); and (3) Customer-to-Customer transactions. <FTNT> <SU>11</SU>  The term “Floor Broker” means an individual who is registered with the Exchange for the purpose, while on the Options Floor, of accepting and handling options orders. <E T="03">See</E> Phlx Options 7, Section 1(c). </FTNT> Today, rebates are paid on qualifying volume at each threshold level based on the below schedule. Floor Qualified Contingent Cross (“QCC”) Orders, as defined in Options 8, Section 30(e), are considered qualifying volume but are not paid rebates based on the below schedule, rather Floor QCC Order are paid the QCC Rebates noted in Options 7, Section 4. Today, the Exchange pays Floor Transaction (Open Outcry) Floor Broker Incentive Program rebates on qualifying volume based on four tiers. <GPOTABLE COLS="4" OPTS="L2,tp0,i1" CDEF="s50,r50,12,12"> <TTITLE> </TTITLE> <CHED H="1"> </CHED> <CHED H="1">Qualifying contracts</CHED> <CHED H="1"> Per contract rebate (customer on one side) </CHED> <CHED H="1"> Per contract rebate (non-customer on both sides) <ENT>$0.02</ENT> <ENT>$0.08</ENT> </ROW> <ROW> <ENT I="01">Tier 2</ENT> <ENT>500,001-5,000,000</ENT> <ENT>0.05</ENT> <ENT>0.12</ENT> </ROW> <ROW> <ENT I="01">Tier 3</ENT> <ENT>5,000,001-10,000,000</ENT> <ENT>0.07</ENT> <ENT>0.16</ENT> </ROW> <ROW> <ENT I="01">Tier 4</ENT> <ENT>Greater than 10,000,000</ENT> <ENT>0.08</ENT> <ENT>0.20</ENT> </ROW> </GPOTABLE> First, the Exchange proposes to amend the Floor Transaction (Open Outcry) Floor Broker Incentive Program with respect to qualifying volume. The Exchange proposes to amend the current rule text in Options 7, Section 4, to also include electronic QCC Orders as qualifying volume. As amended, the rule text would state, <EXTRACT> Rebates will be paid on qualifying volume at each threshold level based on the below schedule. Floor QCC Orders, as defined in Options 8, Section 30(e), and electronic QCC Orders, as defined in Options 3, Section 12, will be considered qualifying volume but would not be paid rebates based on the below schedule, rather Floor QCC Orders and electronic QCC Orders would be paid the QCC Rebates noted in Options 7, Section 4 above. </EXTRACT> While electronic QCC Orders would count toward qualifying volume, electronic QCC Orders, similar to Floor QCC Orders, would not be paid rebates based on the rebate schedule, rather electronic QCC Order would continue to be paid the QCC Rebates noted in Options 7, Section 4. This proposed change would allow Phlx members and member organizations to ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 45k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━