Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the MRX Pricing Schedule at Options 7, Section 3

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104150; File No. SR-MRX-2025-25]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the MRX Pricing Schedule at Options 7, Section 3</SUBJECT> <DATE>September 30, 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 29, 2025, 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. <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 the Exchange's Pricing Schedule at Options 7, Section 3, Table 1 to cap a rebate for eligible Members that add liquidity in Penny Symbols. <SU>3</SU> <FTREF/> <FTNT> <SU>3</SU>  On September 26, 2025, the Exchange filed SR-MRX-2025-24. On September 29, 2025, the Exchange withdrew SR-MRX-2025-24 and filed this proposal. </FTNT> While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on October 1, 2025. The text of the proposed rule change is available on the Exchange's website at <E T="03">https://listingcenter.nasdaq.com/rulebook/mrx/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> The purpose of the proposed rule change is to amend the Exchange's Pricing Schedule at Options 7, Section 3, Table 1 to cap a rebate for eligible Members that add liquidity in Penny Symbols. Today, the Exchange assesses all Non-Priority Customers  <SU>4</SU> <FTREF/> a $0.50 per contract Tier 4 maker fee in Penny Symbols, and all Priority Customers  <SU>5</SU> <FTREF/> a $0.47 per contract Tier 4 maker rebate in Penny Symbols. <SU>6</SU> <FTREF/> Currently, the Exchange offers Members in Tier 4 a rebate if at least half of their trading volume adds liquidity in Penny Symbols. 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  <SU>7</SU> <FTREF/> or Affiliated Entity  <SU>8</SU> <FTREF/> Volume within a month will also be paid a rebate of $0.02 per contract on all their Penny Symbol transactions for that month. <SU>9</SU> <FTREF/> For purposes of proposed note 2, “Total Affiliated Member or Affiliated Entity Volume” will mean all volume executed by the Member on the Exchange in all symbols and order types, including volume executed by Affiliated Members or Affiliated Entities. This note 2 incentive is available to Members through December 31, 2025. <FTNT> <SU>4</SU>  “Non-Priority Customers” include Market Makers, Non-Nasdaq MRX Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and Professional Customers. </FTNT> <FTNT> <SU>5</SU>  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 MRX Options 1, Section 1(a)(36). </FTNT> <FTNT> <SU>6</SU>  As set forth in Table 3 of Options 7, Section 3, the Tier 4 volume requirement is based on executing more than 0.70% of Total Customer ADV. Total Customer ADV is Priority Customer Total Consolidated Volume divided by Customer Total Consolidated Volume, including volume executed by Affiliated Members or Affiliated Entities. Priority Customer Total Consolidated Volume is a Member's total Priority Customer volume executed on MRX in that month, including volume executed by Affiliated Members or Affiliated Entities. All eligible volume from Affiliated Members or an Affiliated Entity will be aggregated in determining applicable tiers. </FTNT> <FTNT> <SU>7</SU>  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. </FTNT> <FTNT> <SU>8</SU>  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. </FTNT> <FTNT> <SU>9</SU>  Effectively, for example, a qualifying Non-Priority Customer under the proposed note 2 incentive would pay $0.48 per contract for all their Penny Symbol transactions adding liquidity for that month ( <E T="03">i.e.,</E> $0.50 maker fee−$0.02 note 2 incentive). A Priority Customer qualifying for the note 2 incentive would receive a higher maker rebate of $0.49 per contract ( <E T="03">i.e.,</E> $0.47 maker rebate + $0.02 note 2 incentive). </FTNT> <HD SOURCE="HD3">Proposal</HD> At this time, the Exchange proposes to cap the rebate incentive at note 2 of Options 7, Section 3, Table 1. The Exchange proposes to cap the additional rebate at $350,000 in a given month. The Exchange will add the following sentence to note 2 of Options 7, Section 3, Table 1, “This additional rebate will be capped at $350,000 in a given month.” While the Exchange is capping the total amount of the rebate that a Member may obtain in a given month, the Exchange continues to believe that the rebate will incentivize Members to send additional order flow to MRX in Penny Symbols. <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes that its proposal is consistent with Section 6(b) of the Act, <SU>10</SU> <FTREF/> in general, and 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>10</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>11</SU>  15 U.S.C. 78f(b)(4) and (5). </FTNT> The Exchange's proposed changes to its Pricing Schedule are reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces in the market for options securities transaction services that constrain its pricing determinations in that market. The fact that this market is competitive has long been recognized by the courts. In <E T="03">NetCoalition</E> v. <E T="03">Securities and Exchange Commission,</E> the D.C. Circuit stated as follows: “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers'. . ..”  <SU>12</SU> <FTREF/> <FTNT> <SU>12</SU>   <E T="03">NetCoalition</E> v. <E T="03">SEC,</E> 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-21)). </FTNT> The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed compa ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 17k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━