Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Price of a 10Gb Ultra Fiber Connection to the Exchange

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104262; File No. SR-ISE-2025-34]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Price of a 10Gb Ultra Fiber Connection to the Exchange</SUBJECT> <DATE>November 25, 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 November 13, 2025, Nasdaq ISE, LLC (“ISE” 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 modify the price of a 10Gb Ultra fiber connection to the Exchange, as described further below. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on January 2, 2026. The text of the proposed rule change is available on the Exchange's website at <E T="03">https://listingcenter.nasdaq.com/rulebook/ise/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 Exchange proposes to amend its fee schedule relating to physical connectivity fees. By way of background, a market participant may opt to connect to the Exchange at its data center through various means, including, <E T="03">inter alia:</E> (1) direct connections and indirect connections through vendors; (2) direct connections via copper and fiber; (3) as to fiber connections, connections with different throughputs (1 gigabit (“Gb”), 1Gb Ultra, 10Gb, 10Gb Ultra, and 40Gb). The Exchange currently assesses a $1,650 installation fee and a $16,500 ongoing monthly fee for a 10Gb Ultra fiber connection. The Exchange proposes to increase this monthly fee to $18,500 per month, while maintaining the existing installation fee. The Exchange notes the proposed fee change will better enable it to continue to maintain and improve its market technology and services. The Exchange also notes that the proposed fee amount, even as amended, will be lower than the monthly fee assessed by the New York Stock Exchange (“NYSE”) for a similar connection. NYSE offers a 10Gb LX LCN Circuit and 10Gb NMS Network Circuit connection for which it charges a $15,000 installation fee and a monthly fee of $22,000 per month. <SU>3</SU> <FTREF/> <FTNT> <SU>3</SU>   <E T="03">See</E> NYSE et al. Connectivity Fee Schedule, last updated October 21, 2025, at 12, available at <E T="03">https://www.nyse.com/publicdocs/nyse/Wireless_Connectivity_Fees_and_Charges.pdf.</E> </FTNT> The Exchange also notes that a market participant can use a single 10 Gb Ultra fiber connection to access all the following affiliated exchanges: the Nasdaq Stock Market, the Nasdaq Options Market, Nasdaq BX, Nasdaq, BX Options, Nasdaq PSX, PHLX Options, Nasdaq ISE, Nasdaq GEMX, Nasdaq MRX, and the Nasdaq Bond Exchange (“Affiliate Exchanges”). Notably, only one monthly fee currently (and will continue) to apply per 10 Gb Ultra fiber connections regardless of how many Affiliate Exchanges are accessed through that one fiber connection. The Exchange will implement the proposed rule change beginning on January 2, 2026. <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes that its proposal is consistent with Section 6(b) of the Act, <SU>4</SU> <FTREF/> in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act, <SU>5</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>4</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>5</SU>  15 U.S.C. 78f(b)(4) and (5). </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 companies.”  <SU>6</SU> <FTREF/> <FTNT> <SU>6</SU>  Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (“Regulation NMS Adopting Release”). </FTNT> Likewise, in <E T="03">NetCoalition</E> v. <E T="03">Securities and Exchange Commission</E>   <SU>7</SU> <FTREF/> (“NetCoalition”) the D.C. Circuit upheld the Commission's use of a market-based approach in evaluating the fairness of market data fees against a challenge claiming that Congress mandated a cost-based approach. <SU>8</SU> <FTREF/> <FTNT> <SU>7</SU>   <E T="03">NetCoalition</E> v. <E T="03">SEC,</E> 615 F.3d 525 (D.C. Cir. 2010). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> NetCoalition, at 534—535. </FTNT> As the court emphasized, the Commission “intended in Regulation NMS that `market forces, rather than regulatory requirements' play a role in determining the market data . . . to be made available to investors and at what cost.”  <SU>9</SU> <FTREF/> <FTNT> <SU>9</SU>   <E T="03">Id.</E> at 537. </FTNT> Further, “[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>10</SU> <FTREF/> Although the court and the SEC were discussing the cash equities markets, the Exchange believes that these views apply with equal force to the options markets. <FTNT> <SU>10</SU>   <E T="03">Id.</E> at 539 (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-21)). </FTNT> The Exchange believes the proposed fee change is reasonable as it will better align the price of this connectivity option to the value it offers to the market participants that utilize it. It will also better enable the Exchange to maintain and improve its connectivity services and facilities. Finally, the proposed fee change is reasonable as the resulting 10Gb Ultra monthly fee will be lower than the amount assessed by NYSE for an analogous market access connection. Additionally, the Exchange believes that the proposal will be an equitable allocation of fees and will not discriminate unfairly against market participants. The proposed fee change is an equitable allocation of fees because it reflects the substantial value that the 10Gb Ultra fiber connection option provides to its users. This connectivity option is particularly attractive to customers that desire ultra-low latency connectivity to Nasdaq's Affiliated Exchanges because it provides sufficient capacity to support most of their activities on the Affiliated Exchanges and does so at a reasonable comparative price point. The proposal is not unfairly discriminatory because 10Gb Ultra connectivity will be available to all customers at the same price. Moreover, it is an optional product. As noted above, customers that do not wish to purchase this product, either at the proposed price or otherwise, have ample alternative options to connect to the Exchange, including many options that are less expensive. While the proposed price increase will impact customers which are latency sensitive and require larger capacity connections than others, this is fair because users of 10Gb Ultra fiber connections consume more resources from the network than do other participants. <HD SOURCE="HD2">B. Self-Regulatory Organization's Statement on Burden on Competition</HD> 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. The proposed fee change will not impact intramarket competition because it will apply to all similarly situated participants equally ( <E T="03">i.e.,</E> all market participants that choose to purchase the 10 Gb Ultra fiber connection). Additionally, the Exchange does not believe its proposed pricing will impos ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 14k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━