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

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104347; File No. SR-Phlx-2025-64]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Phlx Options 7, Section 4</SUBJECT> <DATE>December 8, 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 25, 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 the Broker-Dealer Transaction Cap and the Floor Transaction (Open Outcry) Floor Broker Incentive Program 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). While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on December 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/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 Pricing Schedule at 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), related to the Broker-Dealer  <SU>3</SU> <FTREF/> Transaction Cap and the Floor Transaction  <SU>4</SU> <FTREF/> (Open Outcry) Floor Broker  <SU>5</SU> <FTREF/> Incentive Program. <FTNT> <SU>3</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>4</SU>  The term “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). </FTNT> <FTNT> <SU>5</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> <HD SOURCE="HD3">Broker-Dealer Transaction Cap</HD> Today, the Exchange offers a Broker-Dealer Transaction Cap whereby each Broker-Dealer Floor Options Transaction Charge is capped at $15,000 per transaction (including FLEX and Cabinet Options Transaction Charges). At this time, the Exchange proposes to specify in the rule text that for purposes of this cap, the term “per transaction” includes simple orders or with respect to complex orders, all legs of the same complex order that are Floor Options Transaction Charges. This is the manner in which the term “per transaction” is applied today by the Exchange. The Exchange believes that this additional rule text will make the application of the cap transparent to members and member organizations. <HD SOURCE="HD3">Floor Transaction (Open Outcry) Floor Broker Incentive Program</HD> Currently, Floor Brokers are paid rebates for transactions executed on the trading floor in open outcry on qualifying volume at each threshold level based on the below tiers. The following transactions are not considered qualifying volume: (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. Currently, Floor Qualified Contingent Cross Orders (“QCC”) Orders, as defined in Options 8, Section 30(e), and electronic QCC Orders, as defined in Options 3, Section 12, are considered qualifying volume but are not paid rebates based on the schedule, rather Floor QCC Orders and electronic QCC Orders are paid the QCC Rebates noted in Options 7, Section 4. Rebates are paid on qualifying volume at each threshold level based on the schedule below. <GPOTABLE COLS="4" OPTS="L2,nj,tp0,i1" CDEF="s30,r75,20,20"> <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>$0.04</ENT> <ENT>$0.10</ENT> </ROW> <ROW> <ENT I="01">Tier 2</ENT> <ENT>500,001-5,000,000</ENT> <ENT>0.07</ENT> <ENT>0.18</ENT> </ROW> <ROW> <ENT I="01">Tier 3</ENT> <ENT>5,000,001-10,000,000</ENT> <ENT>0.09</ENT> <ENT>0.18</ENT> </ROW> <ROW> <ENT I="01">Tier 4</ENT> <ENT>Greater than 10,000,000</ENT> <ENT>0.10</ENT> <ENT>0.22</ENT> </ROW> </GPOTABLE> At this time, the Exchange proposes to specify that Broker-Dealer Floor Options Transactions that are capped pursuant to the Broker-Dealer Transaction Cap will be considered qualifying volume but would not be paid rebates pursuant to the Floor Transaction (Open Outcry) Floor Broker Incentive Program. While the Exchange would not pay rebates for the capped Broker-Dealer Floor Options Transactions, these transactions would continue to be capped and count toward qualifying volume, therefore the Exchange believes members and member organizations will continue to be incentivized to transact Broker-Dealer Floor Options Transactions on Phlx. Further, the Exchange recently amended the Floor Transaction (Open Outcry) Floor Broker Incentive Program at Options 7, Section 4. <SU>6</SU> <FTREF/> At the time of those changes, the Exchange did not amend the examples that follow the rebate table to reflect changes to the examples as a result of the amendments to add electronic QCC as qualifying volume and to amend the per contract rebates in the two proposals. <SU>7</SU> <FTREF/> This proposal seeks to revise examples 1 through 4 to reflect the current Floor Transaction (Open Outcry) Floor Broker Incentive Program qualifications and rebates and replace the outdated examples. Examples 1 through 4 would be revised as follows: <FTNT> <SU>6</SU>   <E T="03">See</E> Securities Exchange Act Release Nos. 104034 (September 24, 2025), 90 FR 46674 (September 29, 2025) (SR-Phlx-2025-49); and 104128 (September 29, 2025), 90 FR 47441 (October 1, 2025) (SR-Phlx-2025-55). </FTNT> <FTNT> <SU>7</SU>  SR-Phlx-2025-49 amended the Tier 2 rebate from $0.12 to $0.16 per contract for Non-Customer on both sides. SR-Phlx-2025-50 increased the rebates in all tiers by $0.02 per contract. The Exchange previously offered a per contract rebate if a Customer is on one side of $0.04 per contract for Tier 1 (0-500,000 qualifying contracts), a $0.07 per contract rebate for Tier 2 (500,001-5,000,000 qualifying contracts), a $0.09 per contract rebate for Tier 3 (5,000,001-10,000,000 qualifying contracts) and a $0.10 per contract rebate for Tier 4 (Greater than 10,000,000 qualifying contracts). As amended, the Exchange now offers a per contract rebate if a Non-Customer is on both sides of $0.10 per contract for Tier 1 (0-500,000 qualifying contracts), a $0.18 per contract rebate for Tier 2 (500,001-5,000,000 qualifying contracts), a $0.18 per contract rebate for Tier 3 (5,000,001-10,000,000 qualifying contracts) and a $0.22 per contract rebate for Tier 4 (Greater than 10,000,000 qualifying contracts). </FTNT> <EXTRACT> <E T="03">Example 1:</E> A Floor Broker that executes a total of 2,000,000 qualified contracts in a month comprised of (1) Floor QCC Order volume of 600,000 contracts; (2) Floor Transaction Open Outcry Customer volume of 400,000 contracts; and (3) Floor Transaction Open Outcry volume with Non-Customers on both sides of 1,000,000 contracts, will be paid $0.07 per contract for the 400,000 or $28,000 for the Floor Transaction Open Outcry Customer volume and $0.18 per contract for the 1,000,000 or $180,000 for the Floor Transaction Open Outcry volume with Non-Customers on both sides, equaling a total Floor Broker Incentive Program Rebate of $208,000 for that month. The 600,000 contracts of executed Floor QCC Orders would be paid the applicable QCC Rebate as described in Options 7, Section 4 above. <E T="03">Example 2:</E> A Floor Broker that executes floor transactions with a mix of Customer on one side and Non-Customer on both sides in a given month totaling 2,000,000 contracts (with no Floor QCC volume) wi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 24k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━