Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Lower the Options Regulatory Fee (ORF)

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104361; File No. SR-NYSEAMER-2025-70]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Lower the Options Regulatory Fee (ORF)</SUBJECT> <DATE>December 11, 2025.</DATE> Pursuant to Section 19(b)(1)  <SU>1</SU> <FTREF/> of the Securities Exchange Act of 1934 (“Act”), <SU>2</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>3</SU> <FTREF/> notice is hereby given that on December 1, 2025, NYSE American LLC (“NYSE American” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II 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>  15 U.S.C. 78a. </FTNT> <FTNT> <SU>3</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 NYSE American Options Fee Schedule (“Fee Schedule”) regarding the Options Regulatory Fee (“ORF”). The proposed rule change is available on the Exchange's website at <E T="03">www.nyse.com</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 self-regulatory organization 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 those 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 parts of such statements. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to amend the Fee Schedule to decrease the ORF from $0.0038 per contract to $0.0026 per contract, effective on January 1, 2026, and to provide for a temporary waiver of the ORF for the month leading up to such change, from December 1, through December 31, 2025 (the “Waiver Period”). <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU>   <E T="03">See</E> proposed Fee Schedule, Section VII.A., Options Regulatory Fee (“ORF”). The Exchange proposes to modify the Fee Schedule to provide for a waiver of ORF from December 1 through December 31, 2025, and to provide that the ORF rate would be $0.0026 when the Exchange resumes assessing ORF on January 1, 2026. </FTNT> <HD SOURCE="HD3">Background</HD> As a general matter, the Exchange may only use regulatory funds such as the ORF “to fund the legal, regulatory, and surveillance operations” of the Exchange. <SU>5</SU> <FTREF/> More specifically, the ORF is designed to recover a material portion, but not all, of the Exchange's costs for the supervision and regulation of ATP Holders, including the Exchange's regulatory program and legal expenses associated with options regulation, such as the costs related to in-house staff, third-party service providers, and technology that facilitate regulatory functions such as surveillance, investigation, examinations, and enforcement (collectively, the “ORF Costs”). ORF funds may also be used for indirect expenses such as human resources and other administrative costs. The Exchange monitors the amount of ORF collection to ensure that this amount, in combination with other regulatory fees and fines, does not exceed regulatory costs. <FTNT> <SU>5</SU>  The Exchange considers surveillance operations part of regulatory operations. The limitation on the use of regulatory funds also provides that they shall not be distributed. <E T="03">See</E> Thirteenth Amended and Restated Operating Agreement of NYSE American LLC, Article IV, Section 4.05 and Securities Exchange Act Release No. 87993 (January 16, 2020), 85 FR 4050 (January 23, 2020) (SR-NYSEAMER-2020-04). </FTNT> The ORF is assessed on ATP Holders for options transactions that are cleared by the ATP Holder through the OCC in the Customer range regardless of the exchange on which the transaction occurs and is collected from ATP Holder clearing firms by the OCC on behalf of NYSE American. <SU>6</SU> <FTREF/> All options transactions must clear via a clearing firm, and such clearing firms can then choose to pass through all, a portion, or none of the cost of the ORF to its Customers, <E T="03">i.e.,</E> the entering firms. The Exchange notes that the costs relating to monitoring ATP Holders with respect to Customer trading activity are generally higher than the costs associated with monitoring ATP Holders that do not engage in Customer trading activity, which tends to be more automated and less labor-intensive. By contrast, regulating ATP Holders that engage in Customer trading activity is generally more labor-intensive and requires a greater expenditure of human and technical resources as the Exchange needs to review not only the trading activity on behalf of Customers, but also the ATP Holder's relationship with its Customers via more labor-intensive exam-based programs. <SU>7</SU> <FTREF/> As a result, the costs associated with administering the Customer component of the Exchange's overall regulatory program are materially higher than the costs associated with administering the non-Customer component ( <E T="03">e.g.,</E> ATP Holder proprietary transactions) of its regulatory program. <FTNT> <SU>6</SU>   <E T="03">See</E> Fee Schedule, Section VII.A., Options Regulatory Fee (“ORF”), available at: <E T="03">https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf.</E> The Exchange uses reports from OCC when assessing and collecting the ORF. The ORF is not assessed on outbound linkage trades. An ATP Holder is not assessed the fee until it has satisfied applicable technological requirements necessary to commence operations on NYSE American. <E T="03">See id.</E> </FTNT> <FTNT> <SU>7</SU>  The Exchange notes that many of the Exchange's market surveillance programs require the Exchange to look at and evaluate activity across all options markets, such as surveillance for position limit violations, manipulation, front-running, and contrary exercise advice violations/expiring exercise declarations. The Exchange and other options SROs are parties to a 17d-2 agreement allocating among the SROs regulatory responsibilities relating to compliance by the common members with rules for expiring exercise declarations, position limits, OCC trade adjustments, and Large Option Position Report reviews. <E T="03">See, e.g.,</E> Securities Exchange Act Release No. 85097 (February 11, 2019), 84 FR 4871 (February 19, 2019). </FTNT> Because the ORF is based on options transactions volume, the amount of ORF collected is variable. For example, if options transactions reported to OCC in a given month increase, the ORF collected from ATP Holders will likely increase as well. Similarly, if options transactions reported to OCC in a given month decrease, the ORF collected from ATP Holders will likely decrease as well. Accordingly, the Exchange monitors the amount of ORF collected to ensure that it does not exceed a material portion of ORF Costs. If the Exchange determines the amount of ORF collected exceeds or may exceed a material portion of ORF Costs, the Exchange will, as appropriate, adjust the ORF by submitting a fee change filing to the Securities and Exchange Commission (the “Commission”). Exchange rules establish that market participants must be notified of any change in the ORF via Trader Update at least 30 calendar days prior to the effective date of the change. <SU>8</SU> <FTREF/> <FTNT> <SU>8</SU>   <E T="03">See</E> Fee Schedule, note 6, <E T="03">supra.</E> </FTNT> <HD SOURCE="HD3">Proposed Rule Change</HD> Earlier this year, the Exchange temporarily reduced the ORF from $0.0038 per contract to $0.0023 per contract through December 31, 2025, after which date the ORF would revert to the rate of $0.0038 per contract. <SU>9</SU> <FTREF/> Based on the Exchange's recent review of regulatory costs, ORF collections, and options transaction volume, the Exchange proposes to decrease the ORF from $0.0038 per contract to $0.0026 per contract effective January 1, 2026 and, in concert with the proposed reduction of the ORF, to waive the ORF from December 1 through December 31, 2025 in order to help ensure that the amount collected from the ORF, in combination with other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. The Exchange notified ATP Holders of the proposed temporary waiver of the ORF via Trader Update on October 31, 2025 (which was at least 30 calendar days prior to the proposed operative date of the waiver, December 1, 2025)  <SU>10</SU> <FTREF/> and will also notify ATP Holders of the proposed change to the ORF rate via Trader Update at least 30 days prior to the proposed operative date of the new rate, January 1, 2026. The Exchange believes such notices will ensure that market participants have sufficient opportunity to configure their systems to account properly for both the ORF waiver and revised ORF. <FTNT> <SU>9</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103507 (July 21, 2025), 90 FR 34949 (July 24, 2025) (SR-NYSERAMER-2025-42) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Temporarily Lower the Options Regulatory Fee (ORF)). </FTNT> <FTNT> <SU>10</SU>   <E T="03">S ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 28k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━