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<title>Federal Register, Volume 91 Issue 1 (Friday, January 2, 2026)</title>
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[Federal Register Volume 91, Number 1 (Friday, January 2, 2026)]
[Notices]
[Pages 183-185]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-24135]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104520; File No. SR-ISE-2025-42]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change Concerning the
Exchange's Options Regulatory Fee (ORF) Methodology Until July 1, 2026
December 29, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 19, 2025, Nasdaq ISE, LLC (``ISE'' or ``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend ISE's Pricing Schedule at Options 7,
Section 5, C., ISE Options Regulatory Fee, to delay the implementation
of the new Options Regulatory Fee (``ORF'') and methodology proposed in
SR-ISE-2025-20.\3\ Specifically, the Exchange proposes to delay ISE's
new ORF and methodology therein, which was to be implemented on January
2, 2026, until July 1, 2026 and remove the sunset provision.
Additionally, effective January 2, 2026, the Exchange proposes to
maintain its current ORF methodology at a rate of $0.0011 per contract
side while the industry transitions to the new model.
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\3\ See Securities Exchange Act Release No. 103558 (July 28,
2025), 90 FR 36080 (July 31, 2025) (SR-ISE-2025-020) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Methodology for its Options Regulatory Fee (ORF) as of
January 2, 2026).
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While the changes proposed herein are effective upon filing, the
Exchange has designated the proposed rule change to be operative on
January 2, 2026.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/ise/rulefilings">https://listingcenter.nasdaq.com/rulebook/ise/rulefilings</a>,
and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
ISE previously filed a proposed amendment to its ORF, effective as
of January 2, 2026,\4\ to amend its methodology of collection to
continue to assess ORF for options transactions cleared by OCC in the
Customer range, however ORF would be assessed to each ISE Member for
executions that occur on ISE. At this time, ISE proposes to: (1) delay
the implementation of SR-ISE-2025-20, with respect to the new ORF and
methodology therein to be effective on January 2, 2026, so that it
would now be implemented on July 1, 2026; and (2) maintain its current
ORF methodology at a rate of $0.0011 per contract side effective
January 2, 2026.
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\4\ See id.
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Delay of Implementation
In light of industry feedback from Clearing Members regarding
readiness to implement changes to accommodate the new ORF model and its
methodology of collection, the Exchange proposes to delay the
implementation of SR-ISE-2025-20, with respect to the new ORF and
methodology therein, until July 1, 2026. This delay would provide
market participants additional time to implement the new ORF model and
to design, test and implement changes to the ORF. Additionally, the
Exchange proposes to remove the February 1, 2026 sunset date that would
have allowed the Exchange to revert back to the prior ORF methodology
and rate of $0.0013 per contract side. The Exchange has issued an
Options Trader Alert to notify Participants of the delay at least 30
calendar days prior to the anticipated change.\5\
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\5\ See Options Trader Alert # 2025-03.
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[[Page 184]]
Amended ORF
In light of the unanticipated delay of implementation of its
January 2, 2026 amendments to its ORF and methodology in SR-ISE-2025-20
to accommodate the industry's timeline, ISE proposes to maintain its
current ORF methodology and temporarily increase ORF from $0.0003 to
$0.0011 per contract side, effective January 2, 2026, while the
industry transitions to the new model. The Exchange has issued an
Options Trader Alert to notify Participants of the modification in the
current ORF at least 30 calendar days prior to the anticipated
change.\6\
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\6\ See id.
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Another ISE rule proposal, SR-ISE-2025-25,\7\ reduced the amount of
ORF collected by the Exchange from $0.0013 to $0.0003 per contract
side, effective October 1, 2025, to account for certain fines. By
lowering its ORF, ISE was able to ensure that revenue collected from
the ORF, in combination with its other regulatory fees and fines, did
not exceed Options Regulatory Costs.\8\ ISE presumed it would be
adopting its new ORF and methodology in SR-ISE-2025-20 on January 2,
2026, which would have implemented a new ORF rate. ISE notes that it
announced its new ORF and methodology on July 22, 2025 \9\ to provide
the industry ample time to implement changes to accommodate the new ORF
and its methodology. Despite announcing in July 2025, industry
participants did not prepare for the implementation. At this time, ISE
proposes to temporarily increase its current ORF from $0.0003 to
$0.0011 per contract side effective January 2, 2026. The Exchange notes
that the proposed new rate of $0.0011 is not the rate that was in
effect prior to SR-ISE-2025-25, that rate was $0.0013 per contract
side. Rather than reverting to the prior rate, the Exchange is
considering current options volume and only modestly reverting its pre-
fine rate.
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\7\ See Securities Exchange Act Release No. 103991 (September
17, 2025), 90 FR 45435 (September 22, 2025) (SR-ISE-2025-25) (Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Lower the Options Regulatory Fee (ORF)).
\8\ The regulatory costs for options comprise a subset of the
Exchange's regulatory budget that is specifically related to options
regulatory expenses and encompasses the cost to regulate all
Participants' options activity (``Options Regulatory Cost'').
\9\ See Options Trader Alert #2025-33.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act \11\, which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members, and other persons using its facilities.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \12\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
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Delay of Implementation
The Exchange's proposal to delay the implementation of SR-ISE-2025-
20, with respect to the new ORF and methodology, to be effective on
January 2, 2026, until July 1, 2026 and to remove the February 1, 2026
sunset date that would have allowed the Exchange to revert back to the
prior ORF methodology and rate is consistent with the Act because it
will provide market participants additional time to design, test and
implement the new ORF and its methodology. The proposal to remove the
sunset date is also consistent with the Act given the delay and
anticipated industry commitment to implement the changes.
Amended ORF
The Exchange's proposal to maintain its current ORF methodology at
a rate of $0.0011 per contract side effective January 2, 2026, is
consistent with the Act because it will allow ISE to collect rates
under its current ORF with an adjusted rate given the Exchange is
unable to proceed with the implementation of its new ORF and its
methodology until July 1, 2026, which will allow ISE to offset a
material portion of its Regulatory Cost under its existing authority
until the new ORF is implemented on July 1, 2026. As noted herein, SR-
ISE-2025-25, reduced the amount of ORF collected by the Exchange from
$0.0013 to $0.0003 per contract side, effective October 1, 2025, to
account for certain fines. By lowering its ORF, ISE was able to ensure
that revenue collected from the ORF, in combination with its other
regulatory fees and fines, did not exceed Options Regulatory Costs. On
January 2, 2026, ISE's ORF would have been amended once again as noted
in SR-ISE-2025-20 implementing a new rate. The Exchange did not plan to
delay the implementation and would otherwise have been collecting under
the January 2, 2026 ORF rate if it were not for the delay. The Exchange
notes that the proposed new rate of $0.0011 is not the rate that was in
effect prior to SR-ISE-2025-25, that rate was $0.0013. Rather than
reverting to the prior rate in effect on October 1, 2025, the Exchange
is considering current options volume and only modestly reverting its
pre-fine rate.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on intra-market competition not necessary or
appropriate in furtherance of the purposes of the Act. Rather than
reverting to its October 1, 2025 rate, the Exchange would assess an ORF
rate that represents a temporary modest increase to its current rate in
light of current options volumes until it is able to implement the new
ORF and methodology on July 1, 2026. No Participant would be subject to
the new ORF and methodology until July 1, 2026. The Exchange is not
substantively amending the proposed ORF by delaying its implementation.
The Exchange does not believe that the proposed modified rate
reversion will impose any burden on intra-market competition not
necessary or appropriate in furtherance of the purposes of the Act as
the modified ORF rate for January 2, 2026 is intended to approximate a
rate equivalent to its October 1, 2025 given current options volumes.
The Exchange does not believe that the proposed rate reversion will
impose any burden on inter-market competition not necessary or
appropriate in furtherance of the purposes of the Act as other options
markets may amend their respective ORFs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and paragraph (f) of Rule 19b-4 \14\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such
[[Page 185]]
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission will
institute proceedings to determine whether the proposed rule change
should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1260677e773f717d7f7f777c6661526177713c757d64"><span class="__cf_email__" data-cfemail="94e6e1f8f1b9f7fbf9f9f1fae0e7d4e7f1f7baf3fbe2">[email protected]</span></a>. Please include
file number SR-ISE-2025-42 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-ISE-2025-42. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-ISE-2025-42 and should be submitted on
or before January 23, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-24135 Filed 12-31-25; 8:45 am]
BILLING CODE 8011-01-P
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Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the Exchange's Options Regulatory Fee (ORF) Methodology Until July 1, 2026
<html> <head> <title>Federal Register, Volume 91 Issue 1 (Friday, January 2, 2026)</title> </head> <body><pre> [Federal Register Volume 91, Number 1 (Friday, January 2, 2026)] [...
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91 FR 183
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“Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the Exchange's Options Regulatory Fee (ORF) Methodology Until July 1, 2026,” thefederalregister.org (January 2, 2026), https://thefederalregister.org/documents/2025-24135/self-regulatory-organizations-nasdaq-ise-llc-notice-of-filing-and-immediate-effectiveness-of-a-proposed-rule-change-conc.