Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 88329 

21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an 

interface that allows Market Makers to connect, 

send, and receive messages related to quotes, 

Immediate-or-Cancel Orders, and auction responses 

to the Exchange. Features include the following: (1) 

options symbol directory messages (e.g., underlying 

instruments); (2) System event messages (e.g., start 

of trading hours messages and start of opening); (3) 

trading action messages (e.g., halts and resumes); (4) 

execution messages; (5) quote messages; (6) 

Immediate-or-Cancel Order messages; (7) risk 

protection triggers and purge notifications; (8) 

opening imbalance messages; (9) auction 

notifications; and (10) auction responses. Market 

Makers may only enter interest into SQF in their 

assigned options series. Immediate-or-Cancel 

Orders entered into SQF are not subject to the Order 

Price Protection, Market Order Spread Protection, 

and Size Limitation Protection in Options 3, 

Section 15(a)(1)(A), (1)(B), and (2)(B) respectively. 

See Supplementary Material .03(c) to Options 3, 

Section 7. 

4The SQF Purge Interface only receives and 

notifies of purge requests from the Market Maker. 

See Supplementary Material .03(c) to Options 3, 

Section 7. 

5The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(21). 

6The Exchange waives one SQF Port fee per 

Market Maker per month. See Options 7, Section 6, 

note 4. 

7See Securities Exchange Act Release No. 96824 

(February 7, 2023), 88 FR 8975 (February 10, 2023) 

(SR–MRX–2023–05). As noted in SR–MRX–2023– 

05, the Exchange initially filed the proposed pricing 

changes on May 2, 2022 (SR–MRX–2022–04) and 

subsequently withdrew and replaced multiple times 

until SR–MRX–2023–05. 

8See https://data.bls.gov/timeseries/

PCU5182105182105. 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

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–Phlx–2024–55 and should be 

submitted on or before November 29, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25838 Filed 11–6–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101499; File No. SR–MRX– 

2024–42] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Increase the 

Exchange’s SQF Fees in Options 7, 

Section 6 

November 1, 2024. 

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 October 

18, 2024, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to increase 

the Exchange’s port fees in Options 7, 

Section 6. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on January 1, 2025. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

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 

The purpose of the proposed rule 

change is to increase the Exchange’s 

connectivity fees in Options 7, Section 

6 for the Specialized Quote Feed 

(‘‘SQF’’) Ports 3 and SQF Purge Ports 4

by 4%. 

Options 7, Section 6(i) includes the 

Exchange’s fees that relate to the SQF 

Ports and SQF Purge Ports that Market 

Makers 5 use to connect to the Exchange. 

Today, the Exchange assesses all Market 

Makers an SQF Port fee of $1,250 per 

port per month and an SQF Purge Port 

Fee of $1,250 per port per month.6 In 

addition, the SQF and the SQF Purge 

Ports are currently subject to a monthly 

cap (‘‘SQF Fee Cap’’) of $17,500, which 

is applicable to Market Makers. The 

Exchange now proposes to increase the 

foregoing pricing by 4%. As amended, 

the SQF Port and SQF Purge Port fees 

would each become $1,300 per port per 

month. The amended SQF Fee Cap 

would likewise increase by 4% to 

$18,200. 

The proposed pricing increases would 

enable the Exchange to maintain and 

improve its market technology and 

services to remain competitive with its 

peers. Over the years, customer demand 

for risk protections and capacity has 

increased. The Exchange continues to 

invest in maintaining, improving, and 

enhancing its protocols like SQF Ports 

and SQF Purge Ports for the benefit and 

often at the behest of its customers. 

Such enhancements include refreshing 

hardware, upgrading risk protections 

and information security, and offering 

customers additional capacity. 

Nevertheless, the Exchange has not 

increased the fees for SQF Ports and 

SQF Purge Ports, or the SQF Fee Cap, 

since 2022 7 (where inflation has been 

around 4.3%, as measured using the 

metric described below). Nevertheless, 

the Exchange proposes to increase its 

SQF and SQF Purge Port fees by only 

4%. Further, the Exchange proposes to 

increase the SQF Fee Cap by 4% to align 

with the foregoing fee increases. 

As discussed below, the Exchange 

proposes to adjust its pricing by an 

industry- and product-specific 

inflationary measure. It is reasonable 

and consistent with the Act for the 

Exchange to recoup its investments, at 

least in part, by adjusting its pricing. 

Continuing to operate at pricing frozen 

at 2022 levels impacts the Exchange’s 

ability to enhance its offerings and the 

interests of market participants and 

investors. 

The pricing increases the Exchange 

proposes are based on an industryspecific Producer Price Index (‘‘PPI’’), 

which is a tailored measure of 

inflation.8 As a general matter, the 

Producer Price Index is a family of 

indexes that measures the average 

change over time in selling prices 


lotter on DSK11XQN23PROD with NOTICES1
88330 Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 

9See https://www.bls.gov/ppi/overview.htm. 

10See id. 

11See https://data.bls.gov/timeseries/

PCU5182105182105. 

12See https://www.bls.gov/ppi/factsheets/ 

producer-price-index-for-the-data-processing-andrelated-servicesindustry-naics-518210.htm. 

13See https://www.usinflationcalculator.com/. 

14See supra discussion of SQF Port and SQF 

Purge Port enhancements. Additionally, other 

exchanges have filed for increases in certain fees, 

based in part on comparisons to inflation. See, e.g., 

Securities Exchange Act Release Nos. 34–100004 

(April 22, 2024), 89 FR 32465 (April 26, 2024) (SR– 

CboeBYX–2024–012); and 34–100398 (June 21, 

2024), 89 FR 53676 (June 27, 2024) (SR–BOX–2024– 

16)l; Securities Exchange Act Release No. 34– 

100994 (September 10, 2024), 89 FR 75612 

(September 16, 2024) (SR–NYSEARCA–2024–79). 

15 15 U.S.C. 78f(b). 

16 15 U.S.C. 78f(b)(4) and (5). 

17See https://www.officialdata.org/us/inflation/

2017?amount=1. 

received by domestic producers of 

goods and services. PPI measures price 

change from the perspective of the 

seller. This contrasts with other metrics, 

such as the Consumer Price Index 

(‘‘CPI’’), that measure price change from 

the purchaser’s perspective.9 About 

10,000 PPIs for individual products and 

groups of products are tracked and 

released each month.10 PPIs are 

available for the output of nearly all 

industries in the goods-producing 

sectors of the U.S. economy—mining, 

manufacturing, agriculture, fishing, and 

forestry—as well as natural gas, 

electricity, and construction, among 

others. The PPI program covers 

approximately 69 percent of the service 

sector’s output, as measured by revenue 

reported in the 2017 Economic Census. 

For purposes of this proposal, the 

relevant industry-specific PPI is the 

Hosting, Active Server Pages, and Other 

IT Infrastructure Provisioning Services 

(‘‘Data PPI’’) within the Data Processing 

and Related Services Industry, which is 

an industry net-output PPI that 

measures the average change in selling 

prices received by companies that 

provide data processing services. 

The Data Processing and Related 

Services Industry was introduced to the 

PPI in January 2002 by the Bureau of 

Labor Statistics (‘‘BLS’’) as part of an 

ongoing effort to expand Producer Price 

Index coverage of the services sector of 

the U.S. economy and is identified as 

NAICS—518210 in the North American 

Industry Classification System.11

According to the BLS ‘‘[t]he primary 

output of NAICS 518210 is the 

provision of electronic data processing 

services. In the broadest sense, 

computer services companies help their 

customers efficiently use technology. 

The processing services market consists 

of vendors who use their own computer 

systems—often utilizing proprietary 

software—to process customers’ 

transactions and data. Companies that 

offer processing services collect, 

organize, and store a customer’s 

transactions and other data for recordkeeping purposes. Price movements for 

the NAICS 518210 index are based on 

changes in the revenue received by 

companies that provide data processing 

services. Each month, companies 

provide net transaction prices for a 

specified service. The transaction is an 

actual contract selected by probability, 

where the price-determining 

characteristics are held constant while 

the service is repriced. The prices used 

in index calculation are the actual 

prices billed for the selected service 

contract.’’ 12

The Exchange believes the Data PPI is 

the most appropriate subset of the Data 

Processing and Related Services 

Industry to be considered in the context 

of the proposed pricing changes because 

the Exchange uses its ‘‘own computer 

systems’’ and ‘‘proprietary software,’’ 

i.e., its own data center and proprietary 

matching engine software, respectively, 

to receive options quotes on the 

Exchange’s proprietary trading platform. 

For purposes of this proposed rule 

change, the Exchange examined the 

Data PPI value for the period from May 

2022 to August 2024. The Data PPI had 

a starting value of 111.688 in May 2022 

and an ending value of 116.445 in 

August 2024, a 4.3% increase. This data 

indicates that companies who are also 

in the data storage and processing 

business have generally increased prices 

for a specified service covered under 

NAICS 518210 by an average of 4.3% 

during this period. Based on that 

percentage change, the Exchange 

proposes to make a one-time fee 

increase of only 4%, which reflects an 

increase covering roughly the entire 

period since the last price adjustments 

were made to the SQF Port fee, the SQF 

Purge Port fee, and the related SQF Fee 

Cap. 

The Exchange further believes the 

Data PPI is an appropriate measure for 

purposes of the proposed rule change on 

the basis that it is a stable metric with 

limited volatility, unlike other 

consumer-side inflation metrics. In fact, 

the Data PPI has not experienced a 

greater than 2.16% increase for any one 

calendar year period since Data PPI was 

introduced into the PPI in January 2002. 

The average calendar year change from 

January 2002 to December 2023 was 

.62%, with a cumulative increase of 

15.67% over this 21-year period. The 

Exchange believes the Data PPI is 

considerably less volatile than other 

inflation metrics such as CPI, which has 

had individual calendar-year increases 

of more than 6.5%, and a cumulative 

increase of over 73% over the same 

period.13

The Exchange believes the Data PPI, 

and significant investments into, and 

enhanced performance of, the Exchange 

support the reasonableness of the 

proposed pricing increases.14

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,15 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,16 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. 

This belief is based on two factors. 

First, the current pricing does not 

properly reflect the quality of the SQF 

and SQF Purge Ports, as fees for these 

offerings have been static in nominal 

terms, and therefore falling in real terms 

due to inflation. Second, the Exchange 

believes that investments made in 

enhancing the risk protections and 

capacity of SQF and SQF Purge Ports 

has increased the performance of these 

offerings. 

The Proposed Rule Change Is 

Reasonable 

As noted above, the Exchange has not 

increased any of the fees included in the 

proposal since 2022. However, in the 

years following the last fee increases, 

the Exchange has made significant 

investments in upgrades to its SQF Ports 

and SQF Purge Ports, enhancing the 

quality of its services, as measured by, 

among other things, increased capacity. 

In other words, Exchange customers 

have greatly benefitted, while the 

Exchange’s ability to recoup its 

investments has been hampered. 

Between 2022 and 2024, the inflation 

rate is 3.8% per year, on average, 

producing a cumulative inflation rate of 

7.74%.17 Using the more targeted 

inflation number of Data PPI, the 

cumulative inflation rate was around 

4.3%. The Exchange believes the Data 

PPI is a reasonable metric to base this 

fee increase on because it is targeted to 

producer-side increases in the data 

processing industry, which based on the 

definition adopted by BLS would 

include the Exchange’s port offerings. 

Notwithstanding inflation, as noted 

above, the Exchange has not increased 

its fees at all for seven years for the SQF 

and SQF Purge Ports, or the 


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Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 88331 

18Unlike other market participants, Market 

Makers are subject to market making and quoting 

obligations. See Options 2, Sections 4 and 5. 19 15 U.S.C. 78s(b)(3)(A)(ii). 

corresponding SQF Fee Cap. The 

proposed pricing changes represent a 

modest increase from the current fees 

and related cap. The Exchange believes 

the proposed fee increases are 

reasonable in light of the Exchange’s 

continued expenditure in maintaining a 

robust technology ecosystem. 

Furthermore, the Exchange continues to 

invest in maintaining and enhancing its 

port products—for the benefit and often 

at the behest of its customers and global 

investors. Such enhancements include 

refreshing several aspects of the 

technology ecosystem including 

software, hardware, and network while 

introducing new and innovative 

products. The goal of the enhancements 

discussed above, among other things, is 

to provide more modern connectivity to 

the match engine. Accordingly, the 

Exchange continues to expend resources 

to innovate and modernize its 

technology so that it may benefit its 

members in offering SQF and SQF Purge 

Ports. 

The Proposed Fees Are Equitably 

Allocated and Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposal represents an equitable 

allocation of reasonable dues, fees and 

other charges because Exchange pricing 

has fallen in real terms during the 

relevant period. The Exchange also 

believes that the proposed pricing 

increases are equitably allocated and not 

unfairly discriminatory because they 

would apply uniformly to all Market 

Makers that subscribe to SQF and SQF 

Purge Ports to quote on the Exchange. 

Market Makers are the only market 

participants that are assessed SQF Port 

and SQF Purge Port fees (and subject to 

the related SQF Fee Cap) because they 

are the only market participants that are 

permitted to quote on the Exchange.18

These liquidity providers are critical 

market participants in that they are the 

only market participants that provide 

liquidity to the Exchange on a 

continuous basis. SQF Ports and SQF 

Purge Ports are only utilized in a Market 

Maker’s assigned options series. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed pricing changes will 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intra-Market Competition 

The Exchange believes that the 

proposed pricing does not put any 

market participants at a relative 

disadvantage compared to other market 

participants. As noted above, the 

Exchange would apply the proposed 4% 

increase to the SQF Port and SQF Purge 

Port fees (and related SQF Fee Cap) to 

all Market Makers uniformly. Market 

Makers are the only market participants 

that are assessed SQF Port and SQF 

Purge Port fees (and subject to the 

related SQF Fee Cap) because they are 

the only market participants that are 

permitted to quote on the Exchange. 

These liquidity providers are critical 

market participants in that they are the 

only market participants that provide 

liquidity to the Exchange on a 

continuous basis. SQF Ports and SQF 

Purge Ports are only utilized in a Market 

Maker’s assigned options series. 

Intermarket Competition 

The Exchange believes that the 

proposed pricing does not impose an 

undue burden on intermarket 

competition or on other SROs that is not 

necessary or appropriate. In determining 

the proposed pricing, the Exchange 

utilized an objective and stable metric 

with limited volatility. Utilizing Data 

PPI over a specified period of time is a 

reasonable means of recouping the 

Exchange’s investment in maintaining 

and enhancing its port offerings such as 

the SQF and SQF Purge Ports. The 

Exchange believes utilizing Data PPI, a 

tailored measure of inflation, to increase 

the fees for the SQF Port and SQF Purge 

Port (and the related SQF Fee Cap) to 

recoup the Exchange’s investment in 

maintaining and enhancing such 

offerings would not impose a burden on 

intermarket competition. 

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)(ii) of the Act.19

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 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MRX–2024–42 on the subject line. 

Paper Comments 

• 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–MRX–2024–42. 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 (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

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–MRX–2024–42 and should be 


lotter on DSK11XQN23PROD with NOTICES1
88332 Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an 

interface that allows Market Makers to connect, 

send, and receive messages related to quotes, 

Immediate-or-Cancel Orders, and auction responses 

to the Exchange. Features include the following: (1) 

options symbol directory messages (e.g., underlying 

instruments); (2) System event messages (e.g., start 

of trading hours messages and start of opening); (3) 

trading action messages (e.g., halts and resumes); (4) 

execution messages; (5) quote messages; (6) 

Immediate-or-Cancel Order messages; (7) risk 

protection triggers and purge notifications; (8) 

opening imbalance messages; (9) auction 

notifications; and (10) auction responses. Market 

Makers may only enter interest into SQF in their 

assigned options series. Immediate-or-Cancel 

Orders entered into SQF are not subject to the Order 

Price Protection, Market Order Spread Protection, 

and Size Limitation Protection in Options 3, 

Section 15(a)(1)(A), (1)(B), and (2)(B) respectively. 

See Supplementary Material .03(c) to Options 3, 

Section 7. 

4The SQF Purge Interface only receives and 

notifies of purge requests from the Market Maker. 

See Supplementary Material .03(c) to Options 3, 

Section 7. 

5The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(21). 

6See Securities Exchange Act Release No. 80808 

(May 30, 2017), 82 FR 25894 (June 5, 2017) (SR– 

GEMX–2017–20) (adopting the subject fees). The 

Exchange subsequently increased the monthly cap 

in October 2017. See Securities Exchange Act 

Release No. 81881 (October 16, 2017), 82 FR 48869 

(October 20, 2017) (SR–GEMX–2017–44). 

7 In particular, the Exchange saw an increase of 

around 14.6%–14.8% in inflation within the 

specified time periods discussed below. 

8See https://data.bls.gov/timeseries/

PCU5182105182105. 

9See https://www.bls.gov/ppi/overview.htm. 

10See id. 

submitted on or before November 29, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25834 Filed 11–6–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101501; File No. SR– 

GEMX–2024–39] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Increase the 

Exchange’s SQF Fees in Options 7, 

Section 6.C 

November 1, 2024. 

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 October 

18, 2024, Nasdaq GEMX, LLC (‘‘GEMX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to increase 

the Exchange’s port fees in Options 7, 

Section 6.C. While these amendments 

are effective upon filing, the Exchange 

has designated the proposed 

amendments to be operative on January 

1, 2025. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

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 

The purpose of the proposed rule 

change is to increase the Exchange’s 

connectivity fees in Options 7, Section 

6.C for the Specialized Quote Feed 

(‘‘SQF’’) Ports 3 and SQF Purge Ports 4

by 10%. 

Options 7, Section 6.C(i) includes the 

Exchange’s fees that relate to the SQF 

Ports and SQF Purge Ports that Market 

Makers 5 use to connect to the Exchange. 

Today, the Exchange assesses all Market 

Makers an SQF Port fee of $1,250 per 

port per month and an SQF Purge Port 

Fee of $1,250 per port per month. In 

addition, the SQF and the SQF Purge 

Ports are currently subject to a monthly 

cap (‘‘SQF Fee Cap’’) of $17,500, which 

is applicable to Market Makers. The 

Exchange now proposes to increase the 

foregoing pricing by 10%. As amended, 

the SQF Port and SQF Purge Port fees 

would each become $1,375 per port per 

month. The amended SQF Fee Cap 

would likewise increase by 10% to 

$19,250. 

The proposed pricing increases would 

enable the Exchange to maintain and 

improve its market technology and 

services to remain competitive with its 

peers. Over the years, customer demand 

for risk protections and capacity has 

increased. The Exchange continues to 

invest in maintaining, improving, and 

enhancing its protocols like SQF Ports 

and SQF Purge Ports for the benefit and 

often at the behest of its customers. 

Such enhancements include refreshing 

hardware, upgrading risk protections 

and information security, and offering 

customers additional capacity. 

Nevertheless, the Exchange has not 

increased the fees for SQF Ports and 

SQF Purge Ports, or the SQF Fee Cap, 

since 2017 6 (where inflation has been 

roughly 15%, as measured using the 

metric described below).7 Nevertheless, 

the Exchange proposes to increase its 

SQF and SQF Purge Port fees by only 

10%. Further, the Exchange proposes to 

increase the SQF Fee Cap by 10% to 

align with the foregoing fee increases. 

As discussed below, the Exchange 

proposes to adjust its pricing by an 

industry- and product-specific 

inflationary measure. It is reasonable 

and consistent with the Act for the 

Exchange to recoup its investments, at 

least in part, by adjusting its pricing. 

Continuing to operate at pricing frozen 

at 2017 levels impacts the Exchange’s 

ability to enhance its offerings and the 

interests of market participants and 

investors. 

The pricing increases the Exchange 

proposes are based on an industryspecific Producer Price Index (‘‘PPI’’), 

which is a tailored measure of 

inflation.8 As a general matter, the 

Producer Price Index is a family of 

indexes that measures the average 

change over time in selling prices 

received by domestic producers of 

goods and services. PPI measures price 

change from the perspective of the 

seller. This contrasts with other metrics, 

such as the Consumer Price Index 

(‘‘CPI’’), that measure price change from 

the purchaser’s perspective.9 About 

10,000 PPIs for individual products and 

groups of products are tracked and 

released each month.10 PPIs are 

available for the output of nearly all 

industries in the goods-producing 

sectors of the U.S. economy—mining, 

manufacturing, agriculture, fishing, and 

forestry—as well as natural gas, 


lotter on DSK11XQN23PROD with NOTICES1