88326 Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 

32 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

3An active port shall mean that the port was 

utilized to submit a quote to the System during a 

given month. See Options 7, Section 9, B. Today, 

Market Makers are not assessed an active SQF Port 

Fee for additional ports acquired for ten business 

days for the purpose of transitioning technology. 

The member organization is required to provide the 

Exchange with written notification of the transition 

and all additional ports, provided at no cost, will 

be removed at the end of the ten business days. See 

Options 7, Section 9, B. 

4Phlx proposes to add commas between per port 

and per month on the Pricing Schedule for the SQF 

Purge Port Fee. 

5See Securities Exchange Act Release No. 74833 

(April 29, 2015), 80 FR 25749 (May 5, 2015) (SR– 

Phlx–2015–36). 

6See Securities Exchange Act Release No. 77613 

(April 13, 2016), 81 FR 23023 (April 19, 2016) (SR– 

Phlx–2016–45). 

7See https://data.bls.gov/timeseries/

PCU5182105182105. 

8See https://www.bls.gov/ppi/overview.htm. 

9See Id. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25837 Filed 11–6–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101498; File No. SR–Phlx– 

2024–55] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 7, 

Section 9 

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 PHLX LLC (‘‘Phlx’’ 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 amend 

Options 7, Section 9. 

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/phlx/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 amend the Exchange’s SQF 

Port Fee and SQF Purge Port Fee. 

Specifically, the Exchange proposes to 

raise its SQF Port Fee and SQF Purge 

Port Fee in Options 7, Section 9, B by 

10%. 

Today, Phlx assesses $1,250 per port, 

per month up to a maximum of $42,000 

per month for an SQF Port that receives 

inbound quotes at any time within that 

month.3 With this proposal, Phlx would 

assess Market Makers $1,375 per port, 

per month (a 10% increase from $1,250) 

up to a maximum of $46,200 per month 

(a 10% increase from $42,000). Also, 

today, Phlx assesses $500 per port, per 

month for each of the first 5 SQF Purge 

Ports and $100 per port, per month for 

each port thereafter. With this proposal, 

Phlx would assess Market Makers $550 

per port, per month for each of the first 

5 SQF Purge Ports (a 10% increase from 

$500) and $110 per port, per month for 

each port thereafter (a 10% increase 

from $100).4

The proposed SQF Port Fee and SQF 

Purge Port Fee 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 port protocols—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. The 

Exchange has not increased Phlx’s SQF 

Port Fee since 2015,5 and has not 

increased its SQF Purge Port Fee since 

2016 6 where inflation has been between 

roughly 15%–16%, as measured using 

the metric described below. 

Nevertheless, the Exchange proposes to 

increase its SQF Port Fee by 10%, only 

with respect to inflation that has 

occurred since 2015, and its SQF Purge 

Port Fee by 10%, only with respect to 

inflation that has occurred since 2016. 

Further, the Exchange also proposes to 

increase the maximum monthly fee that 

may be assessed for an SQF Port by 10% 

so as to align with the increase to the 

SQF Port Fee. 

As discussed below, the Exchange 

proposes to adjust its fees 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 fees. 

Continuing to operate at fees frozen at 

2015 and 2016 levels, respectively, 

impacts the Exchange’s ability to 

enhance its offerings and the interests of 

market participants and investors. 

The fee increases the Exchange 

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

which is a tailored measure of 

inflation.7 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.8 About 

10,000 PPIs for individual products and 

groups of products are tracked and 

released each month.9 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, Activer Server Pages, and 

Other IT Infrastructure Provisioning 

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

Processing and Related Services 

Industry, which is an industry netoutput PPI that measures the average 


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Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 88327 

10See https://data.bls.gov/timeseries/

PCU5182105182105. 

11See https://www.bls.gov/ppi/factsheets/ 

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

12See https://www.usinflationcalculator.com/. 

13See 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). 

14 15 U.S.C. 78f(b). 

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

16See https://www.officialdata.org/us/inflation/

2015?amount=1. 

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

2015?amount=1. 

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.10

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.’’ 11

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 rule change to modify 

the SQF Port Fee and the SQF Purge 

Port Fee because the Exchange uses its 

‘‘proprietary software,’’ i.e., its own 

proprietary matching engine software, 

respectively, to receive options quotes 

on the Exchange’s proprietary trading 

platform. 

For purposes of this proposed rule 

change, with respect to the SQF Port 

Fee, the Exchange examined the Data 

PPI value for the period from April 2015 

to August 2024. The Data PPI had a 

starting value of 101.0 in April 2015 and 

an ending value of 116.445 in August 

2024, a 15.29% increase. For purposes 

of this proposed rule change, with 

respect to the SQF Purge Port Fee, the 

Exchange examined the Data PPI value 

for the period from April 2016 to August 

2024. The Data PPI had a starting value 

of 100.4 in April 2016 and an ending 

value of 116.445 in August 2024, a 

15.98% 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 15.29% and 

15.98%, respectively, during this 

period. Based on that percentage 

change, the Exchange proposes to make 

a one-time fee increase of only 10%, 

which reflects an increase covering 

roughly the entire period since the last 

price adjustment to the SQF Port Fee 

and the SQF Purge Port Fee was made. 

Additionally, the Exchange proposes to 

increase the maximum monthly fee that 

may be assessed for an SQF Port by 10% 

so as to align with the increase to the 

SQF Port Fee. 

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.12

The Exchange believes the Data PPI, 

and significant investments into, and 

enhanced performance of, the Exchange 

support the reasonableness of the 

proposed fee increases.13

As a technical amendment, the 

Exchange proposes to add the words 

‘‘active port’’ in parenthesis at the end 

of the description of the SQF Port Fee 

to tie the definition of an active port to 

the description for the port. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,14 in general, and furthers the 

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

of the Act,15 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 fees do not properly 

reflect the quality of the SQF Ports and 

SQF Purge Ports, as the SQF Port Fee 

and SQF Purge Port Fee has 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 Ports and SQF 

Purge Ports has increased the 

performance of these ports. 

The Proposed Rule Change Is 

Reasonable 

As noted above, the Exchange has not 

increased any of the fees included in the 

proposal since 2015 and 2016, 

respectively. 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 2015 and 2024, the inflation 

rate is 3.22% per year, on average, 

producing a cumulative inflation rate of 

33.03%.16 Also, between 2016 and 

2024, the inflation rate is 3.47% per 

year, on average, producing a 

cumulative inflation rate of 31.37%.17

Using the more targeted inflation 

number of Data PPI, the cumulative 

inflation rate was 15.29% between 2015 

and 2024, and 15.98% between 2016 

and 2024. 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 protocols. 

Notwithstanding inflation, as noted 

above, the Exchange has not increased 


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88328 Federal Register / Vol. 89, No. 216 / Thursday, November 7, 2024 / Notices 

18Unlike other market participants, Market 

Makers are subject to market making and quoting 

obligations. See Options 2, Sections 4 and 5. 

19Unlike other market participants, Market 

Makers are subject to market making and quoting 

obligations. See Options 2, Sections 4 and 5. 20 15 U.S.C. 78s(b)(3)(A)(ii). 

its fees at all for over eight and nine 

years, respectively, for the subject 

services. The proposed SQF Port Fee 

and SQF Purge Port Fee represent a 

modest increase from the current SQF 

Port Fee and SQF Purge Port Fee. 

Further, the proposed increase to the 

maximum monthly fee for an SQF Port 

aligns with the increase to the SQF Port 

Fee. The Exchange believes the 

proposed SQF Port Fee and SQF Purge 

Port 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 Ports and SQF 

Purge Ports. 

The Proposed Fees Are Equitably 

Allocated and Not Unfairly 

Discriminatory 

The Exchange also believes that the 

proposed fee increases are equitably 

allocated and not unfairly 

discriminatory because they would 

apply to all Market Makers uniformly. 

Market Makers are the only market 

participants that are assessed the SQF 

Port Fee and SQF Purge Port Fee 

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. The 

Exchange believes that the proposed fee 

increases are equitably allocated and not 

unfairly discriminatory because they 

would apply uniformly to all Market 

Makers that subscribe to SQF Ports and 

SQF Purge Ports to quote on the 

Exchange. The Exchange also believes 

that the proposal represents an equitable 

allocation of reasonable dues, fees and 

other charges because Exchange fees 

have fallen in real terms during the 

relevant period. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed fees will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intramarket Competition 

The Exchange believes that the 

proposed fees do not impose an undue 

burden on intramarket competition 

because they would apply to all Market 

Makers uniformly. Market Makers are 

the only market participants that are 

assessed an SQF Port Fee and an SQF 

Purge Port Fee because they are the only 

market participants that are permitted to 

quote on the Exchange.19 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. The 

Exchange believes that the proposed fee 

increases are equitably allocated and not 

unfairly discriminatory because they 

would apply uniformly to all Market 

Makers that subscribe to SQF Ports and 

SQF Purge Ports to quote on the 

Exchange. 

Intermarket Competition 

The Exchange believes that the 

proposed fees do not impose an undue 

burden on intermarket competition or 

on other SROs that is not necessary or 

appropriate. In determining the 

proposed fees, 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 SQF Ports and SQF Purge 

Ports. The Exchange believes utilizing 

Data PPI, a tailored measure of inflation, 

to increase the SQF Port Fee and SQF 

Purge Port Fee to recoup the Exchange’s 

investment in maintaining and 

enhancing SQF Ports and SQF Purge 

Ports does not impose a burden on 

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.20

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– 

Phlx–2024–55 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–Phlx–2024–55. 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, 


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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