Statement Summary
The Securities and Exchange Commission (SEC) has received a proposal from Nasdaq GEMX, LLC to discontinue the Options Regulatory Fee (ORF) model planned for implementation in June 2025. This decision comes after feedback indicated that certain necessary information for ORF billing would not be available due to upcoming technology updates at the Options Clearing Corporation.
GEMX is re-evaluating its ORF model and may introduce a modified version which would assess fees only on on-exchange transactions, mainly targeting customers. The Exchange maintains that its ORF regulatory revenue will continue to align with its costs. The public is invited to comment on this proposed rule change, as GEMX aims to ensure a fair and consistent billing process for market participants.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102975; File No. SR-GEMX-2025-09]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Discontinue the Options Regulatory Fee Model Scheduled to Be Implemented in June 2025
May 2, 2025
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”) and Rule 19b-4 thereunder, notice is hereby given that on April 28, 2025, Nasdaq GEMX, LLC (“GEMX” or “Exchange”) filed with the Securities and Exchange Commission (the “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.
Self-Regulatory Organization’s Statement
Terms of Substance of the Proposed Rule Change
The Exchange proposes to discontinue the ORF model scheduled to be implemented in June 2025.
The text of the proposed rule change is available on the Exchange’s Website at the principal office of the Exchange, and at the Commission’s Public Reference Room.
Purpose
GEMX proposes to discontinue the ORF model scheduled to be implemented in June 2025. The Exchange received feedback from Members and SIFMA related to this ORF, noting that two fields necessary for information sharing will not be available after an upcoming technology migration at OCC. In light of this information, the Exchange plans to revamp the current process of assessing and collecting the ORF, with subject matter described in a future rule filing.
Particularly, the Exchange is exploring proposing a modified ORF model in which ORF would only be assessed to on-exchange transactions and would continue to be assessed only to customers. The Exchange expects to continue assessing ORF as it does today and will continue to ensure that ORF Regulatory Revenue does not exceed Options Regulatory Cost.
To create real ORF reform, moving to a new ORF model that only assesses a fee to transactions on the Exchange would remove any duplicative ORF billing. The Exchange believes that each exchange should adopt a similar model to ensure consistent industry billing of ORF to the benefit of market participants.
Statutory Basis
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 and, specifically, that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members. It is also believed that the proposed rule change does not permit unfair discrimination.
Burden on Competition
The Exchange does not believe that the proposed rule change will impose any burden on competition. The proposal does not create an unnecessary or inappropriate intra-market burden on competition since no Member would be subject to the June 2025 ORF as a result of this proposal.
Comments on the Proposed Rule Change
No written comments were either solicited or received.
Date of Effectiveness and Commission Action
The rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder. The Commission may temporarily suspend such rule change within 60 days of its filing if necessary for the public interest or investor protection.
Solicitation of Comments
Interested persons are invited to submit written data, views and arguments concerning the proposed rule change. Comments may be submitted electronically or via paper.
- Electronic Comments:
Use the Commission’s internet comment form or send an email to rule-comments with the file number SR-GEMX-2025-09 in the subject line. - Paper Comments:
Send 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-GEMX-2025-09. This file number should be included in email subject lines. To assist the Commission in processing your comments, please use only one method.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Sherry R. Haywood,
Assistant Secretary.
