# SECURITIES AND EXCHANGE COMMISSION > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A38f35f2a95896ae0 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text SECURITIES AND EXCHANGE COMMISSION [Release No. 34-106260; File No. SR-TXSE-2026-026] Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Implement a Lead Market Maker Program on the Exchange September 2, 2026. 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 September 1, 2026, Texas Stock Exchange LLC (the “Exchange” or “TXSE”) filed with the Securities and Exchange Commission (“SEC” or “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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (“Commission”) a proposed rule change to implement an LMM Program on the Exchange. The text of the proposed rule change is available on the Commission’s website (https://www.sec.gov/rules/sro.shtml) at the Exchange’s website (https://www.txse.com/regulations/rules-filings), and at the principal office of the Exchange. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt rules related to its Lead Market Maker Program under Rule 11.024, which is currently reserved. The proposed rules are substantively very similar to the equivalent rules of another exchange.3 Proposed Rule 11.024 would provide the framework for an LMM Program designed to encourage selected registered Market Makers4 to make additional, measurable market-quality commitments in exchange-traded products (“ETPs”) listed by TXSE. The proposal establishes the program’s governance and participation framework. LMM incentives and performance thresholds and objective Minimum Performance Standards will be set forth in a separate filing before the program is implemented. Definitions Proposed Rule 11.024(a) would define an “ETP” as a security listed pursuant to Chapter 3 See Cboe BZX Exchange, Inc. Rule 11.8(e). See Securities Exchange Act Release No. 72020 (Apr. 25, 2014), 79 FR 24807 (May 1, 2014) (SR-BATS-2014-015) (the “BATS Filing”). 4 As defined in Rule 16.002(a)(15), the term “Market Maker” means a dealer that, with respect to a security, holds itself out (by entering quotations into the Exchange) as being willing to buy and sell such security for its own account on a regular and continuous basis and that is registered as such. 2 17. An “LMM” would be a Market Maker registered with the Exchange for a particular LMM Security that has committed to maintain the applicable Minimum Performance Standards. An “LMM Security” would be an ETP that has an LMM. “Minimum Performance Standards” would mean a set of standards applicable to an LMM that may be determined from time to time by the Exchange. Such standards will vary between LMM Securities depending on the applicable listing tier, liquidity, and volatility of the LMM Security in which the LMM is registered. The Minimum Performance Standards are memorialized in the Exchange’s fee schedule. Lead Market Makers Under proposed Rule 11.024(b)(1), the Exchange would select LMMs using factors including experience making markets in the applicable security type, adequacy of capital, willingness to promote the Exchange as a marketplace, issuer preference, operational capacity, support personnel, and adherence to Exchange rules and the federal securities laws. These are non-exclusive factors and no single factor would be dispositive. The Exchange would apply the factors in a manner consistent with the Act and the Exchange’s rules. Proposed Rule 11.024(b)(2) would permit the Exchange to limit the number of LMMs in a security and to modify a previously established limit upon prior written notice to Members. Minimum Performance Standards are provided in the Exchange’s fee schedule and any applicable fees and rebates will be calculated based on the Exchange’s fee schedule. If an LMM fails the Minimum Performance Standards for two consecutive months, the LMM would be subject, in the Exchange’s discretion, to forfeiture of its LMM status in that LMM Security. For purposes of the proposed rule, failure of the Minimum Performance Standards occurs when an LMM fails to meet at least half of the applicable Minimum Performance Standards for a calendar month. The two-consecutive-month standard is shorter than the three-out-of-four-month standard 3 in the original BATS program and is intended to prevent a persistently underperforming LMM from retaining a preferred designation. An LMM seeking to withdraw from an LMM Security would provide 30 days’ written notice, unless it is also withdrawing its Market Maker registration in the security. This separate notice period is designed to allow the Exchange to manage reassignment and reduce the risk of a gap in LMM coverage, while existing Rule 11.017 would continue to govern withdrawal of the underlying Market Maker security registration. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, in general, and furthers the objectives of Section 6(b)(5) of the Act, in particular, in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, protect investors and the public interest, and avoid unfair discrimination among customers, issuers, brokers, and dealers. The proposed LMM Program is designed to improve quoting and displayed liquidity in TXSE-listed ETPs by linking any LMM pricing benefit to measurable standards that will be publicly filed. Registration as a Market Maker is available to Members satisfying the Exchange’s existing qualification requirements, and eligible Market Makers may become an LMM and seek LMM assignments. The selection factors are reasonably related to the ability to make markets reliably and comply with regulatory obligations. These are non-exclusive factors and no single factor would be dispositive. The proposal also includes safeguards against preferential treatment without performance. An LMM that fails the Minimum Performance Standards for two months may result in loss of LMM status. The 30-day withdrawal notice requirement supports continuity in 4 liquidity provisioning on the Exchange. The separate fee filing will address the reasonable and equitable allocation of any LMM fees, credits, or rebates and will specify the performance measures needed to evaluate whether an LMM qualifies for those economics. For these reasons, the Exchange believes that the proposed changes do not raise any new or novel material issues that have not already been considered by the Commission in connection with the LMM Program offered by the Exchange and comparable liquidity provisioning programs on other national securities exchanges. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposal will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the proposal is a competitive response to similar programs on other exchanges. Any Member that satisfies the Exchange’s Market Maker requirements may seek an LMM assignment. The Exchange will select LMMs using disclosed factors tied to capacity, experience, compliance, issuer preference, and the needs of the market. Although the Exchange may limit the number of LMMs in a security, a limit is reasonably designed to maintain meaningful responsibility and will be subject to prior written notice. The applicable Minimum Performance Standards and economics will be filed publicly and will apply on the same terms to similarly situated LMMs. The Exchange does not believe the proposal will impose an unnecessary or inappropriate burden on intermarket competition. The proposal is a competitive response to liquidity provisioning programs at other listing exchanges and is designed to improve TXSE’s ability to compete for ETP listings and order flow. Competing exchanges may maintain or adopt comparable programs. To the extent the proposal improves market quality in TXSE-listed ETPs, the resulting competition among listing venues may benefit issuers and investors. 5 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others The Exchange neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act5 and subparagraph (f)(6) of Rule 19b-4 thereunder.6 A proposed rule change filed under Rule 19b-4(f)(6)7 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b 4(f)(6)(iii),8 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative upon filing. The Exchange notes that the upcoming launch of its ETP listing business and the associated LMM Program are widely known to be occurring among the industry and market maker community and that participation in the LMM Program is open to all Members. The Exchange states that waiver of the 30-day operative delay would allow the Exchange to adopt its LMM Program and to submit the 5 15 U.S.C. 78s(b)(3)(A)(iii). 6 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 7 17 CFR 240.19b-4(f)(6). 8 17 CFR 240.19b-4(f)(6)(iii). 6 associated fee filing as soon as possible, allowing the Exchange to have the LMM Program in place for the launch of its ETP listing business in September. In addition, the proposed rule change is substantively similar to the rules of another national securities exchange.9 For these foregoing reasons the Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.10 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further 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-TXSE-2026-026 on the subject line. 9 See supra note 3. 10 For purposes only of waiver the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 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-TXSE-2026-026. 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 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-TXSE-2026-026 and should be submitted on or before [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Sherry R. Haywood, Assistant Secretary. 11 17 CFR 200.30-3(a)(12). 8 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A38f35f2a95896ae0. Public record. Not legal advice.