The Securities and Exchange Commission published a notice on December 29, 2025, detailing a filing by Nasdaq MRX, LLC, a self-regulatory organization, to amend its Options Regulatory Fee structure. The proposal, effective immediately upon filing but operative from January 2, 2026, delays a previously approved change to the fee's methodology until July 1, 2026, and reduces the current fee rate in the interim. This development addresses feedback from market participants on operational readiness and accounts for increased trading volumes, ensuring that regulatory fees remain aligned with actual oversight costs. Filed under Section 19(b)(3)(A) of the Securities Exchange Act of 1934, the rule change invites public comments until January 23, 2026, highlighting ongoing efforts to balance regulatory funding with industry capabilities.
Background on Options Regulatory Fees
Options Regulatory Fees, or ORFs, are charges imposed by exchanges like Nasdaq MRX to fund the costs of supervising and regulating options trading activities. These fees are typically assessed per contract side on transactions cleared in the customer range, with the revenue supporting surveillance, investigations, and enforcement related to options markets. MRX's current ORF, set at $0.0010 per contract side, was designed to cover a subset of the exchange's overall regulatory budget specifically tied to options oversight, known as Options Regulatory Costs.
In May 2025, MRX filed SR-MRX-2025-11, which proposed shifting the ORF methodology starting January 2, 2026. Under that plan, the fee would continue to apply to customer-range transactions cleared by the Options Clearing Corporation but would be assessed directly to each MRX member based on executions occurring on the exchange. This change aimed to refine how fees are collected while maintaining revenue neutrality relative to regulatory expenses. The filing included a sunset provision allowing reversion to the prior methodology and a $0.0004 rate by February 1, 2026, if needed. However, industry developments have prompted adjustments to this timeline.
Details of the Proposed Rule Change
The current filing, SR-MRX-2025-33, seeks two main modifications. First, it postpones the implementation of the new ORF methodology outlined in SR-MRX-2025-11 from January 2, 2026, to July 1, 2026. This delay eliminates the February 1, 2026, sunset provision, removing the option to revert to the older framework. Second, effective January 2, 2026, MRX proposes lowering its existing ORF from $0.0010 to $0.0007 per contract side.
These changes are documented in the exchange's Pricing Schedule at Options 7, Section 5, C. The proposal maintains the current collection method—assessing the fee on customer-range transactions—until the delayed methodology takes effect. MRX notified participants of these adjustments via Options Trader Alert #2025-03, issued at least 30 calendar days in advance, in line with standard practices for fee changes.
Reasons for the Delay and Rate Adjustment
The primary driver for the delay stems from feedback from clearing members and other industry participants indicating insufficient readiness to adopt the new ORF model. According to the filing, this input highlighted the need for additional time to design, test, and implement necessary system changes. MRX had initially announced the methodology shift in July 2025 through Options Trader Alert #2025-33, intending to give ample preparation time. Despite this, stakeholders reported challenges in meeting the January 2026 deadline, prompting the exchange to extend the timeline by six months.
Concurrently, the rate reduction addresses a surge in options trading volumes, which would otherwise generate excess revenue under the current fee structure. The filing states that lowering the ORF to $0.0007 ensures that collections, combined with other regulatory fees and fines, do not surpass Options Regulatory Costs. This adjustment reflects MRX's commitment to equitable fee allocation, as emphasized in the proposal: 'By lowering its ORF, MRX 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.' The exchange notes that it had anticipated implementing the new methodology and rate in January but adjusted the current rate to maintain balance during the interim period.
Statutory Basis and Consistency with Securities Laws
MRX asserts that the proposal aligns with Section 6(b) of the Securities Exchange Act of 1934, particularly subsections requiring equitable allocation of reasonable fees and rules not designed to permit unfair discrimination. The delay is presented as a means to provide market participants with sufficient time for compliance, fostering fair competition without imposing undue burdens. The rate decrease is justified as a response to volume growth, ensuring fees remain reasonable and tied to actual regulatory needs.
The filing references no direct legal precedents but draws on the Act's broader framework for self-regulatory organizations to adjust fees based on operational realities. It also notes that other options exchanges may similarly amend their ORFs, suggesting the change does not create competitive imbalances. No comments were received on the proposal prior to filing, and the SEC's notice solicits input to evaluate consistency with public interest and investor protection.
Perspectives from Stakeholders
Industry participants, particularly clearing members, have expressed concerns over the technical and operational hurdles of the new methodology, viewing the delay as a pragmatic response. From the exchange's standpoint, the adjustments prevent over-collection of fees amid rising volumes, maintaining fiscal responsibility. Regulators, through the SEC's review process, will assess whether the changes adequately protect investors and promote fair markets. Critics might argue that repeated delays could signal inefficiencies in implementation planning, though the filing frames this as a collaborative adjustment. Supporters could highlight it as evidence of responsiveness to market feedback, avoiding disruptions in a high-volume trading environment.
Potential Implications
In the short term, the rate reduction may lower costs for members engaging in customer transactions, potentially encouraging higher trading activity on MRX. The delay provides breathing room for system upgrades, reducing risks of errors during transition. Over the longer term, successful implementation of the new methodology could streamline fee assessments, better aligning them with exchange-specific executions. However, if industry readiness issues persist, further postponements might erode confidence in regulatory fee reforms. The proposal underscores broader trends in options markets, where volume growth necessitates frequent fee calibrations to avoid surpluses or deficits in regulatory funding.
In summary, Nasdaq MRX's filing represents a measured response to operational and market dynamics, prioritizing equitable fee structures. As the SEC reviews comments, potential next steps include approval, suspension, or modifications based on feedback. Ongoing debates may center on the balance between timely regulatory innovations and practical implementation challenges, with implications for how exchanges fund oversight in evolving markets. Future adjustments could arise if volumes fluctuate or if additional industry input emerges, highlighting the adaptive nature of securities regulation.
