SEC公告Nasdaq ISE修订期权做市商风控规则：取消ISE与GEMX间跨市场减速带(Kill Switch/MWSB)联动

8011-01-P
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106651; File No. SR-ISE-2026-54]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Amend Market-Wide Speed Bump and Kill
Switch
October 13, 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 October 1, 2026, Nasdaq ISE, LLC (“ISE” or
“Exchange”) filed with the Securities and Exchange Commission (“SEC” or “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 the Market-Wide Speed Bump and the Kill Switch.
The text of the proposed rule change is available on the Exchange’s Website at

https://listingcenter.nasdaq.com/rulebook/ise/rulefilings, and at the principal office of the
Exchange.
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

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

17 CFR 240.19b-4.

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 Exchange proposes to amend the Market-Wide Speed Bump at Options 3, Section
15(a)(3)(B)(vii) and the Kill Switch at Options 3, Section 17 to eliminate the existing crossmarket functionality between ISE and its affiliate, Nasdaq GEMX, LLC (“GEMX”).
Background
The Market-Wide Speed Bump (“MWSB”) is a Market Maker risk protection under
Options 3, Section 15(a)(3)(B)(vii). This protection provides Market Makers a market wide
parameter by which the Exchange will automatically remove the Market Maker’s quotes in all
classes when, during a time period established by the Market Maker, the total number of quote
removal events specified in Options 3, Section 15(a)(3)(B)(i)(a)-(d) and (B)(2) exceeds the
market wide parameter provided by the Market Maker to the Exchange.
The Kill Switch, set forth in Options 3, Section 17, enables Members to initiate a
message to the System to promptly cancel all existing orders and restrict entry of additional
orders across their FIX,3 OTTO4 and Precise5 order entry protocols. Members may submit a Kill

“Financial Information eXchange” or “FIX” is an interface that allows Members and their Sponsored
Customers to connect, send, and receive messages related to orders and auction orders and responses to and
from the Exchange. Features include the following: (1) execution messages; (2) order messages; (3) risk
protection triggers and cancel notifications; and (4) post trade allocation messages. See Supplementary
Material .03(a) to Options 3, Section 7.

“Ouch to Trade Options” or “OTTO” is an interface that allows Members and their Sponsored Customers
to connect, send, and receive messages related to orders, auction orders, and auction responses to and from
the Exchange. Features include the following: (1) options symbol directory messages (e.g., underlying and
complex 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) order
messages; (6) risk protection triggers and cancel notifications; (7) auction notifications; (8) auction
responses; and (9) post trade allocation messages. See Supplementary Material .03(b) to Options 3, Section
7.

“Nasdaq Precise” or “Precise” is a front-end interface that allows Electronic Access Members and their
Sponsored Customers to send orders to the Exchange and perform other related functions. Features include
the following: (1) order and execution management: enter, modify, and cancel orders on the Exchange, and
manage executions (e.g., parent/child orders, inactive orders, and post-trade allocations); (2) market data:
access to real-time market data (e.g., NBBO and Exchange BBO); (3) risk management: set customizable

Switch request to the System for certain identifier(s) on a user level, and the System will send an
automated message to the Member when a Kill Switch request has been processed by the
Exchange’s System.
Currently, the MWSB permits Market Makers to request the Exchange to set the market
wide parameter for the MWSB to apply either to just ISE or across both ISE and GEMX.
Similarly, the Kill Switch currently permits Members to elect to have the Kill Switch cancel and
restrict their order activity either on ISE or across both ISE and GEMX. Where a Market Maker
or Member elects to apply the protection across both markets, a breach of the market wide
parameter under the MWSB, or a Kill Switch request, results in the corresponding action being
taken on both ISE and GEMX.
Of the Nasdaq affiliated options exchanges,6 only ISE and GEMX currently offer MWSB
and Kill Switch functionality that may be applied on a cross-market basis; MRX7 offers MWSB
on a per-exchange basis only and MRX, Phlx, NTX Options, and NOM offer a Kill Switch
protection on a per-exchange basis only.
Proposal
The Exchange has determined to harmonize the MWSB and Kill Switch functionality
across the Nasdaq affiliated options exchanges, where applicable. Because the comparable
protections, as applicable, on MRX, Phlx, NTX Options, and NOM operate on a per-exchange
basis only, harmonization supports removing the cross-market functionality currently available

risk parameters (e.g., kill switch); and (4) book keeping and reporting: comprehensive audit trail of orders
and trades (e.g., order history and done away trade reports). See Supplementary Material .03(b) to Options
3, Section 7.
ISE has five affiliated options exchanges, GEMX; Nasdaq MRX, LLC (“MRX”); Nasdaq PHLX LLC
(“Phlx”); Nasdaq Texas, LLC (“NTX Options”); and The Nasdaq Options Market, LLC (“NOM”).

Phlx, NTX Options and NOM do not offer MWSB.

between ISE8 and GEMX.9 The Exchange accordingly proposes to amend the MWSB at
Options 3, Section 15(a)(3)(B)(vii) to delete the sentence that presently permits Market Makers
to request the Exchange to set the market wide parameter to apply across ISE and GEMX, and to
amend the Kill Switch at Options 3, Section 17(a) and (a)(1) to delete the references that
presently permit Members to elect cross-market application of the Kill Switch. Nasdaq GEMX
will file a companion rule change to make conforming amendments to its MWSB and Kill
Switch.
Following the proposed amendments, all Market Makers will apply MWSB parameters
on a per-exchange basis on ISE, and all Members will apply Kill Switch requests on a perexchange basis on ISE. GEMX separately offers a MWSB rule at GEMX Options 3, Section
15(a)(3)(B)(vii) and a Kill Switch rule at GEMX Options 3, Section 17, in each case on a perexchange basis. Market Makers and Members will retain the ability to configure separate risk
parameters and to submit separate Kill Switch requests for each Nasdaq affiliated options
exchange on which they are authorized to trade.
Implementation
The Exchange will announce the operative date of the proposed rule change in an Options
Trader Alert. The Exchange will implement the change on or before Q2 2027.
2.

Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act,10 in

See Securities Exchange Act Release No. 87412 (October 29, 2019), 84 FR 59423 (November 4, 2019)
(SR-ISE-2019-29) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Options 3, Section 17, the Exchange’s Kill Switch Risk Protection). See also Securities Exchange Act
Release No. 73147 (September 19, 2014), 79 FR 57639 September 25, 2014) (SR-ISE-2014-09) (Order
Approving Proposed Rule Change Related to Market Maker Risk Parameters).

See Securities Exchange Act Release No. 87413 (October 29, 2019), 84 FR 59428 (November 4, 2019)
(SR-GEMX-2019-15) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Options 3, Section 17, the Exchange’s Kill Switch Risk Protection). See also Securities Exchange Act
Release No. 77488 (March 31, 2016), 81 FR 20021 (April 6, 2016) (SR-ISE-2014-09) (Notice of Filing of
Proposed Rule Change Related to Market Wide Risk Protection).

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

general, and furthers the objectives of Section 6(b)(5) of the Act,11 in particular, in that it is
designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a free and open market and a
national market system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is consistent with the Section
(6)(b)(5)12 requirement that the rules of an exchange not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
The Exchange believes that harmonizing the MWSB and Kill Switch functionality across
the Nasdaq affiliated options exchanges, as applicable, will remove impediments to and perfect
the mechanism of a free and open market and a national market system by promoting consistent,
transparent, and predictable risk-management functionality for Market Makers and Members that
access more than one Nasdaq affiliated options exchange. Today, Market Makers and Members
that trade across the Nasdaq affiliated options exchanges must understand and administer two
different models for these protections: (i) a per-exchange model on MRX for MWCB and Kill
Switch and a per-exchange model on MRX, Phlx, NTX Options, and NOM for Kill Switch, and
(ii) a hybrid model on ISE and GEMX that permits, but does not require, cross-market election
for these two risk protections. The Exchange believes that this differential treatment is a source
of operational complexity that does not correspond to any material difference in the underlying
risk protection provided. Aligning ISE with the per-exchange model reduces the risk of Market
Maker or Member confusion or inadvertent misconfiguration when establishing MWSB
parameters or submitting Kill Switch requests across markets.

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

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

The Exchange further believes that the proposed rule change will protect investors and
the public interest by preserving the substantive risk protection provided by the MWSB and the
Kill Switch on ISE. All Market Makers will remain subject to the mandatory MWSB
requirement on ISE, and all Members will retain the ability to submit Kill Switch requests on
ISE. Market Makers will continue to have discretion to establish their own parameters, subject to
Exchange-established minimum and maximum time periods and default values. Members will
continue to be able to submit Kill Switch requests for certain Identifier(s) on a user level and will
continue to receive an automated message from the System when a Kill Switch request has been
processed. The only substantive change is that a Market Maker’s MWSB parameters on ISE will
only apply to that Market Maker’s activity on ISE, and a Member’s Kill Switch request
submitted on ISE will only apply to that Member’s activity on ISE, in each case without
aggregation with activity on GEMX. Market Makers and Members that wish to apply the
corresponding protections to their activity on GEMX will continue to do so pursuant to GEMX
Options 3, Section 15(a)(3)(B)(vii) (MWSB) and GEMX Options 3, Section 17 (Kill Switch).
Removing these elections in the interest of harmonization is likewise consistent with the
Act. Cross-market application of the MWSB and Kill Switch on ISE and GEMX is an available
feature that Market Makers and Members elect (or decline) to use; withdrawing the election does
not diminish the mandatory MWSB that applies to every ISE Market Maker or the Kill Switch
functionality that remains available to every ISE Member.
B.

Self-Regulatory Organization’s Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will impose any burden on
competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on
intra-market competition because no Market Maker or Member will be disadvantaged relative to
any other Market Maker or Member as a result of the proposed change. Further, Market Makers

and Members that wish to obtain aggregated risk protection across multiple exchanges may
continue to configure their own risk-management systems to that effect.
The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition. Rather, removing the cross-market election will bring ISE into greater
alignment with the risk-protection framework generally available in the U.S. listed options
markets and will harmonize the Exchange’s MWSB and Kill Switch with those of the other
Nasdaq affiliated options exchanges, as applicable.
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
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 Act13 and subparagraph (f)(6) of Rule 19b-4 thereunder.14
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 necessary or appropriate in the public interest, for the protection of investors, or
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

15 U.S.C. 78s(b)(3)(A)(iii).

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.

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-ISE2026-54 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-ISE-2026-54. 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-ISE-2026-54 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.15

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21130 Filed: 10/15/2026 8:45 am; Publication Date: 10/16/2026]

17 CFR 200.30-3(a)(12).