Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified and Superseded by Amendment No. 1, To Adopt Extended Trading Hours for Eligible Equity and Index Options

SECURITIES AND EXCHANGE COMMISSION [Release No. 34-105785; File No. SR-MRX-2026-11] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified and Superseded by Amendment No. 1, To Adopt Extended Trading Hours for Eligible Equity and Index Options June 26, 2026. I. Introduction On March 19, 2026, Nasdaq MRX, LLC (“MRX” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)  1 and Rule 19b-4 thereunder, 2 a proposed rule change to allow for extended trading sessions of certain index options and eligible equity options. The proposed rule change was published for comment in the Federal Register on March 31, 2026. 3 On May 12, 2026, pursuant to Section 19(b)(2) of the Act, 4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. 5 On June 12, 2026, the Exchange filed Amendment No. 1 to the proposed rule change, which amended and superseded the original proposed rule change in its entirety. 6 The Commission is publishing this notice and order to solicit comment on Amendment No. 1 in Sections II and III below, which sections are being published verbatim as filed by the Exchange, and to approve the proposed rule change, as modified and superseded by Amendment No. 1, on an accelerated basis. 1  15 U.S.C. 78s(b)(1). 2  17 CFR 240.19b-4. 3   See Securities Exchange Act Release No. 105097 (Mar. 26, 2026), 91 FR 16066. 4  15 U.S.C. 78s(b)(2). 5   See Securities Exchange Act Release No. 105452, 91 FR 27995 (May 15, 2026). The Commission designated June 29, 2026, as the date by which the Commission shall approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change. See id. 6  The full text of Amendment No. 1 can be found on the Commission's website at https://www.sec.gov/comments/SR-MRX-2026-11/srmrx202611-818280-2493511.pdf. II. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to adopt extended trading hours to allow for the trading of certain eligible index options and equity options, and make related conforming changes. The Exchange initially submitted this rule filing on March 19, 2026 (the “Initial Filing”). 7 This Amendment No. 1 supersedes the Initial Filing and replaces it in its entirety. This Amendment No. 1 provides additional support for the proposal and also adds to the proposal by: (1) detailing the selection and removal process for equity options for extended trading hours, including the semiannual review process for equity option eligibility and designation for extended trading hours, (2) limiting stop orders and stock-tied complex orders during extended trading hours, (3) modifying the opening process trigger, (4) specifying how orders may be designated for participation during which trading hours, (5) describing the application of market maker appointments, opening process quoting obligations, continuous quoting obligations, and participation entitlements during extended trading hours, and (6) including references to equity options in the proposed extended trading hours disclosures. 7   See Securities Exchange Act Release No. 105097 (March 26, 2026), 91 FR 16066 (March 31, 2026) (SR-MRX-2026-11). The text of the proposed rule change is available on the Exchange's website at https://listingcenter.nasdaq.com/rulebook/mrx/rulefilings, and at the principal office of the Exchange. III. 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 Exchange proposes to amend its rules to adopt extended trading hours (“Extended Trading Hours” or “ETH”) for certain eligible index options and equity options, and to make related conforming changes. Specifically for index options, the Exchange proposes to allow for ETH trading of NDX, 8 NDXP, 9 and XND  10 options during ETH. For equity ( e.g., stock and ETF) options, the Exchange proposes to allow for ETH trading of multi-listed equity options that meet certain eligibility criteria based on quantitative metrics like trading volume and market capitalization, which are designed to limit eligibility to actively traded and liquid products. As discussed in detail below, Extended Trading Hours will consist of: 8  NDX options refers to a.m.-settled options on the Nasdaq-100 Index. 9  NDXP options refers to p.m.-settled options on the Nasdaq-100 Index. 10  XND options refers to options that are based on 1/100 the value of the Nasdaq-100 Index. • An early ETH session (“Early ETH Session”) from 7:30 a.m. Eastern Time  11 to 9:25 a.m.; and 11  All times in this filing are Eastern Time unless otherwise noted. • An extended close (“Extended Close”) where trading in certain eligible option classes will extend beyond 4:00 p.m. to 4:15 p.m. Background Currently, options transactions may be made on the Exchange from 9:30 a.m. through 4:00 p.m. or 4:15 p.m. 12 (9:30 a.m. through 4:00 p.m. or 4:15 p.m., as applicable, will be referred to as “Regular Trading Hours” or “RTH”). Regular Trading Hours are consistent with the regular trading hours of other U.S. options exchanges and U.S. equity exchanges. However, many U.S. equity exchanges and certain other U.S. options exchanges, including Cboe Exchange, Inc. (“Cboe”), presently allow for trading outside of Regular Trading Hours as well. 13 12   See Options 3, Section 1. 13  For example, The Nasdaq Stock Exchange LLC (“Nasdaq”) currently allows for a Pre-Market Hours session from 4:00 a.m. to 9:30 a.m. and a Post-Market Hours session from 4:00 p.m. until 8:00 p.m. See Nasdaq Equity 1, Section 1(a)(9). Cboe BZX Exchange, Inc. (“BZX”) also allows for an Early Trading Session from 4:00 a.m. to 8:00 a.m., a Pre-Opening Session from 8:00 a.m. to 9:30 a.m., and an After Hours Trading Session from 4:00 p.m. through 8:00 p.m. See BZX Rule 1.5(c), (r), and (ff). Additionally, Cboe currently allows for the trading of certain index options during Global Trading Hours from 8:15 p.m. (previous day) to 9:25 a.m. and during Curb Trading Hours from 4:15 p.m. to 5:00 p.m. See Cboe Rule 5.1(c) and (d). Cboe also recently received approval for its proposal to allow for the trading of certain eligible multi-listed equity options during Global Trading Hours and Curb Trading Hours. See Securities Exchange Act Release No. 105569 (May 28, 2026), 91 FR 33005 (June 2, 2026) (SR-CBOE-2025-079). Further, Cboe C2 Exchange, Inc. (“C2”) currently allows for the trading of certain index options during Global Trading Hours from 8:30 a.m. to 9:15 a.m. See C2 Rule 5.1(c). The Exchange believes there is investor demand for trading equity options and index options outside of RTH. As noted above, many U.S. equity exchanges allow for trading in securities before and after the regular trading hours of 9:30 a.m. to 4:00 p.m., including in stocks that comprise the Nasdaq-100 Index. 14 It is common for investors to engage in hedging and other investment strategies that involve index options and some of the stocks that comprise the underlying index, as well as investment strategies involving equity options and their underlying securities. Currently, this investment activity on the Exchange would be limited to Regular Trading Hours. Allowing certain eligible index options and equity options to participate during Extended Trading Hours would help align trading in such products to the expanded trading that already occurs for the underlying securities, and help meet investor demand to use these products outside of Regular Trading Hours. 14  As noted above, the proposed eligible index options for ETH trading, NDX, NDXP, and XND options, are all based on the Nasdaq-100 Index. Proposal To implement Extended Trading Hours, the Exchange proposes to adopt new Options 3C (Extended Trading Hours). All rules applicable to options during Regular Trading Hours will apply to the extent possible to options during Extended Trading Hours, including, without limitation, trading rules (including the Exchange's various auction mechanisms, risk controls, and price protections), obvious error rules, option listing rules, Market Maker  15 requirements, and business conduct rules. All Members may (but are not required to) participate in ETH, and Members do not need to separately apply to participate during ETH. The Exchange is therefore adopting new Options 3C to address only the operational and structural differences that are unique to ETH trading while maintaining the applicability of the broader rulebook. 15  The term “Market Makers” refers to “Competitive Market Makers” and “Primary Market Makers” collectively. See Options 1, Section 1(a)(22). To reflect this concept, proposed Options 3C, Section 1(a) will provide that Options 3C rules will apply only during Extended Trading Hours. Options traded during Extended Trading Hours will be subject to all other rules applicable to options on the Exchange, including, without limitation, the trading rules, the listing rules, and business conduct rules, unless the context otherwise requires or otherwise provided in Options 3C. Proposed Section 1(b) will provide that for purposes of Options 3C, “Extended Trading Hours” or “ETH” will mean the trading hours outside of Regular Trading Hours of 9:30 a.m. ET to 4:00 p.m. (or 4:15 p.m. for certain products pursuant to Options 3, Section 1) and will cover: • the Early ETH Session, as described in Options 3C, Section 2; and • the Extended Close, as described in Options 3C, Section 2. Proposed Section 1(c) will provide that for purposes of Options 3C, the “Extended RTH Session” will include RTH and the Extended Close. The Exchange notes that the Extended Close will not be a separate trading session, but rather an extension of Regular Trading Hours. This is consistent with how certain designated ETF options are allowed to trade on the Exchange until 4:15 p.m. today. However, the Exchange will provide Members flexibility to determine which trading hours their orders will trade on the Exchange, allowing, for example, the exclusion of the Extended Close if preferred by marking their orders as RTH only. Specifically, Members will be able to mark their orders to participate as follows: (1) RTH only (9:30 a.m.-4 p.m., or 4:15 p.m. for designated ETF options), (2) Extended RTH Session (9:30 a.m.-4:15 p.m.), or (3) Early ETH Session and Extended RTH Session (7:30 a.m.-4:15 p.m.). 16 16   See proposed Options 3C, Section 4(b). Proposed Options 3C, Section 2(a) will provide that for option classes designated by the Exchange as eligible for trading pursuant to Options 3C, Section 3, the Early ETH Session will be conducted from 7:30 a.m. ET. to 9:25 a.m. ET on the business days specified in General 3, Rule 1030. 17 17  General 3, Rule 1030, which incorporates Nasdaq General 3, Rule 1030 by reference, provides that the Exchange will be open for the transaction of business days, and lists out the holidays on which the Exchange will not be open for business. Proposed Section 2(b) will provide that for option classes designated by the Exchange as eligible for trading pursuant to proposed Section 3 of Options 3C, trading will continue until 4:15 p.m. ET on the business days specified in General 3, Rule 1030. Proposed Section 2(c) will specify the interaction between the different trading sessions on holidays and shortened trading days. Proposed Section 2(c)(1) will provide that if there are no Regular Trading Hours, there will be no Early ETH Session or Extended Close. Proposed Section 2(c)(2) will provide that on a trading day with shortened Regular Trading Hours ( e.g., the Exchange is open for a half day of regular trading between 9:30 a.m. through 1 p.m.): (1) the Early ETH Session will occur prior to the shortened Regular Trading Hours; and (2) the Extended Close will commence at the end of the shortened Regular Trading Hours and continue for 15 minutes ( e.g., 1:00 p.m. to 1:15 p.m.). The Exchange recognizes that the proposed Extended Trading Hours are shorter than the extended trading hours for equities, which may commence as early as 4:00 a.m. and conclude as late as 8:00 p.m. 18 Since equity options generally will not trade unless the underlying security also trades, any trading hours outside of RTH available for equity options are limited to extended trading hours available for the underlying equities. Although ETH for equity options could mirror the extended trading hours available for the underlying equities, the Exchange proposes to limit ETH trading, and establishes trading hours for equity options that are notably shorter than the hours of extended trading for equities. The Exchange believes that the shorter Extended Trading Hours running from 7:30 a.m. to 9:25 a.m. and 4:00 p.m. to 4:15 p.m., rather than hours that align with the full extended trading hours available to the underlying equities, is appropriate because of the lack of industry experience with ETH for equity options that are physically-settled. Limiting the ETH window of time for equity options allows for a paced introduction of this new type of trading session for equity options. The limited trading hours for ETH will allow the Exchange to monitor and assess the development and functioning of ETH markets for equity options. As it relates to index options, the Exchange recognizes that the proposed Extended Trading Hours for NDX, NDXP, and XND options are notably shorter than the extended trading hours for certain index options on Cboe. 19 However, the Exchange believes that it is appropriate to align the extended trading hours for both index and equity options on its market to help ensure an orderly and measured implementation, as this is the first time the Exchange is expanding its trading hours beyond RTH. Additionally, based on numerous industry discussions and feedback from Members, the Exchange believes that the proposed timeframe for ETH for both index and equity options can be supported by Market Makers, clearing firms, and other market participants from a personnel coverage perspective. 18   See supra note 13. 19   See supra note 13. Extended Hours Trading will allow market participants to engage in trading of designated index and equity options in conjunction with the trading in the underlying securities during these hours. As it relates to trading in multi-listed equity options during ETH, however, since trading in such options is a new initiative, the Exchange proposes in proposed Options 3C, Section 3(a) to limit the number of equity option classes that may be designated for ETH at 100 option classes. 20 The limit is intended to allow the Exchange to monitor and assess the development and functioning of ETH markets for equity options within a limited group of equity options initially. 20  As noted above, Cboe already allows for the trading of certain index options outside of their regular trading hours today. See supra note 13. In particular, proposed Section 3(a) will establish specific eligibility criteria for an equity option class to meet in order to be eligible for ETH trading, and will provide that the Exchange may designate as eligible for trading during ETH up to 100 multiply listed equity option classes that satisfy the following criteria for the preceding six calendar months: • the option has an average daily volume of 150,000 contracts; • the underlying equity to the option has a $50 billion market capitalization; and • the underlying equity to the option has an average daily trading volume of 10 million shares. The Exchange believes option classes with the highest anticipated demand will be eligible for trading in ETH based on the requirements established in proposed Section 3(a) and that the criteria described above will result in the listing of options in ETH having sufficient demand and liquidity to support an ETH market. 21 Furthermore, the Exchange chose criteria so as to limit the initial number of equity options eligible for ETH to those most likely to have the highest liquidity and to avoid options with underlying securities that may only have temporarily high volume or market capitalization. 21  Proposed rule text in the Initial Filing that permitted accelerated eligibility for certain equity options with underlying securities recently listed as a result of an initial public offering has been removed from this Amendment No. 1 to simplify the proposal. To determine which options are eligible and designated by the Exchange for ETH, the Exchange will identify on a semiannual basis (following each January 1 and July 1) the option classes meeting the criteria in proposed Section 3(a)(1) and select up to 100 of such option classes to be designated for trading in ETH; however, the Exchange will have discretion to determine which of the eligible option classes will be designated to trade in ETH. The Exchange will not be obligated to include all options that meet the criteria in ETH, and the number of designated equity options may be less than 100 designated option classes. Proposed Section 3(a)(2) will establish the initial process by which the Exchange would review and determine eligibility for equity option classes pursuant to proposed Section 3(a)(1). Specifically, the Exchange will use trading data from the preceding six-month period ending either June 30 or December 31 prior to the launch of equity options ETH trading. The initial list of options designated for ETH trading will be announced publicly in an Exchange notice (“ETH Exchange Notice”), and the first day of ETH trading for equity options will also be announced in the ETH Exchange Notice. 22 The Exchange will designate options for ETH trading from equity options meeting the criteria in proposed Section 3(a)(1). Following the initial selection process, the Exchange will conduct a review twice per year to reassess the list of eligible equity options using data from the preceding July 1 through December 31, and again based on data from January 1 through June 30. 23 The Exchange will designate equity options eligible for trading in ETH and publish the updated list of designated equity options via an ETH Exchange Notice following completion of a semiannual review, and newly designated option classes may begin trading on the first trading day of February and August, respectively. 22  The initial listing of equity options in ETH will be selected by the Exchange and is not subject to the listing date requirements of the semiannual review process that will occur after the launch of ETH. 23  The Exchange intends to determine options that are initially designated for ETH trading at the time of approval of this Amendment No. 1 based on the most recent 6-month review cycle and subsequently will conduct reviews semiannually commencing the next review cycle. Proposed Section 3(a)(3) further specifies the semiannual review process for the selection of equity options designated for ETH trading by detailing how option classes may be removed from the list of designated options. If an option that was previously designated for ETH trading no longer meets the criteria in proposed Section 3(a)(1) following a semiannual review, the Exchange will identify any such equity option class and provide the last day of ETH trading for each such option class in the semiannual ETH Exchange Notice. Equity options identified as no longer meeting eligibility requirements for ETH will be removed from ETH trading within 18 months of the determination that the option class no longer meets ETH eligibility criteria, and the last day of trading for any such equity option class during ETH will be communicated through the ETH Exchange Notice. Providing a notice of removal of an equity option class from ETH up to 18 months after the date the option class is determined to be no longer eligible for ETH will avoid sudden market disturbances resulting from the abrupt removal of any such option from ETH. Allowing the Exchange to determine a removal date within 18 months ensures that, except for certain longer dated series, open interest existing in the equity option class to be removed from ETH trading will have generally expired. Additionally, the 18-month period will allow for two additional semiannual review cycles during which equity options previously designated for removal may subsequently meet eligibility criteria again and consequently may continue to trade during ETH pursuant to proposed Section 3(a)(3)(C). Whereas the removal process established in proposed Section 3(a)(3)(A) is intended to provide an extended time period for the removal of equity options to avoid sudden market disruptions, the Exchange acknowledges that certain conditions, although unlikely, may warrant an acceleration of removal of an equity option class from ETH. Consequently, proposed Section 3(a)(3)(B) allows the Exchange to remove an equity option class from ETH trading prior to the announced removal date if the Exchange observes limited or no market activity in ETH for the option class. If such a condition is observed, the Exchange may remove the option class from ETH trading with at least seven days notice. The Exchange may remove the option class from ETH prior to the removal date by issuing an Exchange notice designating a new removal date for the option class from ETH. Additionally, pursuant to proposed Section 3(a)(4), the Exchange may remove any option class from ETH trading for any reason with at least 30 days notice. The Exchange expects to use such authority in limited situations, such as in response to Market Maker preference or concern regarding continued ETH trading in a particular option class or the announcement of an unusual corporate action on the underlying equity to an option class (and the effective date of such corporate action is not imminent) that could introduce confusion or uncertainty about the value of an option, thereby significantly reducing liquidity during ETH for the option class. Similarly, the Exchange may immediately remove an option class from ETH if the Exchange deems such action is necessary in the interest of investor protection or the maintenance of fair and orderly markets. For example, if a corporate action that was not previously announced on the underlying security is effective immediately and results in a substantial change to the value or composition of the underlying security (such as may be in the case of a reorganization, among others), the Exchange may immediately remove the option from ETH trading. The Exchange will provide notice of such determination as soon as practicable after the determination to remove has been made. Any option class designated for removal from ETH trading pursuant to proposed Section 3(a)(3) or (4) and that is included in the 100 multiply listed option class limit will continue to be included in the 100 option class limit until the removal date of any such option class. The Exchange may also designate as eligible for trading during ETH any equity option class that is traded on another exchange during ETH or any other extended trading hours session. 24 Any equity option designated by the Exchange as eligible for ETH trading because the option was initially traded by another exchange during ETH or any other extended trading hours session will not be counted against the 100 option class limit in proposed Section 3(a)(1). The Exchange believes that the exclusion from the 100 option class limit of such equity options initially listed for trading on another exchange during that exchange's extended trading session is appropriate for competitive as well as market protection purposes. For example, if other option exchanges adopt the Exchange's qualification criteria, the exact same list of options would be eligible for extended trading hours sessions pursuant to rules of such other exchange(s) as would be eligible under the Exchange's Rules. However, if more than 100 equity options met the eligibility criteria, the Exchange could designate up to 100 of any of the equity options that met the criteria for trading in extended trading hours sessions, and the Exchange's selection could be different than those selected by another exchange for trading in extended trading hours sessions. Additionally, it is possible that another exchange may adopt different eligibility criteria and/or select more than 100 equity option classes. In either situation in which another exchange could designate for trading equity options that differ from the equity options designated by the Exchange for ETH trading, the Exchange may list those equity options designated by another exchange and such options selected in this manner would not count towards the Exchange's 100 equity options limit for extended trading hours sessions. 25 24   See proposed Options 3C, Section 3(a)(1). 25  The Exchange is not obligated to list the same equity option classes selected by another exchange for trading in extended trading hours sessions. This provision would allow for trading in these options during extended trading hours on multiple exchanges. Options trading on multiple exchanges can encourage competition, improve market efficiencies and increase liquidity while offering investors more trading opportunities. Consequently, the Exchange believes it is appropriate to have the ability to trade options that are multiply-listed for RTH sessions, that the Exchange is permitted to list, and that may trade in extended trading hours on another exchange (through that exchange's extended trading hours rules) without impacting the administration of the Exchange's extended trading hours sessions specifically established pursuant to the Exchange's Rules. Additionally, this exclusion from the 100 option class limit is similar in structure, for example, to the rules for Short Term Options Series, which allows the Exchange to list additional option classes selected by other exchanges under their short term options rules and such selections are in addition to the 50 Short Term Option Series classes that the Exchange may select. 26 The exclusion is also in alignment with the Exchange's ability to initially list for trading options that meet the Exchange's listing requirements for continued listing and are traded on at least one other exchange. 27 26   See Supplementary Material .03(a) to Options 4, Section 5, which incorporates Nasdaq ISE, LLC (“ISE”) Supplementary Material .03(a) to Options 4, Section 5 by reference. 27   See Options 4, Section 3(b)(6), which incorporates ISE Options 4, Section 3(b)(6) by reference. Proposed Section 3(b)(1) will provide that the Exchange may designate as eligible for trading during ETH the following index options: NDX, NDXP, and XND. Proposed Section 3(b)(2) will provide that if the Exchange designates a class of index options as eligible for trading during ETH, Binary Options with the same underlying index are also deemed eligible for trading during ETH. 28 Proposed Section 3(b)(3) will provide that the Exchange will not report a value of an index underlying an index option during ETH because the value of the underlying index is not being calculated during this time. 29 The closing value of the index from the previous trading day will be available for Members that trade during ETH. However, the Exchange does not believe it would be useful or efficient to disseminate to Members the same value repeatedly at frequent intervals, as it does during Regular Trading Hours (when the index value is being updated). 30 28   See Securities Exchange Act Release No. 104966 (March 11, 2026), 91 FR 12652 (March 16, 2026) (SR-MRX-2026-05). 29   See Cboe Rule 5.1(c)(3) and (d)(3) for similar provisions. 30  ISE Options 4A, Section 3(d)(11), which the Exchange incorporates by reference, currently provides that the underlying index value for a broad-based index ( e.g., Nasdaq-100 Index) will be widely disseminated at least once every 15 seconds. This provision is superseded during ETH by proposed Options 3C, Section 3(b)(2), and thus no dissemination will occur during ETH. Proposed Section 3(c) and (d) will specify the eligible option series that would be available during ETH and how expiration day trading for those option series would be handled by the Exchange. In particular, any series in option classes eligible for ETH pursuant to proposed Options 3C, Section 3(a) and (b) that would be available during the subsequent RTH would be available during the Early ETH Session. Any series in option classes eligible for ETH pursuant to proposed Options 3C, Section 3(a) and (b) that would be available during the previous RTH would likewise be available during the Extended Close, except for expiring index options. Further, a.m.-settled index options will be available for trading through the Extended Close on the business day prior to expiration, but will not be available for trading during the Early ETH Session on their expiration date. P.M.-settled index options will be available for trading through Regular Trading Hours on their expiration date, but will not be available for trading in the Extended Close on their expiration date. Lastly, equity options will be available for trading through the Extended Close on their expiration date. Proposed Options 3C, Section 4(a) provides that the Exchange may determine to make the order types and times-in-force (“TIFs”) in Options 3, Section 7 available on a class or System  31 basis during ETH, except as otherwise specified herein. The Exchange notes that it currently has the authority to make certain order types and TIFs available on a class or System basis during RTH pursuant to Options 3, Section 7, and therefore proposes to have similar authority with respect to ETH. 31  The term “System” means the electronic system operated by the Exchange that receives and disseminates quotes, executes orders and reports transactions. See Options 1, Section 1(a)(50). Proposed Section 4(b) provides that Members may designate orders for participation in: (1) RTH only, (2) Extended RTH Session only, or (3) both the Early ETH Session and Extended RTH Session (“All Sessions”). All quotes entered during the Early ETH Session will be purged after the end of such session. As discussed in detail below, this is to allow for the System to transition over to Regular Trading Hours. The Exchange expects reduced liquidity, higher volatility, and wider spreads during ETH, particularly the Early ETH Session. Therefore, the Exchange proposes not to allow Market Orders  32 and Stop Orders  33 during the Early ETH Session, and such orders designated for participation in All Sessions will be rejected. 34 The Exchange believes it is appropriate to not allow Market Orders and Stop Orders during the Early ETH Session in order to protect customers should wide price fluctuations occur due to the potential illiquid and volatile nature of the market or other factors that could impact market activity. 35 The Exchange will allow Market Orders and Stop Orders during the Extended Close between 4:00 p.m.-4:15 p.m. as it believes this time period will be more actively quoted. The Exchange believes that market participants should have some familiarity with trading within this time frame as the Exchange already designates certain ETF and index options to trade until 4:15 p.m. today. The Exchange therefore believes that offering this flexibility for Market Orders and Stop Orders during the Extended Close is appropriate. To the extent Members do not want their Market Orders and Stop Orders to persist beyond 4:00 p.m., they may designate their orders as RTH only pursuant to proposed Options 3C, Section 4(b). 32  A Market Order is an order to buy or sell a stated number of options contracts that is to be executed at the best price obtainable when the order reaches the Exchange. Members can designate that their Market Orders not executed after a pre-established period of time, as established by the Exchange, will be cancelled back to the Member, once an options series has opened for trading. Market Orders on the order book would be immediately cancelled if an options series is halted, provided the Member designated the cancellation of Market Order. See Options 3, Section 7(a). 33  A Stop Order is an order that becomes a market order when the stop price is elected. A stop order to buy is elected when the option is bid or trades on the Exchange at, or above, the specified stop price. A stop order to sell is elected when the option is offered or trades on the Exchange at, or below, the specified stop price. A Stop Order shall be cancelled if it is immediately electable upon receipt. Stop Orders may only be entered through FIX. A Stop Order shall not be elected by a trade that is reported late or out of sequence or by a Complex Order trading with another Complex Order. See Options 3, Section 7(d). 34   See proposed Options 3, Section 4(c). As discussed above, Members may designate their orders for participation during (1) RTH only, (2) RTH and Extended Close ( i.e., Extended RTH), or (3) Early ETH Session, RTH, and Extended Close ( i.e., All Sessions). See proposed Options 3, Section 4(b). 35  Today, Cboe similarly restricts Market Orders outside of their regular trading hours. See Cboe Rule 5.6(b). The Exchange also proposes to not allow Add Liquidity Orders  36 during the Early ETH Session to align with current System functionality where Add Liquidity Orders are not allowed to participate in the RTH opening process. Otherwise, Add Liquidity Orders entered during the Early ETH Session could persist into the next trading session and participate in the RTH opening process if those orders do not execute during the Early ETH Session. Accordingly, proposed Section 4(c) will provide that Add Liquidity Orders designated for participation in All Sessions will be rejected. 36  An Add Liquidity Order is a limit order that is to be executed in whole or in part on the Exchange (i) only after being displayed on the Exchange's limit order book; and (ii) without routing any portion of the order to another market center. Members may specify whether an Add Liquidity Order shall be cancelled or re-priced to the minimum price variation above the national best bid price (for sell orders) or below the national best offer price (for buy orders) if, at the time of entry, the order (i) is executable on the Exchange; or (ii) the order is not executable on the Exchange, but would lock or cross the national best bid or offer. If at the time of entry, an Add Liquidity Order would lock or cross one or more non-displayed orders or quotes on the Exchange, the Add Liquidity Order shall be cancelled or re-priced to the minimum price variation above the best non-displayed bid price (for sell orders) or below the best non-displayed offer price (for buy orders). Notwithstanding the aforementioned, if an Add Liquidity Order would not lock or cross an order or quote on the System but would lock or cross the NBBO, the order will be handled pursuant to Options 3, Section 5(d). An Add Liquidity Order will be ranked in the Exchange's limit order book in accordance with Options 3, Section 10. Add Liquidity Orders may only be submitted when an options series is open for trading. Add Liquidity Orders may only have a time-in-force designation of Day. See Options 3, Section 7(n). Further, the Exchange proposes not to allow Stock-Option Orders  37 and Stock-Complex Orders  38 during the Early ETH Session because the Exchange currently requires, among other things, that these orders fall within the high-low range for the day in the underlying stock at the time the Stock-Option Order or Stock-Complex Order is processed. 39 The Exchange understands that the equity high-low reference is currently only provided between the hours of 9:30 a.m. to 4:00 p.m. and that this information is not being disseminated at the same time as Extended Trading Hours. Accordingly, the Exchange will not allow Stock-Option Orders or Stock-Complex Orders during the Early ETH Session since there would be no high-low information available prior to 9:30 a.m. For the Extended Close, the Exchange will use the high-low information from the equity market's regular trading hour session. To reflect the foregoing, proposed Section 4(c) will provide that Stock-Option Orders and Stock-Complex Orders designated for participation in All Sessions will be rejected. 37  The term “Stock-Option Order” refers to an order for a “Stock-Option Strategy,” which is the purchase or sale of a stated number of units of an underlying stock or a security convertible into the underlying stock (“convertible security”) coupled with the purchase or sale of options contract(s) on the opposite side of the market representing either (A) the same number of units of the underlying stock or convertible security, or (B) the number of units of the underlying stock necessary to create a delta neutral position, but in no case in a ratio greater than eight-to-one (8.00), where the ratio represents the total number of units of the underlying stock or convertible security in the option leg to the total number of units of the underlying stock or convertible security in the stock leg. See Options 3, Section 14(a)(2) and (5). 38  The term “Stock-Complex Order” refers to an order for a “Stock-Complex Strategy,” which is the purchase or sale of a stated number of units of an underlying stock or a security convertible into the underlying stock (“convertible security”) coupled with the purchase or sale of a Complex Options Strategy on the opposite side of the market representing either (A) the same number of units of the underlying stock or convertible security, or (B) the number of units of the underlying stock necessary to create a delta neutral position, but in no case in a ratio greater than eight-to-one (8.00), where the ratio represents the total number of units of the underlying stock or convertible security in the option legs to the total number of units of the underlying stock or convertible security in the stock leg. Only those Stock-Complex Strategies with no more than the applicable number of legs, as determined by the Exchange on a class-by-class basis, are eligible for processing. See Options 3, Section 14(a)(3) and (5). 39  Specifically, Options 3, Section 16(d) provides that for complex orders in Stock-Option Strategies and Stock-Complex Strategies, the Exchange shall electronically communicate the underlying security component of a Complex Order to Nasdaq Execution Services, LLC (“NES”), its designated broker dealer, for immediate execution. Such execution and reporting will not occur on the Exchange and will be handled by NES pursuant to applicable rules regarding equity trading. NES will ensure that the execution price is within the high-low range for the day in that stock at the time the Complex Order is processed and within a certain price from the current market pursuant to Options 3, Section 16(a). If the stock price is not within these parameters, the Complex Order is not executable and the Exchange will hold the Complex Order on the Order Book, if consistent with Member instructions. The Exchange also proposes to eliminate the TIFs of Good-Till-Canceled (“GTC”) and Good-Till-Date (“GTD”) from its rulebook to avoid the operational complexity of having such orders persist between trading sessions. Accordingly, the Exchange proposes to delete the GTC and GTD rule text in Supplementary Material .02(b) and (c) of Options 3, Section 7 and in Options 3, Section 14(b)(11) and (12), and reserve those rules. The Exchange also proposes to delete the sentence referencing GTC and GTD orders in Options 3, Section 8(k). In addition, because the Exchange incorporates by reference ISE Options 5 (Order Protections and Locked and Crossed Markets rules) into its Options 5, and ISE Options 5 references GTC and GTD orders therein, the Exchange proposes to add a sentence at the end of its Options 5 providing that notwithstanding the foregoing, all references to “GTC” and “GTD” in Nasdaq ISE Options 5 will not be incorporated into this Nasdaq MRX Options 5, as those times-in-force designations are not available on Nasdaq MRX. Additionally, as set forth in Supplementary Material .02(a) of Options 3, Section 7, the Exchange currently offers a TIF of “Day,” which expires at the end of the day on which it was entered. The Exchange is not modifying this TIF under this proposal, but notes that a Day order would expire depending on the Member's session eligibility designation pursuant to proposed Section 4(b) ( e.g., RTH only designation means the Day order expires at 4:00 p.m. and All Sessions designation means the Day order expires at 4:15 p.m.). Proposed Section 4(d) will provide that orders are not routable during ETH. As such, all orders during ETH will be required to be entered as Do-Not-Route (“DNR”) orders and may be repriced pursuant to Options 3, Section 5(d) to comply with the Options Order Protection and Locked/Crossed Market Plan (“Linkage Plan”). 40 Options 3, Section 5(d) currently provides that an order would not be executed at a price that trades through another market or displayed at a price that would lock or cross another market and that an order that is designated by a Member as non-routable would be re-priced in order to comply with applicable trade-through and locked and crossed markets restrictions. If, at the time of entry, an order that the entering party has elected not to make eligible for routing would cause a locked or crossed market violation or would cause a trade-through violation, it would be re-priced to the current national best offer (for bids) or the current national best bid (for offers) as non-displayed, and displayed at one minimum price variance above (for offers) or below (for bids) the national best price. 40  The Linkage Plan requires U.S. options exchanges to establish a framework for providing order protection and addressing locked and crossed markets in eligible options classes. The Linkage Plan is a national market system plan approved by the Commission pursuant to Section 11A of the Act and Rule 608 thereunder. The full text of the Linkage Plan is available at https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf. All operating U.S. options exchanges participate in the Linkage Plan. If another U.S. options exchange lists any of the eligible option classes outside of RTH, trading of such option classes on the Exchange would comply with the Linkage Plan. As noted above, Cboe's proposal to list and trade eligible multi-listed equity options outside of their regular trading hours was recently approved. See supra note 13. Proposed Options 3C, Section 5 will set forth the opening process for the Early ETH Session. Other than as specified herein, the Exchange will use the same RTH opening process described in Options 3, Section 8, with everything being pushed back by two hours for the Early ETH Session opening process. Proposed Section 5(b) will provide that the opening process for the Early ETH Session will be triggered by the first disseminated trade or first disseminated quote on any national securities exchange at or after 7:30 a.m. This is different from the RTH opening process, which is triggered by the first disseminated trade or quote on the primary market. The Exchange is proposing to use the first disseminated trade or quote on any national securities exchange because not all securities will be trading on their primary market during the proposed Early ETH Session ( e.g., certain NYSE-listed securities), and, therefore, an opening process trigger based on the primary market may not occur. Therefore, the proposed rule change would permit the Exchange to list options on eligible equities that also trade during extended trading hours on any equity market, even if not the primary listing market. Another difference from the RTH opening process is the Primary Market Maker's current obligation to enter a Valid Width Quote in 90% of its assigned series within one minute of the underlying's open pursuant to Options 3, Section 8(c)(3). 41 In contrast, the Exchange proposes for the Early ETH Session opening process to only require Primary Market Makers to fulfill this obligation if they choose to start quoting in the Early ETH Session opening process. The Exchange believes this is appropriate given that it is not requiring Market Makers, including Primary Market Makers, to participate in the Early ETH Session. Accordingly, proposed Section 5(b) will provide that only Primary Market Makers that choose to quote in the Early ETH Session will be obligated to enter Valid Width Quotes pursuant to Options 3, Section 8(c)(3). 41  In particular, Options 3, Section 8(c)(3) provides that the PMM assigned in a particular equity or index option must enter a Valid Width Quote, in 90% of their assigned series, not later than one minute following the dissemination of a quote or trade by the market for the underlying security or, in the case of index options, following the receipt of the opening price in the underlying index. The PMM assigned in a particular U.S. dollar-settled foreign currency option must enter a Valid Width Quote, in 90% of their assigned series, not later than one minute after the announced market opening. Provided an options series has not opened pursuant to Options 3, Section 8(c)(1)(ii), PMMs must promptly enter a Valid Width Quote in the remainder of their assigned series, which did not open within one minute following the dissemination of a quote or trade by the market for the underlying security or, in the case of index options, following the receipt of the opening price in the underlying index or, with respect to U.S. dollar-settled foreign currency options, following the announced market opening. Once an options series has opened pursuant to Options 3, Section 8(c)(1)(i) and ii, a PMM must submit intra-day, two-sided quotes in such options series pursuant to Options 2, Section 5(e)(2). Proposed Section 5(c) will provide that Market Maker Valid Width Quotes and Opening Sweeps  42 received starting at 7:25 a.m. (versus 9:25 a.m. as currently provided for the RTH opening) will be included in the Early ETH Session opening process. Orders designated for both the Early ETH Session and Extended RTH Session, and entered at any time before an eligible option series opens are included in the Early ETH Session opening process. This is consistent with the current RTH opening process mechanics in Options 3, Section 8(c), including where Market Maker Valid Width Quotes and Opening Sweeps received starting at 9:25 a.m. are included in the RTH opening process. However, the Exchange also proposes to modify this RTH opening process time from 9:25 a.m. to 9:26 a.m. in order to provide the Exchange time to transition between the Early ETH Session and Regular Trading Hours. Because the Early ETH Session would last between 7:30 a.m. to 9:25 a.m., the Exchange would use the one-minute time period between the end of the Early ETH Session at 9:25 a.m. and the time in which it would begin to accept Market Maker interest for the RTH opening process at 9:26 a.m. to purge quotes from the Early ETH Session and prepare to transition over to the next trading session. 42  An Opening Sweep is a one-sided order entered by a Market Maker through SQF for execution against eligible interest in the System during the Opening Process. This order type is not subject to any protections listed in Options 3, Section 15, except for Automated Quotation Adjustments and Market Wide Risk Protection. The Opening Sweep will only participate in the Opening Process pursuant to Options 3, Section 8(b)(1) and will be cancelled upon the open if not executed. See Options 3, Section 7(u). The Exchange also proposes to explicitly provide in Options 3C, Section 5(d) that orders would not be routable during the Early ETH Session opening process and that such orders would be required to be entered as DNR orders, consistent with the proposal to not allow routing during the remainder of the Early ETH Session. As such, an order during the Early ETH Session opening process may similarly be repriced pursuant to Options 3, Section 5(d) to comply with the Linkage Plan. Proposed Options 3C, Section 6 will set forth the trading halt provisions for ETH. The trading halt provisions applicable to equity options and index options during RTH will generally apply to those options during ETH, except limit-up limit-down trading pauses and market-wide circuit breakers because those trading halts by their terms only apply during RTH. Accordingly, the Exchange proposes that for equity options, the Exchange will follow the trading halt and reopening halt procedures in Options 3, Section