Nasdaq ISE Auction Mechanism Rule Changes

Content

April 17, 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 April 13, 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 permit orders for the accounts of Market Makers assigned to the options class to be solicited for
the initiating order (3) submitted for execution against an agency order into a Facilitation Mechanism, the Solicited Order Mechanism (“SOM”) or a
Price Improvement Mechanism (“PIM”) as well as a FLEX PIM or FLEX SOM.

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 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 Supplementary Material .01 and .03 to Options 3, Section 11 (Auction Mechanisms), Supplementary
Material .06 to Options 3, Section 13 (Price Improvement Mechanism for Crossing Transactions), Options 3A, Section 12 (FLEX
Price Improvement Mechanism (“FLEX PIM” or “FLEX PIM Auction”)) and Supplementary Material .02 to Options 3A, Section 13 (FLEX
Solicited Order Mechanism (“FLEX SOM” or “FLEX SOM Auction”)) to permit orders by Members in a Facilitation Mechanism, a SOM,
a PIM, a FLEX PIM or a FLEX SOM to trade against the Agency Orders (4) for the accounts of Market Makers assigned to the options class. Cboe Exchange, Inc. (“Cboe”) recently received approval to
amend its rules in an identical manner. (5) The Exchange also proposes an amendment to Options 5, Section 4 relating to the handling of Immediate-or-Cancel Orders. (6)

Background

PIM

A PIM Auction is an electronic auction intended to provide an Agency Order with the opportunity to receive price improvement
(over the National Best Bid or Offer (“NBBO”)). There is no specific size requirement for a PIM Auction. Upon submitting an
Agency Order into a PIM, the initiating Electronic Access Member must also submit a contra-side paired order. The initiating
order guarantees that the Agency Order will receive an execution at no worse than the auction price. Upon commencement of
an auction, market participants may submit responses to trade against the Agency Order. (7) At the conclusion of a PIM, the Agency Order will be executed in full at the best prices available, taking into consideration
orders and quotes in the Exchange market and Improvement Orders. (8) ISE's PIM is very similar to Cboe's Automated Price Improvement Mechanism or “AIM.” (9) Options 3A, Section 12 describes a FLEX PIM Auction. ISE's FLEX PIM is consistent with non-FLEX PIM auction behavior. 10 Additionally, ISE's FLEX PIM is similar to Cboe Rule 5.73.

SOM

Options 3, Section 11(d) and Options 3A, Section 13 contain the requirements applicable to the execution of Agency Orders
using SOM. A SOM Auction is an electronic auction intended to provide a larger-sized (orders of 500 or more contracts) Agency
Order with the opportunity to receive price improvement over the NBBO. Options 3, Section 13 and Options 3A, Section 12 contain
the requirements applicable to the execution of orders the Electronic Access Member represents as agent using PIM. A PIM Auction
is an electronic auction intended to provide an Agency Order with the opportunity to receive price improvement (over the National
Best Bid or Offer (“NBBO”)). Upon submitting an Agency Order into a SOM, the initiating Electronic Access Member must also
submit a contra-side paired order. The initiating order guarantees that the Agency Order will receive an execution at no worse
than the auction price. Upon commencement of an auction, market participants may submit responses to trade against the Agency
Order. (11) At the conclusion of a SOM, execution will depend on whether there is sufficient size to execute the entire Agency Order at
an improved price (or prices) (12) as the SOM is designated as all-or-none. (13) ISE's SOM is very similar to Cboe's Solicited Auction Mechanism or “SAM.” (14) Options 3A, Section 13 describes a FLEX SOM Auction. ISE's FLEX SOM is consistent with non-FLEX SOM auction behavior. (15) Additionally, ISE's FLEX SOM is similar to Cboe Rule 5.74.

Facilitation Mechanism

Options 3, Section 11(b) describes a Facilitation Mechanism which is an electronic auction intended to provide a larger-sized
Agency Order with the opportunity to receive price improvement over the NBBO. Block-sized orders (fifty (50) contracts or
more pursuant to Options 3, Section 11(a)) may be entered into a Facilitation Mechanism by a Member to facilitate a customer
order it represents as agent. Members must be willing to execute the entire size of orders entered into the Facilitation Mechanism
pursuant to Options 3, Section 11(b). Under this mechanism, a Member submits a Facilitation Order along with a matching contra-side
order, and the System initiates an auction during which other participants may submit competing responses. At the conclusion
of the auction, the facilitating Member is entitled to a guaranteed participation right at the final execution price, provided
the Member's price matches or improves upon the best competing response. Pursuant to Options 3, Section 11(b)(4)(B), the facilitating
Member may be allocated up to forty percent (40%) (or such lower percentage requested by the Member) of the original size
of the facilitation order, but only after better-priced Responses, orders and quotes, as well as Primary Customer Orders and
Primary Customer Responses at the facilitation price, are executed in full at such price point.

The Exchange notes that Cboe does not have a Facilitation Mechanism. The ISE Facilitation Mechanism is similar to Cboe's SAM.
The key differences are:

the ISE Facilitation Mechanism requires a minimum of 50 contracts pursuant to Options 3, Section 11(b) while a Cboe SAM requires
a minimum of 500 contracts pursuant to Cboe Rule 5.39(a)(3);P> Cboe's SAM has an all-or-none allocation at Cboe Rule 5.39(e)
while the ISE Facilitation Mechanism must be willing to execute the entire size at Options 3, Section 11(b); and

Cboe Rule 5.39 requires that a Cboe Trading Permit Holder submit for execution an order it represents as agent (“Agency Order”)
against a solicited order(s) (which cannot have a Capacity F for the same EFID as the Agency Order into a SAM pursuant to
Cboe Rule 5.39 wherein the Agency Order and Solicited Order cannot both be for the accounts of Priority Customers whereas
the ISE Facilitation Mechanism does not have similar limitations.

These aforementioned differences do not result in a different analysis as to the impact of permitting orders by Members in
a Facilitation Mechanism to trade against the Agency Orders for the accounts of Market Makers assigned to the options class.
The Exchange's analysis below applies to the Facilitation Mechanism as it applies to a SOM, PIM or FLEX SOM or FLEX PIM.

Proposal

Currently, Supplementary Material .01 and .03 to Options 3, Section 11, Supplementary Material .06 to Options 3, Section 13,
Options 3A, Section 12, and Supplementary Material .02 to Options 3A, Section 13 prohibit orders by Members in a Facilitation
Auction, SOM, PIM, FLEX PIM or FLEX SOM (collectively “Paired Auctions”), respectively, to trade against the Agency Orders
for the accounts of Market Makers assigned to the options class. The Exchange notes Market Makers may not be solicited as
the contra-side for complex Facilitation Auctions, SOMs and PIMs. Cboe does not similarly limit the contra-side for their
complex AIM, complex SAM, complex FLEX AIM or complex FLEX SAM auctions. (16) The Exchange's proposal would therefore apply to both simple and complex orders.

While market participants other than assigned Market Makers may contribute liquidity to these Paired Auctions as

either a contra-side order or responses, assigned Market Makers, who are the primary source of liquidity on the Exchange in
their assigned options, are limited in the manner in which they may provide liquidity to these Paired Auctions. Given that
contra-side orders that comprise initiating orders may be allocated a percentage of the Agency Order at the conclusion of
the auctions, the limited ability of assigned Market Makers to participate in a Paired Auction may reduce the execution opportunities
for these liquidity providers, which execution opportunities are available to other market participants who may be solicited
or submit responses.

The Exchange believes that eliminating the prohibition against assigned Market Makers acting as contra in Paired Auctions
would enhance price improvement opportunities in the Paired Auctions. This is particularly for retail and smaller Priority
Customer orders in a PIM. Allowing assigned Market Makers registered with the Exchange to be facilitated or solicited as contras
may result in exposure of more small Priority Customer orders to potential price improvement via auction processes in a PIM.
The Exchange further notes that Options 3, Section 22(d) (Limitations on Order Entry) provides that, prior to or after submitting
an order to ISE, a Member cannot inform another Member or any other third party of any of the terms of the order for purposes
of violating this Rule. This protection will remain in place under the proposed rule change to address any potential information
leakage concerns in the Paired Auctions as Options 3, Section 22 applies to the Paired Auctions.

The Exchange believes that the restriction has become operationally outdated in current market structure. It is common practice
that Agency Orders already involve the same Market Maker firm acting as both the contra-side (in an away Market Maker capacity)
and auction respondent (as an assigned Market Maker registered on the Exchange). Eliminating this restriction would reduce
an arbitrary and unnecessary burden and allow Market Makers to structure more efficient auction processes, which may ultimately
promote greater competition among Market Makers and provide market participants with enhanced opportunities for price improvement.

The Exchange is proposing to amend Supplementary Material .01 and .03 to Options 3, Section 11, Supplementary Material .06
to Options 3, Section 13, Options 3A, Section 12, and Supplementary Material .02 to Options 3A, Section 13 to permit orders
for the accounts of Market Makers in an assigned options class to be solicited for the initiating order submitted for execution
against an Agency Order in all options. The Exchange believes providing assigned Market Makers with an additional way to participate
in Paired Auctions will expand available liquidity for these Paired Auctions, which may increase execution and price improvement
opportunities, particularly for Priority Customer orders in a PIM. The Exchange notes that no similar restriction applies
to crossing transactions in open outcry trading. (17) Brokers seeking liquidity to execute against customer orders on the trading floor regularly solicit assigned Floor Market
Makers in the applicable class for this liquidity, as they are generally the primary source of liquidity in a class. Therefore,
the Exchange believes the proposed rule change will further align open outcry and Paired Auctions and the execution and price
improvement opportunities available in both auctions by permitting the same participants to be solicited as contras in Paired
Auctions across all options at all times.

In addition to Cboe, the Exchange notes the electronic price improvement auction of another options exchange currently permits
orders for the accounts of appointed market-makers to be solicited as the contra orders for that auction. (18)

Options 5, Section 4

The Exchange proposes to amend subparagraph (a) at Options 5, Section 4, Order Routing, which currently states, “Immediate-or-Cancel
(“IOC”) Orders will be cancelled immediately if not executed, and will not be routed.” The Exchange proposes to instead state
that, “Immediate-or-Cancel (“IOC”) Orders will be rejected and will not be routed.” While the current sentence reflects the
operation of IOC Orders as provided in Supplementary Material .02(d) to Options 3, Section 7, within the context of routing,
the sentence may be confusing. Options 5, Section 4 explains the manner in which various order types are handled differently
for purposes of routing. An IOC Order will not rest on the order book by its definition and cannot route. The Exchange proposes
to amend the language to be clear that IOC Orders are not subject to routing and therefore would be rejected. This proposed
language is consistent with Supplementary Material .02(d) to Options 3, Section 7 and makes clear the treatment of IOC Orders
for purposes of Options 5, Section 4.

Implementation

The Exchange proposes to implement these proposed changes on or before Q3 2026. The Exchange will issue an Options Trader
Alert indicating the date the changes will be implemented.

2. Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act, (19) in general, and furthers the objectives of Section 6(b)(5) of the Act, (20) in particular, in that it is designed to promote just and equitable principles of trade, 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.

The Exchange believes the proposed rule change will promote just and equitable principles of trade and remove impediments
to and perfect the mechanism of a free and open market and a national market system because it will provide the primary liquidity
providers on the Exchange with an additional way to participate in Paired Auctions. Additionally, by permitting brokers to
solicit primary liquidity providers in a class for Paired Auctions, the Exchange believes brokers will be able to more efficiently
locate liquidity to fill their customer orders, particularly during times of volatility. As a result, the Exchange believes
the proposed rule change will likely expand available liquidity for these Paired Auctions, which may create additional execution
and price improvement opportunities for market participants at all times, which ultimately benefits investors.

The Exchange believes the proposed rule change is consistent with the Act because it will further align open outcry and Paired
Auctions and the execution and price improvement opportunities available in both auctions by permitting the same participants
to be solicited as the contra-side in both types of auctions across all options. Currently, assigned Market Makers may be
solicited with respect to crossing transactions on trading floors but may not be solicited with respect to Paired Auctions. (21) The Exchange believes there is no reason to

restrict a Market Maker's ability to provide liquidity into Paired Auctions when they are able to similarly provide that liquidity
in open outcry trading. As noted above, the electronic price improvement auction of another options exchange currently permits
orders for the accounts of assigned market makers to be solicited as the contra-side orders for that auction. (22)

In particular, the Exchange believes the proposed rule change will promote competition in Paired Auctions, including competition
to initiate Paired Auctions, which will remove impediments to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors. The Exchange believes the availability of this liquidity to Agency Orders
will positively affect the experience for Agency Orders and overall quality of the auctions. Furthermore, the Exchange believes
increasing the number of market participants available to be solicited may increase competition to provide initiating orders,
which may lead to a Paired Auction being initiated at a better price. More market participants competing to provide initiating
orders may lead to solicited parties providing more aggressive initial prices. The Exchange believes the ability of all market
participants, including assigned Market Makers that did not submit an initiating order, to become the contra-side to a Paired
Auction will continue to provide competition for executions against Agency Orders.

The Exchange believes any risk that assigned Market Makers may misuse the nonpublic information of an upcoming Paired Auction
is de minimis. Supplementary Material .03 to Options 3, Section 22 provides that the exposure requirement applicable to principal
transactions in Options 3, Section 22(b) (23) applies to the entry of orders with knowledge that there is a pre-existing unexecuted agency, proprietary, or solicited order
on the Exchange. Members may demonstrate that orders were entered without knowledge by providing evidence that effective information
barriers between the persons, business units, and/or systems entering the orders onto the Exchange were in existence at the
time the orders were entered. Such information barriers must be fully documented and provided to the Exchange upon request.
Further, the Exchange notes that Supplementary Material .01 to Options 3, Section 13 prohibits a pattern or practice of submitting
orders or quotes or the purpose of disrupting or manipulating PIM Auctions, and Options 9, Section 9 requires Members to establish,
maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material, nonpublic information
by Members and their associated persons. Finally, Options 3, Section 22(d) (Limitations on Order Entry) provides that, prior
to or after submitting an order to ISE, a Member cannot inform another Member or any other third party of any of the terms
of the order for purposes of violating the Rule.

The Exchange believes the proposed rule change is not designed to permit unfair discrimination between customers, issuers,
brokers, or dealers because it will permit orders for accounts of assigned Market Makers to be solicited in the same manner
as orders for the accounts of all other market participants. Currently, all market participants other than assigned Market
Makers may be solicited as the contra-side and submit responses in Paired Auctions for all options. Given the additional costs
and obligations associated with being an assigned Market Maker, the Exchange does not believe these Market Makers should have
fewer execution opportunities with respect to volume submitted for execution through Paired Auctions and not for electronic
execution against interest in the book. The Exchange believes the proposed rule change will provide all Market Makers on the
Exchange with the same ability to participate in Paired Auctions in all options at all times, which may further increase execution
and price improvement opportunities for market participants.

Cboe does not have an auction equivalent to the Facilitation Mechanism, however the Exchange's Facilitation Mechanism is similar
to Cboe's SAM. The key differences noted in the Purpose section do not differentiate the Facilitation Mechanism for purposes
of permitting orders by Members in a Facilitation Mechanism to trade against the Agency Orders for the accounts of Market
Makers assigned to the options class. The Exchange's aforementioned analysis applies to the Facilitation Mechanism as it applies
to a SOM, PIM or FLEX SOM or FLEX PIM in the same manner as it applies to the Paired Auctions.

Options 5, Section 4

The Exchange's proposal to amend Options 5, Section 4(a) is consistent with the Act because it will bring greater clarity
to the current rule text by clearly explaining that IOC Orders will not route.

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 the proposed rule change will impose any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act because it provides the same execution opportunities in Paired Auctions
to assigned Market Makers that are currently available to all other market participants. Additionally, the proposed rule change
will further align open outcry and Paired Auctions and the execution and price improvement opportunities available in both
auctions by permitting the same participants to be solicited as a contra-side in auctions across all options.

The Exchange does not believe the proposed rule change will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act because it relates to orders submitted into Paired Auctions on the
Exchange. Additionally, the Exchange notes that, in addition to Cboe, the rules of at least one other options exchange permits
orders for the accounts of assigned market makers to be solicited as contra-side orders for that exchange's electronic price
improvement auction. (24) The Exchange believes the proposed rule change may improve price competition within Paired Auctions, because the primary liquidity
providers will be able to increase participation in Paired Auctions.

Options 5, Section 4

The Exchange's proposal to amend Options 5, Section 4(a) does not impose an undue burden on competition, rather the proposal
clarifies the current rule text.

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
Act (25) and subparagraph (f)(6) of Rule 19b-4 thereunder. (26)

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

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-ISE-2026-18 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-2026-18. 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-2026-18 and should be submitted on or before May 13, 2026.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. (27)

Vanessa A. Countryman, Secretary. [FR Doc. 2026-07785 Filed 4-21-26; 8:45 am] BILLING CODE 8011-01-P

Footnotes

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

(2) 17 CFR 240.19b-4.

(3) The “initiating order” is the order comprised of principal interest or a solicited order(s) submitted to trade against the
order the submitting Electronic Access Member represents as agent (the “Agency Order”).

(4) Agency Orders are orders entered by a Member that are represented as agent.

(5) See Securities Exchange Act Release No. 105049 (March 19, 2026), 91 FR 14057 (March 24, 2026) (SR-Cboe-2025-090).

(6) Immediate-or-Cancel is an order entered with a TIF of “IOC” that is to be executed in whole or in part upon receipt. Any
portion not so executed is to be treated as cancelled. See Supplementary Material .02(d) to Options 3, Section 7.

(7) See Options 3, Section 13(c)(2). Responses in PIM are called Improvement Orders. See also Options 3A, Section 13(c)(5).

(8) The Agency Order will receive executions at multiple price levels if there is insufficient size to execute the entire order
at the best price. See Options 3, Section 13(d).

(9) An AIM Auction is an electronic auction intended to provide an Agency Order with the opportunity to receive price improvement
(over the National Best Bid or Offer (“NBBO”)). Upon submitting an Agency Order into an AIM Auction, the initiating Trading
Permit Holder (“Initiating TPH”) must also submit a contra-side second order (“Initiating Order”) for the same size as the
Agency Order. The Initiating Order guarantees that the Agency Order will receive an execution at no worse than the auction
price. Upon commencement of an auction, market participants may submit responses to trade against the Agency Order. See Cboe Rule 5.37(c)(5). At the conclusion of an AIM Auction, depending on the contra-side interest (including auction responses)
available, the Initiating Order may be allocated a certain percentage (or more) of the Agency Order. See Cboe Rule 5.37(e).

(10) See Securities Exchange Act Release No. 101720 (November 22, 2024), 89 FR 94986 (November 29, 2024) (SR-ISE-2024-12) (Notice of

Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No.
1, To Adopt Rules To List and Trade FLEX Options). Footnote 136 notes that the Exchange's proposal will be consistent with
current non-FLEX auction behavior, including current PIM behavior.

(11) See Options 3, Section 11(b)(3) and (d)(2) and Section 13(c)(2). Responses in PIM are called Improvement Orders. See also Options 3A, Section 12(c)(5) and Section 13(c)(5).

(12) If at the time of execution there is insufficient size to execute the entire Agency Order at an improved price (or prices),
the Agency Order will be executed against the solicited order at the proposed execution price so long as, at the time of execution:
(i) the execution price is equal to or better than the best bid or offer on the Exchange, and (ii) there are no Priority Customer
Orders or Priority Customer Responses on the Exchange that are priced equal to the proposed execution price. If there are
Priority Customer Orders or Priority Customer Responses on the Exchange on the opposite side of the Agency Order at the proposed
execution price and there is sufficient size to execute the entire size of the Agency Order, the Agency Order will be executed
against the bid or offer, and the solicited order will be cancelled. See Options 3, Section 11(d)(3)(A). If at the time of execution there is sufficient size to execute the entire Agency Order at
an improved price (or prices), the Agency Order will be executed at the improved price(s), provided the execution price is
equal to or better than the best bid or offer on the Exchange, and the solicited order will be cancelled. See Options 3, Section 11(d)(3)(B). In each case the aggregate size of all orders, quotes and Responses at each price will be
used to determine whether the entire agency order can be executed at an improved price (or prices).

(13) See Options 3, Section 11(d).

(14) A SAM Auction is an electronic auction intended to provide a larger-sized Agency Order with the opportunity to receive price
improvement over the NBBO. Upon submitting an Agency Order into a SAM Auction, the initiating Trading Permit Holder (“Initiating
TPH”) must also submit a contra-side second order (“Initiating Order”) for the same size as the Agency Order. The Initiating
Order guarantees that the Agency Order will receive an execution at no worse than the auction price. Upon commencement of
an auction, market participants may submit responses to trade against the Agency Order. See Cboe Rule 5.39(c)(5). At the conclusion of a SAM Auction, depending on the contra-side interest (including auction responses)
available, the Initiating Order may be allocated the entire Agency Order or none of the Agency Order. See Cboe Rule 5.39(e).

(15) See Securities Exchange Act Release No. 101720 (November 22, 2024), 89 FR 94986 (November 29, 2024) (SR-ISE-2024-12) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No.
1, To Adopt Rules To List and Trade FLEX Options). Footnote 136 notes that the Exchange's proposal will be consistent with
current non-FLEX auction behavior, including current SOM behavior.

(16) See supra note 5.

(17) See e.g., Nasdaq Phlx LLC (“Phlx”) Options 8 Rules.

(18) See NYSE American, Inc. (“American”) Rule 971.1NY and NYSE Pillar Options FIX Gateway Protocol Specification, Section 5.2, New
Cross Order. See also https://www.nyse.com/markets/american-options/cube-customer-best-execution.

(19) 15 U.S.C. 78f(b).

(20) 15 U.S.C. 78f(b)(5).

(21) Phlx's trading floor does not have a similar restriction. See Phlx Options 8 Rules.

(22) See supra notes 5 and 18.

(23) Electronic Access Members may not execute as principal orders they represent as agent unless (i) agency orders are first
exposed on the Exchange for at least one (1) second, (ii) the Electronic Access Member has been bidding or offering on the
Exchange for at least one (1) second prior to receiving an agency order that is executable against such bid or offer, or (iii)
the Member utilizes the Facilitation Mechanism pursuant to Options 3, Section 11(b) and (c); (iv) the Member utilizes the
Price Improvement Mechanism for Crossing Transactions pursuant to Options 3, Section 13; (v) the Member utilizes Qualified
Contingent Cross Orders pursuant to Options 3, Section 12(c) and (d); (vi) the Member utilizes a Customer Cross Order pursuant
to Options 3, Sections 12(a) or (b); or (vii) the Member utilizes a Complex Order Exposure pursuant to Supplementary Material
.01 to Options 3, Section 14. Electronic Access Members may not execute as principal orders they represent as agent within
the Solicitation Mechanism pursuant to Options 3, Section 11(d) and (e). See Options 3, Section 22(b).

(24) See supra note 18.

(25) 15 U.S.C. 78s(b)(3)(A)(iii).

(26) 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.

(27) 17 CFR 200.30-3(a)(12).

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