# Self-Regulatory Organizations; 24X National Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Connectivity Fees
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [^1] and Rule 19b-4 thereunder, [^2] notice is hereby given that on September 24, 2025, 24X National Exchange LLC (“24X” or the “Exchange”) filed with the Securities and Exchange Commission (“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.
[^1] 15 U.S.C. 78s(b)(1).
[^2] 17 CFR 240.19b-4.
**I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change**
The Exchange proposes to adopt connectivity fees for cross-connects at the Primary and Disaster Recovery facilities. The Exchange also proposes to adopt connectivity fees for Logical Connectivity (Primary), effective September 29, 2025. The proposed rule change is available on the Exchange's website at *https://equities.24exchange.com/regulation* 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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
**A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change**
**1. Purpose**
The Exchange is proposing to establish monthly connectivity fees. In advance of the Exchange's commencement of operations as a national securities exchange, the Exchange determined it was reasonable and appropriate to charge market participants for their connectivity to the Exchange.
**Cross-Connect Fees**
The Exchange proposes to offer to both Members [^3] and non-Members the option to utilize a 10 Gigabit (“Gb”) ultra-low latency (“ULL”) fiber cross-connection to the Exchange's Primary and Disaster Recovery facilities, as well as a 10Gb ULL fiber cross-connection to the Test Environment. The Exchange proposes to establish a Cross-Connect fee of $5,700 per 10Gb physical interface per month that will be assessed to Members and non-Members for connecting to the Primary facility. The Exchange also proposes to establish a Cross-Connect fee of $2,850 per 10Gb physical interface per month that will be assessed to Members and non-Members for connecting to the Disaster Recovery facility. The Exchange does not contemplate charging a fee for connection to the Test Environment at this time. The Exchange believes these fees will encourage Members to connect to the Exchange's backup trading systems and to conduct appropriate testing of their use of the Exchange. The Exchange also believes that it is reasonable to charge a lower fee for connection to the Disaster Recovery facility than for connection to the Primary facility given that, pursuant to 24X Rule 2.4, a small number of Members are expected to be required to connect and participate in testing of the Exchange's backup systems.
[^3] The term “Member” shall mean any registered broker or dealer that has been admitted to membership in the Exchange. *See* 24X Rule 1.5(u).
Monthly network connectivity fees for Members and non-Members for connectivity will be assessed in any month the Member or non-Member is credentialed to use any of the 24X Application Programming Interfaces in the Primary facility or Disaster Recovery facility. [^4]
[^4] As proposed, fees for connectivity services would be assessed based on each active connectivity service product at the close of business on the first day of each month. If a product is canceled prior to such fee being assessed, then the Member will not be obligated to pay the applicable product fee.
**Port Fees**
The Exchange proposes to establish a $500 fee for Primary Logical Connectivity sessions. These application sessions, commonly known as ports, are utilized to perform a particular function on the Exchange, such as order entry or order cancellation, receipt of drop copies, or proprietary market data dissemination. All market participants (Members and non-Members) will be charged per session per month.
**I. Additional Discussion of Proposed Fees**
As illustrated in the following table, the Exchange has sought to make its connectivity fees consistent with, and in some cases lower than, those of other exchanges, [^5] thereby assuring that the fees will not create a financial burden on any participant and will not have an undue impact on competition among market participants in general or on smaller market participants in particular.
[^5]*See, e.g.,* the Long-Term Stock Exchange, Inc. (“LTSE”) fee schedule, available at: *https://ltse.com/trading/fee-schedules;* the MEMX LLC (“MEMX”) connectivity fee schedule, available at: *https://info.memxtrading.com/connectivity-fees/;* and the Cboe EDGX Exchange, Inc. (“Cboe EDGX”) fee schedule, available at *https://www.cboe.com/us/equities/membership/fee_schedule/edgx/.*
| Exchange | Cross-connect | Cross-connect | Logical connectivity |
| --- | --- | --- | --- |
| 24X | $5,700 | $2,850 | $500 |
| LTSE | 5,500 | 2,750 | 450 |
| MEMX | 6,000 | 3,000 | 450 |
| Cboe EDGX | 8,500 | 6,000 | 550 |
The Exchange believes that this level of diligence and transparency is called for by the requirements of Section 19(b)(1) under the Act [^6] and Rule 19b-4 thereunder [^7] with respect to the types of information self-regulatory organizations (“SROs”) should provide when filing fee changes, [^8] and Section 6(b) of the Act, [^9] which requires, among other things, that exchange fees be reasonable and equitably allocated, [^10] not designed to permit unfair discrimination, [^11] and that they not impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Act. [^12]
[^6] 15 U.S.C. 78s(b)(1).
[^7] 17 CFR 240.19b-4.
[^8] In 2019, Commission staff published guidance suggesting the types of information that SROs may use to demonstrate that their fee filings comply with the standards of the Act (“Fee Guidance”). While 24X understands that the Fee Guidance does not create new legal obligations of SROs, the Fee Guidance is consistent with 24X's view about the type and level of transparency that exchanges should meet to demonstrate compliance with their existing obligations when they seek to charge new fees. *See* Staff Guidance on SRO Rule Filings Relating to Fees (May 21, 2019), available at: *http://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees.*
[^9] 15 U.S.C. 78f(b).
[^10] 15 U.S.C. 78f(b)(4).
[^11] 15 U.S.C. 78f(b)(5).
[^12] 15 U.S.C. 78f(b)(8).
**2. Statutory Basis**
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) [^13] of the Act in general, and furthers the objectives of Section 6(b)(4) [^14] of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its Members and other persons using its facilities. Additionally, the Exchange believes that the proposed fees are consistent with the objectives of Section 6(b)(5) [^15] of the Act in that they are designed 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 national market system, and, in general, to protect investors and the public interest, and, particularly, are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
[^13] 15 U.S.C. 78f.
[^14] 15 U.S.C. 78f(b)(4).
[^15] 15 U.S.C. 78f(b)(5).
The Exchange believes that the proposed fees for connectivity services to 24X are reasonable, equitable, not unfairly discriminatory, and otherwise consistent with the Act because, as described above, they are consistent with, and in some cases lower than, the connectivity fees charged by other exchanges, [^16] and because the allocation of the proposed fees, which increase depending on the number of physical connections or application sessions used by each Member or non-Member, is based on the resources consumed by the respective type of market participant ( *i.e.,* lowest resource consuming Members and non-Members will pay the least, and highest resource consuming Members and non-Members will pay the most).
[^16]*See supra* note 5.
In addition, the proposed fees will help to encourage connectivity services usage in a way that aligns with the Exchange's regulatory obligations. As a national securities exchange, the Exchange is subject to Regulation Systems Compliance and Integrity (“Reg SCI”). [^17] Reg SCI Rule 1001(a) requires that the Exchange establish, maintain, and enforce written policies and procedures reasonably designed to ensure (among other things) that its Reg SCI systems have levels of capacity adequate to maintain the Exchange's operational capability and promote the maintenance of fair and orderly markets. [^18] By encouraging market participants to be efficient with their usage of connectivity services, the fees will support the Exchange's Reg SCI obligations in this regard by ensuring that unused application sessions are available to be allocated based on individual Member or Non-Member needs and as the Exchange's overall order and trade volumes increase. This will encourage market participants to purchase only what they need. Additionally, because the Exchange will charge a lower rate for a physical connection to the Disaster Recovery facility and no fee for connection to the Test Environment, the proposed fee structure will further support the Exchange's Reg SCI compliance by reducing the potential impact of a disruption should the Exchange be required to switch to its Disaster Recovery facility and encouraging Members to engage in any necessary system testing with low or no cost imposed by the Exchange. [^19]
[^17] 17 CFR 242.1000-1007.
[^18] 17 CFR 242.1001(a).
[^19] While some Members might directly connect to the Disaster Recovery facility and incur the proposed $2,850 per month fee, there are other ways to connect to the Exchange, such as through a service bureau or extranet. A Member connecting through another method would not incur any fees charged directly by the Exchange. However, the Exchange notes that a third-party service provider providing connectivity to the Exchange likely would charge a fee for providing such connectivity; such fees are not set by or shared in by the Exchange.
In conclusion, the Exchange submits that its proposed fee structure satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act [^20] for the reasons discussed above in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its Members and other persons using its facilities, does not permit unfair discrimination between customers, issuers, brokers, or dealers, and 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, particularly as the proposal neither targets nor will it have a disparate impact on any particular category of market participant.
[^20] 15 U.S.C. 78f(b)(4) and (5).
**B. Self-Regulatory Organization's Statement on Burden on Competition**
In accordance with Section 6(b)(8) of the Act, [^21] the Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
[^21] 15 U.S.C. 78f(b)(8).
**Intramarket Competition**
The Exchange does not believe that the proposed rule change to establish connectivity fees would place certain market participants at the Exchange at a relative disadvantage compared to other market participants because the proposed connectivity pricing is associated with relative usage of the Exchange by each market participant and does not impose a barrier to entry to smaller participants. The Exchange believes its proposed pricing is reasonable considering what other exchanges charge and, when coupled with the availability of third-party providers that also offer connectivity solutions, that participation on the Exchange is affordable for all market participants, including smaller trading firms. As described above, the connectivity services purchased by market participants typically increase based on their additional message traffic and the complexity of their operations. The market participants that utilize more connectivity services typically utilize the most bandwidth, and those are the participants that consume the most resources from the network. Accordingly, the proposed fees for connectivity services do not favor certain categories of market participants in a manner that would impose a burden on competition; rather, the allocation of the proposed fees for connectivity reflects the network resources consumed by the various sizes of market participants.
**Intermarket Competition**
The Exchange does not believe the proposed connectivity fees place an undue burden on competition on other SROs that is not necessary or appropriate. In particular, the proposed fees are comparable to and in some cases lower than fees charged by other exchanges for the same or similar services. [^22] The Exchange is also unaware of any assertion that the proposed fees for connectivity services would somehow unduly impair its competition with other exchanges, and competing equities exchanges are free to adopt comparable fee structures subject to the SEC rule filing process.
[^22]*See supra* note 5.
**C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others**
No written comments were solicited or received with respect to the proposed rule change.
**III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action**
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) [^23] of the Act and subparagraph (f)(2) of Rule 19b-4 thereunder, [^24] because it establishes a due, fee, or other charge imposed by the Exchange. 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 under Section 19(b)(2)(B) [^25] of the Act to determine whether the proposed rule change should be approved or disapproved.
[^23] 15 U.S.C. 78s(b)(3)(A).
[^24] 17 CFR 240.19b-4(f)(2).
[^25] 15 U.S.C. 78s(b)(2)(B).
**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 *[email protected].* Please include file number SR-24X-2025-10 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-24X-2025-10. 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-24X-2025-10 and should be submitted on or before October 21, 2025.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [^26]
[^26] 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.