Nasdaq GEMX eliminates cross-market risk protection election

On October 1, 2026 Nasdaq GEMX, LLC filed a proposed rule change under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4. The filing, identified as File No. SR-GEMX-2026-35 and released as Release No. 34-106596, was published in the Federal Register on October 5, 2026 (FR Doc No. 2026-20598). The Commission deemed the change immediately effective because it does not significantly affect investor protection, competition, or require a 30-day waiting period.

The amendment targets Options 3, Section 15(a)(1)(C) and removes the existing cross-market functionality that allows members to aggregate Market Wide Risk Protection (MWRP) thresholds across GEMX and its affiliate Nasdaq ISE, LLC. Currently, GEMX and ISE permit a hybrid model where members may elect to apply MWRP on a per-exchange basis or across both markets, while the other four Nasdaq affiliated options exchanges - MRX, Phlx, NTX Options, and NOM - operate on a per-exchange model only.

To harmonize the risk-protection framework, GEMX proposes to delete the references that permit cross-market election of MWRP counting programs, order rejection, and order cancellation. Nasdaq ISE will file a companion amendment (SR-ISE-2026-52) to make conforming changes to its own Options 3, Section 15(a)(1)(C). GEMX will announce the operative date in an Options Trader Alert and implement the change on or before Q2 2027.

The Exchange stated that the amendment imposes no undue burden on competition; no written comments were received. Members that wish to apply aggregated risk protection across multiple exchanges may continue to configure their own risk-management systems, but the mandatory MWRP thresholds on GEMX will remain unchanged.

Effective immediately, all GEMX members must configure MWRP parameters solely for activity on GEMX. The cross-market aggregation with ISE is eliminated, and members seeking similar protection on ISE must rely on ISE's separate rule. This alignment is intended to reduce operational complexity and promote consistent risk-management practices across Nasdaq's affiliated options exchanges.