The Securities and Exchange Commission has announced a rule change proposed by The Nasdaq Stock Market LLC. This change involves modifying the Options Regulatory Fee (ORF) by decreasing it from $0.0016 to $0.0014 per contract side, starting from November 1, 2024, until December 31, 2024, to ensure that the revenue from this fee does not exceed the costs associated with regulatory responsibilities. From January 1, 2025, Nasdaq plans to introduce a new method of assessing ORF, which will exclude proprietary product transactions and focus on clearing transactions across various participant types, while adopting different rates for trades executed on Nasdaq and non-Nasdaq exchanges. This new approach aims to cover a material portion of regulatory costs without generating excessive revenue and is set to conclude on July 1, 2025, when the original rates and structure will be reinstated unless further reviewed.
Simple Explanation
When someone wants to trade options (like special bets on the stock market) on the Nasdaq, they have to pay a tiny fee called the Options Regulatory Fee (ORF). Nasdaq is changing how this fee works to make sure it's fair and not too high, and they've promised to look at it again in the middle of next year to see if they need to make more changes.