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SEC clears Long-Term Stock Exchange's first market maker program

SEC clears Long-Term Stock Exchange's first market maker program

Rule Changes

Rule change took effect immediately, ahead of the exchange's planned October 1 launch

Yesterday: SEC publishes immediate effectiveness notice

Overview

Updated 1 hour ago

Long-Term Stock Exchange has never registered a market maker. On September 21, the Securities and Exchange Commission (SEC) made a rule change immediately effective that lets the exchange launch its first market maker program, planned for an October 1 start.

The framework sets who can register as a market maker, how much capital they need, and what quoting obligations they must meet. LTSE is adopting rules substantially similar to another national exchange's, aiming to attract the liquidity providers its listings have lacked.

Why it matters

LTSE has never had a market maker. Whether this program attracts one determines if the exchange can deliver competitive liquidity.

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Key Indicators

0
Market makers registered on LTSE
LTSE has never registered a market maker; its first program was slated to launch October 1, 2026.
6
Rule changes in the proposal
Definitions, registration, obligations, authorized traders, and security-level registration all restructured.
30 days
Operative delay waived
SEC waived the standard 30-day operative delay, making the rule change effective September 21, 2026.

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Organizations Involved

Timeline

June 2026 October 2026

6 events Latest: Yesterday
Tap a bar to jump to that date
  1. SEC publishes immediate effectiveness notice

    Latest Regulatory Notice

    Federal Register publication confirmed the market maker rule change took effect upon filing September 21.

  2. LTSE launches market maker program

    Program Launch

    LTSE started its first market maker program, designed to attract firms providing two-sided quotes.

  3. SEC makes updated rule change immediately effective

    Regulatory Action

    LTSE filed its updated market maker framework; the SEC waived the 30-day operative delay.

  4. SEC extends review of June filing

    Regulatory Action

    The SEC set September 16, 2026 as the deadline to act on the original market maker proposal.

  5. SEC publishes notice of June filing

    Regulatory Notice

    The SEC published Federal Register notice of LTSE's proposed market maker rule changes.

  6. LTSE files first market maker rule proposal

    Regulatory Filing

    LTSE filed a proposed rule change to amend its market maker rules, beginning the two-phase rulemaking.

Scenarios

1

LTSE registers its first market maker

Possible Resolves by Jan 31, 2027

Discussed by: LTSE, in its SEC filing and program rationale

The program was slated to launch October 1. If the framework works as designed, firms will register as market makers and begin posting continuous two-sided quotes in dually-listed securities, adding displayed liquidity and narrowing spreads. LTSE's filing describes this as the program's purpose.

2

Market maker program draws no participants

Possible Resolves by Jan 31, 2027

Discussed by: Implicit in the filing's own premise: LTSE has never attracted a market maker

LTSE has operated its entire existence without a market maker. The rule change creates the framework, but registration is voluntary. If firms judge quoting on a small exchange unprofitable, the program could launch with no takers, leaving LTSE's liquidity situation unchanged.

3

LTSE expands market making to its own listed securities

Likely Resolves by Q2 2027

Discussed by: LTSE, in its SEC filing

The filing states LTSE will file another proposed rule change to adopt market making in LTSE-Primary-Listed Securities before permitting that activity. This is the program's stated next step after the non-primary-listed framework is in place.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2016

IEX exchange launch (2016)

The Investors Exchange (IEX), founded by Brad Katsuyama of 'Flash Boys' fame, won SEC approval and launched as a new US equities exchange. It used a 350-microsecond speed bump to slow high-frequency traders and attract institutional order flow, building liquidity from nothing against NYSE and Nasdaq.

Then

IEX captured measurable market share and proved a challenger could take order flow from incumbents.

Now

It remains a small exchange by volume, showing how hard sustained liquidity growth is for new venues.

Why this matters now

LTSE is another challenger exchange using market structure design, this time a market maker program, to build the liquidity it lacks.

2005

Regulation NMS (2005)

The SEC adopted Regulation National Market System, a sweeping rewrite of US market structure covering order protection, access, and market data. It replaced older fixed rules with a framework where exchanges compete for order flow.

Then

Reg NMS was phased in through 2006 and 2007, reshaping how exchanges handled quotes and orders.

Now

It still governs the market structure LTSE operates within, including how market maker quotes must be handled.

Why this matters now

LTSE's market maker program exists to satisfy the quoting and liquidity standards that the Reg NMS-era framework created.

Sources

(9)