TXSE Lead Market Maker Rule: The Money Is in the Other Filing

Texas Stock Exchange Adopts a Lead Market Maker Framework for ETPs

The Texas Stock Exchange just made its Lead Market Maker rule operative, and the rule contains no money. TXSE filed the Lead Market Maker (LMM) program as new Rule 11.024, under Release No. 34-106260, File No. SR-TXSE-2026-026, in a notice dated September 2, 2026. The SEC's notice was published in the Federal Register on September 8, 2026 as Document No. 2026-18207, at 91 FR 57180, and the filing was submitted for immediate effectiveness under Rule 19b-4(f)(6).

Rule 11.024 is a selection framework and nothing more. TXSE states that LMM incentives, performance thresholds and objective Minimum Performance Standards will be set out in a separate filing before the program is implemented. That filing, SR-TXSE-2026-030, proposes three ETP listing-fee tiers, three tiers of LMM Minimum Performance Standards, and daily stipends paid by the Exchange to qualifying LMMs.

For an ETF sponsor weighing a TXSE listing, the rule is the plumbing. The economics live in the second filing.

What Rule 11.024 Does, and What It Leaves Out

TXSE is a young venue. The SEC approved its registration as a national securities exchange on September 30, 2025, and the exchange launched trading in summer 2026. A listings business for ETPs is the logical next step, and an LMM program is how exchanges recruit liquidity providers to stand behind those listings.

According to the rule text in Exhibit 5, Rule 11.024 takes a rule number that is currently reserved and lets the Exchange select LMMs for ETPs listed under Chapter 17 of its rulebook.

The filing establishes

• A selection framework. TXSE gains rule authority to assign LMMs to Chapter 17 ETPs.
• A procedural route. The filing is made under Section 19(b)(1) of the Exchange Act and Rule 19b-4(f)(6).
• A comment window. Public comments were due September 29, 2026.

The filing defers

• Incentives. These include what an LMM is paid and how.
• Performance thresholds. These cover what an LMM must deliver to earn those payments.
• Minimum Performance Standards. These are the objective tests that define whether an LMM is doing its job.

Filings under Rule 19b-4(f)(6) normally cannot become operative for 30 days. TXSE asked the SEC to waive that delay, and the Commission granted the waiver and designated the rule operative upon filing.

An Effective Rule Is Not an Operating Program

Founders and asset managers often treat "the rule is effective" and "the program is live" as the same event. In this case they are not the same, and the gap is deliberate.

Rule 19b-4(f)(6) is the fast lane for exchange filings that do not significantly affect investor protection or the public interest and do not impose a significant burden on competition. A bare selection framework fits that lane comfortably. The terms that actually move capital do not stay in that framework. Stipends, fee tiers and performance standards decide which market makers show up, which ETPs they commit to, and what a sponsor pays to list.

Splitting the program puts the contested economics into a separate document with its own release number, Release No. 34-106505, and its own publication date. That document was published October 1, 2026 as Doc. 2026-20071. TXSE says it filed it on September 14, 2026. The economics filing was also submitted for immediate effectiveness, so it did not take a slower path than the framework. The SEC may summarily suspend either filing within 60 days of filing. For the framework, filed September 1, 2026, that window runs to roughly October 31, 2026.

The more consequential detail in SR-TXSE-2026-030 is where the money comes from. Issuer listing fees fund the Exchange-paid Daily Stipends. The issuer pays the Exchange, and the Exchange pays the market maker. That is why TXSE addresses FINRA Rule 5250, which restricts payments by issuers to market makers for quoting their securities, and Regulation M Rule 102, which restricts issuers from bidding for or inducing purchases of their own securities during a distribution. It is also why unearned Signature Tier stipends are credited back to the issuer the following January. The stipend is the issuer's money routed through the Exchange, and the filing is built to keep that route on the right side of both rules.

Reading Rule 11.024 tells you whether TXSE can assign a lead market maker. It does not tell you whether that arrangement makes commercial sense for your fund. That answer sits in SR-TXSE-2026-030.

What ETF Sponsors Should Decide This Quarter

The decision owners here are the head of capital markets, the CFO and, for registered products, the fund board that will hear the listing recommendation. The legal mechanics matter only as far as they change cost and liquidity.

Action items

First, price the listing against SR-TXSE-2026-030, not Rule 11.024. The three listing-fee tiers and the Exchange-paid stipends determine your all-in cost and the market maker support you can expect. Ask your outside counsel to map your ETP to the tier it would fall into.

Second, translate Minimum Performance Standards into secondary-market quality. The three tiers of standards are the closest thing a sponsor has to a service-level commitment on spreads and displayed liquidity. Your board will want to know how those standards are measured and what happens when they are missed.

Third, treat stipends as rule-based, not contractual. Exchange-paid stipends are set by rule filing, and a later filing can change them. Model the listing on the assumption that the incentive terms can move after launch.

Fourth, track the open procedural record. Each filing has its own comment window, and the SEC retains authority to act on immediately effective filings after they are filed. Assign someone to watch both SEC dockets. The framework filing is on the SEC's SR-TXSE-2026-026 page, and the economics filing is SR-TXSE-2026-030.

Questions to put to your team

• Which TXSE listing-fee tier would our next ETP fall into?
• Does an Exchange-paid stipend change our current LMM arrangements on another venue?
• Who presents the venue comparison to the board, and when?

Key Takeaways on the TXSE Lead Market Maker Program

• Rule 11.024 is a framework, not a deal. It lets TXSE select LMMs for Chapter 17 ETPs, but incentives and performance standards were expressly deferred to a later filing.
• The economics are in SR-TXSE-2026-030. That filing proposes three listing-fee tiers, three tiers of Minimum Performance Standards, and daily stipends paid by the Exchange to qualifying LMMs.
• An operative rule is not a funded program. Rule 11.024 became operative upon filing after the SEC waived the 30-day delay, but the incentives that make the program work arrived in a separate release.
• A new venue changes the listing calculus. TXSE has launched trading, and an ETP listings program puts it in direct competition for sponsor business.