Directed/Preferred Market Makers, associated with the same member, are collectively required to provide two-sided quotations in 90% of the cumulative number of seconds, or such higher percentage as the exchange may announce in advance, among all options series in which the Directed/Preferred Market Maker has executed a Directed/Preferred Order on a daily basis, except that a Directed/Preferred Market Maker shall not be required to make two-sided markets in any Quarterly Options Series, any Adjusted Options Series, and any options series with an expiration of nine months or greater for options on equities and ETFs or with an expiration of twelve months or greater for index options. A Directed/Preferred Market Maker has the ongoing quoting obligation from the time a Directed/Preferred Market Maker executes its first Directed/Preferred Order in the options series in which the Directed/Preferred Market Maker is assigned until a Directed/Preferred Market Maker notifies the exchange that the Directed/Preferred Market Maker is no longer directed.

For example, all non-directed/non-preferred Market Maker badges are aggregated for the 60% obligation. When the firm is assigned an options series as a Market Maker and receives and executes a Directed/Preferred order, the firm is directed/preferred in that options series. In this case, the 60% quoting obligation no longer applies in that options series. Instead, all options series in which the firm is directed/preferred will be subject to a heightened 90% quoting obligation and aggregated in the 90% continuous quoting obligation bucket until the firm notifies the exchange that it is no longer directed/preferred. For options series where the firm has not received or executed a directed/preferred order and therefore is not directed/preferred, the firm remains subject to the 60% quoting obligation, and these options series are aggregated in the Market Maker bucket.

ISE, GEMX, MRX, and PHLX will aggregate quoting activity across all market maker roles that have a 90% continuous, two-sided quoting obligation (or such higher percentage as the applicable exchange may announce) on each respective exchange, when badges and options series are assigned within the same member organization or Member. For example, on ISE, compliance with the continuous, two-sided quoting obligations of PMMs, Preferred PMMs, and Preferred CMMs will be calculated together. Please review Options Regulatory Alert #2026-48 for more details.

For example: Assume a member has 150 assigned symbols on ISE, with 100 symbols in the Primary Market Maker role (of which 25 executed Directed or Preferenced Orders) and 50 symbols in the Competitive Market Maker role (of which 25 executed Directed or Preferenced Orders):

125 symbols count toward a single aggregated 90% bucket (combining Primary Market Maker and Directed/Preferenced Order activity), and 25 symbols count toward the 60% bucket — two obligations, calculated on a combined basis for the overlapping roles.

For questions about whether you received and executed a Directed/Preferred order, contact Nasdaq Market Operations at OptionsHelpdesk@Nasdaq.com. For questions about whether you opted in or out of receiving Directed/Preferred orders, or to change your prior election, contact Membership at membership@nasdaq.com.

Quoting time for a directed/preferred symbol is measured starting at the time the Firm received and executed a directed/preferred order in that symbol, and not at the beginning of the trading day on which the Firm became preferenced in that symbol.

This applies to Preferred Competitive Market Makers on ISE, GEMX, and MRX and Directed SQT/RSQTs on PHLX.

Please see ISE/MRX/GEMX/PHLX Options 2 Section 5 for more details.