Nasdaq PHLX Anti-Internalization Rule Amendment and CORE FIX Protocol Delay

On March 30, 2026, Nasdaq PHLX LLC filed a proposed rule change (SR-PHLX-2026-17) with the SEC to amend Equity 4, Rule 3307(c), which governs the Exchange's anti-internalization functionality. This functionality prevents buy and sell orders from the same firm from executing against each other, reducing unwanted internal trading costs. The amendment extends Port-Level Anti-Internalization Functionality to participants using the FIX order entry protocol, and formally codifies that the FLITE order entry protocol already has access to this feature. Currently, Rule 3307(c) only explicitly covers the OUCH and CORE FIX protocols. The FLITE protocol has informally been using the functionality, and this rule change brings the rulebook in line with actual practice. For FLITE users, the rule becomes operative 30 days after filing. For FIX protocol users, the Exchange plans to implement the functionality before end of 2026 with advance notice via an Equity Trader Alert. Additionally, the Exchange postpones the planned launch of the CORE FIX order entry protocol. Originally expected in Q1 2026, the launch is now pushed to before end of 2026 due to product pipeline reprioritization. The Exchange will issue an Equity Trader Alert before the CORE FIX implementation. The rule change took immediate effect under Section 19(b)(3)(A)(iii) of the Securities Exchange Act, though the SEC retains the ability to summarily suspend it within 60 days. Public comments are accepted until April 24, 2026.

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