(a) Market Maker Rights may be owned by (i) registered broker-dealers approved as Members of the Exchange according to the requirements contained in this Options 2A or (ii) individuals and organizations that are not Members of the Exchange or that are otherwise Members, but do not seek to exercise trading privileges associated with such Rights (collectively "non-Member owners").

(b) Non-Member owners shall not be permitted to exercise trading privileges on the Exchange with respect to such Rights, and are not considered Members of the Exchange with respect to such Rights for any purposes of these Rules. Non-Member owners of Market Maker Rights shall lease the trading privileges associated with the Rights (i.e., the "Membership") to registered broker-dealers approved by the Exchange as Members.

(c) Every non-Member owner of Market Maker Rights shall submit a non-Member owner application in the form and manner prescribed by the Exchange. Non-Member owner applications must be accompanied by a non-refundable application fee. Approved non-Member owner applicants must complete the transfer of Market Maker Rights to the applicant within ninety (90) days of the date of approval by the Exchange. Should an approved applicant fail to complete the transfer of a Market Maker Right within ninety (90) days, its approval shall expire unless an extension is granted by the Exchange based on a showing that a transfer is pending or near completion.

(d) Any increase in the number of authorized PMM Rights or CMM Rights must be approved by the affirmative vote of the holders of at least a majority of the then outstanding PMM Rights, voting as a class, and the affirmative vote of the holders of at least a majority of the then outstanding CMM Rights, voting as a class (such voting rights, the "Core Rights").

(e) Any amendments to the LLC Agreement or the By-Laws that would alter or change the powers, preferences or special rights of one or more series of PMM Rights or CMM Rights must also be approved by the holders of a majority of such PMM Rights or CMM Rights, as applicable.

(f) Approved applicants for membership with the Exchange must become effective market makers within ninety (90) days of the date of approval by the Exchange by owning or leasing a Membership. Should an approved applicant fail to own or lease a Membership within ninety (90) days, its approval shall expire unless an extension is granted by the Exchange based on a showing that a transfer is pending or near completion.

Adopted June 6, 2019 (SR-ISE-2019-17); amended December 29, 2020 (SR-ISE-2020-43), operative January 29, 2021.

(a) An applicant to become a Member or an approved Member may seek approval to exercise trading privileges associated with more than one Membership in the form and manner prescribed by the Exchange.

(b) An applicant or approved Member will be denied approval with respect to a particular Membership if (together with any of its affiliates) approval would result in the applicant or approved Member being approved to exercise the trading privileges associated with more than one (1) Primary Market Maker Membership or more than ten (10) Competitive Market Maker Memberships. This requirement may be waived by the Exchange for good cause shown, but in no event shall the Exchange waive this requirement if such waiver would result in the applicant or approved Member (together with any of its affiliates) being approved to exercise trading privileges associated with more than 20% of the outstanding Competitive Market Maker Memberships.

Supplementary Material to Options 2A, Section 2

.01 When making its determination whether good cause has been shown to waive the limitations contained in Options 2A, Section 2(b), the Exchange will consider whether an operational, business or regulatory need to exceed the limits has been demonstrated. In those cases where such a need is demonstrated, the Exchange also will consider any operational, business or regulatory concerns that might be raised if such a waiver were granted. The Exchange only will waive such limitations when, in its judgment, such action is in the best interest of the Exchange.

.02 In addition to the trading concentration limits contained in this Rule, no holder or lessee of Market Maker Rights, together with any affiliate, may gain ownership or voting rights in excess of 20% of the outstanding PMM Rights or CMM Rights, as applicable.

[Adopted June 6, 2019 (SR-ISE-2019-17).]

(a) The owner of Market Maker Rights may sell or otherwise transfer ownership of its Market Maker Rights upon the approval of the Exchange. A sale or other transfer of Market Maker Rights shall not be effective until an executed purchase or transfer agreement between the owner and an approved transferee has been filed with, and approved by, the Exchange in writing. The Exchange will provide a bulletin board on which interests to sell or purchase such Market Maker Rights may be posted; however, owners are not required to post interest to sell nor to give preference to posted interests to purchase Market Maker Rights.

(b) Whenever one or more of the following conditions exist with respect to Market Maker Rights, the Exchange may offer the Rights for sale by posting a notice of such sale on a bulletin board for at least thirty (30) days:

(1) An individual owner of Market Maker Rights has died or has been declared legally incompetent, and the legal representative of such owner has failed to consummate a transfer of the Rights within six (6) months of the owner's death or incompetence or within such extended time as may have been granted by the Exchange;

(2) An owner's good standing has been terminated or has been suspended and has failed to be reinstated at the expiration of the period of suspension including any extension of such period that may have been granted by the Exchange; and

(3) An owner that is an organization has been dissolved, formally or informally, and no transfer of its Market Maker Rights has been accomplished within six (6) months of the dissolution or within such extended time as may have been granted by the Exchange.

(4) An owner exceeds the concentration limitations contained in Options 2A, Section 2.

(c) Pursuant to paragraph (a) above, the Exchange's Membership Department shall either approve or disapprove an executed transfer agreement between an owner and an approved applicant within thirty (30) days of receipt of the agreement. A transfer agreement may be disapproved under the following circumstances: (i) the contract attempts to transfer only part of the rights associated with a Market Maker Right; or (ii) the transfer would result in the transferee exceeding the ownership concentration limits contained in the Rules, or would otherwise violate the Exchange's Rules.

(d) The owner or an approved applicant that is a party to an executed transfer agreement that is denied approval (the "Applicant") may appeal the Membership Department's decision to the Exchange Review Council, as set forth below.

(1) Initiation of Review by Applicant. Within 25 days after service of a decision under paragraph (c), an Applicant that is denied approval may file a written request for review with the Exchange Review Council. A request for review shall state with specificity why the Applicant believes that the Membership Department's decision is inconsistent with the bases for denial set forth in Options 2A, Section 3(c), or otherwise should be set aside, and state whether a hearing is requested. The Applicant simultaneously shall file by first-class mail a copy of the request with the Exchange.

(2) Transmission of Documents. Within ten days after the filing of a request for review, the Exchange shall:

(A) transmit to the Exchange Review Council copies of all documents that were considered in connection with the Exchange's decision and an index to the documents; and

(B) serve on the Applicant a copy of such documents (other than those documents originally submitted by the Applicant) and a copy of the index.

(3) Appointment of Subcommittee. The Exchange Review Council or the Review Subcommittee defined in Rule 9120 shall appoint a Subcommittee to participate in the review. The Subcommittee shall be composed of two or more persons who shall be current or past members of the Exchange Review Council or former Directors.

(4) Powers of Subcommittee. If a hearing is requested, the Subcommittee shall conduct the hearing. If a hearing is not requested, the Subcommittee may serve a notice directing that a hearing be held. If a hearing is not requested or directed, the Subcommittee shall conduct its review on the basis of the record developed before the Membership Department and any written submissions made by the Applicant or the Membership Department in connection with the request for review.

(5) Hearing

(A) Notice. If a hearing is requested or directed, the hearing shall be held within 45 days after the filing of the request with the Exchange Review Council or service of the notice by the Subcommittee. The Exchange Review Council shall serve written notice of the date and time of the hearing to the Applicant by facsimile or overnight courier not later than 14 days before the hearing.

(B) Counsel. The Applicant and the Membership Department may be represented by counsel at a hearing conducted pursuant to this Rule.

(C) Evidence. Formal rules of evidence shall not apply to a hearing under this Rule. Not later than five days before the hearing, the Applicant and the Membership Department shall exchange copies of their proposed hearing exhibits and witness lists and provide copies of the same to the Exchange Review Council. If the Applicant or the Membership Department fails to provide copies of its proposed hearing exhibits or witness list within such time, the Subcommittee shall exclude the evidence or witnesses from the proceeding, unless the Subcommittee determines that good cause is shown for failure to comply with the production date set forth in this subparagraph.

(D) Transcript. The hearing shall be recorded and a transcript prepared by a court reporter. A transcript of the hearing shall be available for purchase from the court reporter at prescribed rates. The Applicant, the Membership Department, or a witness may seek to correct the transcript. A proposed correction of the transcript shall be submitted to the Subcommittee within a reasonable period of time prescribed by the Subcommittee. Upon notice to the Applicant and the Membership Department, the Subcommittee may direct the correction to the transcript as requested or sua sponte.

(6) Additional Information, Briefs. At any time during its consideration, the Subcommittee or the Exchange Review Council may direct the Applicant or the Membership Department to file additional information or briefs. Any additional information or brief filed shall be provided to all parties before the Exchange Review Council renders its decision.

(7) Abandonment of Request for Review. If an Applicant fails to specify the grounds for its request for review under Options 2A, Section 3(d)(1), appear at a hearing for which it has notice, or file information or briefs as directed, the Exchange Review Council or the Review Subcommittee may dismiss the request for review as abandoned, and the decision of the Membership Department shall become a final Exchange action. Upon a showing of good cause, the Exchange Review Council or the Review Subcommittee may withdraw a dismissal entered pursuant to this paragraph.

(8) Subcommittee Recommendation. The Subcommittee shall present a recommended decision in writing to the Exchange Review Council within 60 days after the date of the hearing held pursuant to subparagraph (d)(5), and not later than seven days before the meeting of the Exchange Review Council at which the membership proceeding shall be considered.

(9) Decision

(A) Proposed Written Decision. After considering all matters presented in the review and the Subcommittee's recommended written decision, the Exchange Review Council may affirm, modify, or reverse the Membership Department's decision or remand the proceeding with instructions. The Exchange Review Council shall prepare a proposed written decision pursuant to subparagraph (d)(9)(B).

(B) Contents. The decision shall include:

(i) a description of the Exchange Review Council's decision, including its rationale;

(ii) a description of the principal issues raised in the review;

(iii) a summary of the evidence on each issue; and

(iv) a statement whether the Membership Department's decision is affirmed, modified, or reversed, and a rationale therefor that references the bases for denial in Options 2A, Section 3(c).

(C) Issuance of Decision. After Expiration of Call for Review Periods. The Exchange Review Council shall provide its proposed written decision to the Exchange Board. The Exchange Board may call the proceeding for review pursuant to Options 2A, Section 3(d)(10). If the Exchange Board does not call the proceeding for review, the proposed written decision of the Exchange Review Council shall become final. The Exchange Review Council shall serve the Applicant with a written notice specifying the date on which the call for review period expired and stating that the final written decision will be served within 15 days after such date. The Exchange Review Council shall serve its final written decision within 15 days after the date on which the call for review period expired. The decision shall constitute the final action of the Exchange for purposes of SEC Rule 19d-3, unless the Exchange Review Council remands the membership proceeding.

(D) Failure to Issue Decision. If the Exchange Review Council fails to serve its final written decision within the time prescribed in subparagraph (d)(9)(C), the Applicant may file a written request with the Exchange Board requesting that the Exchange Board direct the Exchange Review Council to serve its decision immediately or to show good cause for an extension of time. Within seven days after the filing of such a request, the Board shall direct the Exchange Review Council to serve its written decision immediately or to show good cause for an extension of time. If the Exchange Review Council shows good cause for an extension of time, the Exchange Board may extend the 15-day time limit by not more than 15 days.

(10) Discretionary Review by the Exchange Board

(A) Call for Review by Director. A Director may call a proceeding for review by the Exchange Board if the call for review is made within the period prescribed in subparagraph (d)(10)(B).

(B) 15 Day Period; Waiver. A Director shall make his or her call for review at the next meeting of the Exchange Board that is at least 15 days after the date on which the Exchange Board receives the proposed written decision of the Exchange Review Council. By unanimous vote of the Exchange Board, the Exchange Board may shorten the period to less than 15 days. By an affirmative vote of the majority of the Exchange Board then in office, the Exchange Board may, during the 15 day period, vote to extend the period to more than 15 days.

(C) Review At Next Meeting. If a Director calls a proceeding for review within the time prescribed in subparagraph (d)(10)(B), the Exchange Board shall review the proceeding not later than the next meeting of the Exchange Board. The Exchange Board may order the Applicant and the Membership Department to file briefs in connection with review proceedings pursuant to this paragraph.

(D) Decision of the Exchange Board, Including Remand. After review, the Exchange Board may affirm, modify, or reverse the proposed written decision of the Exchange Review Council. Alternatively, the Exchange Board may remand the proceeding with instructions. The Exchange Board shall prepare a written decision that includes all of the elements described in subparagraph (d)(9)(B).

(11) Issuance of Decision. The Exchange Board shall serve its written decision on the Applicant within 15 days after the meeting at which it conducted its review. The decision shall constitute the final action of the Exchange for purposes of SEC Rule 19d-3, unless the Exchange Board remands the proceeding.

[Adopted June 6, 2019 (SR-ISE-2019-17); amended June 10, 2020 (SR-ISE-2020-22), operative July 10, 2020.]

The owner of Market Maker Rights in good standing may lease a Market Maker Membership to a Member, and a lessee of a Market Maker Membership in good standing may sublease such Membership to a Member with the permission of the owner. The owner must retain the Core Rights associated with such Market Maker Rights and may not transfer such voting rights to the lessee.

(a) A Membership may only be leased to a Member of the Exchange that has been approved to conduct the appropriate market making activities.

(b) Lease agreements, which may not become effective until approved by the Exchange in writing, shall include provisions covering:

(1) the duration of the lease arrangement;

(2) the consideration to be paid by the lessee;

(3) the assignability of the respective interests of the lessee and lessor in such lease agreement; and

(4) as between the parties, which party shall exercise the voting rights of the Membership and which party shall provide the funds necessary to satisfy all applicable Exchange dues, fees and other charges.

(c) Any division of rights and responsibilities between the owner and lessee shall not affect the obligation of the owner to pay all amounts due the Exchange upon default of the lessee.

[Adopted June 6, 2019 (SR-ISE-2019-17).]

(a) An individual owner of Market Maker Rights that is an executive officer, director, principal shareholder or general partner of a registered broker-dealer that is or proposes to become a Member of the Exchange, may register his Membership for such broker-dealer by filing an application in the form prescribed by the Exchange.

(b) The registration of a Membership for a Member by an individual may be withdrawn by the Exchange for any reason that would justify withdrawal of the approval of the individual as an owner of a Membership.

(c) Upon the death, retirement, withdrawal or resignation from a Member of an individual whose Membership is registered for the organization which leaves the organization without a Membership, the Exchange may permit the organization to continue to act as a Member in good standing for such period as the Exchange deems reasonably necessary to enable the organization to acquire a Membership.

[Adopted June 6, 2019 (SR-ISE-2019-17).]