Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 19.6, 48055-48059 [2022-16782]
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Federal Register / Vol. 87, No. 150 / Friday, August 5, 2022 / Notices
the same change.21 The Exchange states
that implementing the proposal
simultaneously with other option
exchanges will promote the protection
of investors by harmonizing the strike
listing methodology across exchanges.
In addition, the Exchange’s proposal to
extend current $0.50 strike price
intervals in equity options to short term
options with strike prices less than $100
will conform this portion of the Short
Term Option Series Program to that of
other options exchanges.22 The
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest because the proposed
rule change does not raise any new or
novel issues. Accordingly, the
Commission hereby waives the
operative delay.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeBZX–2022–042 on the subject line.
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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
21 The Commission recently approved a
substantially similar proposal. See Securities
Exchange Act Release No. 95085 (June 10, 2022), 87
FR 36353 (June 16, 2022) (SR–ISE–2022–10) (Order
Approving a Proposed Rule Change, as Modified by
Amendment No. 1, to Amend ISE Options 4,
Section 5, Series of Options Contracts Open for
Trading).
22 See, e.g., Cboe Exchange, Inc. Rule 4.5(d)(5).
23 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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All submissions should refer to File
Number SR–CboeBZX–2022–042. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBZX–2022–042 and
should be submitted on or before
August 26, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–16783 Filed 8–4–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95407; File No. SR–
CboeEDGX–2022–034]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
19.6
August 1, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
notice is hereby given that on August 1,
2022, Cboe EDGX Exchange, Inc.
(‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX Options’’)
proposes to amend Rule 19.6. The text
of the proposed rule change is provided
in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/edgx/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The proposed rule change amends
Rule 19.6, Interpretation and Policy .05.
Specifically, the Exchange proposes to
amend Rule 19.6, Interpretation and
Policy .05(f) to account for conflicts
between different provisions within the
Short Term Option Series Rules, extend
current $0.50 strike price intervals in
equity options to short term options
with strike prices less than $100, and
make other clarifying changes.
24 17
1 15
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3 15
4 17
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U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
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In 2021, the Exchange amended Rule
19.6, Interpretation and Policy .05 to
limit the intervals between strikes in
equity options listed as part of the Short
Term Option Series Program, excluding
Exchange-Traded Fund Shares and
ETNs, that have an expiration date more
than twenty-one days from the listing
date (‘‘Strike Interval Proposal’’).5 The
Strike Interval Proposal adopted new
paragraph (f), which included a table
that intended to specify the applicable
strike intervals that would supersede
subparagraph (e) 6 for Short Term
Option Series in equity options,
excluding options on exchange-traded
fund shares and on exchange-traded
notes, which have an expiration more
than 21 days from the listing date. The
Strike Interval Proposal was designed to
reduce the density of strike intervals
that would be listed in later weeks,
within the Short Term Option Series
Program, by utilizing limitations for
intervals between strikes that have an
expiration date more than 21 days from
the listing date.
The Exchange proposes to amend
Rule 19.6, Interpretation and Policy .05
to clarify the current rule text and
amend the application of the table to
account for potential conflicts within
the Short Term Option Series Rules.
Currently, Rule 19.6, Interpretation and
Policy .05(f) provides that
notwithstanding subparagraph (e),7
when Short Term Option Series in
equity options (excluding options on
ETFs and ETNs) have an expiration
more than 21 days from the listing date,
the strike interval for each option class
will be based on the following table:
Share price 8
Tier
Average daily volume
Less than $25
1 .....................
2 .....................
3 .....................
Greater than 5,000 ..................................
Greater than 1,000 to 5,000 ....................
0 to 1,000 ................................................
First, the Exchange proposes to add
the phrase ‘‘which specifies the
applicable interval for listing’’ to the
end of the first sentence of paragraph (f).
The table within that paragraph
provides for the listing of intervals
based on certain parameters (average
daily volume and share price). The
Exchange proposes to add the phrase
‘‘which specifies the applicable interval
for listing’’ to clarify that the only
permitted intervals are as specified in
$25 to less
than $75
$0.50
1.00
2.50
$75 to less
than $150
$1.00
1.00
5.00
$1.00
1.00
5.00
the table within paragraph (f), as
proposed to be amended.
Second, the Exchange proposes to
amend the table in paragraph (f) to
address situations in which there is a
conflict between applying the intervals
in paragraph (e) and the table in
paragraph (f). Today, there are instances
where a conflict is presented as between
the application of the table within
paragraph (f) and the rule text within
paragraph (e) with respect to the correct
interval. To address these potential
conflicts, the Exchange proposes that to
$150 to less
than $500
$5.00
5.00
5.00
$500 or
greater
$5.00
10.00
10.00
the extent there is a conflict between
applying the current table within
paragraph (f) and the rule text within
paragraph (e), the greater interval would
apply. To reflect this within the Rules,
the Exchange proposes to amend the
table in paragraph (f) to specify what the
greater interval would be, and thus the
interval the Exchange would apply, in
the event of any possible conflict
between the two rule provisions.
Specifically, the proposed rule change
amends the table as follows:
Share price
Average daily
volume
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Tier
1 .........
Greater than 5,000
2 .........
Greater than 1,000
to 5,000.
Less than $25
17:20 Aug 04, 2022
$75 to less
than $150
$0.50 for strikes less than
$1.00 for strikes
$100 in Short Term Option
less than $150.
Series Program classes and
$2.50 for strikes
classes that trade in $1 ingreater than $150.
crements in non-Short Term
Option Series Program.
$1.00 for strikes between
$100 and $150 for classes
that do not otherwise trade
in $1.00 increments in nonShort Term Options. $2.50
for strikes greater than $150.
$1.00 for strikes less than
$1.00 for strikes
$150. $2.50 for strikes
less than $150.
greater than $150.
$2.50 for strikes
greater than $150.
5 See Securities Exchange Act Release No. 91469
(April 2, 2021), 86 FR 18333 (April 8, 2021) (SR–
CboeEDGX–2021–016).
6 Rule 19.6, Interpretation and Policy .05(e) states
if a class does not trade in $1 strike price intervals,
the strike price interval for Short Term Option
Series may be (i) $0.50 or greater where the strike
price is less than $75; (ii) $1.00 or greater where the
strike price is between $75 and $150; or (iii) $2.50
or greater for strike prices greater than $150.
7 The proposed rule change makes a
nonsubstantive change to correct the term
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$25 to less
than $75
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$500 or
greater
$1.00 for strikes
less than $150.
$2.50 for strikes
greater than $150.
$5.00
$5.00
$1.00 for strikes
less than $150.
$2.50 for strikes
greater than $150.
5.00
10.00
‘‘subparagraph’’ to ‘‘paragraph’’ in the introductory
paragraph of Rule 19.6, Interpretation and Policy
.05(f) as well as subparagraph (f)(3).
8 The Share Price is the closing price on the
primary market on the last day of the calendar
quarter. In the event of a corporate action, the Share
Price of the surviving company is utilized. The
Average Daily Volume is the total number of option
contracts traded in a given security for the
applicable calendar quarter divided by the number
of trading days in the applicable calendar quarter.
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$150 to less
than $500
Beginning on the second trading day in the first
month of each calendar quarter, the Average Daily
Volume is calculated by utilizing data from the
prior calendar quarter based on Customer-cleared
volume at OCC. For options listed on the first
trading day of a given calendar quarter, the Average
Daily Volume is calculated using the quarter prior
to the last trading calendar quarter. See Rule 19.6,
Interpretation and Policy .05(f)(1) and (2).
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Share price
Average daily
volume
Less than $25
$25 to less
than $75
$75 to less
than $150
0 to 1,000 ...............
$2.50 .......................................
$5.00 .......................
$5.00 .......................
Tier
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3 .........
Below are some examples to
demonstrate the application of the
proposed table:
Example 1: Assume a Tier 1 stock that
closed on the last day of Q1 with a
quarterly share price higher than $75
but less than $150. Therefore, utilizing
the current table within paragraph (f),
the interval would be $1.00 for strikes
added during Q2 even for strikes above
$150. However, paragraph (e) provides
that the Exchange may list a Short Term
Option Series at $2.50 intervals where
the strike price is above $150. In other
words, there is a potential conflict
between the permitted strike intervals
above $150 during Q2. In this example,
current paragraph (f) would specify a
$1.00 interval whereas current
paragraph (e) would specify a $2.50
interval. Consistent with selecting the
greater interval (from current paragraph
(e)), the permissible strike interval in
this scenario would be $2.50 as set forth
in the proposed table. Therefore, during
Q2, the following strikes would be
eligible to list: $152.50 and $157.50. For
strikes less than $150, the following
strikes would be eligible to list during
Q2: $149 and $148 because Short Term
Option Series with expiration dates
more than 21 days from the listing date
as well as Short Term Option Series
with expiration dates less than 21 days
from the listing date would both be
eligible to list $1 intervals pursuant to
both paragraphs (e) and (f).
Example 2: Assume a Tier 2 stock that
closed on the last day of Q1 with a
quarterly share price less than $25.
Therefore, utilizing the current table
within paragraph (f), the interval would
be $1.00 for strikes added during Q2
even for strikes above $25. However,
paragraph (e) provides that the
Exchange may list a Short Term Option
Series at $0.50 intervals where the strike
is less than $100 [sic], at $1.00 intervals
where the strike price is between $100
[sic] and $150, and at $2.50 intervals
where the strike price is above $150. In
other words, there is a potential conflict
between the permitted strike intervals
below $100 [sic] and above $150 during
Q2. In this example, current paragraph
(f) would specify a $1.00 interval for
strikes below $100 whereas current
paragraph (e) would specify a $0.50
interval. Consistent with selecting the
greater interval (from current paragraph
(f)), the permissible strike interval in
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this scenario for strikes below $100
would be $1.00 as set forth in the
proposed table. For strikes between
$100 [sic] and $150, there is no conflict,
as both provisions would provide $1.00
intervals for those strikes. For strikes
above $150, current paragraph (f) would
specify a $1.00 interval for strikes above
$150 whereas current paragraph (e)
would specify a $2.50 interval.
Consistent with selecting the greater
interval (from current paragraph (e)), the
permissible strike interval in this
scenario for strikes above $150 would be
$2.50 as set forth in the proposed table.
Example 3: Assume a Tier 3 stock that
closed on the last day of Q1 with a
quarterly share price less than $25.
Therefore, utilizing the current table
within paragraph (f), the interval would
be $2.50 for all strikes added during Q2.
However, paragraph (e) provides that
the Exchange may list a Short Term
Option Series at $0.50 intervals where
the strike price is less than $100 [sic],
$1.00 intervals where the strike price is
between $100 [sic] and $150, and $2.50
intervals where the strike price is above
$150. In other words, there is a potential
conflict between the permitted strike
intervals below $150 during Q2 (there is
no conflict for strikes above $150, as
both provisions provide for a $2.50
strike interval). Consistent with
selecting the greater interval (From
current paragraph (f)), the permissible
strike interval in this scenario for strikes
below $150 would be $2.50 as set forth
in the proposed table.9
Third, the Exchange proposes to
delete the last sentence of the
introductory paragraph of paragraph (f),
which states ‘‘[t]he below table indicates
the applicable strike intervals and
supersedes paragraph (d) above, which
permits additional series to be opened
for trading on the Exchange when the
Exchange deems it necessary to
maintain an orderly market, to meet
customer demand or when the market
price of the underlying security moves
substantially from the exercise price or
prices of the series already opened.’’
The table within paragraph (f)
supersedes other rules pertaining to
9 The Exchange made similar corresponding
changes to the table for tier 1 and tier 2 stocks with
prices $25 to less than $75 and $75 to less than
$150, with all potential conflicts between current
paragraphs (e) and (f) resolved to apply the greater
interval.
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$150 to less
than $500
5.00
$500 or
greater
10.00
strike intervals, but the table does not
supersede rules governing the addition
of options series. Therefore, the table
within paragraph (f) and the rule text of
paragraph (d) do not conflict with each
other. Deleting the reference to
paragraph (d) will avoid potential
confusion.
Fourth, the Exchange proposes to
delete subparagraph (f)(4), which states
‘‘[n]otwithstanding the limitations
imposed by this subparagraph (f), this
subparagraph (f) does not amend the
range of strikes for Short Term Option
Series may be listed pursuant to
subparagraph (e) above.’’ While the
range limitations continue to be
applicable within paragraph (f), the
strike ranges do not conflict with the
strike intervals and therefore the
sentence is not necessary. Removing
this provision will avoid potential
confusion.
Finally, the Exchange proposes to
amend Rule 19.6, Interpretation and
Policy .05(e) to extend $0.50 strike price
intervals in equity options to short-term
options with strike prices less than $100
instead of the current $75. This
proposed change is intended to conform
this provision of the Short Term Option
Series Program to that of other options
exchanges.10 With this proposed
change, for short term options in equity
option classes that do not trade in $1
strike price intervals, the strike price
interval for Short Term Option Series
may be (i) $0.50 or greater where the
strike price is less than $100; (ii) $1.00
or greater where the strike price is
between $100 and $150; or (iii) $2.50 or
greater for strike prices greater than
$150.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 12 requirements that the rules of
10 This is consistent with the rules of other
options exchanges. See, e.g., Cboe Options Rule
4.5(d)(5).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 13 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes the Strike
Proposal continues to limit the intervals
between strikes listed in the Short Term
Option Series Program that have an
expiration date more than twenty-one
days.
In particular, the Exchange’s proposed
addition to the first sentence of Rule
19.6, Interpretation and Policy .05(f) is
consistent with the Act because it
clarifies that the only permitted
intervals are as specified in the table
within that subparagraph, as amended.
The Exchange believes this proposed
rule change will bring greater
transparency to the rule. The proposed
rule change to amend the table within
Rule 19.6, Interpretation and Policy
.05(f) to address potential conflicts
between that paragraph and paragraph
(e) with respect to the correct strike
interval is consistent with the Act
because it protects investors and the
public interest by adding transparency
to the manner in which the Exchange
implements its listing rules and removes
potential uncertainty. The proposed rule
text specifies the applicable intervals
when there is a conflict between the
rule text within paragraphs (e) and (f),
thereby providing certainty as to the
outcome. The table within paragraph (f)
impacts strike intervals and supersedes
other strike interval rules but does not
supersede the addition of option series.
Therefore, paragraph (d) regarding the
addition of option series does not
conflict with the table in paragraph (f).
Deleting the last sentence of the
introductory paragraph of Rule 19.6,
Interpretation and Policy .05(f) that
includes the reference to paragraph (d)
is therefore consistent with the Act.
Similarly, deleting Rule 19.6,
Interpretation and Policy .05(f)(4) is
consistent with the Act because while
the range limitations continue to be
applicable, the strike ranges do not
13 Id.
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conflict with strike intervals, rendering
the sentence unnecessary. Deletion of
this provision will avoid potential
confusion.
The Strike Interval Proposal was
designed to reduce the density of strike
intervals that would be listed in later
weeks, within the Short Term Option
Series Program, by utilizing limitations
for intervals between strikes which have
an expiration date more than twentyone days from the listing date. The
Exchange’s proposal intends to continue
to remove certain strike intervals where
there exist clusters of strikes whose
characteristics closely resemble one
another and, therefore, do not serve
different trading needs,14 rendering
these strikes less useful. Also, the Strike
Interval Proposal continues to reduce
the number of strikes listed on the
Exchange, allowing Market-Makers to
expend their capital in the options
market in a more efficient manner,
thereby improving overall market
quality on the Exchange.
Additionally, by applying the greater
interval would control as between the
current rule text within Rule 19.6,
Interpretation and Policy .05(e) and (f),
the Exchange is reducing the number of
strikes listed in a manner consistent
with the intent of the Strike Interval
Proposal, which was to reduce strikes
which were farther out in time. The
result of this clarification is to select
wider strike intervals for Short Term
Option Series in equity options which
have an expiration date more than
twenty-one days from the listing date.
This rule change would harmonize
strike intervals as between inner
weeklies (those having less than twentyone days from the listing date) and outer
weeklies (those having more than
twenty-one days from the listing date)
so that strike intervals are not widening
as the listing date approaches.
The proposed rule change to extend
current $0.50 strike price intervals in
equity options to short term options
with strike prices less than $100 will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, because
it will conform this portion of the Short
Term Option Series Program to that of
other options exchanges.15
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
14 For example, two strikes that are densely
clustered may have the same risk properties and
may also be the same percentage out-of-the-money.
15 See, e.g., Cboe Options Rule 4.5(d)(5).
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necessary or appropriate in furtherance
of the purposes of the Act. The Strike
Interval Proposal continues to limit the
number of Short Term Option Series
Program strike intervals available for
quoting and trading on the Exchange for
all Options Members. The Exchange
believes adding clarifying language to
the first sentence of Rule 19.6,
Interpretation and Policy .05(f)
regarding which parameter the table
within that provision amends within the
Short Term Option Series Program will
bring greater transparency to the rules.
Amending the table within paragraph (f)
to address potential conflicts as between
the rule text of Rule 19.6, Interpretation
and Policy .05(e) and (f) will bring
greater transparency to and reduce
potential confusion regarding the
manner in which the Exchange
implements its listing rules. Deleting the
last sentence of the first paragraph of the
introductory paragraph of Rule 19.6,
Interpretation and Policy .05(f) that
references paragraph (d) does not
impose an undue burden on
competition and will avoid potential
confusion because the table within
paragraph (f) impacts strike intervals
and supersedes other rules pertaining to
strike intervals, but the table does not
supersede rules governing the addition
of options series, such as paragraph (d).
Deleting Rule 19.6, Interpretation and
Policy .05(f)(4) will also avoid any
potential confusion because, while the
range limitations continue to be
applicable, the strike ranges do not
conflict with strike intervals and are not
necessary. Extending current $0.50
strike price intervals in equity options
to short term options with strike prices
less than $100 will not impose an undue
burden on competition, because it is
consistent with the rules of other
options exchanges.16
While this proposal continues to limit
the intervals of strikes listed on the
Exchange, the Exchange continues to
balance the needs of market participants
by continuing to offer a number of
strikes to meet a market participant’s
investment objective. The Exchange’s
Strike Interval Proposal does not impose
an undue burden on intermarket
competition as this Strike Interval
Proposal does not impact the listings
available at another self-regulatory
organization.
16 See,
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e.g., Cboe Options Rule 4.5(d)(5).
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Federal Register / Vol. 87, No. 150 / Friday, August 5, 2022 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to 19(b)(3)(A)
of the Act 17 and Rule 19b–4(f)(6) 18
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 19 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),20 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the Exchange
may implement the proposed rule
change on August 1, 2022—the same
time other exchanges are implementing
the same change.21 The Exchange states
that implementing the proposal
simultaneously with other option
exchanges will promote the protection
of investors by harmonizing the strike
listing methodology across exchanges.
In addition, the Exchange’s proposal to
extend current $0.50 strike price
intervals in equity options to short term
options with strike prices less than $100
will conform this portion of the Short
Term Option Series Program to that of
other options exchanges.22 The
Commission believes that waiver of the
17 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
19 17 CFR 240.19b–4(f)(6).
20 17 CFR 240.19b–4(f)(6)(iii).
21 The Commission recently approved a
substantially similar proposal. See Securities
Exchange Act Release No. 95085 (June 10, 2022), 87
FR 36353 (June 16, 2022) (SR–ISE–2022–10) (Order
Approving a Proposed Rule Change, as Modified by
Amendment No. 1, to Amend ISE Options 4,
Section 5, Series of Options Contracts Open for
Trading).
22 See, e.g., Cboe Exchange, Inc. Rule 4.5(d)(5).
lotter on DSK11XQN23PROD with NOTICES1
18 17
VerDate Sep<11>2014
17:20 Aug 04, 2022
Jkt 256001
30-day operative delay is consistent
with the protection of investors and the
public interest because the proposed
rule change does not raise any new or
novel issues. Accordingly, the
Commission hereby waives the
operative delay.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2022–034 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeEDGX–2022–034. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
23 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
48059
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR-CboeEDGX–2022–034, and
should be submitted on or before
August 26, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–16782 Filed 8–4–22; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #17440 and #17441;
New Mexico Disaster Number NM–00080]
Presidential Declaration Amendment of
a Major Disaster for the State of New
Mexico
U.S. Small Business
Administration.
ACTION: Amendment 3.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of New Mexico
(FEMA–4652–DR), dated 05/04/2022.
Incident: Wildfires, Straight-line
Winds, Flooding, Mudflows, and Debris
Flows directly related to the Wildfires.
Incident Period: 04/05/2022 through
07/23/2022.
DATES: Issued on 08/02/2022.
Physical Loan Application Deadline
Date: 09/06/2022.
Economic Injury (EIDL) Loan
Application Deadline Date: 02/06/2023.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUMMARY:
24 17
E:\FR\FM\05AUN1.SGM
CFR 200.30–3(a)(12), (59).
05AUN1
]]>Agencies
[Federal Register Volume 87, Number 150 (Friday, August 5, 2022)]
[Notices]
[Pages 48055-48059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16782]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95407; File No. SR-CboeEDGX-2022-034]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 19.6
August 1, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 1, 2022, Cboe EDGX Exchange, Inc. (``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
proposes to amend Rule 19.6. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The proposed rule change amends Rule 19.6, Interpretation and
Policy .05. Specifically, the Exchange proposes to amend Rule 19.6,
Interpretation and Policy .05(f) to account for conflicts between
different provisions within the Short Term Option Series Rules, extend
current $0.50 strike price intervals in equity options to short term
options with strike prices less than $100, and make other clarifying
changes.
[[Page 48056]]
In 2021, the Exchange amended Rule 19.6, Interpretation and Policy
.05 to limit the intervals between strikes in equity options listed as
part of the Short Term Option Series Program, excluding Exchange-Traded
Fund Shares and ETNs, that have an expiration date more than twenty-one
days from the listing date (``Strike Interval Proposal'').\5\ The
Strike Interval Proposal adopted new paragraph (f), which included a
table that intended to specify the applicable strike intervals that
would supersede subparagraph (e) \6\ for Short Term Option Series in
equity options, excluding options on exchange-traded fund shares and on
exchange-traded notes, which have an expiration more than 21 days from
the listing date. The Strike Interval Proposal was designed to reduce
the density of strike intervals that would be listed in later weeks,
within the Short Term Option Series Program, by utilizing limitations
for intervals between strikes that have an expiration date more than 21
days from the listing date.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 91469 (April 2,
2021), 86 FR 18333 (April 8, 2021) (SR-CboeEDGX-2021-016).
\6\ Rule 19.6, Interpretation and Policy .05(e) states if a
class does not trade in $1 strike price intervals, the strike price
interval for Short Term Option Series may be (i) $0.50 or greater
where the strike price is less than $75; (ii) $1.00 or greater where
the strike price is between $75 and $150; or (iii) $2.50 or greater
for strike prices greater than $150.
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 19.6, Interpretation and Policy
.05 to clarify the current rule text and amend the application of the
table to account for potential conflicts within the Short Term Option
Series Rules. Currently, Rule 19.6, Interpretation and Policy .05(f)
provides that notwithstanding subparagraph (e),\7\ when Short Term
Option Series in equity options (excluding options on ETFs and ETNs)
have an expiration more than 21 days from the listing date, the strike
interval for each option class will be based on the following table:
---------------------------------------------------------------------------
\7\ The proposed rule change makes a nonsubstantive change to
correct the term ``subparagraph'' to ``paragraph'' in the
introductory paragraph of Rule 19.6, Interpretation and Policy
.05(f) as well as subparagraph (f)(3).
\8\ The Share Price is the closing price on the primary market
on the last day of the calendar quarter. In the event of a corporate
action, the Share Price of the surviving company is utilized. The
Average Daily Volume is the total number of option contracts traded
in a given security for the applicable calendar quarter divided by
the number of trading days in the applicable calendar quarter.
Beginning on the second trading day in the first month of each
calendar quarter, the Average Daily Volume is calculated by
utilizing data from the prior calendar quarter based on Customer-
cleared volume at OCC. For options listed on the first trading day
of a given calendar quarter, the Average Daily Volume is calculated
using the quarter prior to the last trading calendar quarter. See
Rule 19.6, Interpretation and Policy .05(f)(1) and (2).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Share price \8\
-------------------------------------------------------------------------------
Tier Average daily volume $25 to less $75 to less $150 to less $500 or
Less than $25 than $75 than $150 than $500 greater
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................... Greater than 5,000............... $0.50 $1.00 $1.00 $5.00 $5.00
2.................................... Greater than 1,000 to 5,000...... 1.00 1.00 1.00 5.00 10.00
3.................................... 0 to 1,000....................... 2.50 5.00 5.00 5.00 10.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
First, the Exchange proposes to add the phrase ``which specifies
the applicable interval for listing'' to the end of the first sentence
of paragraph (f). The table within that paragraph provides for the
listing of intervals based on certain parameters (average daily volume
and share price). The Exchange proposes to add the phrase ``which
specifies the applicable interval for listing'' to clarify that the
only permitted intervals are as specified in the table within paragraph
(f), as proposed to be amended.
Second, the Exchange proposes to amend the table in paragraph (f)
to address situations in which there is a conflict between applying the
intervals in paragraph (e) and the table in paragraph (f). Today, there
are instances where a conflict is presented as between the application
of the table within paragraph (f) and the rule text within paragraph
(e) with respect to the correct interval. To address these potential
conflicts, the Exchange proposes that to the extent there is a conflict
between applying the current table within paragraph (f) and the rule
text within paragraph (e), the greater interval would apply. To reflect
this within the Rules, the Exchange proposes to amend the table in
paragraph (f) to specify what the greater interval would be, and thus
the interval the Exchange would apply, in the event of any possible
conflict between the two rule provisions. Specifically, the proposed
rule change amends the table as follows:
----------------------------------------------------------------------------------------------------------------
Share price
Average daily ------------------------------------------------------------------------------------
Tier volume $25 to less $75 to less $150 to less $500 or
Less than $25 than $75 than $150 than $500 greater
----------------------------------------------------------------------------------------------------------------
1........ Greater than $0.50 for $1.00 for $1.00 for $5.00 $5.00
5,000. strikes less strikes less strikes less
than $100 in than $150. than $150.
Short Term $2.50 for $2.50 for
Option Series strikes greater strikes
Program classes than $150. greater than
and classes $150.
that trade in
$1 increments
in non-Short
Term Option
Series Program.
$1.00 for
strikes between
$100 and $150
for classes
that do not
otherwise trade
in $1.00
increments in
non-Short Term
Options. $2.50
for strikes
greater than
$150.
2........ Greater than $1.00 for $1.00 for $1.00 for 5.00 10.00
1,000 to 5,000. strikes less strikes less strikes less
than $150. than $150. than $150.
$2.50 for $2.50 for $2.50 for
strikes greater strikes greater strikes
than $150. than $150. greater than
$150.
[[Page 48057]]
3........ 0 to 1,000...... $2.50........... $5.00........... $5.00.......... 5.00 10.00
----------------------------------------------------------------------------------------------------------------
Below are some examples to demonstrate the application of the
proposed table:
Example 1: Assume a Tier 1 stock that closed on the last day of Q1
with a quarterly share price higher than $75 but less than $150.
Therefore, utilizing the current table within paragraph (f), the
interval would be $1.00 for strikes added during Q2 even for strikes
above $150. However, paragraph (e) provides that the Exchange may list
a Short Term Option Series at $2.50 intervals where the strike price is
above $150. In other words, there is a potential conflict between the
permitted strike intervals above $150 during Q2. In this example,
current paragraph (f) would specify a $1.00 interval whereas current
paragraph (e) would specify a $2.50 interval. Consistent with selecting
the greater interval (from current paragraph (e)), the permissible
strike interval in this scenario would be $2.50 as set forth in the
proposed table. Therefore, during Q2, the following strikes would be
eligible to list: $152.50 and $157.50. For strikes less than $150, the
following strikes would be eligible to list during Q2: $149 and $148
because Short Term Option Series with expiration dates more than 21
days from the listing date as well as Short Term Option Series with
expiration dates less than 21 days from the listing date would both be
eligible to list $1 intervals pursuant to both paragraphs (e) and (f).
Example 2: Assume a Tier 2 stock that closed on the last day of Q1
with a quarterly share price less than $25. Therefore, utilizing the
current table within paragraph (f), the interval would be $1.00 for
strikes added during Q2 even for strikes above $25. However, paragraph
(e) provides that the Exchange may list a Short Term Option Series at
$0.50 intervals where the strike is less than $100 [sic], at $1.00
intervals where the strike price is between $100 [sic] and $150, and at
$2.50 intervals where the strike price is above $150. In other words,
there is a potential conflict between the permitted strike intervals
below $100 [sic] and above $150 during Q2. In this example, current
paragraph (f) would specify a $1.00 interval for strikes below $100
whereas current paragraph (e) would specify a $0.50 interval.
Consistent with selecting the greater interval (from current paragraph
(f)), the permissible strike interval in this scenario for strikes
below $100 would be $1.00 as set forth in the proposed table. For
strikes between $100 [sic] and $150, there is no conflict, as both
provisions would provide $1.00 intervals for those strikes. For strikes
above $150, current paragraph (f) would specify a $1.00 interval for
strikes above $150 whereas current paragraph (e) would specify a $2.50
interval. Consistent with selecting the greater interval (from current
paragraph (e)), the permissible strike interval in this scenario for
strikes above $150 would be $2.50 as set forth in the proposed table.
Example 3: Assume a Tier 3 stock that closed on the last day of Q1
with a quarterly share price less than $25. Therefore, utilizing the
current table within paragraph (f), the interval would be $2.50 for all
strikes added during Q2. However, paragraph (e) provides that the
Exchange may list a Short Term Option Series at $0.50 intervals where
the strike price is less than $100 [sic], $1.00 intervals where the
strike price is between $100 [sic] and $150, and $2.50 intervals where
the strike price is above $150. In other words, there is a potential
conflict between the permitted strike intervals below $150 during Q2
(there is no conflict for strikes above $150, as both provisions
provide for a $2.50 strike interval). Consistent with selecting the
greater interval (From current paragraph (f)), the permissible strike
interval in this scenario for strikes below $150 would be $2.50 as set
forth in the proposed table.\9\
---------------------------------------------------------------------------
\9\ The Exchange made similar corresponding changes to the table
for tier 1 and tier 2 stocks with prices $25 to less than $75 and
$75 to less than $150, with all potential conflicts between current
paragraphs (e) and (f) resolved to apply the greater interval.
---------------------------------------------------------------------------
Third, the Exchange proposes to delete the last sentence of the
introductory paragraph of paragraph (f), which states ``[t]he below
table indicates the applicable strike intervals and supersedes
paragraph (d) above, which permits additional series to be opened for
trading on the Exchange when the Exchange deems it necessary to
maintain an orderly market, to meet customer demand or when the market
price of the underlying security moves substantially from the exercise
price or prices of the series already opened.'' The table within
paragraph (f) supersedes other rules pertaining to strike intervals,
but the table does not supersede rules governing the addition of
options series. Therefore, the table within paragraph (f) and the rule
text of paragraph (d) do not conflict with each other. Deleting the
reference to paragraph (d) will avoid potential confusion.
Fourth, the Exchange proposes to delete subparagraph (f)(4), which
states ``[n]otwithstanding the limitations imposed by this subparagraph
(f), this subparagraph (f) does not amend the range of strikes for
Short Term Option Series may be listed pursuant to subparagraph (e)
above.'' While the range limitations continue to be applicable within
paragraph (f), the strike ranges do not conflict with the strike
intervals and therefore the sentence is not necessary. Removing this
provision will avoid potential confusion.
Finally, the Exchange proposes to amend Rule 19.6, Interpretation
and Policy .05(e) to extend $0.50 strike price intervals in equity
options to short-term options with strike prices less than $100 instead
of the current $75. This proposed change is intended to conform this
provision of the Short Term Option Series Program to that of other
options exchanges.\10\ With this proposed change, for short term
options in equity option classes that do not trade in $1 strike price
intervals, the strike price interval for Short Term Option Series may
be (i) $0.50 or greater where the strike price is less than $100; (ii)
$1.00 or greater where the strike price is between $100 and $150; or
(iii) $2.50 or greater for strike prices greater than $150.
---------------------------------------------------------------------------
\10\ This is consistent with the rules of other options
exchanges. See, e.g., Cboe Options Rule 4.5(d)(5).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ requirements that the rules of
[[Page 48058]]
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \13\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange believes the
Strike Proposal continues to limit the intervals between strikes listed
in the Short Term Option Series Program that have an expiration date
more than twenty-one days.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ Id.
---------------------------------------------------------------------------
In particular, the Exchange's proposed addition to the first
sentence of Rule 19.6, Interpretation and Policy .05(f) is consistent
with the Act because it clarifies that the only permitted intervals are
as specified in the table within that subparagraph, as amended. The
Exchange believes this proposed rule change will bring greater
transparency to the rule. The proposed rule change to amend the table
within Rule 19.6, Interpretation and Policy .05(f) to address potential
conflicts between that paragraph and paragraph (e) with respect to the
correct strike interval is consistent with the Act because it protects
investors and the public interest by adding transparency to the manner
in which the Exchange implements its listing rules and removes
potential uncertainty. The proposed rule text specifies the applicable
intervals when there is a conflict between the rule text within
paragraphs (e) and (f), thereby providing certainty as to the outcome.
The table within paragraph (f) impacts strike intervals and supersedes
other strike interval rules but does not supersede the addition of
option series. Therefore, paragraph (d) regarding the addition of
option series does not conflict with the table in paragraph (f).
Deleting the last sentence of the introductory paragraph of Rule 19.6,
Interpretation and Policy .05(f) that includes the reference to
paragraph (d) is therefore consistent with the Act. Similarly, deleting
Rule 19.6, Interpretation and Policy .05(f)(4) is consistent with the
Act because while the range limitations continue to be applicable, the
strike ranges do not conflict with strike intervals, rendering the
sentence unnecessary. Deletion of this provision will avoid potential
confusion.
The Strike Interval Proposal was designed to reduce the density of
strike intervals that would be listed in later weeks, within the Short
Term Option Series Program, by utilizing limitations for intervals
between strikes which have an expiration date more than twenty-one days
from the listing date. The Exchange's proposal intends to continue to
remove certain strike intervals where there exist clusters of strikes
whose characteristics closely resemble one another and, therefore, do
not serve different trading needs,\14\ rendering these strikes less
useful. Also, the Strike Interval Proposal continues to reduce the
number of strikes listed on the Exchange, allowing Market-Makers to
expend their capital in the options market in a more efficient manner,
thereby improving overall market quality on the Exchange.
---------------------------------------------------------------------------
\14\ For example, two strikes that are densely clustered may
have the same risk properties and may also be the same percentage
out-of-the-money.
---------------------------------------------------------------------------
Additionally, by applying the greater interval would control as
between the current rule text within Rule 19.6, Interpretation and
Policy .05(e) and (f), the Exchange is reducing the number of strikes
listed in a manner consistent with the intent of the Strike Interval
Proposal, which was to reduce strikes which were farther out in time.
The result of this clarification is to select wider strike intervals
for Short Term Option Series in equity options which have an expiration
date more than twenty-one days from the listing date. This rule change
would harmonize strike intervals as between inner weeklies (those
having less than twenty-one days from the listing date) and outer
weeklies (those having more than twenty-one days from the listing date)
so that strike intervals are not widening as the listing date
approaches.
The proposed rule change to extend current $0.50 strike price
intervals in equity options to short term options with strike prices
less than $100 will remove impediments to and perfect the mechanism of
a free and open market and a national market system, because it will
conform this portion of the Short Term Option Series Program to that of
other options exchanges.\15\
---------------------------------------------------------------------------
\15\ See, e.g., Cboe Options Rule 4.5(d)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Strike Interval Proposal
continues to limit the number of Short Term Option Series Program
strike intervals available for quoting and trading on the Exchange for
all Options Members. The Exchange believes adding clarifying language
to the first sentence of Rule 19.6, Interpretation and Policy .05(f)
regarding which parameter the table within that provision amends within
the Short Term Option Series Program will bring greater transparency to
the rules. Amending the table within paragraph (f) to address potential
conflicts as between the rule text of Rule 19.6, Interpretation and
Policy .05(e) and (f) will bring greater transparency to and reduce
potential confusion regarding the manner in which the Exchange
implements its listing rules. Deleting the last sentence of the first
paragraph of the introductory paragraph of Rule 19.6, Interpretation
and Policy .05(f) that references paragraph (d) does not impose an
undue burden on competition and will avoid potential confusion because
the table within paragraph (f) impacts strike intervals and supersedes
other rules pertaining to strike intervals, but the table does not
supersede rules governing the addition of options series, such as
paragraph (d). Deleting Rule 19.6, Interpretation and Policy .05(f)(4)
will also avoid any potential confusion because, while the range
limitations continue to be applicable, the strike ranges do not
conflict with strike intervals and are not necessary. Extending current
$0.50 strike price intervals in equity options to short term options
with strike prices less than $100 will not impose an undue burden on
competition, because it is consistent with the rules of other options
exchanges.\16\
---------------------------------------------------------------------------
\16\ See, e.g., Cboe Options Rule 4.5(d)(5).
---------------------------------------------------------------------------
While this proposal continues to limit the intervals of strikes
listed on the Exchange, the Exchange continues to balance the needs of
market participants by continuing to offer a number of strikes to meet
a market participant's investment objective. The Exchange's Strike
Interval Proposal does not impose an undue burden on intermarket
competition as this Strike Interval Proposal does not impact the
listings available at another self-regulatory organization.
[[Page 48059]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6) \18\
thereunder.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\20\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the Exchange may implement the proposed rule change on August 1, 2022--
the same time other exchanges are implementing the same change.\21\ The
Exchange states that implementing the proposal simultaneously with
other option exchanges will promote the protection of investors by
harmonizing the strike listing methodology across exchanges. In
addition, the Exchange's proposal to extend current $0.50 strike price
intervals in equity options to short term options with strike prices
less than $100 will conform this portion of the Short Term Option
Series Program to that of other options exchanges.\22\ The Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest because the
proposed rule change does not raise any new or novel issues.
Accordingly, the Commission hereby waives the operative delay.\23\
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\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ The Commission recently approved a substantially similar
proposal. See Securities Exchange Act Release No. 95085 (June 10,
2022), 87 FR 36353 (June 16, 2022) (SR-ISE-2022-10) (Order Approving
a Proposed Rule Change, as Modified by Amendment No. 1, to Amend ISE
Options 4, Section 5, Series of Options Contracts Open for Trading).
\22\ See, e.g., Cboe Exchange, Inc. Rule 4.5(d)(5).
\23\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2022-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CboeEDGX-2022-034. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeEDGX-2022-034, and should be
submitted on or before August 26, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16782 Filed 8-4-22; 8:45 am]
BILLING CODE 8011-01-P
