Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Short Term Option Series Program in Rule 19.6, Interpretation and Policy .05 and a Related Definition in Rule 16.1, 70869-70875 [2022-25232]
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
Conference Room, 11555 Rockville Pike,
Rockville, Maryland. The public is
invited to attend the Commission’s
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Thursday, December 8, 2022
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Dated: November 16, 2022.
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Notice.
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DATES: Effective date: November 21,
2022.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Christopher C. Meyerson, 202–268–
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The
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gives notice that, pursuant to 39 CFR
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with the Postal Regulatory Commission
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Concerning Global Reseller Expedited
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Expedited Package Contracts subsection
in the Mail Classification Schedule.
Documents are available at
www.prc.gov, Docket No. MC2023–46.
SUPPLEMENTARY INFORMATION:
Sarah Sullivan,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2022–25297 Filed 11–18–22; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
International Product Change—
Removal of Priority Mail International
Regional Rate Boxes—Non-Published
Rates and Priority Mail International
Regional Rates Boxes Contracts
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
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Priority Mail International Regional Rate
Boxes—Non-Published Rates and
Priority Mail International Regional Rate
Boxes (PMI RRB) Contracts from the
Competitive Product List in the Mail
Classification Schedule.
DATES: Applicable date: November 10,
2022.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
[FR Doc. 2022–25332 Filed 11–17–22; 11:15 am]
Christopher C. Meyerson, 202–268–
7820.
BILLING CODE 7590–01–P
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ACTION:
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 39 CFR 3040.130 et seq., on
November 10, 2022, it filed with the
Postal Regulatory Commission a Request
of the United States Postal Service to
SUPPLEMENTARY INFORMATION:
POSTAL SERVICE
International Product Change—Global
Reseller Expedited Package Contracts
AGENCY:
Postal ServiceTM.
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70869
Remove Priority Mail International
Regional Rate Boxes—Non-Published
Rates and Priority Mail International
Regional Rate Boxes (PMI RRB)
Contracts from the Competitive Product
List in the Mail Classification Schedule.
Documents are available at
www.prc.gov, Docket No. MC2023–45.
Sarah Sullivan,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2022–25293 Filed 11–18–22; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96313; File No. SR–
CboeBZX–2022–056]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend the
Short Term Option Series Program in
Rule 19.6, Interpretation and Policy .05
and a Related Definition in Rule 16.1
November 15, 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 November
14, 2022, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘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 BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to amend the Short Term
Option Series Program in Rule 19.6,
Interpretation and Policy .05 and a
related definition in Rule 16.1. 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/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
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 Exchange proposes to amend the
Short Term Option Series Program in
Rule 19.6, Interpretation and Policy .05.
Specifically, the Exchange proposes to
amend the Short Term Option Series
Program to: (1) limit the number of
Short Term Option Expiration Dates for
options on SPDR S&P 500 ETF Trust
(SPY), the INVESCO QQQ TrustSM,
Series 1 (QQQ), and iShares Russell
2000 ETF (IWM) from five to two
expirations for Monday and Wednesday
expirations; and (2) expand the Short
Term Option Series program to permit
the listing and trading of options series
with Tuesday and Thursday expirations
for options on SPY and QQQ listed
pursuant to the Short Term Option
Series Program, subject to the same
proposed limitation of two expirations.
The Exchange also proposes to amend
the definition of Short Term Option
Series in Rule 16.1.
lotter on DSK11XQN23PROD with NOTICES1
Curtail Short Term Option Expiration
Dates
Currently, after an option class has
been approved for listing and trading on
the Exchange, the Exchange may open
for trading on any Thursday or Friday
that is a business day (‘‘Short Term
Option Opening Date’’) series of options
on that class that expire at the close of
business on each of the next five Fridays
that are business days and are not
Fridays on which monthly options
series or Quarterly Options Series expire
(‘‘Short Term Option Expiration Dates’’).
The Exchange may have no more than
a total of five Short Term Option
Expiration Dates not including any
Monday or Wednesday SPY, QQQ, and
IWM Expirations. Further, if the
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Exchange is not open for business on
the respective Thursday or Friday, the
Short Term Option Opening Date will
be the first business day immediately
prior to that respective Thursday or
Friday. Similarly, if the Exchange is not
open for business on a Friday, the Short
Term Option Expiration Date will be the
first business day immediately prior to
that Friday.
Today, with respect to Wednesday
SPY, QQQ, and IWM Expirations, the
Exchange may open for trading on any
Tuesday or Wednesday that is a
business day series of options on SPY,
QQQ, and IWM to expire on any
Wednesday of the month that is a
business day and is not a Wednesday in
which Quarterly Options Series expire
(‘‘Wednesday SPY Expirations,’’
‘‘Wednesday QQQ Expirations,’’ and
‘‘Wednesday IWM Expirations’’). With
respect to Monday SPY, QQQ, and IWM
Expirations, the Exchange may open for
trading on any Friday or Monday that is
a business day series of options on the
SPY, QQQ, or IWM to expire on any
Monday of the month that is a business
day and is not a Monday in which
Quarterly Options Series expire
(‘‘Monday SPY Expirations,’’ ‘‘Monday
QQQ Expirations,’’ and ‘‘Monday IWM
Expirations’’), provided that Monday
SPY Expirations, Monday QQQ
Expirations, and Monday IWM
Expirations that are listed on a Friday
must be listed at least one business
week and one business day prior to the
expiration. The Exchange may list up to
five consecutive Wednesday SPY
Expirations, Wednesday QQQ
Expirations, and Wednesday IWM
Expirations and five consecutive
Monday SPY Expirations, Monday QQQ
Expirations, and Monday IWM
Expirations at one time; the Exchange
may have no more than a total of five
each of Wednesday SPY Expirations,
Wednesday QQQ Expirations, and
Wednesday IWM Expirations and a total
of five each of Monday SPY Expirations,
Monday QQQ Expirations, and Monday
IWM Expirations. Monday and
Wednesday SPY Expirations, Monday
and Wednesday QQQ Expirations, and
Monday and Wednesday IWM
Expirations will be subject to the
provisions of Rule 19.6, Interpretation
and Policy .05.
Proposal
At this time, the Exchange proposes to
curtail the number of Short Term
Option Expiration Dates from five to
two 5 for SPY, QQQ and IWM for
Monday and Wednesday Expirations, as
5 The Exchange proposes to list the two front
months for Short Term Option Daily Expirations.
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
well as the proposed Tuesday and
Thursday Expirations in SPY and QQQ
(‘‘Short Term Option Daily
Expirations’’). The Exchange proposes
to create a new category of Short Term
Option Expirations Dates called ‘‘Short
Term Option Daily Expirations,’’ which
will only permit two Short Term Option
Expiration Dates for each of Monday,
Tuesday, Wednesday, and Thursday
expirations at one time. The Exchange
proposes to include a table, labelled
‘‘Table 1’’, within Rule 19.6,
Interpretation and Policy .05(h), which
specifies each symbol that qualifies as a
Short Term Option Daily Expiration.
The table would note the number of
expirations for each symbol as well as
expiration days. The Exchange proposes
to include Monday and Wednesday
expirations for SPY, QQQ, and IWM and
Tuesday and Thursday expirations for
SPY and QQQ and list the number of
expirations as ‘‘2’’ for these symbols.
The Exchange’s proposal to permit
Tuesday and Thursday expirations for
options on SPY and QQQ listed
pursuant to the Short Term Option
Series Program is explained below in
more detail. In the event Short Term
Option Daily Expirations expire on the
same day in the same class as a monthly
options series or a Quarterly Options
Series, the Exchange would skip that
week’s listing and instead list the
following week; the two weeks of Short
Term Option Expiration Dates would
therefore not be consecutive.
Specifically, the Exchange proposes to
state within Rule 19.6, Interpretation
and Policy .05(h):
In addition to the above, the Exchange may
open for trading series of options on the
symbols provided in Table 1 below that
expire at the close of business on each of the
next two Mondays, Tuesdays, Wednesdays,
and Thursdays, respectively, that are
business days and are not business days on
which monthly options series or Quarterly
Options Series expire (‘‘Short Term Option
Daily Expirations’’). The Exchange may have
no more than a total of two Short Term
Option Daily Expirations for each of Monday,
Tuesday, Wednesday, and Thursday
expirations at one time. Short Term Option
Daily Expirations would be subject to this
Interpretation and Policy .05
SPY, QQQ, and IWM Friday
expirations and other option symbols
expiring on a Friday that are not noted
in Table 1 will continue to have a total
of five Short Term Option Expiration
Dates provided those Friday expirations
are not Fridays on which monthly
options series or Quarterly Options
Series expire (‘‘Friday Short Term
Option Expiration Dates’’). These
expirations would be referred to as
‘‘Short Term Option Weekly
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
Expirations’’ to distinguish them from
the proposed expirations that would be
subject to Short Term Option Daily
Expirations. The Exchange proposes to
add rule text to Rule 19.6, Interpretation
and Policy .05(h) which states that
Monday Short Term Option Expiration
Dates, Tuesday Short Term Option
Expiration Dates, Wednesday Short
Term Option Expiration Dates, and
Thursday Short Term Option Expiration
Dates, together with Friday Short Term
Option Expiration Dates, are collectively
‘‘Short Term Option Expiration Dates.’’ 6
lotter on DSK11XQN23PROD with NOTICES1
Tuesday and Thursday Expirations
At this time, the Exchange proposes to
expand the Short Term Option Series
Program to permit the listing and
trading of no more than a total of two
consecutive Tuesday and Thursday
‘‘Tuesday Short Term Option Daily
Expirations’’ and ‘‘Thursday Short Term
Option Daily Expirations’’ each for SPY
and QQQ at one time. Tuesday and
Thursday Short Term Option Daily
Expirations would be subject to Rule
19.6, Interpretation and Policy .05.
A Short Term Option Series means a
series in an option class that is
approved for listing and trading on the
Exchange in which the series is opened
for trading on any Monday, Tuesday,
Wednesday, Thursday, or Friday that is
a business day and that expires on the
Monday, Wednesday, or Friday of the
following business week that is a
business day, or, in the case of a series
that is listed on a Friday and expires on
a Monday, is listed one business week
and one business day prior to that
expiration. If a Tuesday, Wednesday,
Thursday or Friday is not a business
day, the series may be opened (or shall
expire) on the first business day
immediately prior to that Tuesday,
Wednesday, Thursday or Friday. For a
series listed pursuant to this section for
Monday expiration, if a Monday is not
a business day, the series shall expire on
the first business day immediately
following that Monday.
The Exchange proposes to amend this
definition in Rule 16.1 to accommodate
the listing of options series that expire
on Tuesdays and Thursdays.
Specifically, the Exchange proposes to
add Tuesday and Thursdays to the
permitted expiration days, which
currently include Monday, Wednesday,
and Friday, that it may open for trading.
The Exchange also proposes
corresponding changes within Rule
19.6, Interpretation and Policy .05,
6 Defining the term ‘‘Short Term Option
Expiration Dates’’ will make clear that this term
includes expiration dates for each day Short Term
Options are listed.
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21:25 Nov 18, 2022
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which sets forth the requirements for
SPY and QQQ options that are listed
pursuant to the Short Term Option
Series Program as Short Term Option
Daily Expirations, to accommodate the
listing of options series that expire on
Tuesdays and Thursdays. Similar to
Monday and Wednesday SPY, QQQ,
and IWM Short Term Option Daily
Expirations within Rule 19.6,
Interpretation and Policy .05, the
Exchange proposes that it may open for
trading on any Monday or Tuesday that
is a business day series of options on the
symbols provided in Table 1 that expire
at the close of business on each of the
next two Tuesdays that are business
days and are not business days in which
monthly options series or Quarterly
Options Series expire (‘‘Tuesday Short
Term Option Expiration Date’’).
Likewise, the Exchange proposes that
it may open for trading on any
Wednesday or Thursday that is a
business day series of options on
symbols provided in Table 1 that expire
at the close of business on each of the
next two Thursdays that are business
days and are not business days in which
monthly options series or Quarterly
Options Series expire (‘‘Thursday Short
Term Option Expiration Date’’).
In the event that options on SPY and
QQQ expire on a Tuesday or Thursday
and that Tuesday or Thursday is the
same day that a monthly option series
or Quarterly Options Series expires, the
Exchange would skip that week’s listing
and instead list the following week; the
two weeks would therefore not be
consecutive. Today, Monday and
Wednesday Expirations in SPY, QQQ,
and IWM skip the weekly listing in the
event the weekly listing expires on the
same day in the same class as a
Quarterly Options Series. Currently,
there is no rule text provision that states
that Monday and Wednesday
Expirations in SPY, QQQ, and IWM skip
the weekly listing in the event the
weekly listing expires on the same day
in the same class as a monthly option
series. Practically speaking, Monday
and Wednesday Expirations in SPY,
QQQ, and IWM would not expire on the
same day as a monthly expiration.
The interval between strike prices for
the proposed Tuesday and Thursday
SPY and QQQ Short Term Option Daily
Expirations will be the same as those for
the current Short Term Option Series for
Monday, Wednesday, and Friday
expirations applicable to the Short Term
Option Series Program.7 Specifically,
the Tuesday and Thursday SPY and
QQQ Short Term Option Daily
Expirations will have a $0.50 strike
interval minimum.8 As is the case with
other equity options series listed
pursuant to the Short Term Option
Series Program, the Tuesday and
Thursday SPY and QQQ Short Term
Option Daily Expiration series will be
P.M.-settled.
Pursuant to proposed Rule 19.6,
Interpretation and Policy .05, with
respect to the Short Term Option Series
Program, a Tuesday or Thursday
expiration series will expire on the first
business day immediately prior to that
Tuesday or Thursday, e.g., Monday or
Wednesday of that week, respectively, if
the Tuesday or Thursday is not a
business day.
Currently, for each option class
eligible for participation in the Short
Term Option Series Program, the
Exchange is limited to opening thirty
(30) series for each expiration date for
the specific class.9 The thirty (30) series
restriction does not include series that
are open by other securities exchanges
under their respective weekly rules; the
Exchange may list these additional
series that are listed by other options
exchanges.10 This thirty (30) series
restriction would apply to Tuesday and
Thursday SPY and QQQ Short Term
Option Daily Expiration series as well.
In addition, the Exchange will be able
to list series that are listed by other
exchanges, assuming they file similar
rules with the Commission to list SPY
and QQQ options expiring on Tuesdays
and Thursdays with a limit of two
Tuesday Short Term Daily Expirations
and two Thursday Short Term Daily
Expirations.
Finally, the Exchange is amending
Rule 19.6, Interpretation and Policy
.05(b) to conform the rule text to the
usage of the term ‘‘Short Term Option
Daily Expirations.’’ Today, with the
exception of Monday and Wednesday
SPY Expirations, Monday and
Wednesday QQQ Expirations, and
Monday and Wednesday IWM
Expirations, no Short Term Option
Series may expire in the same week in
which monthly option series on the
same class expire. With this proposal,
Tuesday and Thursday SPY Expirations
and Tuesday and Thursday QQQ
Expirations would be treated similarly
to existing Monday and Wednesday
SPY, QQQ, and IWM Expirations. With
respect to monthly option series, Short
Term Option Daily Expirations will be
permitted to expire in the same week in
which monthly option series in the
same class expire. Not listing Short
Term Option Daily Expirations for one
8 See
id.
Rule 19.6, Interpretation and Policy .05(a).
10 See id.
9 See
7 See
PO 00000
Rule 19.6, Interpretation and Policy .05(e)
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70871
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
week every month because there was a
monthly on that same class on the
Friday of that week would create
investor confusion. Further, as with
Monday and Wednesday SPY, QQQ,
and IWM Expirations, the Exchange
would not permit Tuesday and
Thursday Short Term Option Daily
Expirations to expire on a business day
in which monthly options series or
Quarterly Options Series expire.11
Therefore, all Short Term Option Daily
Expirations would expire at the close of
business on each of the next two
Mondays, Tuesdays, Wednesdays, and
Thursdays, respectively, that are
business days and are not business days
on which monthly options series or
Quarterly Options Series expire. The
Exchange believes that it is reasonable
to not permit two expirations on the
same day in which a monthly options
series or a Quarterly Options Series
would expire.
The Exchange does not believe that
any market disruptions will be
encountered with the introduction of
P.M.-settled Tuesday and Thursday
Short Term Option Daily Expirations.
The Exchange has the necessary
capacity and surveillance programs in
place to support and properly monitor
trading in the proposed Tuesday and
Thursday Short Term Option Daily
Expirations. The Exchange currently
trades P.M.-settled Short Term Option
Series that expire Monday and
Wednesday for SPY, QQQ and IWM and
has not experienced any market
disruptions nor issues with capacity.
Today, the Exchange has surveillance
programs in place to support and
properly monitor trading in Short Term
Option Series that expire Monday and
Wednesday for SPY, QQQ and IWM.
lotter on DSK11XQN23PROD with NOTICES1
Impact of Proposal
The Exchange notes that listings in
the Short Term Option Series Program
comprise a significant part of the
standard listing in options markets. The
below tables sets forth the percentage of
weekly listings as compared to monthly,
quarterly, and Long-Term Option Series
in 2020 and 2022 in the options
industry.12 The weekly strikes
11 While the Exchange proposes to add rule text
within Rule 19.6, Interpretation and Policy .05 with
respect to Monday Expirations, Tuesday
Expirations, and Wednesdays Expirations stating
that those expirations would not expire on business
days that are business days on which monthly
options series expire, practically speaking this
would not occur.
12 Per Nasdaq ISE, LLC (‘‘Nasdaq ISE’’), this
information was sourced from The Options Clearing
Corporation (‘‘OCC’’). The information includes
time averaged data for all 16 options markets up to
August 18, 2022. See Securities Exchange Act
Release No. 95841 (September 20, 2022), 87 FR
58399 (September 26, 2022) (SR–ISE–2022–18).
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21:25 Nov 18, 2022
Jkt 259001
displayed market quality.14 Also, the
Exchange’s proposal curtails the number
of expirations in SPY, QQQ, and IWM
without reducing the classes of options
available for trading on the Exchange.
The Exchange believes that despite the
proposed curtailment of expirations,
NUMBER OF STRIKES—2020
Trading Permit Holders will continue to
be able to expand hedging tools because
Percent
Expiration
of total
all days of the week would be available
series
to permit Trading Permit Holders to
tailor their investment and hedging
Monthly .......................................
59
needs more effectively in SPY and QQQ.
Weekly ........................................
24
decreased from 24% to 19% in these
two years. The Exchange notes that
during this timeframe, all options
exchanges mitigated weekly strike
intervals.
LEAP ...........................................
Quarterly .....................................
16
1
TOTAL VOLUME—2022
[Through August 18]
NUMBER OF STRIKES—2022
Expiration
Percent
of total
series
Expiration
Monthly .......................................
Weekly ........................................
LEAP ...........................................
Quarterly .....................................
64
19
17
0
By limiting the number of Short Term
Option Daily Expirations for SPY, QQQ,
and IWM to two expirations for Monday
and Wednesday expirations, and
expanding the Short Term Option Series
Program to permit Tuesday and
Thursday expirations for SPY and QQQ,
the Exchange anticipates that it would
overall reduce the number of weekly
expiration dates. With respect to SPY,
the reduction from five to two
expirations will reduce 11.80% of
strikes on SPY with Monday and
Wednesday expirations. With respect to
QQQ, the reduction from five to two
expirations will reduce 12.86% of
strikes on QQQ with Monday and
Wednesday expirations. With respect to
IWM, the reduction from five to two
expirations will reduce 11.86% of
strikes on IWM with Monday and
Wednesday expirations. Additionally,
expanding the Short Term Option Series
Program to permit the listing of Tuesday
and Thursday expirations in SPY and
QQQ will account for the addition of
7.86% of strikes in SPY and the
addition of 8.57% of strikes in QQQ.
Therefore, the total net reduction would
be 3.94% for SPY and 4.29% for QQQ.13
The overall reduction offered by this
proposal reduces the number of Short
Term Option Expirations to be listed on
the Exchange and should encourage
Market-Makers to continue to deploy
capital more efficiently and improve
13 Nasdaq ISE sourced this information, which are
estimates, from LiveVol®. The information includes
data for all 16 options markets as of August 18,
2022. See id.
PO 00000
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Sfmt 4703
Monthly .......................................
Weekly ........................................
LEAP ...........................................
Quarterly .....................................
Percent
of total
series
39
48
12
1
Weeklies comprise 48% of the total
volume of options listings.15 The
Exchange believes that inner weeklies
represent high volume as compared to
outer weeklies and would be more
attractive to market participants. Similar
to SPY, QQQ and IWM Monday and
Wednesday Expirations, the
introduction of SPY and QQQ Tuesday
and Thursday expirations will, among
other things, expand hedging tools
available to market participants and
continue the reduction of the premium
cost of buying protection. The Exchange
believes that SPY and QQQ Tuesday
and Thursday expirations will allow
market participants to purchase SPY
and QQQ options based on their timing
as needed and allow them to tailor their
investment and hedging needs more
effectively.
Implementation
The Exchange proposes to implement
this rule change on November 14, 2022.
The Exchange will issue an Exchange
Notice to notify Trading Permit Holders
of the implementation date.
Notwithstanding this implementation,
Monday and Wednesday Expirations in
SPY, QQQ, and IWM that were listed
prior to the date of implementation will
continue to be listed on the Exchange
until those options expire pursuant to
14 Market-Makers are required to quote a specified
time in their assigned options series. See Rule 22.6.
15 This table sets forth industry volume. Weeklies
comprise 48% of volume while only being 19% of
the strikes. Nasdaq ISE sourced this information
from OCC. The information includes data for all 16
options markets as of August 18, 2022. See
Securities Exchange Act Release No. 95841
(September 20, 2022), 87 FR 58399 (September 26,
2022) (SR–ISE–2022–18)
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lotter on DSK11XQN23PROD with NOTICES1
current Short Term Option Series rules
within Rule 19.6, Interpretation and
Policy .05.
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.16 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 17 requirements that the rules of
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) 18 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The proposal is consistent with the
Act as the overall reduction offered by
this proposal reduces the number of
Short Term Option Expirations to be
listed on the Exchange. This reduction
would remove impediments to and
perfect the mechanism of a free and
open market by encouraging MarketMakers to continue to deploy capital
more efficiently and improve displayed
market quality.19 Also, the Exchange’s
proposal curtails the number of
Monday, Tuesday, Wednesday, and
Thursday expirations in SPY, QQQ, and
IWM without reducing the classes of
options available for trading on the
Exchange. The Exchange believes that
despite the proposed curtailment of
expirations, Trading Permit Holders will
continue to be able to expand hedging
tools and tailor their investment and
hedging needs more effectively in SPY,
QQQ, and IWM.
Similar to SPY, QQQ, and IWM
Monday and Wednesday Expirations
(proposed to be SPY, QQQ and IWM
Monday and Wednesday Short Term
Daily Expirations), the introduction of
SPY and QQQ Tuesday and Thursday
16 15
17 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
18 Id.
19 Market-Makers are required to quote a specified
time in their assigned options series. See Rule 22.6.
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Short Term Daily Expirations is
consistent with the Act as it will, among
other things, expand hedging tools
available to market participants and
continue the reduction of the premium
cost of buying protection. The Exchange
believes that SPY and QQQ Tuesday
and Thursday expirations (proposed to
be SPY and QQQ Tuesday and
Thursday Short Term Daily Expirations)
will allow market participants to
purchase SPY and QQQ options based
on their timing as needed and allow
them to tailor their investment and
hedging needs more effectively. Further,
the proposal to permit Tuesday and
Thursday Short Term Daily Expirations
for options on SPY and QQQ listed
pursuant to the Short Term Option
Series Program, subject to the proposed
limitation of two expirations, would
protect investors and the public interest
by providing the investing public and
other market participants more
flexibility to closely tailor their
investment and hedging decisions in
SPY and QQQ options, thus allowing
them to better manage their risk
exposure.
In particular, the Exchange believes
the Short Term Option Series Program
has been successful to date and that
Tuesday and Thursday SPY and QQQ
Short Term Daily Expirations should
simply expand the ability of investors to
hedge risk against market movements
stemming from economic releases or
market events that occur throughout the
month in the same way that the Short
Term Option Series Program has
expanded the landscape of hedging.
Similarly, the Exchange believes
Tuesday and Thursday SPY and QQQ
Short Term Daily Expirations should
create greater trading and hedging
opportunities and flexibility and will
provide customers with the ability to
tailor their investment objectives more
effectively. The Exchange currently lists
Monday and Wednesday SPY, QQQ,
and IWM Expirations (proposed to be
SPY, QQQ, and IWM Monday and
Wednesday Short Term Daily
Expirations).20
Today, with the exception of Monday
and Wednesday SPY Expirations,
Monday and Wednesday QQQ
Expirations, and Monday and
Wednesday IWM Expirations, no Short
Term Option Series may expire in the
same week in which monthly option
series on the same class expire. With
this proposal, Tuesday and Thursday
SPY Expirations and Tuesday and
Thursday QQQ Expirations would be
treated similarly to existing Monday and
Wednesday SPY, QQQ, and IWM
20 See
PO 00000
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Frm 00104
Fmt 4703
Sfmt 4703
70873
Expirations. The Exchange believes that
permitting Short Term Option Daily
Expirations to expire in the same week
that standard monthly options expire on
Fridays is consistent with Act. Not
listing Short Term Option Daily
Expirations for one week every month
because there was a monthly on that
same class on the Friday of that week
would create investor confusion.
Further, as with Monday and
Wednesday SPY, QQQ, and IWM
Expirations, the Exchange would not
permit Tuesday and Thursday Short
Term Option Daily Expirations to expire
on a business day in which monthly
options series or Quarterly Options
Series expire. Therefore, all Short Term
Option Daily Expirations would expire
at the close of business on each of the
next two Mondays, Tuesdays,
Wednesdays, and Thursdays,
respectively, that are business days and
are not business days in which monthly
options series or Quarterly Options
Series expire. The Exchange believes
that it is consistent with the Act to not
permit two expirations on the same day
in which a monthly options series or a
Quarterly Options Series would expire
similar to Monday and Wednesday SPY,
QQQ, and IWM Expirations.
There are no material differences in
the treatment of Wednesday SPY and
QQQ expirations for Short Term Option
Series as compared to the proposed
Tuesday and Thursday SPY and QQQ
Short Term Daily Expirations. Given the
similarities between Wednesday SPY,
QQQ and IWM Expirations and the
proposed Tuesday and Thursday SPY
and QQQ Short Term Daily Expirations,
the Exchange believes that applying the
provisions in Rule 19.6, Interpretation
and Policy .05 that currently apply to
Wednesday SPY, QQQ and IWM
Expirations to Tuesday and Thursday
SPY and QQQ Short Term Daily
Expirations is justified.
The Exchange further represents that
it has an adequate surveillance program
in place to detect manipulative trading
in the proposed Tuesday and Thursday
SPY and QQQ Short Term Daily
Expirations, in the same way that it
monitors trading in the current Short
Term Option Series and trading in
Monday and Wednesday SPY, QQQ,
and IWM Expirations. The Exchange
also represents that it has the necessary
systems capacity to support the new
options series. Finally, the Exchange
does not believe that any market
disruptions will be encountered with
the introduction of Tuesday and
Thursday SPY and QQQ Short Term
Daily Expirations.
Finally, the Exchange notes the
proposed rule change is substantively
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
the same as a rule change proposed by
ISE, which the Commission recently
approved.21
lotter on DSK11XQN23PROD with NOTICES1
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 proposal
will provide an overall reduction in the
number of Short Term Option
Expirations to be listed on the
Exchange. The Exchange believes this
reduction will not impose an undue
burden on competition, rather, it should
encourage Market-Makers to continue to
deploy capital more efficiently and
improve displayed market quality.22
Also, the Exchange’s proposal curtails
the number of weekly expirations in
SPY, QQQ, and IWM without reducing
the classes of options available for
trading on the Exchange. The Exchange
believes that despite the proposed
curtailment of weekly expirations,
Trading Permit Holders will continue to
be able to expand hedging tools and
tailor their investment and hedging
needs more effectively in SPY, QQQ,
and IWM.
Similar to SPY, QQQ and IWM
Monday and Wednesday Expirations,
the Exchange believes the introduction
of SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations will not
impose an undue burden on
competition. The Exchange believes that
it will, among other things, expand
hedging tools available to market
participants and continue the reduction
of the premium cost of buying
protection. The Exchange believes that
SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations will allow
market participants to purchase SPY
and QQQ options based on their timing
as needed and allow them to tailor their
investment and hedging needs more
effectively. The Exchange does not
believe the proposal will impose any
burden on intermarket competition, as
nothing prevents the other options
exchanges from proposing similar rules
to list and trade Short-Term Option
Series with Tuesday and Thursday
Short Term Daily Expirations. The
Exchange notes that having Tuesday
and Thursday SPY and QQQ expirations
is not a novel proposal, as Wednesday
SPY, QQQ and IWM Expirations are
currently listed on the Exchange.23
21 See Securities and Exchange Act Release No.
96281 (November 9, 2022) (SR–ISE–2022–18).
22 Market-Makers are required to quote a specified
time in their assigned options series. See Rule 22.6.
23 See Rule 19.6, Interpretation and Policy .05.
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21:25 Nov 18, 2022
Jkt 259001
Additionally, as noted above, the
Commission recently approved a
substantively identical proposal of
another exchange.24 Further, the
Exchange does not believe the proposal
will impose any burden on intramarket
competition, as all market participants
will be treated in the same manner
under this proposal.
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 25 and Rule
19b–4(f)(6) thereunder.26 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 from the date on which it
was filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 27 and
subparagraph (f)(6) of Rule 19b–4
thereunder.28 The Commission notes
that it recently approved Nasdaq ISE’s
substantially similar proposal.29 The
Exchange has stated that waiver of the
30-day operative delay will allow the
Exchange to implement the proposal at
the same time as competitor exchanges.
For these reasons, the Commission
believes that the proposed rule change
presents no novel issues and that waiver
of the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.30
24 See Securities and Exchange Act Release No.
96281 (November 9, 2022) (SR–ISE–2022–18).
25 15 U.S.C. 78s(b)(3)(A)(iii).
26 17 CFR 240.19b–4(f)(6).
27 15 U.S.C. 78s(b)(3)(A)(iii).
28 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.
29 See Securities Exchange Act Release No. 96281
(November 9, 2022) (SR–ISE–2022–18).
30 For purposes only of waiving the 30-day
operative delay, the Commission has also
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
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 SRCboeBZX–2022–056 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–CboeBZX–2022–056. 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 such
filing also will be available for
inspection and copying at the principal
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / Notices
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–2022–056 and
should be submitted on or before
December 12, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–25232 Filed 11–18–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96315; File No. SR–CBOE–
2022–059]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Short Term
Option Series Program in Rule 4.5(d)
November 15, 2022.
lotter on DSK11XQN23PROD with NOTICES1
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 November
14, 2022, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘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 ‘‘noncontroversial’’ 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 Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
the Short Term Option Series Program
in Rule 4.5(d). 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
31 17
CFR 200.30–3(a)(12), (59).
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).
1 15
VerDate Sep<11>2014
21:25 Nov 18, 2022
Jkt 259001
website (https://www.cboe.com/
AboutCBOE/CBOELegalRegulatory
Home.aspx), 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 Exchange proposes to amend the
Short Term Option Series Program in
Rule 4.5(d). Specifically, the Exchange
proposes to amend the Short Term
Option Series Program to: (1) limit the
number of Short Term Option
Expiration Dates for options on SPDR
S&P 500 ETF Trust (SPY), the INVESCO
QQQ TrustSM, Series 1 (QQQ), and
iShares Russell 2000 ETF (IWM) from
five to two expirations for Monday and
Wednesday expirations; and (2) expand
the Short Term Option Series program
to permit the listing and trading of
options series with Tuesday and
Thursday expirations for options on
SPY and QQQ listed pursuant to the
Short Term Option Series Program,
subject to the same proposed limitation
of two expirations.
Curtail Short Term Option Expiration
Dates
Currently, after an option class has
been approved for listing and trading on
the Exchange, the Exchange may open
for trading on any Thursday or Friday
that is a business day (‘‘Short Term
Option Opening Date’’) series of options
on that class that expire at the close of
business on each of the next five Fridays
that are business days and are not
Fridays on which monthly options
series or Quarterly Options Series expire
(‘‘Short Term Option Expiration Dates’’).
The Exchange may have no more than
a total of five Short Term Option
Expiration Dates not including any
Monday or Wednesday SPY, QQQ, and
IWM Expirations. Further, if the
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
70875
Exchange is not open for business on
the respective Thursday or Friday, the
Short Term Option Opening Date will
be the first business day immediately
prior to that respective Thursday or
Friday. Similarly, if the Exchange is not
open for business on a Friday, the Short
Term Option Expiration Date will be the
first business day immediately prior to
that Friday.
Today, with respect to Wednesday
SPY, QQQ, and IWM Expirations, the
Exchange may open for trading on any
Tuesday or Wednesday that is a
business day series of options on SPY,
QQQ, and IWM to expire on any
Wednesday of the month that is a
business day and is not a Wednesday in
which Quarterly Options Series expire
(‘‘Wednesday SPY Expirations,’’
‘‘Wednesday QQQ Expirations,’’ and
‘‘Wednesday IWM Expirations’’). With
respect to Monday SPY, QQQ, and IWM
Expirations, the Exchange may open for
trading on any Friday or Monday that is
a business day series of options on the
SPY, QQQ, or IWM to expire on any
Monday of the month that is a business
day and is not a Monday in which
Quarterly Options Series expire
(‘‘Monday SPY Expirations,’’ ‘‘Monday
QQQ Expirations,’’ and ‘‘Monday IWM
Expirations’’), provided that Monday
SPY Expirations, Monday QQQ
Expirations, and Monday IWM
Expirations that are listed on a Friday
must be listed at least one business
week and one business day prior to the
expiration. The Exchange may list up to
five consecutive Wednesday SPY
Expirations, Wednesday QQQ
Expirations, and Wednesday IWM
Expirations and five consecutive
Monday SPY Expirations, Monday QQQ
Expirations, and Monday IWM
Expirations at one time; the Exchange
may have no more than a total of five
each of Wednesday SPY Expirations,
Wednesday QQQ Expirations, and
Wednesday IWM Expirations and a total
of five each of Monday SPY Expirations,
Monday QQQ Expirations, and Monday
IWM Expirations. Monday and
Wednesday SPY Expirations, Monday
and Wednesday QQQ Expirations, and
Monday and Wednesday IWM
Expirations will be subject to the
provisions of Rule 4.5(d).
Proposal
At this time, the Exchange proposes to
curtail the number of Short Term
Option Expiration Dates from five to
two 5 for SPY, QQQ and IWM for
Monday and Wednesday Expirations, as
well as the proposed Tuesday and
5 The Exchange proposes to list the two front
months for Short Term Option Daily Expirations.
E:\FR\FM\21NON1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 223 (Monday, November 21, 2022)]
[Notices]
[Pages 70869-70875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25232]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96313; File No. SR-CboeBZX-2022-056]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Short Term Option Series Program in Rule 19.6, Interpretation and
Policy .05 and a Related Definition in Rule 16.1
November 15, 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 November 14, 2022, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'')
proposes to amend the Short Term Option Series Program in Rule 19.6,
Interpretation and Policy .05 and a related definition in Rule 16.1.
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/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary,
[[Page 70870]]
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 Exchange proposes to amend the Short Term Option Series Program
in Rule 19.6, Interpretation and Policy .05. Specifically, the Exchange
proposes to amend the Short Term Option Series Program to: (1) limit
the number of Short Term Option Expiration Dates for options on SPDR
S&P 500 ETF Trust (SPY), the INVESCO QQQ TrustSM, Series 1 (QQQ), and
iShares Russell 2000 ETF (IWM) from five to two expirations for Monday
and Wednesday expirations; and (2) expand the Short Term Option Series
program to permit the listing and trading of options series with
Tuesday and Thursday expirations for options on SPY and QQQ listed
pursuant to the Short Term Option Series Program, subject to the same
proposed limitation of two expirations.
The Exchange also proposes to amend the definition of Short Term
Option Series in Rule 16.1.
Curtail Short Term Option Expiration Dates
Currently, after an option class has been approved for listing and
trading on the Exchange, the Exchange may open for trading on any
Thursday or Friday that is a business day (``Short Term Option Opening
Date'') series of options on that class that expire at the close of
business on each of the next five Fridays that are business days and
are not Fridays on which monthly options series or Quarterly Options
Series expire (``Short Term Option Expiration Dates''). The Exchange
may have no more than a total of five Short Term Option Expiration
Dates not including any Monday or Wednesday SPY, QQQ, and IWM
Expirations. Further, if the Exchange is not open for business on the
respective Thursday or Friday, the Short Term Option Opening Date will
be the first business day immediately prior to that respective Thursday
or Friday. Similarly, if the Exchange is not open for business on a
Friday, the Short Term Option Expiration Date will be the first
business day immediately prior to that Friday.
Today, with respect to Wednesday SPY, QQQ, and IWM Expirations, the
Exchange may open for trading on any Tuesday or Wednesday that is a
business day series of options on SPY, QQQ, and IWM to expire on any
Wednesday of the month that is a business day and is not a Wednesday in
which Quarterly Options Series expire (``Wednesday SPY Expirations,''
``Wednesday QQQ Expirations,'' and ``Wednesday IWM Expirations''). With
respect to Monday SPY, QQQ, and IWM Expirations, the Exchange may open
for trading on any Friday or Monday that is a business day series of
options on the SPY, QQQ, or IWM to expire on any Monday of the month
that is a business day and is not a Monday in which Quarterly Options
Series expire (``Monday SPY Expirations,'' ``Monday QQQ Expirations,''
and ``Monday IWM Expirations''), provided that Monday SPY Expirations,
Monday QQQ Expirations, and Monday IWM Expirations that are listed on a
Friday must be listed at least one business week and one business day
prior to the expiration. The Exchange may list up to five consecutive
Wednesday SPY Expirations, Wednesday QQQ Expirations, and Wednesday IWM
Expirations and five consecutive Monday SPY Expirations, Monday QQQ
Expirations, and Monday IWM Expirations at one time; the Exchange may
have no more than a total of five each of Wednesday SPY Expirations,
Wednesday QQQ Expirations, and Wednesday IWM Expirations and a total of
five each of Monday SPY Expirations, Monday QQQ Expirations, and Monday
IWM Expirations. Monday and Wednesday SPY Expirations, Monday and
Wednesday QQQ Expirations, and Monday and Wednesday IWM Expirations
will be subject to the provisions of Rule 19.6, Interpretation and
Policy .05.
Proposal
At this time, the Exchange proposes to curtail the number of Short
Term Option Expiration Dates from five to two \5\ for SPY, QQQ and IWM
for Monday and Wednesday Expirations, as well as the proposed Tuesday
and Thursday Expirations in SPY and QQQ (``Short Term Option Daily
Expirations''). The Exchange proposes to create a new category of Short
Term Option Expirations Dates called ``Short Term Option Daily
Expirations,'' which will only permit two Short Term Option Expiration
Dates for each of Monday, Tuesday, Wednesday, and Thursday expirations
at one time. The Exchange proposes to include a table, labelled ``Table
1'', within Rule 19.6, Interpretation and Policy .05(h), which
specifies each symbol that qualifies as a Short Term Option Daily
Expiration. The table would note the number of expirations for each
symbol as well as expiration days. The Exchange proposes to include
Monday and Wednesday expirations for SPY, QQQ, and IWM and Tuesday and
Thursday expirations for SPY and QQQ and list the number of expirations
as ``2'' for these symbols. The Exchange's proposal to permit Tuesday
and Thursday expirations for options on SPY and QQQ listed pursuant to
the Short Term Option Series Program is explained below in more detail.
In the event Short Term Option Daily Expirations expire on the same day
in the same class as a monthly options series or a Quarterly Options
Series, the Exchange would skip that week's listing and instead list
the following week; the two weeks of Short Term Option Expiration Dates
would therefore not be consecutive. Specifically, the Exchange proposes
to state within Rule 19.6, Interpretation and Policy .05(h):
---------------------------------------------------------------------------
\5\ The Exchange proposes to list the two front months for Short
Term Option Daily Expirations.
In addition to the above, the Exchange may open for trading
series of options on the symbols provided in Table 1 below that
expire at the close of business on each of the next two Mondays,
Tuesdays, Wednesdays, and Thursdays, respectively, that are business
days and are not business days on which monthly options series or
Quarterly Options Series expire (``Short Term Option Daily
Expirations''). The Exchange may have no more than a total of two
Short Term Option Daily Expirations for each of Monday, Tuesday,
Wednesday, and Thursday expirations at one time. Short Term Option
Daily Expirations would be subject to this Interpretation and Policy
---------------------------------------------------------------------------
.05
SPY, QQQ, and IWM Friday expirations and other option symbols
expiring on a Friday that are not noted in Table 1 will continue to
have a total of five Short Term Option Expiration Dates provided those
Friday expirations are not Fridays on which monthly options series or
Quarterly Options Series expire (``Friday Short Term Option Expiration
Dates''). These expirations would be referred to as ``Short Term Option
Weekly
[[Page 70871]]
Expirations'' to distinguish them from the proposed expirations that
would be subject to Short Term Option Daily Expirations. The Exchange
proposes to add rule text to Rule 19.6, Interpretation and Policy
.05(h) which states that Monday Short Term Option Expiration Dates,
Tuesday Short Term Option Expiration Dates, Wednesday Short Term Option
Expiration Dates, and Thursday Short Term Option Expiration Dates,
together with Friday Short Term Option Expiration Dates, are
collectively ``Short Term Option Expiration Dates.'' \6\
---------------------------------------------------------------------------
\6\ Defining the term ``Short Term Option Expiration Dates''
will make clear that this term includes expiration dates for each
day Short Term Options are listed.
---------------------------------------------------------------------------
Tuesday and Thursday Expirations
At this time, the Exchange proposes to expand the Short Term Option
Series Program to permit the listing and trading of no more than a
total of two consecutive Tuesday and Thursday ``Tuesday Short Term
Option Daily Expirations'' and ``Thursday Short Term Option Daily
Expirations'' each for SPY and QQQ at one time. Tuesday and Thursday
Short Term Option Daily Expirations would be subject to Rule 19.6,
Interpretation and Policy .05.
A Short Term Option Series means a series in an option class that
is approved for listing and trading on the Exchange in which the series
is opened for trading on any Monday, Tuesday, Wednesday, Thursday, or
Friday that is a business day and that expires on the Monday,
Wednesday, or Friday of the following business week that is a business
day, or, in the case of a series that is listed on a Friday and expires
on a Monday, is listed one business week and one business day prior to
that expiration. If a Tuesday, Wednesday, Thursday or Friday is not a
business day, the series may be opened (or shall expire) on the first
business day immediately prior to that Tuesday, Wednesday, Thursday or
Friday. For a series listed pursuant to this section for Monday
expiration, if a Monday is not a business day, the series shall expire
on the first business day immediately following that Monday.
The Exchange proposes to amend this definition in Rule 16.1 to
accommodate the listing of options series that expire on Tuesdays and
Thursdays. Specifically, the Exchange proposes to add Tuesday and
Thursdays to the permitted expiration days, which currently include
Monday, Wednesday, and Friday, that it may open for trading.
The Exchange also proposes corresponding changes within Rule 19.6,
Interpretation and Policy .05, which sets forth the requirements for
SPY and QQQ options that are listed pursuant to the Short Term Option
Series Program as Short Term Option Daily Expirations, to accommodate
the listing of options series that expire on Tuesdays and Thursdays.
Similar to Monday and Wednesday SPY, QQQ, and IWM Short Term Option
Daily Expirations within Rule 19.6, Interpretation and Policy .05, the
Exchange proposes that it may open for trading on any Monday or Tuesday
that is a business day series of options on the symbols provided in
Table 1 that expire at the close of business on each of the next two
Tuesdays that are business days and are not business days in which
monthly options series or Quarterly Options Series expire (``Tuesday
Short Term Option Expiration Date'').
Likewise, the Exchange proposes that it may open for trading on any
Wednesday or Thursday that is a business day series of options on
symbols provided in Table 1 that expire at the close of business on
each of the next two Thursdays that are business days and are not
business days in which monthly options series or Quarterly Options
Series expire (``Thursday Short Term Option Expiration Date'').
In the event that options on SPY and QQQ expire on a Tuesday or
Thursday and that Tuesday or Thursday is the same day that a monthly
option series or Quarterly Options Series expires, the Exchange would
skip that week's listing and instead list the following week; the two
weeks would therefore not be consecutive. Today, Monday and Wednesday
Expirations in SPY, QQQ, and IWM skip the weekly listing in the event
the weekly listing expires on the same day in the same class as a
Quarterly Options Series. Currently, there is no rule text provision
that states that Monday and Wednesday Expirations in SPY, QQQ, and IWM
skip the weekly listing in the event the weekly listing expires on the
same day in the same class as a monthly option series. Practically
speaking, Monday and Wednesday Expirations in SPY, QQQ, and IWM would
not expire on the same day as a monthly expiration.
The interval between strike prices for the proposed Tuesday and
Thursday SPY and QQQ Short Term Option Daily Expirations will be the
same as those for the current Short Term Option Series for Monday,
Wednesday, and Friday expirations applicable to the Short Term Option
Series Program.\7\ Specifically, the Tuesday and Thursday SPY and QQQ
Short Term Option Daily Expirations will have a $0.50 strike interval
minimum.\8\ As is the case with other equity options series listed
pursuant to the Short Term Option Series Program, the Tuesday and
Thursday SPY and QQQ Short Term Option Daily Expiration series will be
P.M.-settled.
---------------------------------------------------------------------------
\7\ See Rule 19.6, Interpretation and Policy .05(e)
\8\ See id.
---------------------------------------------------------------------------
Pursuant to proposed Rule 19.6, Interpretation and Policy .05, with
respect to the Short Term Option Series Program, a Tuesday or Thursday
expiration series will expire on the first business day immediately
prior to that Tuesday or Thursday, e.g., Monday or Wednesday of that
week, respectively, if the Tuesday or Thursday is not a business day.
Currently, for each option class eligible for participation in the
Short Term Option Series Program, the Exchange is limited to opening
thirty (30) series for each expiration date for the specific class.\9\
The thirty (30) series restriction does not include series that are
open by other securities exchanges under their respective weekly rules;
the Exchange may list these additional series that are listed by other
options exchanges.\10\ This thirty (30) series restriction would apply
to Tuesday and Thursday SPY and QQQ Short Term Option Daily Expiration
series as well. In addition, the Exchange will be able to list series
that are listed by other exchanges, assuming they file similar rules
with the Commission to list SPY and QQQ options expiring on Tuesdays
and Thursdays with a limit of two Tuesday Short Term Daily Expirations
and two Thursday Short Term Daily Expirations.
---------------------------------------------------------------------------
\9\ See Rule 19.6, Interpretation and Policy .05(a).
\10\ See id.
---------------------------------------------------------------------------
Finally, the Exchange is amending Rule 19.6, Interpretation and
Policy .05(b) to conform the rule text to the usage of the term ``Short
Term Option Daily Expirations.'' Today, with the exception of Monday
and Wednesday SPY Expirations, Monday and Wednesday QQQ Expirations,
and Monday and Wednesday IWM Expirations, no Short Term Option Series
may expire in the same week in which monthly option series on the same
class expire. With this proposal, Tuesday and Thursday SPY Expirations
and Tuesday and Thursday QQQ Expirations would be treated similarly to
existing Monday and Wednesday SPY, QQQ, and IWM Expirations. With
respect to monthly option series, Short Term Option Daily Expirations
will be permitted to expire in the same week in which monthly option
series in the same class expire. Not listing Short Term Option Daily
Expirations for one
[[Page 70872]]
week every month because there was a monthly on that same class on the
Friday of that week would create investor confusion. Further, as with
Monday and Wednesday SPY, QQQ, and IWM Expirations, the Exchange would
not permit Tuesday and Thursday Short Term Option Daily Expirations to
expire on a business day in which monthly options series or Quarterly
Options Series expire.\11\ Therefore, all Short Term Option Daily
Expirations would expire at the close of business on each of the next
two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that
are business days and are not business days on which monthly options
series or Quarterly Options Series expire. The Exchange believes that
it is reasonable to not permit two expirations on the same day in which
a monthly options series or a Quarterly Options Series would expire.
---------------------------------------------------------------------------
\11\ While the Exchange proposes to add rule text within Rule
19.6, Interpretation and Policy .05 with respect to Monday
Expirations, Tuesday Expirations, and Wednesdays Expirations stating
that those expirations would not expire on business days that are
business days on which monthly options series expire, practically
speaking this would not occur.
---------------------------------------------------------------------------
The Exchange does not believe that any market disruptions will be
encountered with the introduction of P.M.-settled Tuesday and Thursday
Short Term Option Daily Expirations. The Exchange has the necessary
capacity and surveillance programs in place to support and properly
monitor trading in the proposed Tuesday and Thursday Short Term Option
Daily Expirations. The Exchange currently trades P.M.-settled Short
Term Option Series that expire Monday and Wednesday for SPY, QQQ and
IWM and has not experienced any market disruptions nor issues with
capacity. Today, the Exchange has surveillance programs in place to
support and properly monitor trading in Short Term Option Series that
expire Monday and Wednesday for SPY, QQQ and IWM.
Impact of Proposal
The Exchange notes that listings in the Short Term Option Series
Program comprise a significant part of the standard listing in options
markets. The below tables sets forth the percentage of weekly listings
as compared to monthly, quarterly, and Long-Term Option Series in 2020
and 2022 in the options industry.\12\ The weekly strikes decreased from
24% to 19% in these two years. The Exchange notes that during this
timeframe, all options exchanges mitigated weekly strike intervals.
---------------------------------------------------------------------------
\12\ Per Nasdaq ISE, LLC (``Nasdaq ISE''), this information was
sourced from The Options Clearing Corporation (``OCC''). The
information includes time averaged data for all 16 options markets
up to August 18, 2022. See Securities Exchange Act Release No. 95841
(September 20, 2022), 87 FR 58399 (September 26, 2022) (SR-ISE-2022-
18).
Number of Strikes--2020
------------------------------------------------------------------------
Percent of
Expiration total
series
------------------------------------------------------------------------
Monthly..................................................... 59
Weekly...................................................... 24
LEAP........................................................ 16
Quarterly................................................... 1
------------------------------------------------------------------------
Number of Strikes--2022
------------------------------------------------------------------------
Percent of
Expiration total
series
------------------------------------------------------------------------
Monthly..................................................... 64
Weekly...................................................... 19
LEAP........................................................ 17
Quarterly................................................... 0
------------------------------------------------------------------------
By limiting the number of Short Term Option Daily Expirations for
SPY, QQQ, and IWM to two expirations for Monday and Wednesday
expirations, and expanding the Short Term Option Series Program to
permit Tuesday and Thursday expirations for SPY and QQQ, the Exchange
anticipates that it would overall reduce the number of weekly
expiration dates. With respect to SPY, the reduction from five to two
expirations will reduce 11.80% of strikes on SPY with Monday and
Wednesday expirations. With respect to QQQ, the reduction from five to
two expirations will reduce 12.86% of strikes on QQQ with Monday and
Wednesday expirations. With respect to IWM, the reduction from five to
two expirations will reduce 11.86% of strikes on IWM with Monday and
Wednesday expirations. Additionally, expanding the Short Term Option
Series Program to permit the listing of Tuesday and Thursday
expirations in SPY and QQQ will account for the addition of 7.86% of
strikes in SPY and the addition of 8.57% of strikes in QQQ. Therefore,
the total net reduction would be 3.94% for SPY and 4.29% for QQQ.\13\
The overall reduction offered by this proposal reduces the number of
Short Term Option Expirations to be listed on the Exchange and should
encourage Market-Makers to continue to deploy capital more efficiently
and improve displayed market quality.\14\ Also, the Exchange's proposal
curtails the number of expirations in SPY, QQQ, and IWM without
reducing the classes of options available for trading on the Exchange.
The Exchange believes that despite the proposed curtailment of
expirations, Trading Permit Holders will continue to be able to expand
hedging tools because all days of the week would be available to permit
Trading Permit Holders to tailor their investment and hedging needs
more effectively in SPY and QQQ.
---------------------------------------------------------------------------
\13\ Nasdaq ISE sourced this information, which are estimates,
from LiveVol[supreg]. The information includes data for all 16
options markets as of August 18, 2022. See id.
\14\ Market-Makers are required to quote a specified time in
their assigned options series. See Rule 22.6.
Total Volume--2022
[Through August 18]
------------------------------------------------------------------------
Percent of
Expiration total
series
------------------------------------------------------------------------
Monthly..................................................... 39
Weekly...................................................... 48
LEAP........................................................ 12
Quarterly................................................... 1
------------------------------------------------------------------------
Weeklies comprise 48% of the total volume of options listings.\15\
The Exchange believes that inner weeklies represent high volume as
compared to outer weeklies and would be more attractive to market
participants. Similar to SPY, QQQ and IWM Monday and Wednesday
Expirations, the introduction of SPY and QQQ Tuesday and Thursday
expirations will, among other things, expand hedging tools available to
market participants and continue the reduction of the premium cost of
buying protection. The Exchange believes that SPY and QQQ Tuesday and
Thursday expirations will allow market participants to purchase SPY and
QQQ options based on their timing as needed and allow them to tailor
their investment and hedging needs more effectively.
---------------------------------------------------------------------------
\15\ This table sets forth industry volume. Weeklies comprise
48% of volume while only being 19% of the strikes. Nasdaq ISE
sourced this information from OCC. The information includes data for
all 16 options markets as of August 18, 2022. See Securities
Exchange Act Release No. 95841 (September 20, 2022), 87 FR 58399
(September 26, 2022) (SR-ISE-2022-18)
---------------------------------------------------------------------------
Implementation
The Exchange proposes to implement this rule change on November 14,
2022. The Exchange will issue an Exchange Notice to notify Trading
Permit Holders of the implementation date. Notwithstanding this
implementation, Monday and Wednesday Expirations in SPY, QQQ, and IWM
that were listed prior to the date of implementation will continue to
be listed on the Exchange until those options expire pursuant to
[[Page 70873]]
current Short Term Option Series rules within Rule 19.6, Interpretation
and Policy .05.
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.\16\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \17\ requirements that the rules of 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) \18\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(5).
\18\ Id.
---------------------------------------------------------------------------
The proposal is consistent with the Act as the overall reduction
offered by this proposal reduces the number of Short Term Option
Expirations to be listed on the Exchange. This reduction would remove
impediments to and perfect the mechanism of a free and open market by
encouraging Market-Makers to continue to deploy capital more
efficiently and improve displayed market quality.\19\ Also, the
Exchange's proposal curtails the number of Monday, Tuesday, Wednesday,
and Thursday expirations in SPY, QQQ, and IWM without reducing the
classes of options available for trading on the Exchange. The Exchange
believes that despite the proposed curtailment of expirations, Trading
Permit Holders will continue to be able to expand hedging tools and
tailor their investment and hedging needs more effectively in SPY, QQQ,
and IWM.
---------------------------------------------------------------------------
\19\ Market-Makers are required to quote a specified time in
their assigned options series. See Rule 22.6.
---------------------------------------------------------------------------
Similar to SPY, QQQ, and IWM Monday and Wednesday Expirations
(proposed to be SPY, QQQ and IWM Monday and Wednesday Short Term Daily
Expirations), the introduction of SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations is consistent with the Act as it will,
among other things, expand hedging tools available to market
participants and continue the reduction of the premium cost of buying
protection. The Exchange believes that SPY and QQQ Tuesday and Thursday
expirations (proposed to be SPY and QQQ Tuesday and Thursday Short Term
Daily Expirations) will allow market participants to purchase SPY and
QQQ options based on their timing as needed and allow them to tailor
their investment and hedging needs more effectively. Further, the
proposal to permit Tuesday and Thursday Short Term Daily Expirations
for options on SPY and QQQ listed pursuant to the Short Term Option
Series Program, subject to the proposed limitation of two expirations,
would protect investors and the public interest by providing the
investing public and other market participants more flexibility to
closely tailor their investment and hedging decisions in SPY and QQQ
options, thus allowing them to better manage their risk exposure.
In particular, the Exchange believes the Short Term Option Series
Program has been successful to date and that Tuesday and Thursday SPY
and QQQ Short Term Daily Expirations should simply expand the ability
of investors to hedge risk against market movements stemming from
economic releases or market events that occur throughout the month in
the same way that the Short Term Option Series Program has expanded the
landscape of hedging. Similarly, the Exchange believes Tuesday and
Thursday SPY and QQQ Short Term Daily Expirations should create greater
trading and hedging opportunities and flexibility and will provide
customers with the ability to tailor their investment objectives more
effectively. The Exchange currently lists Monday and Wednesday SPY,
QQQ, and IWM Expirations (proposed to be SPY, QQQ, and IWM Monday and
Wednesday Short Term Daily Expirations).\20\
---------------------------------------------------------------------------
\20\ See Rule 19.6, Interpretation and Policy .05.
---------------------------------------------------------------------------
Today, with the exception of Monday and Wednesday SPY Expirations,
Monday and Wednesday QQQ Expirations, and Monday and Wednesday IWM
Expirations, no Short Term Option Series may expire in the same week in
which monthly option series on the same class expire. With this
proposal, Tuesday and Thursday SPY Expirations and Tuesday and Thursday
QQQ Expirations would be treated similarly to existing Monday and
Wednesday SPY, QQQ, and IWM Expirations. The Exchange believes that
permitting Short Term Option Daily Expirations to expire in the same
week that standard monthly options expire on Fridays is consistent with
Act. Not listing Short Term Option Daily Expirations for one week every
month because there was a monthly on that same class on the Friday of
that week would create investor confusion.
Further, as with Monday and Wednesday SPY, QQQ, and IWM
Expirations, the Exchange would not permit Tuesday and Thursday Short
Term Option Daily Expirations to expire on a business day in which
monthly options series or Quarterly Options Series expire. Therefore,
all Short Term Option Daily Expirations would expire at the close of
business on each of the next two Mondays, Tuesdays, Wednesdays, and
Thursdays, respectively, that are business days and are not business
days in which monthly options series or Quarterly Options Series
expire. The Exchange believes that it is consistent with the Act to not
permit two expirations on the same day in which a monthly options
series or a Quarterly Options Series would expire similar to Monday and
Wednesday SPY, QQQ, and IWM Expirations.
There are no material differences in the treatment of Wednesday SPY
and QQQ expirations for Short Term Option Series as compared to the
proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations.
Given the similarities between Wednesday SPY, QQQ and IWM Expirations
and the proposed Tuesday and Thursday SPY and QQQ Short Term Daily
Expirations, the Exchange believes that applying the provisions in Rule
19.6, Interpretation and Policy .05 that currently apply to Wednesday
SPY, QQQ and IWM Expirations to Tuesday and Thursday SPY and QQQ Short
Term Daily Expirations is justified.
The Exchange further represents that it has an adequate
surveillance program in place to detect manipulative trading in the
proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations,
in the same way that it monitors trading in the current Short Term
Option Series and trading in Monday and Wednesday SPY, QQQ, and IWM
Expirations. The Exchange also represents that it has the necessary
systems capacity to support the new options series. Finally, the
Exchange does not believe that any market disruptions will be
encountered with the introduction of Tuesday and Thursday SPY and QQQ
Short Term Daily Expirations.
Finally, the Exchange notes the proposed rule change is
substantively
[[Page 70874]]
the same as a rule change proposed by ISE, which the Commission
recently approved.\21\
---------------------------------------------------------------------------
\21\ See Securities and Exchange Act Release No. 96281 (November
9, 2022) (SR-ISE-2022-18).
---------------------------------------------------------------------------
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 proposal will provide an
overall reduction in the number of Short Term Option Expirations to be
listed on the Exchange. The Exchange believes this reduction will not
impose an undue burden on competition, rather, it should encourage
Market-Makers to continue to deploy capital more efficiently and
improve displayed market quality.\22\ Also, the Exchange's proposal
curtails the number of weekly expirations in SPY, QQQ, and IWM without
reducing the classes of options available for trading on the Exchange.
The Exchange believes that despite the proposed curtailment of weekly
expirations, Trading Permit Holders will continue to be able to expand
hedging tools and tailor their investment and hedging needs more
effectively in SPY, QQQ, and IWM.
---------------------------------------------------------------------------
\22\ Market-Makers are required to quote a specified time in
their assigned options series. See Rule 22.6.
---------------------------------------------------------------------------
Similar to SPY, QQQ and IWM Monday and Wednesday Expirations, the
Exchange believes the introduction of SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations will not impose an undue burden on
competition. The Exchange believes that it will, among other things,
expand hedging tools available to market participants and continue the
reduction of the premium cost of buying protection. The Exchange
believes that SPY and QQQ Tuesday and Thursday Short Term Daily
Expirations will allow market participants to purchase SPY and QQQ
options based on their timing as needed and allow them to tailor their
investment and hedging needs more effectively. The Exchange does not
believe the proposal will impose any burden on intermarket competition,
as nothing prevents the other options exchanges from proposing similar
rules to list and trade Short-Term Option Series with Tuesday and
Thursday Short Term Daily Expirations. The Exchange notes that having
Tuesday and Thursday SPY and QQQ expirations is not a novel proposal,
as Wednesday SPY, QQQ and IWM Expirations are currently listed on the
Exchange.\23\ Additionally, as noted above, the Commission recently
approved a substantively identical proposal of another exchange.\24\
Further, the Exchange does not believe the proposal will impose any
burden on intramarket competition, as all market participants will be
treated in the same manner under this proposal.
---------------------------------------------------------------------------
\23\ See Rule 19.6, Interpretation and Policy .05.
\24\ See Securities and Exchange Act Release No. 96281 (November
9, 2022) (SR-ISE-2022-18).
---------------------------------------------------------------------------
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \25\ and Rule 19b-4(f)(6) thereunder.\26\
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 from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \27\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\28\ The Commission notes that it recently
approved Nasdaq ISE's substantially similar proposal.\29\ The Exchange
has stated that waiver of the 30-day operative delay will allow the
Exchange to implement the proposal at the same time as competitor
exchanges. For these reasons, the Commission believes that the proposed
rule change presents no novel issues and that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\30\
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78s(b)(3)(A)(iii).
\26\ 17 CFR 240.19b-4(f)(6).
\27\ 15 U.S.C. 78s(b)(3)(A)(iii).
\28\ 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.
\29\ See Securities Exchange Act Release No. 96281 (November 9,
2022) (SR-ISE-2022-18).
\30\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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-CboeBZX-2022-056 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-CboeBZX-2022-056. 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 such filing also will be available for inspection
and copying at the principal
[[Page 70875]]
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-
056 and should be submitted on or before December 12, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25232 Filed 11-18-22; 8:45 am]
BILLING CODE 8011-01-P
