Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 404, Series of Option Contracts Open for Trading and the Short Term Option Series Program, 71727-71731 [2022-25473]
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Federal Register / Vol. 87, No. 225 / Wednesday, November 23, 2022 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96342; File No. SR–MIAX–
2022–41]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Exchange Rule 404,
Series of Option Contracts Open for
Trading and the Short Term Option
Series Program
November 17, 2022.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on November 16, 2022, Miami
International Securities Exchange, LLC
(‘‘MIAX Options’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. 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
The Exchange is filing a proposal to
amend Exchange Rule 404, Series of
Option Contracts Open for Trading.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/ at MIAX Options’ principal
office, and at the Commission’s Public
Reference Room.
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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.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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
Exchange Rule 404, Series of Option
Contracts Open for Trading.
Specifically, the Exchange proposes to
amend Interpretations and Polices .02 of
Rule 404 to (i) 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 (ii) 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 a Short Term Option
Series contained in Exchange Rule 100.
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 in 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,’’
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‘‘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 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 Interpretations and
Policies .02 of Exchange Rule 404.
Proposal
At this time, the Exchange proposes to
curtail the number of Short Term
Option Expiration Dates from five to
two 3 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
Expiration 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, labeled
‘‘Table 1,’’ within Interpretations and
Policies .02 of Rule 404, 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
3 The Exchange proposes to list the two front
months for Short Term Option Daily Expirations.
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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 Policy .02 of
Exchange Rule 404,
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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 in
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
Policy .02
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 in 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
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 Policy .02 of Exchange
Rule 404, 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.’’ 4
4 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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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 Policy
.02 of Exchange Rule 404.
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 the
definition of Short Term Option Series
in Exchange Rule 100 to accommodate
the listing of options series that expire
on Tuesdays and Thursdays.
Specifically, the Exchange proposes to
add Tuesday and Thursday 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 Policy
.02 of Exchange Rule 404, 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.
Similar to Monday and Wednesday
SPY, QQQ, and IWM Short Term Option
Daily Expirations within Policy .02 of
Exchange Rule 404, 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’’).
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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.5 Specifically,
the Tuesday and Thursday SPY and
QQQ Short Term Option Daily
Expirations will have a $0.50 strike
interval minimum.6 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.
With respect to the Short Term
Option Series Program, a Tuesday or
Thursday expiration series shall 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.7
Currently, for each option class
eligible for participation in the Short
5 See Interpretations and Policies .02(e) of
Exchange Rule 404.
6 See Interpretations and Policies .02(e) of
Exchange Rule 404.
7 See Interpretations and Policies .02 of Exchange
Rule 404.
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Term Option Series Program, the
Exchange is limited to opening thirty
(30) series for each expiration date for
the specific class.8 The thirty (30) series
restriction does not include series that
are opened by other securities
exchanges under their respective weekly
rules; the Exchange may list these
additional series that are listed by other
exchanges.9 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
Policy .02(b) of Exchange Rule 404, 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 on the same class expire.
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.10 Therefore, all Short
Term Option Daily Expirations would
expire at the close of business on each
8 See Interpretations and Policies .02(c) of
Exchange Rule 404.
9 See Interpretations and Policies .02(a) of
Exchange Rule 404.
10 While the Exchange proposes to add rule text
within Policy .02 of Exchange Rule 404 with respect
to Monday Expirations, Tuesday Expirations, and
Wednesday Expirations, stating that those
expirations would not expire on business days that
are business days in which monthly options series
expire, practically speaking this would not occur.
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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 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.
The Exchange’s proposal mirrors that
of Nasdaq ISE, which was recently
approved by the Commission.11 In its
proposal Nasdaq ISE provides an
analysis of the impact of the proposal
which the Exchange does not dispute.
Implementation
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
current Short Term Option Series Rules
within Interpretations and Policies .02
of Exchange Rule 404.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 12 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 13 in particular, in that it is
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
11 See
Securities Exchange Act Release No. 96281
(November 9, 2022), 87 FR 68769 (November 16,
2022) (SR–ISE–2022–18) (Order Granting Approval
of a Proposed Rule Change to Amend the Short
Term Option Series Program).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
PO 00000
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71729
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The proposal is consistent with the
Act as 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 14 to continue to deploy capital
more efficiently and improve displayed
market quality.15 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, Members 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
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 (renamed 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
14 The term ‘‘Market Makers’’ refers to ‘‘Lead
Market Makers’’, ‘‘Primary Lead Market Makers’’
and Registered Market Makers’’ collectively. See
Exchange Rule 100.
15 Today, Primary Lead Market Makers, Lead
Market Makers, and Registered Market Makers are
required to quote a specified time in the appointed
classes. See Exchange Rule 603(e)(1)(i), 603(e)(2)(i),
and 603(e)(3)(i) respectively.
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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 (renamed SPY,
QQQ, and IWM Monday and
Wednesday Short Term Daily
Expirations).16
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 the 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
16 See Interpretations and Policies .02 of
Exchange Rule 404.
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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 IMW [sic] 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 Policy .02 of Exchange
Rule 404 that currently apply to
Wednesday SPY, QQQ, and IWM
Expirations to Tuesday and Thursday
SPY and QQQ Short Term Daily
Expirations is justified.
Finally, the Exchange 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.
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.17
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,
Members will continue to be able to
expand hedging tools and tailor their
17 See
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Frm 00162
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investment and hedging needs more
effectively in SPY, QQQ, and IWM.
Similar to SPY, QQQ, and IWM
Monday and Wednesday Expirations,
the introduction of SPY and QQQ
Tuesday and Thursday Short Term
Daily Expirations does 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
inter-market 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.18
Further, the Exchange does not
believe the proposal will impose any
burden on intra-market 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
Written comments were neither
solicited nor received.
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 19 and Rule
19b–4(f)(6) thereunder.20 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 21 and
18 See Interpretations and Policies .02 of
Exchange Rule 404.
19 15 U.S.C. 78s(b)(3)(A)(iii).
20 17 CFR 240.19b–4(f)(6).
21 15 U.S.C. 78s(b)(3)(A)(iii).
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Federal Register / Vol. 87, No. 225 / Wednesday, November 23, 2022 / Notices
subparagraph (f)(6) of Rule 19b–4
thereunder.22
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 23 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 24
permits the Commission to 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
proposed rule change may become
operative upon filing. The Commission
notes that it recently approved Nasdaq
ISE’s substantially similar proposal.25
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.26
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
lotter on DSK11XQN23PROD with NOTICES1
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.
22 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.
23 17 CFR 240.19b–4(f)(6).
24 17 CFR 240.19b–4(f)(6)(iii).
25 See Securities Exchange Act Release No. 96281
(November 9, 2022), 87 FR 68769 (November 11,
2022) (SR–ISE–2022–18).
26 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).
VerDate Sep<11>2014
16:45 Nov 22, 2022
Jkt 259001
Comments may be submitted by any of
the following methods:
71731
SECURITIES AND EXCHANGE
COMMISSION
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–
MIAX–2022–41 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–MIAX–2022–41. 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
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–MIAX–2022–41 and should
be submitted on or before December
14,2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–25473 Filed 11–22–22; 8:45 am]
BILLING CODE 8011–01–P
27 17
PO 00000
CFR 200.30–3(a)(12), (59).
Frm 00163
Fmt 4703
Sfmt 4703
[Release No. 34–96348; File No. SR–MSRB–
2022–09]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Rule G–3, on
Professional Qualification
Requirements, To Delete References to
Certain Temporary Regulatory Relief
Implemented During the Height of the
Coronavirus Disease
November 17, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on November 16, 2022, the Municipal
Securities Rulemaking Board (‘‘MSRB’’
or ‘‘Board’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the MSRB. 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
The MSRB filed with the Commission
a proposed rule change to amend Rule
G–3, on professional qualification
requirements, to delete references to
certain temporary regulatory relief,3
implemented during the height of the
coronavirus disease (‘‘COVID–19’’ or
‘‘pandemic’’) (the ‘‘proposed rule
change’’).
The MSRB has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
Section 19(b)(3)(A) 4 of the Act and Rule
19b–4(f)(6) 5 thereunder, which renders
the proposed rule change effective upon
receipt of this filing by the Commission.
The MSRB would have the proposed
rule change become operative on
December 27, 2022.
The text of the proposed rule change
is available on the MSRB’s website at
https://msrb.org/2022-SEC-Filings, at
the MSRB’s principal office, and at the
Commission’s Public Reference Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Release No. 34–88694 (April 20, 2020), 85
FR 23088 (April 24, 2020) (File No. SR–MSRB–
2020–01) (the ‘‘April 2020 relief’’).
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\23NON1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 225 (Wednesday, November 23, 2022)]
[Notices]
[Pages 71727-71731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25473]
[[Page 71727]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96342; File No. SR-MIAX-2022-41]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 404, Series of Option
Contracts Open for Trading and the Short Term Option Series Program
November 17, 2022.
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on November 16, 2022, Miami International
Securities Exchange, LLC (``MIAX Options'' or the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') a proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 404,
Series of Option Contracts Open for Trading.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/ at MIAX Options'
principal office, 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 Exchange Rule 404, Series of Option
Contracts Open for Trading. Specifically, the Exchange proposes to
amend Interpretations and Polices .02 of Rule 404 to (i) limit the
number of Short Term Option Expiration Dates for options on SPDR S&P
500 ETF Trust (SPY), the INVESCO QQQ Trust\SM\, Series 1(QQQ), and
iShares Russell 2000 ETF (IWM) from five to two expirations for Monday
and Wednesday expirations; and (ii) 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 a Short Term
Option Series contained in Exchange Rule 100.
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 in 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 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 Interpretations and Policies .02
of Exchange Rule 404.
Proposal
At this time, the Exchange proposes to curtail the number of Short
Term Option Expiration Dates from five to two \3\ 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'').
---------------------------------------------------------------------------
\3\ The Exchange proposes to list the two front months for Short
Term Option Daily Expirations.
---------------------------------------------------------------------------
The Exchange proposes to create a new category of Short Term Option
Expiration 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, labeled ``Table 1,'' within
Interpretations and Policies .02 of Rule 404, 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
[[Page 71728]]
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 Policy .02 of Exchange Rule 404,
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 in 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 Policy .02
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 in 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 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 Policy .02 of Exchange Rule 404,
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.'' \4\
---------------------------------------------------------------------------
\4\ 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 Policy .02 of
Exchange Rule 404.
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 the definition of Short Term Option
Series in Exchange Rule 100 to accommodate the listing of options
series that expire on Tuesdays and Thursdays. Specifically, the
Exchange proposes to add Tuesday and Thursday 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 Policy .02
of Exchange Rule 404, 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. Similar to Monday and
Wednesday SPY, QQQ, and IWM Short Term Option Daily Expirations within
Policy .02 of Exchange Rule 404, 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.\5\ Specifically, the Tuesday and Thursday SPY and QQQ
Short Term Option Daily Expirations will have a $0.50 strike interval
minimum.\6\ 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.
---------------------------------------------------------------------------
\5\ See Interpretations and Policies .02(e) of Exchange Rule
404.
\6\ See Interpretations and Policies .02(e) of Exchange Rule
404.
---------------------------------------------------------------------------
With respect to the Short Term Option Series Program, a Tuesday or
Thursday expiration series shall 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.\7\
---------------------------------------------------------------------------
\7\ See Interpretations and Policies .02 of Exchange Rule 404.
---------------------------------------------------------------------------
Currently, for each option class eligible for participation in the
Short
[[Page 71729]]
Term Option Series Program, the Exchange is limited to opening thirty
(30) series for each expiration date for the specific class.\8\ The
thirty (30) series restriction does not include series that are opened
by other securities exchanges under their respective weekly rules; the
Exchange may list these additional series that are listed by other
exchanges.\9\ 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.
---------------------------------------------------------------------------
\8\ See Interpretations and Policies .02(c) of Exchange Rule
404.
\9\ See Interpretations and Policies .02(a) of Exchange Rule
404.
---------------------------------------------------------------------------
Finally, the Exchange is amending Policy .02(b) of Exchange Rule
404, 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 on the same class expire. 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.\10\
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 reasonable to not
permit two expirations on the same day in which a monthly options
series or a Quarterly Options Series would expire.
---------------------------------------------------------------------------
\10\ While the Exchange proposes to add rule text within Policy
.02 of Exchange Rule 404 with respect to Monday Expirations, Tuesday
Expirations, and Wednesday Expirations, stating that those
expirations would not expire on business days that are business days
in 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.
The Exchange's proposal mirrors that of Nasdaq ISE, which was
recently approved by the Commission.\11\ In its proposal Nasdaq ISE
provides an analysis of the impact of the proposal which the Exchange
does not dispute.
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 96281 (November 9,
2022), 87 FR 68769 (November 16, 2022) (SR-ISE-2022-18) (Order
Granting Approval of a Proposed Rule Change to Amend the Short Term
Option Series Program).
---------------------------------------------------------------------------
Implementation
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 current Short Term Option Series Rules
within Interpretations and Policies .02 of Exchange Rule 404.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \13\ in particular, in that it
is 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 mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The proposal is consistent with the Act as 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 \14\
to continue to deploy capital more efficiently and improve displayed
market quality.\15\ 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, Members will continue to be able to expand
hedging tools and tailor their investment and hedging needs more
effectively in SPY, QQQ, and IWM.
---------------------------------------------------------------------------
\14\ The term ``Market Makers'' refers to ``Lead Market
Makers'', ``Primary Lead Market Makers'' and Registered Market
Makers'' collectively. See Exchange Rule 100.
\15\ Today, Primary Lead Market Makers, Lead Market Makers, and
Registered Market Makers are required to quote a specified time in
the appointed classes. See Exchange Rule 603(e)(1)(i), 603(e)(2)(i),
and 603(e)(3)(i) respectively.
---------------------------------------------------------------------------
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 (renamed 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
[[Page 71730]]
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 (renamed SPY, QQQ, and IWM Monday and
Wednesday Short Term Daily Expirations).\16\
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\16\ See Interpretations and Policies .02 of Exchange Rule 404.
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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
the 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 IMW [sic] 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
Policy .02 of Exchange Rule 404 that currently apply to Wednesday SPY,
QQQ, and IWM Expirations to Tuesday and Thursday SPY and QQQ Short Term
Daily Expirations is justified.
Finally, the Exchange 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.
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.\17\ 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, Members
will continue to be able to expand hedging tools and tailor their
investment and hedging needs more effectively in SPY, QQQ, and IWM.
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\17\ See supra note 15.
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Similar to SPY, QQQ, and IWM Monday and Wednesday Expirations, the
introduction of SPY and QQQ Tuesday and Thursday Short Term Daily
Expirations does 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 inter-market 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.\18\
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\18\ See Interpretations and Policies .02 of Exchange Rule 404.
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Further, the Exchange does not believe the proposal will impose any
burden on intra-market 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
Written comments were neither solicited nor received.
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 \19\ and Rule 19b-4(f)(6) thereunder.\20\
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 \21\ and
[[Page 71731]]
subparagraph (f)(6) of Rule 19b-4 thereunder.\22\
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\19\ 15 U.S.C. 78s(b)(3)(A)(iii).
\20\ 17 CFR 240.19b-4(f)(6).
\21\ 15 U.S.C. 78s(b)(3)(A)(iii).
\22\ 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 pursuant to Rule 19b-4(f)(6) under the
Act \23\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \24\ permits the
Commission to 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 proposed rule change may become operative upon filing. The
Commission notes that it recently approved Nasdaq ISE's substantially
similar proposal.\25\ 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.\26\
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\23\ 17 CFR 240.19b-4(f)(6).
\24\ 17 CFR 240.19b-4(f)(6)(iii).
\25\ See Securities Exchange Act Release No. 96281 (November 9,
2022), 87 FR 68769 (November 11, 2022) (SR-ISE-2022-18).
\26\ 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).
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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-MIAX-2022-41 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-MIAX-2022-41. 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 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-MIAX-2022-41 and should be submitted on
or before December 14, 2022.
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\27\ 17 CFR 200.30-3(a)(12), (59).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25473 Filed 11-22-22; 8:45 am]
BILLING CODE 8011-01-P
