Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 404, Series of Option Contracts Open for Trading, 819-823 [2023-29005]
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Federal Register / Vol. 89, No. 4 / Friday, January 5, 2024 / Notices
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–NYSEAMER–2023–64. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSEAMER–2023–64 and should
be submitted on or before January 26,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023–29006 Filed 1–4–24; 8:45 am]
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99251; File No. SR–
PEARL–2023–72]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 404, Series of Option Contracts
Open for Trading
December 29, 2023.
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 December 22, 2023, MIAX PEARL,
LLC (‘‘MIAX Pearl’’ or ‘‘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.miaxglobal.com/markets/
us-options/pearl-options/rule-filings, at
MIAX Pearl’s 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
Rule 404 to accommodate the listing of
options series that would expire at the
1 15
11 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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819
close of business on the last business
day of a calendar month (‘‘Monthly
Options Series’’).
Pursuant to new proposed
Interpretation and Policy .13 to
Exchange Rule 404, the Exchange may
list Monthly Options Series for up to
five currently listed option classes that
are either index options or options on
exchange-traded funds (‘‘ETFs’’).3 In
addition, the Exchange may also list
Monthly Options Series on any options
classes that are selected by other
securities exchanges that employ a
similar program under their respective
rules.4 The Exchange may list 12
expirations for Monthly Options Series.
Monthly Options Series need not be for
consecutive months; however, the
expiration date of a nonconsecutive
expiration may not be beyond what
would be considered the last expiration
date if the maximum number of
expirations were listed consecutively.5
Other expirations in the same class are
not counted as part of the maximum
numbers of Monthly Options Series
3 The Exchange proposes to amend Exchange
Rule 404(a) to provide that proposed Interpretation
and Policy .13 to Exchange Rule 404 will describe
how the Exchange will fix a specific expiration date
and exercise price for Monthly Options Series and
that proposed Interpretation and Policy .13 to
Exchange Rule 404 will govern the procedures for
opening Monthly Options Series, respectively. This
is consistent with language in current Exchange
Rules 404(a) for other Short Term Options Series
and Quarterly Options Series.
4 Currently, Cboe Exchange, Inc. has a similar
program. See Securities Exchange Act Release No.
98915 (Nov. 13, 2023) (SR–CBOE–2023–049) (Order
Approving a Proposed Rule Change To Adopt
Monthly Options Series).
5 The Exchange notes this provision considers
consecutive monthly listings. In other words, as
other expirations (such as Quarterly Options Series)
are not counted as part of the maximum, those
expirations would not be considered when
considering when the last expiration date would be
if the maximum number were listed consecutively.
For example, if it is January 2024 and the Exchange
lists Quarterly Options Series in class ABC with
expirations in March, June, September, December,
and the following March, the Exchange could also
list Monthly Options Series in class ABC with
expirations in January, February, April, May, July,
August, October, and November 2024 and January
and February of 2025. This is because, if Quarterly
Options Series, for example, were counted, the
Exchange would otherwise never be able to list the
maximum number of Monthly Options Series. This
is consistent with the listing provisions for
Quarterly Options Series, which permit calendar
quarter expirations. The need to list series with the
same expiration in the current calendar year and
the following calendar year (whether Monthly or
Quarterly expiration) is to allow market participants
to execute one-year strategies pursuant to which
they may not roll their exposures in the longerdated options (e.g., January 2025) prior to the
expiration of the nearer-dated option (e.g., January
2024).
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expirations for a class.6 Monthly
Options Series will be PM-settled.7
The strike price of each Monthly
Options Series will be fixed at a price
per share, with at least two, but no more
than five, strike prices above and at least
two, but no more than five, strike prices
below the value of the underlying index
or price of the underlying security at
about the time that a Monthly Options
Series is opened for trading on the
Exchange. The Exchange will list strike
prices for Monthly Options Series that
are reasonably related to the current
price of the underlying security or
current index value of the underlying
index to which such series relates at
about the time such series of options is
first opened for trading on the
Exchange. The term ‘‘reasonably related
to the current price of the underlying
security or index value of the
underlying index’’ means that the
exercise price is within 30% of the
current underlying security price or
index value.8 Additional Monthly
Options Series of the same class may be
open for trading on the Exchange when
the Exchange deems it necessary to
maintain an orderly market, to meet
Member 9 demand, or when the market
price of the underlying security moves
substantially from the initial exercise
price or prices. To the extent that any
additional strike prices are listed by the
Exchange, such additional strike prices
will be within 30% above or below the
closing price of the underlying index or
security on the preceding day. The
Exchange may also open additional
strike prices of Monthly Options Series
that are more than 30% above or below
the current price of the underlying
security, provided that demonstrated
Member interest exists for such series,
as expressed by institutional, corporate,
Members or their brokers. Market
Makers trading for their own account
will not be considered when
determining Member interest under this
provision. The opening of the new
6 See proposed Interpretation and Policy .13(b) to
Exchange Rule 404.
7 See proposed Interpretation and Policy .13(c) to
Exchange Rule 404.
8 See proposed Interpretation and Policy .13(d).
The Exchange notes these proposed provisions are
consistent with the initial series provision for the
Quarterly Options Series program in Interpretation
and Policy .03 to Exchange Rule 404. While
different than the initial strike listing provision for
the Quarterly Options Series program in current
Interpretation and Policy .03 to Exchange Rule 404,
the Exchange believes the proposed provision is
appropriate, as it contemplates classes that may
have strike intervals of $5 or greater.
9 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
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Monthly Options Series will not affect
the series of options of the same class
previously opened.10 The interval
between strike prices on Monthly
Options Series will be the same as the
interval for strike prices for series in
that same options class that expire in
accordance with the normal monthly
expiration cycle.11
By definition, Monthly Options Series
can never expire in the same week that
a standard options series that expires on
the third Friday of a month in the same
class expires. The same, however, is not
the case with respect to Short Term
Options Series or Quarterly Options
Series. Therefore, to avoid any
confusion in the marketplace, the
Exchange proposes to amend
Interpretation and Policy .02 to
Exchange Rule 404 to provide that the
Exchange will not list a Short Term
Options Series in a class on a date on
which a Monthly Options Series or
Quarterly Options Series expires.12
Similarly, proposed Interpretation and
Policy .13(b) to Exchange Rule 404
provides that no Monthly Options
Series may expire on a date that
coincides with an expiration date of a
Quarterly Options Series in the same
index or ETF class. In other words, the
Exchange will not list a Short Terms
Options Series on an index or ETF if a
Monthly Options Series on that index or
ETF were to expire on the same date,
nor will the Exchange list a Monthly
Options Series on an index or ETF if a
Quarterly Options Series on that ETF
were to expire on the same date to
prevent the listing of series with
concurrent expirations.13
10 See proposed Interpretation and Policy .13(e) to
Exchange Rule 404.
11 See proposed Interpretation and Policy .13(f) to
Exchange Rule 404; see also Interpretations and
Policies .01 and .04, .06, .08, .09, .10 to Exchange
Rule 404 (permissible strike prices for ETF classes)
and Interpretations and Policies .05, .07, .11 to
Exchange Rule 404 (permissible strike prices for
index options).
12 The Exchange also proposes to make a nonsubstantive change to Interpretation and Policy .02
to Exchange Rule 404 to change current references
to ‘‘monthly options series’’ to ‘‘standard expiration
options series’’ (i.e., series that expire on the third
Friday of a month), to eliminate potential
confusion. The current references to ‘‘monthly
options series’’ are intended to refer to those series
that expire on the third Friday of a month, which
are generally referred to in the industry as standard
expirations.
13 The Exchange notes this would not prevent the
Exchange from listing a P.M.-settled Monthly
Options Series on an index with the same
expiration date as an A.M.-settled Short Term
Options Series on the same index, both of which
may expire on a Friday. The Exchange believes this
concurrent listing would provide investors with yet
another hedging mechanism and is reasonable given
these series would not be identical (unlike if they
were both P.M.-settled). This could not occur with
respect to ETFs, as all Short Term Options Series
on ETFs are P.M.-settled.
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With respect to Monthly Options
Series added pursuant to proposed
Interpretation and Policy .13(a)–(f) to
Exchange Rule 404, the Exchange will,
on a monthly basis, review series that
are outside a range of five strikes above
and five strikes below the current price
of the underlying index or security, and
delist series with no open interest in
both the put and the call series having
a strike: (i) higher than the highest strike
price with open interest in the put and/
or call series for a given expiration
month; and (ii) lower than the lowest
strike price with open interest in the put
and/or call series for a given expiration
month. Notwithstanding this delisting
policy, Member requests to add strikes
and/or maintain strikes in Monthly
Options Series in series eligible for
delisting will be granted. In connection
with this delisting policy, if the
Exchange identifies series for delisting,
the Exchange will notify other options
exchanges with similar delisting
policies regarding eligible series for
delisting and will work with such other
exchanges to develop a uniform list of
series to be delisted, so as to ensure
uniform series delisting of multiply
listed Monthly Options Series.14
The Exchange believes that Monthly
Options Series will provide investors
with another flexible and valuable tool
to manage risk exposure, minimize
capital outlays, and be more responsive
to the timing of events affecting the
securities that underlie options
contracts. The Exchange believes
limiting Monthly Options Series to five
classes will ensure the addition of these
new series will have a negligible impact
on the Options Price Reporting
Authority (‘‘OPRA’’) and the Exchange’s
quoting capacity. The Exchange
represents it has the necessary systems
capacity to support new options series
that will result from the introduction of
Monthly Options Series.
The Exchange also represents its
current surveillance programs will
apply to Monthly Options Series and
will properly monitor trading in the
proposed Monthly Options Series. The
Exchange currently lists Quarterly
Options Series in certain ETF classes,15
which expire at the close of business at
the end of four calendar months (i.e., the
end of each calendar quarter), and has
not experienced any market disruptions
nor issues with capacity. The
Exchange’s surveillance programs
14 See proposed Interpretation and Policy .13(g) to
Exchange Rule. Pursuant to Exchange Rule 1807,
exercise limits for impacted index and ETF classes
would be equal to the applicable position limits.
15 The Exchange notes it currently lists quarterly
expirations on certain ETF options pursuant to
Interpretation and Policy .03 to Exchange Rule 404.
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Federal Register / Vol. 89, No. 4 / Friday, January 5, 2024 / Notices
currently in place to support and
properly monitor trading in these
Quarterly Options Series, as well as
Short Term Options Series and standard
expiration series, will apply to the
proposed Monthly Options Series. The
Exchange believes its surveillances
continue to be designed to deter and
detect violations of its Rules, including
position and exercise limits and
possible manipulative behavior, and
these surveillances will apply to
Monthly Options Series that the
Exchange determines to list for trading.
Ultimately, the Exchange does not
believe the proposed rule change raises
any unique regulatory concerns because
existing safeguards—such as position
and exercise limits (and the aggregation
of options overlying the same index or
ETF) and reporting requirements—
would continue to apply.
The Exchange notes that the proposed
rule change is substantively identical to
proposed rule changes recently filed by
the Cboe Exchange, Inc. (‘‘Cboe’’),16 and
the Exchange’s affiliate, MIAX
Options.17
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.18 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 19 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) 20 requirement that
the rules of an exchange not be designed
16 See
supra note 4.
Securities Exchange Act Release No. 98973
(November 16, 2023), 88 FR 81495 (November 22,
2023) (SR–MIAX–2023–44). The Exchange notes
that MIAX Chapter XVIII is incorporated by
reference in its entirety into the rulebook of MIAX
Pearl. As such, the amendments to MIAX Chapter
XVIII in the aforementioned proposal will also
apply to MIAX Pearl Chapter XVIII.
18 15 U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(5).
20 Id.
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17 See
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to permit unfair discrimination between
Members, issuers, brokers, or dealers.
In particular, the Exchange believes
the introduction of Monthly Options
Series will remove impediments to and
perfect the mechanism of a free and
open market and a national market
system by expanding hedging tools
available to market participants. The
Exchange believes the proposed
monthly expirations will allow market
participants to transact in the index and
ETF options listed pursuant to the
proposed rule change based on their
timings as needed and allow them to
tailor their investment and hedging
needs more effectively. Further, the
Exchange believes the availability of
Monthly Options Series would protect
investors and the public interest by
providing investors with more
flexibility to closely tailor their
investment and hedging decisions in
these options, thus allowing them to
better manage their risk exposure.
The Exchange believes the Quarterly
Options Series Program has been
successful to date and the proposed
Monthly Options Series program simply
expands the ability of investors to hedge
risk against market movements
stemming from economic releases or
market events that occur at month’s end
in the same way the Quarterly Options
Series Program has expanded the
landscape of hedging for quarter-end
news. Monthly Options Series will also
complement Short Term Options Series,
which will allow investors to hedge risk
against events that occur throughout a
month. The Exchange believes the
availability of additional expirations
should create greater trading and
hedging opportunities for investors, as
well as provide investors with the
ability to tailor their investment
objectives more effectively.
The Exchange notes the proposed
terms of Monthly Options Series,
including the limitation to five index
and ETF option classes, are
substantively the same as the current
terms of Quarterly Options Series.21
Quarterly Options Series expire on the
last business day of a calendar quarter,
which is the last business day of every
third month. The proposed Monthly
Options Series would fills the gaps
between Quarterly Options Series
expirations by permitting series to
expire on the last business day of every
month, rather than every third month.
The proposed Monthly Options Series
may be listed in accordance with the
same terms as Quarterly Options Series,
21 Compare proposed Interpretation and Policy
.13 of Exchange Rule 404 to Interpretation and
Policy .03 of Exchange Rule 404.
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821
including permissible strikes. As is the
case with Quarterly Options Series, no
Short Term Options Series may expire
on the same day as a Monthly Options
Series. Similarly, as proposed, no
Monthly Options Series may expire on
the same day as a Quarterly Options
Series. The Exchange believes
preventing listing series with concurrent
expirations in a class will eliminate
potential investor confusion and thus
protect investors and the public interest.
Given that Quarterly Options Series the
Exchange currently lists are essentially
Monthly Options Series that can expire
at the end of only certain calendar
months, the Exchange believes it is
reasonable to list Monthly Options
Series in accordance with the same
terms, as it will promote just and
equitable principles of trade. The
Exchange believes limiting Monthly
Options Series to five classes will
ensure the addition of these new series
will have a negligible impact on the
Exchange and OPRA’s quoting capacity.
The Exchange represents it has the
necessary systems capacity to support
new options series that will result from
the introduction of Monthly Options
Series.
The Exchange also represents its
current surveillance programs will
apply to Monthly Options Series and
will properly monitor trading in the
proposed Monthly Options Series. As
mentioned above, the Exchange
currently trades Quarterly Options
Series in certain ETF classes, which
expire at the close of business at the end
of three calendar months (i.e., the end
of each calendar quarter), and has not
experienced any market disruptions nor
issues with capacity. The Exchange’s
surveillance programs currently in place
to support and properly monitor trading
in these Quarterly Options Series, as
well as Short Term Options Series, and
standard expiration series, will apply to
the proposed Monthly Options Series.
The Exchange believes its surveillances
continue to be designed to deter and
detect violations of its Rules, including
position and exercise limits and
possible manipulative behavior, and
these surveillances will apply to
Monthly Options Series that the
Exchange determines to list for trading.
Ultimately, the Exchange does not
believe the proposed rule change raises
any unique regulatory concerns because
existing safeguards—such as position
and exercise limits (and the aggregation
of options overlying the same ETF or
index) and reporting requirements—
would continue to apply.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe the proposed
rule change to list Monthly Options
Series will impose any burden on
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as any
Monthly Options Series the Exchange
lists for trading will be available in the
same manner for all market participants
who wish to trade such options. The
Exchange notes the proposed terms of
the Monthly Options Series, including
the limitation to five index and ETF
option classes, are substantively the
same as the current terms of Quarterly
Options Series.22 Quarterly Options
Series expire on the last business day of
a calendar quarter, which is the last
business day of every third month,
making the concept of Monthly Options
Series in a limited number of index and
ETF options not novel. The proposed
Monthly Options Series will fill the
gaps between Quarterly Options Series
expirations by permitting series to
expire on the last business day of every
month, rather than every third month.
The proposed Monthly Options Series
may be listed in accordance with the
same terms as Quarterly Options Series,
including permissible strikes. Monthly
Options Series will trade on the
Exchange in the same manner as other
options in the same class.
The Exchange does not believe the
proposed rule change to list Monthly
Options Series will impose any burden
on intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as nothing
prevents other options exchanges from
proposing similar rules. As discussed
above, the proposed rule change would
permit listing of Monthly Options Series
in five index or ETF options, as well as
any other classes that other exchanges
may list under similar programs. To the
extent that the availability of Monthly
Options Series makes the Exchange a
more attractive marketplace to market
participants at other exchanges, market
participants are free to elect to become
market participants on the Exchange.
The Exchange believes that the
proposed rule change may relieve any
burden on, or otherwise promote,
competition. Similar to Short Term
Options Series and Quarterly Options
Series, the Exchange believes the
22 See Interpretation and Policy .03 to Exchange
Rule 404.
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introduction of Monthly Options Series
will not impose an undue burden on
competition. The Exchange believes that
it will, among other things, expand
hedging tools available to market
participants. The Exchange believes
Monthly Options Series will allow
market participants to purchase options
based on their timing as needed and
allow them to tailor their investment
and hedging needs more effectively.
Consequently, the Exchange does not
believe that the proposed change
implicates competition at all.
Additionally, and as stated above, a
Cboe proposal to accommodate the
listing of options series that would
expire at the close of business on the
last business day of a calendar month in
the same manner has been recently
approved.23
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 24 and Rule
19b–4(f)(6) thereunder.25 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 26 and
subparagraph (f)(6) of Rule 19b–4
thereunder.27
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 28 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 29
permits the Commission to designate a
shorter time if such action is consistent
23 See
supra note 4.
U.S.C. 78s(b)(3)(A)(iii).
25 17 CFR 240.19b–4(f)(6).
26 15 U.S.C. 78s(b)(3)(A)(iii).
27 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.
28 17 CFR 240.19b–4(f)(6).
29 17 CFR 240.19b–4(f)(6)(iii).
24 15
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with the protection of investors and the
public interest. The Exchange has
requested that the Commission waive
the 30-day operative delay so that the
Exchange may list Monthly Options
Series immediately, which the Exchange
believes will benefit investors by
promoting competition in Monthly
Options Series. The Exchange notes that
its proposal is substantively identical to
the proposal submitted by Cboe
Exchange, Inc. for its Monthly Options
Series program.30 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.31
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
PEARL–2023–72 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–PEARL–2023–72. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
30 See
supra note 4.
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).
31 For
E:\FR\FM\05JAN1.SGM
05JAN1
Federal Register / Vol. 89, No. 4 / Friday, January 5, 2024 / Notices
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–PEARL–2023–72 and should be
submitted on or before January 26, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023–29005 Filed 1–4–24; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[License No. 01/01–0423]
lotter on DSK11XQN23PROD with NOTICES1
Crystal Financial SBIC, LP; Surrender
of License of Small Business
Investment Company
Pursuant to the authority granted to
the United States Small Business
Administration under section 309 of the
Small Business Investment Act of 1958,
as amended, and 13 CFR 107.1900 of the
Code of Federal Regulations to function
as a small business investment company
under the Small Business Investment
Company License No. 01/01–0423
issued to Crystal Financial SBIC, LP,
32 17
CFR 200.30–3(a)(12), (59).
VerDate Sep<11>2014
17:32 Jan 04, 2024
Jkt 262001
said license is hereby declared null and
void.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, United States Small Business
Administration.
[FR Doc. 2024–00020 Filed 1–4–24; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
[License No. 02/32–0667]
Bridges Ventures U.S. Sustainable
Growth Fund, L.P.; Surrender of
License of Small Business Investment
Company
Pursuant to the authority granted to
the United States Small Business
Administration under section 309 of the
Small Business Investment Act of 1958,
as amended, and 13 CFR 107.1900 of the
Code of Federal Regulations to function
as a small business investment company
under the Small Business Investment
Company License No. 02/32–0667
issued to Bridges Ventures U.S.
Sustainable Growth Fund, L.P., said
license is hereby declared null and void.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, United States Small Business
Administration.
[FR Doc. 2024–00015 Filed 1–4–24; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
[License No. 05/05–0351]
Stonehenge Opportunity Fund V, L.P.;
Notice Seeking Exemption Under
Section 312 of the Small Business
Investment Act, Conflicts of Interest
Notice is hereby given that
Stonehenge Opportunity Fund V, L.P.,
191 W Nationwide Boulevard, Suite
600, Columbus, OH 43215, a Federal
Licensee under the Small Business
Investment Act of 1958, as amended
(‘‘the Act’’), in connection with the
financing of a small business concern,
has sought an exemption under section
312 of the Act and 13 CFR 107.730,
Financings which Constitute Conflicts
of Interest of the Small Business
Administration (‘‘SBA’’) Rules and
Regulations. Stonehenge Opportunity
Fund V, L.P. is seeking a written
exemption from SBA for a proposed
financing to True North Asphalt
Holdings, LLC, 1241 E 11 Mile Road,
Madison Heights, MI 48071.
The financing is brought within the
purview of 13 CFR 107.730(a) of the
Regulations because True North Asphalt
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
823
Holdings, LLC is an Associate of
Stonehenge Opportunity Fund V, L.P.
because Associate Stonehenge
Opportunity Fund IV, L.P. owns a
greater than ten percent interest in True
North Asphalt Holdings, LLC, therefore
this transaction is considered Financing
which constitute conflicts of interest
requiring SBA’s prior written
exemption.
Notice is hereby given that any
interested person may submit written
comments on this transaction within
fifteen days of the date of this
publication to the Associate
Administrator, Office of Investment and
Innovation, U.S. Small Business
Administration, 409 Third Street SW,
Washington, DC 20416.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, United States Small Business
Administration.
[FR Doc. 2024–00009 Filed 1–4–24; 8:45 am]
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
[License No. 06/06–0356]
Independent Bankers Capital Fund IV,
L.P.; Notice Seeking Exemption Under
Section 312 of the Small Business
Investment Act, Conflicts of Interest
Notice is hereby given that
Independent Bankers Capital Fund IV,
L.P., 5949 Sherry Lane, Suite 1472,
Dallas, TX 75225, a Federal Licensee
under the Small Business Investment
Act of 1958, as amended (‘‘the Act’’), in
connection with the financing of a small
concern, has sought an exemption under
section 312 of the Act and section
107.730, Financings which Constitute
Conflict of Interest of the Small
Business Administration (‘‘SBA’’) Rules
and Regulations (13 CFR 107.730).
Independent Bankers Capital Fund IV,
L.P. (‘‘IBCF IV’’) is proposing to provide
financing to Central States Bus Sales,
Inc. (‘‘Company’’) to support the
Company’s growth.
The proposed transaction is brought
within the purview of § 107.730 of the
Regulations because Diamond State
Ventures II, L.P. (‘‘DSV’’), an Associate
of IBCF IV as defined in § 107.50, holds
a 25% of equity interest in the
Company. By virtue of DSV’s equity
ownership, the Company and IBCF IV
are also Associates. DSV expects to
receive $8.122 million from the
proposed transaction.
Therefore, the proposed transaction
requires a regulatory exemption
pursuant to 13 CFR 107.730. Notice is
hereby given that any interested person
E:\FR\FM\05JAN1.SGM
05JAN1
]]>Agencies
[Federal Register Volume 89, Number 4 (Friday, January 5, 2024)]
[Notices]
[Pages 819-823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-29005]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99251; File No. SR-PEARL-2023-72]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 404, Series of Option Contracts Open for Trading
December 29, 2023.
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 December 22, 2023, MIAX PEARL, LLC (``MIAX
Pearl'' or ``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.miaxglobal.com/markets/us-options/pearl-options/rule-filings, at MIAX Pearl's 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 Rule 404 to accommodate the listing
of options series that would expire at the close of business on the
last business day of a calendar month (``Monthly Options Series'').
Pursuant to new proposed Interpretation and Policy .13 to Exchange
Rule 404, the Exchange may list Monthly Options Series for up to five
currently listed option classes that are either index options or
options on exchange-traded funds (``ETFs'').\3\ In addition, the
Exchange may also list Monthly Options Series on any options classes
that are selected by other securities exchanges that employ a similar
program under their respective rules.\4\ The Exchange may list 12
expirations for Monthly Options Series. Monthly Options Series need not
be for consecutive months; however, the expiration date of a
nonconsecutive expiration may not be beyond what would be considered
the last expiration date if the maximum number of expirations were
listed consecutively.\5\ Other expirations in the same class are not
counted as part of the maximum numbers of Monthly Options Series
[[Page 820]]
expirations for a class.\6\ Monthly Options Series will be PM-
settled.\7\
---------------------------------------------------------------------------
\3\ The Exchange proposes to amend Exchange Rule 404(a) to
provide that proposed Interpretation and Policy .13 to Exchange Rule
404 will describe how the Exchange will fix a specific expiration
date and exercise price for Monthly Options Series and that proposed
Interpretation and Policy .13 to Exchange Rule 404 will govern the
procedures for opening Monthly Options Series, respectively. This is
consistent with language in current Exchange Rules 404(a) for other
Short Term Options Series and Quarterly Options Series.
\4\ Currently, Cboe Exchange, Inc. has a similar program. See
Securities Exchange Act Release No. 98915 (Nov. 13, 2023) (SR-CBOE-
2023-049) (Order Approving a Proposed Rule Change To Adopt Monthly
Options Series).
\5\ The Exchange notes this provision considers consecutive
monthly listings. In other words, as other expirations (such as
Quarterly Options Series) are not counted as part of the maximum,
those expirations would not be considered when considering when the
last expiration date would be if the maximum number were listed
consecutively. For example, if it is January 2024 and the Exchange
lists Quarterly Options Series in class ABC with expirations in
March, June, September, December, and the following March, the
Exchange could also list Monthly Options Series in class ABC with
expirations in January, February, April, May, July, August, October,
and November 2024 and January and February of 2025. This is because,
if Quarterly Options Series, for example, were counted, the Exchange
would otherwise never be able to list the maximum number of Monthly
Options Series. This is consistent with the listing provisions for
Quarterly Options Series, which permit calendar quarter expirations.
The need to list series with the same expiration in the current
calendar year and the following calendar year (whether Monthly or
Quarterly expiration) is to allow market participants to execute
one-year strategies pursuant to which they may not roll their
exposures in the longer-dated options (e.g., January 2025) prior to
the expiration of the nearer-dated option (e.g., January 2024).
\6\ See proposed Interpretation and Policy .13(b) to Exchange
Rule 404.
\7\ See proposed Interpretation and Policy .13(c) to Exchange
Rule 404.
---------------------------------------------------------------------------
The strike price of each Monthly Options Series will be fixed at a
price per share, with at least two, but no more than five, strike
prices above and at least two, but no more than five, strike prices
below the value of the underlying index or price of the underlying
security at about the time that a Monthly Options Series is opened for
trading on the Exchange. The Exchange will list strike prices for
Monthly Options Series that are reasonably related to the current price
of the underlying security or current index value of the underlying
index to which such series relates at about the time such series of
options is first opened for trading on the Exchange. The term
``reasonably related to the current price of the underlying security or
index value of the underlying index'' means that the exercise price is
within 30% of the current underlying security price or index value.\8\
Additional Monthly Options Series of the same class may be open for
trading on the Exchange when the Exchange deems it necessary to
maintain an orderly market, to meet Member \9\ demand, or when the
market price of the underlying security moves substantially from the
initial exercise price or prices. To the extent that any additional
strike prices are listed by the Exchange, such additional strike prices
will be within 30% above or below the closing price of the underlying
index or security on the preceding day. The Exchange may also open
additional strike prices of Monthly Options Series that are more than
30% above or below the current price of the underlying security,
provided that demonstrated Member interest exists for such series, as
expressed by institutional, corporate, Members or their brokers. Market
Makers trading for their own account will not be considered when
determining Member interest under this provision. The opening of the
new Monthly Options Series will not affect the series of options of the
same class previously opened.\10\ The interval between strike prices on
Monthly Options Series will be the same as the interval for strike
prices for series in that same options class that expire in accordance
with the normal monthly expiration cycle.\11\
---------------------------------------------------------------------------
\8\ See proposed Interpretation and Policy .13(d). The Exchange
notes these proposed provisions are consistent with the initial
series provision for the Quarterly Options Series program in
Interpretation and Policy .03 to Exchange Rule 404. While different
than the initial strike listing provision for the Quarterly Options
Series program in current Interpretation and Policy .03 to Exchange
Rule 404, the Exchange believes the proposed provision is
appropriate, as it contemplates classes that may have strike
intervals of $5 or greater.
\9\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\10\ See proposed Interpretation and Policy .13(e) to Exchange
Rule 404.
\11\ See proposed Interpretation and Policy .13(f) to Exchange
Rule 404; see also Interpretations and Policies .01 and .04, .06,
.08, .09, .10 to Exchange Rule 404 (permissible strike prices for
ETF classes) and Interpretations and Policies .05, .07, .11 to
Exchange Rule 404 (permissible strike prices for index options).
---------------------------------------------------------------------------
By definition, Monthly Options Series can never expire in the same
week that a standard options series that expires on the third Friday of
a month in the same class expires. The same, however, is not the case
with respect to Short Term Options Series or Quarterly Options Series.
Therefore, to avoid any confusion in the marketplace, the Exchange
proposes to amend Interpretation and Policy .02 to Exchange Rule 404 to
provide that the Exchange will not list a Short Term Options Series in
a class on a date on which a Monthly Options Series or Quarterly
Options Series expires.\12\ Similarly, proposed Interpretation and
Policy .13(b) to Exchange Rule 404 provides that no Monthly Options
Series may expire on a date that coincides with an expiration date of a
Quarterly Options Series in the same index or ETF class. In other
words, the Exchange will not list a Short Terms Options Series on an
index or ETF if a Monthly Options Series on that index or ETF were to
expire on the same date, nor will the Exchange list a Monthly Options
Series on an index or ETF if a Quarterly Options Series on that ETF
were to expire on the same date to prevent the listing of series with
concurrent expirations.\13\
---------------------------------------------------------------------------
\12\ The Exchange also proposes to make a non-substantive change
to Interpretation and Policy .02 to Exchange Rule 404 to change
current references to ``monthly options series'' to ``standard
expiration options series'' (i.e., series that expire on the third
Friday of a month), to eliminate potential confusion. The current
references to ``monthly options series'' are intended to refer to
those series that expire on the third Friday of a month, which are
generally referred to in the industry as standard expirations.
\13\ The Exchange notes this would not prevent the Exchange from
listing a P.M.-settled Monthly Options Series on an index with the
same expiration date as an A.M.-settled Short Term Options Series on
the same index, both of which may expire on a Friday. The Exchange
believes this concurrent listing would provide investors with yet
another hedging mechanism and is reasonable given these series would
not be identical (unlike if they were both P.M.-settled). This could
not occur with respect to ETFs, as all Short Term Options Series on
ETFs are P.M.-settled.
---------------------------------------------------------------------------
With respect to Monthly Options Series added pursuant to proposed
Interpretation and Policy .13(a)-(f) to Exchange Rule 404, the Exchange
will, on a monthly basis, review series that are outside a range of
five strikes above and five strikes below the current price of the
underlying index or security, and delist series with no open interest
in both the put and the call series having a strike: (i) higher than
the highest strike price with open interest in the put and/or call
series for a given expiration month; and (ii) lower than the lowest
strike price with open interest in the put and/or call series for a
given expiration month. Notwithstanding this delisting policy, Member
requests to add strikes and/or maintain strikes in Monthly Options
Series in series eligible for delisting will be granted. In connection
with this delisting policy, if the Exchange identifies series for
delisting, the Exchange will notify other options exchanges with
similar delisting policies regarding eligible series for delisting and
will work with such other exchanges to develop a uniform list of series
to be delisted, so as to ensure uniform series delisting of multiply
listed Monthly Options Series.\14\
---------------------------------------------------------------------------
\14\ See proposed Interpretation and Policy .13(g) to Exchange
Rule. Pursuant to Exchange Rule 1807, exercise limits for impacted
index and ETF classes would be equal to the applicable position
limits.
---------------------------------------------------------------------------
The Exchange believes that Monthly Options Series will provide
investors with another flexible and valuable tool to manage risk
exposure, minimize capital outlays, and be more responsive to the
timing of events affecting the securities that underlie options
contracts. The Exchange believes limiting Monthly Options Series to
five classes will ensure the addition of these new series will have a
negligible impact on the Options Price Reporting Authority (``OPRA'')
and the Exchange's quoting capacity. The Exchange represents it has the
necessary systems capacity to support new options series that will
result from the introduction of Monthly Options Series.
The Exchange also represents its current surveillance programs will
apply to Monthly Options Series and will properly monitor trading in
the proposed Monthly Options Series. The Exchange currently lists
Quarterly Options Series in certain ETF classes,\15\ which expire at
the close of business at the end of four calendar months (i.e., the end
of each calendar quarter), and has not experienced any market
disruptions nor issues with capacity. The Exchange's surveillance
programs
[[Page 821]]
currently in place to support and properly monitor trading in these
Quarterly Options Series, as well as Short Term Options Series and
standard expiration series, will apply to the proposed Monthly Options
Series. The Exchange believes its surveillances continue to be designed
to deter and detect violations of its Rules, including position and
exercise limits and possible manipulative behavior, and these
surveillances will apply to Monthly Options Series that the Exchange
determines to list for trading. Ultimately, the Exchange does not
believe the proposed rule change raises any unique regulatory concerns
because existing safeguards--such as position and exercise limits (and
the aggregation of options overlying the same index or ETF) and
reporting requirements--would continue to apply.
---------------------------------------------------------------------------
\15\ The Exchange notes it currently lists quarterly expirations
on certain ETF options pursuant to Interpretation and Policy .03 to
Exchange Rule 404.
---------------------------------------------------------------------------
The Exchange notes that the proposed rule change is substantively
identical to proposed rule changes recently filed by the Cboe Exchange,
Inc. (``Cboe''),\16\ and the Exchange's affiliate, MIAX Options.\17\
---------------------------------------------------------------------------
\16\ See supra note 4.
\17\ See Securities Exchange Act Release No. 98973 (November 16,
2023), 88 FR 81495 (November 22, 2023) (SR-MIAX-2023-44). The
Exchange notes that MIAX Chapter XVIII is incorporated by reference
in its entirety into the rulebook of MIAX Pearl. As such, the
amendments to MIAX Chapter XVIII in the aforementioned proposal will
also apply to MIAX Pearl Chapter XVIII.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\18\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \19\ 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) \20\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
Members, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
\20\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the introduction of Monthly
Options Series will remove impediments to and perfect the mechanism of
a free and open market and a national market system by expanding
hedging tools available to market participants. The Exchange believes
the proposed monthly expirations will allow market participants to
transact in the index and ETF options listed pursuant to the proposed
rule change based on their timings as needed and allow them to tailor
their investment and hedging needs more effectively. Further, the
Exchange believes the availability of Monthly Options Series would
protect investors and the public interest by providing investors with
more flexibility to closely tailor their investment and hedging
decisions in these options, thus allowing them to better manage their
risk exposure.
The Exchange believes the Quarterly Options Series Program has been
successful to date and the proposed Monthly Options Series program
simply expands the ability of investors to hedge risk against market
movements stemming from economic releases or market events that occur
at month's end in the same way the Quarterly Options Series Program has
expanded the landscape of hedging for quarter-end news. Monthly Options
Series will also complement Short Term Options Series, which will allow
investors to hedge risk against events that occur throughout a month.
The Exchange believes the availability of additional expirations should
create greater trading and hedging opportunities for investors, as well
as provide investors with the ability to tailor their investment
objectives more effectively.
The Exchange notes the proposed terms of Monthly Options Series,
including the limitation to five index and ETF option classes, are
substantively the same as the current terms of Quarterly Options
Series.\21\ Quarterly Options Series expire on the last business day of
a calendar quarter, which is the last business day of every third
month. The proposed Monthly Options Series would fills the gaps between
Quarterly Options Series expirations by permitting series to expire on
the last business day of every month, rather than every third month.
The proposed Monthly Options Series may be listed in accordance with
the same terms as Quarterly Options Series, including permissible
strikes. As is the case with Quarterly Options Series, no Short Term
Options Series may expire on the same day as a Monthly Options Series.
Similarly, as proposed, no Monthly Options Series may expire on the
same day as a Quarterly Options Series. The Exchange believes
preventing listing series with concurrent expirations in a class will
eliminate potential investor confusion and thus protect investors and
the public interest. Given that Quarterly Options Series the Exchange
currently lists are essentially Monthly Options Series that can expire
at the end of only certain calendar months, the Exchange believes it is
reasonable to list Monthly Options Series in accordance with the same
terms, as it will promote just and equitable principles of trade. The
Exchange believes limiting Monthly Options Series to five classes will
ensure the addition of these new series will have a negligible impact
on the Exchange and OPRA's quoting capacity. The Exchange represents it
has the necessary systems capacity to support new options series that
will result from the introduction of Monthly Options Series.
---------------------------------------------------------------------------
\21\ Compare proposed Interpretation and Policy .13 of Exchange
Rule 404 to Interpretation and Policy .03 of Exchange Rule 404.
---------------------------------------------------------------------------
The Exchange also represents its current surveillance programs will
apply to Monthly Options Series and will properly monitor trading in
the proposed Monthly Options Series. As mentioned above, the Exchange
currently trades Quarterly Options Series in certain ETF classes, which
expire at the close of business at the end of three calendar months
(i.e., the end of each calendar quarter), and has not experienced any
market disruptions nor issues with capacity. The Exchange's
surveillance programs currently in place to support and properly
monitor trading in these Quarterly Options Series, as well as Short
Term Options Series, and standard expiration series, will apply to the
proposed Monthly Options Series. The Exchange believes its
surveillances continue to be designed to deter and detect violations of
its Rules, including position and exercise limits and possible
manipulative behavior, and these surveillances will apply to Monthly
Options Series that the Exchange determines to list for trading.
Ultimately, the Exchange does not believe the proposed rule change
raises any unique regulatory concerns because existing safeguards--such
as position and exercise limits (and the aggregation of options
overlying the same ETF or index) and reporting requirements--would
continue to apply.
[[Page 822]]
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
does not believe the proposed rule change to list Monthly Options
Series will impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act, as
any Monthly Options Series the Exchange lists for trading will be
available in the same manner for all market participants who wish to
trade such options. The Exchange notes the proposed terms of the
Monthly Options Series, including the limitation to five index and ETF
option classes, are substantively the same as the current terms of
Quarterly Options Series.\22\ Quarterly Options Series expire on the
last business day of a calendar quarter, which is the last business day
of every third month, making the concept of Monthly Options Series in a
limited number of index and ETF options not novel. The proposed Monthly
Options Series will fill the gaps between Quarterly Options Series
expirations by permitting series to expire on the last business day of
every month, rather than every third month. The proposed Monthly
Options Series may be listed in accordance with the same terms as
Quarterly Options Series, including permissible strikes. Monthly
Options Series will trade on the Exchange in the same manner as other
options in the same class.
---------------------------------------------------------------------------
\22\ See Interpretation and Policy .03 to Exchange Rule 404.
---------------------------------------------------------------------------
The Exchange does not believe the proposed rule change to list
Monthly Options Series will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, as nothing prevents other options exchanges from
proposing similar rules. As discussed above, the proposed rule change
would permit listing of Monthly Options Series in five index or ETF
options, as well as any other classes that other exchanges may list
under similar programs. To the extent that the availability of Monthly
Options Series makes the Exchange a more attractive marketplace to
market participants at other exchanges, market participants are free to
elect to become market participants on the Exchange.
The Exchange believes that the proposed rule change may relieve any
burden on, or otherwise promote, competition. Similar to Short Term
Options Series and Quarterly Options Series, the Exchange believes the
introduction of Monthly Options Series will not impose an undue burden
on competition. The Exchange believes that it will, among other things,
expand hedging tools available to market participants. The Exchange
believes Monthly Options Series will allow market participants to
purchase options based on their timing as needed and allow them to
tailor their investment and hedging needs more effectively.
Consequently, the Exchange does not believe that the proposed
change implicates competition at all. Additionally, and as stated
above, a Cboe proposal to accommodate the listing of options series
that would expire at the close of business on the last business day of
a calendar month in the same manner has been recently approved.\23\
---------------------------------------------------------------------------
\23\ See supra note 4.
---------------------------------------------------------------------------
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 \24\ and Rule 19b-4(f)(6) thereunder.\25\
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 \26\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\27\
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\24\ 15 U.S.C. 78s(b)(3)(A)(iii).
\25\ 17 CFR 240.19b-4(f)(6).
\26\ 15 U.S.C. 78s(b)(3)(A)(iii).
\27\ 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 \28\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \29\ 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 Exchange may list Monthly Options Series immediately, which
the Exchange believes will benefit investors by promoting competition
in Monthly Options Series. The Exchange notes that its proposal is
substantively identical to the proposal submitted by Cboe Exchange,
Inc. for its Monthly Options Series program.\30\ 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.\31\
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\28\ 17 CFR 240.19b-4(f)(6).
\29\ 17 CFR 240.19b-4(f)(6)(iii).
\30\ See supra note 4.
\31\ 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-PEARL-2023-72 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-PEARL-2023-72. This file
number should be included on the subject line if email is used. To help
the Commission process and review your
[[Page 823]]
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 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to file number
SR-PEARL-2023-72 and should be submitted on or before January 26, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
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\32\ 17 CFR 200.30-3(a)(12), (59).
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Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023-29005 Filed 1-4-24; 8:45 am]
BILLING CODE 8011-01-P
