Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Short Term Options Series Program in Rule 19.6, Interpretation and Policy .05, 30404-30408 [2024-08572]
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ddrumheller on DSK120RN23PROD with NOTICES1
30404
Federal Register / Vol. 89, No. 79 / Tuesday, April 23, 2024 / Notices
response to a filing submitted by Nasdaq
ISE that was recently approved by the
Commission.30 The Exchange has stated
that waiver of the 30-day operative
delay would permit the Exchange to
implement the proposal at the same
time as its competitor exchanges, thus
creating competition among Short Term
Option Series. 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 30-day
operative delay and designates the
proposed rule change as 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.
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–BOX–2024–11 and should be
submitted on or before May 14, 2024.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Vanessa A. Countryman,
Secretary.
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–
BOX–2024–11 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–BOX–2024–11. 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/
30 See
supra note 5.
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
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[FR Doc. 2024–08570 Filed 4–22–24; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–99979; File No. SR–
CboeBZX–2024–029]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend the
Short Term Options Series Program in
Rule 19.6, Interpretation and Policy .05
April 17, 2024.
Pursuant to 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 April 15,
2024, Cboe BZX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II,
which Items have been prepared by the
Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
amend the Short Term Options Series
Program in Rule 19.6, Interpretation and
Policy .05. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Short Term Option Series Program in
Rule 19.6, Interpretation and Policy .05
(Series of Options Contracts Open for
Trading). Specifically, the Exchange
proposes to expand the Short Term
Option Series program to permit the
listing and trading of options series with
Tuesday and Thursday expirations for
options on iShares Russell 2000 ETF
(‘‘IWM’’), specifically permitting two
expiration dates for the proposed
Tuesday and Thursday expirations in
IWM.
Currently, Table 1 in Rule 19.6,
Interpretation and Policy .05(h),
specifies each symbol that qualifies as a
Short Term Option Daily Expiration.5
3 15
32 17
CFR 200.30–3(a)(12), (59).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The Exchange may open for trading on any
Thursday or Friday that is a business day series of
4 17
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Federal Register / Vol. 89, No. 79 / Tuesday, April 23, 2024 / Notices
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Today, Table 1 permits the listing and
trading of Monday Short Term Option
Daily Expirations and Wednesday Short
Term Option Daily Expirations for IWM.
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
IWM Short Term Option Daily
Expirations beyond the current week for
each of Monday, Tuesday, Wednesday,
and Thursday expirations at one time.6
The listing and trading of Tuesday and
Thursday Short Term Option Daily
Expirations would be subject to Rule
19.6, Interpretation and Policy .05.
Today, Tuesday Short Term Option
Daily Expirations in SPDR S&P 500 ETF
Trust (‘‘SPY’’) and the INVESCO QQQ
TrustSM, Series 1 (‘‘QQQ’’) 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 standard expiration options
series, Monthly Options Series, or
Quarterly Options Series expire
(‘‘Tuesday Short Term Option
Expiration Date’’).7 Also, today,
Thursday Short Term Option Daily
Expirations in SPY and QQQ may open
for trading on any Tuesday or
Wednesday 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
Wednesdays that are business days and
are not business days in which standard
expiration options series, Monthly
Options Series, or Quarterly Options
Series expire (‘‘Wednesday Short Term
Option Expiration Date’’).8
In the event that options on IWM
expire on a Tuesday or Thursday and
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
standard expiration options series, Monthly
Options Series, or Quarterly Options Series. Of
these series of options, the Exchange may have no
more than a total of five Short Term Option
Expiration Dates. In addition, the Exchange may
open for trading series of options on certain
symbols that expire at the close of business on each
of the next two Mondays, Tuesdays, Wednesdays,
and Thursdays, respectively, that are business days
beyond the current week and are not business days
in which standard expiration options series,
Monthly Options Series, or Quarterly Options
Series expire (‘‘Short Term Option Daily
Expirations’’). See Rule 19.6, Interpretation and
Policy .05.
6 The Exchange would amend the Tuesday and
Thursday expirations for IWM in Table 1 Rule 19.6,
Interpretation and Policy .05(h) from ‘‘0’’ to ‘‘2’’ to
permit Tuesday and Thursday expirations for
options on IWM listed pursuant to the Short Term
Option Series.
7 See Rule 19.6, Interpretation and Policy .05(h).
8 Id.
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that Tuesday or Thursday is a business
day in which standard expiration
options series, Monthly Options Series,
or Quarterly Options Series expire, the
Exchange would skip that week’s listing
and instead list the following week; the
two weeks would therefore not be
consecutive. With this proposal, the
Exchange would be able to open for
trading series of options on IWM that
expire at the close of business on each
of the next two Mondays, Tuesdays,
Wednesdays, and Thursdays,
respectively, that are business days
beyond the current week and are not
business days in which standard
expiration options series, Monthly
Options Series, or Quarterly Options
Series expire.9
The interval between strike prices for
the proposed Tuesday and Thursday
IWM Short Term Option Daily
Expirations will be the same as those for
Tuesday and Thursday IWM Short Term
Option Daily Expirations in SPY and
QQQ, applicable to the Short Term
Option Series Program.10 Specifically,
the Tuesday and Thursday IWM Short
Term Option Daily Expirations will
have a $0.50 strike interval minimum.
As is the case with other equity options
series listed pursuant to the Short Term
Option Series Program, the Tuesday and
Thursday IWM Short Term Option Daily
Expiration series will be P.M.-settled.
Pursuant to Rule 19.6, Interpretation
and Policy .05(h), 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.
Currently, for each option class
eligible for participation in the Short
Term Option Series Program, the
Exchange is limited to opening thirty
(30) series for each expiration date for
the specific class.11 The thirty (30)
series restriction does not include series
that are open by other securities
exchanges under their respective weekly
rules; the Exchange may list these
additional series that are listed by other
options exchanges.12 This thirty (30)
series restriction would apply to
Tuesday and Thursday IWM Short Term
Option Daily Expiration series as well.
With this proposal, Tuesday and
Thursday IWM Expirations would be
9 Today, IWM may trade on Mondays and
Wednesdays, in addition to Fridays, as is the case
for all options series.
10 See Rule 19.6, Interpretation and Policy .05(e).
11 See Rule 19.6, Interpretation and Policy .05(a).
12 See Rule 19.6, Interpretation and Policy .05(a).
PO 00000
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30405
treated the same as Tuesday and
Thursday Expirations in SPY and QQQ.
With respect to monthly option series,
Short Term Option Daily Expirations
expire in the same week in which
monthly option series on the same class
expire.13 Further, as is the case today
with other Tuesday and Thursday Short
Term Option Daily 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.14
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 beyond the current week
and are not business days in which
standard expiration options series,
Monthly Options Series, or Quarterly
Options Series expire. The Exchange
does not believe that any market
disruptions will be encountered with
the introduction of P.M.-settled Tuesday
and Thursday IWM 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
Tuesday and Thursday for SPY and
QQQ 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
Tuesday and Thursday for SPY and
QQQ.
Impact of Proposal
The Exchange notes that listings in
the Short Term Option Series Program
comprise a significant part of the
standard listing in options markets. The
below table sets forth the percentage of
weekly listings as compared to monthly,
quarterly, and Long-Term Option Series
in 2023 in the options industry.15 The
Exchange notes that during this time
period all options exchanges mitigated
weekly strike intervals.
13 See
Rule 19.6, Interpretation and Policy .05(b).
Rule 19.6, Interpretation and Policy .05(h).
15 Per Nasdaq ISE, LLC (‘‘Nasdaq ISE’’), this
information was sourced from The Options Clearing
Corporation (‘‘OCC’’). The information includes
time averaged data for all 17 options markets
through December 8, 2023. See Securities Exchange
Act Release No. 99604 (February 26, 2024), 89 FR
15235 (March 1, 2024) (SR–ISE–2024–06).
14 See
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Federal Register / Vol. 89, No. 79 / Tuesday, April 23, 2024 / Notices
NUMBER OF STRIKES—2023
Expiration
Percent of
total series
(percent)
Monthly .................................
Weekly ..................................
LEAP .....................................
Quarterly ...............................
62.82
17.22
17.77
2.20
Similar to SPY and QQQ, the
Exchange would limit the number of
Short Term Option Daily Expirations for
IWM to two expirations for Tuesday and
Thursday expirations while expanding
the Short Term Option Series Program
to permit Tuesday, and Thursday
expirations for IWM. Expanding the
Short Term Option Series Program to
permit the listing of Tuesday and
Thursday expirations in IWM will
account for the addition of 6.77% of
strikes for IWM.16 With respect to the
impact to the Short Term Option Series
Program on IWM overall, the impact
would be a 20% increase in strikes.17
With respect to the impact to the Short
Term Options Series Program overall,
the impact would be a 0.1% increase in
strikes.18 Members will continue to be
able to expand hedging tools because all
days of the week would be available to
permit Members to tailor their
investment and hedging needs more
effectively in IWM.
NUMBER OF STRIKES—2023
Expiration
Monthly .................................
Weekly ..................................
LEAP .....................................
Quarterly ...............................
Percent of
total series
(percent)
35.13
48.30
12.87
3.70
ddrumheller on DSK120RN23PROD with NOTICES1
Weeklies comprise 48.30% of the total
volume of options contracts.19 The
Exchange believes that inner weeklies
(first two weeks) represent high volume
as compared to outer weeklies (the last
16 Nasdaq ISE sourced this information, which are
estimates, from LiveVol®. The information includes
data for all 17 options markets as of January 3, 2024.
See id.
17 Nasdaq ISE sourced this information, which are
estimates, from LiveVol®. The information includes
data for all 17 options markets as of January 3, 2024.
See id.
18 Nasdaq ISE sourced this information, which are
estimates, from LiveVol®. The information includes
data for all 17 options markets as of January 3, 2024.
See id.
19 This table sets forth industry volume. Weeklies
comprise 48.30% of volume while only comprising
17.22% of the strikes. Nasdaq ISE sourced this
information from OCC. The information includes
data for all 17 options markets through December
8, 2023. See Securities Exchange Act Release No.
99604 (February 26, 2024), 89 FR 15235 (March 1,
2024) (SR–ISE–2024–06).
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three weeks) and would be more
attractive to market participants. The
introduction of IWM Tuesday and
Thursday expirations will, among other
things, expand hedging tools available
to market participants and continue the
reduction of the premium cost of buying
protection. The Exchange believes that
IWM Tuesday and Thursday expirations
will allow market participants to
purchase IWM options based on their
timing as needed and allow them to
tailor their investment and hedging
needs more effectively.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.20 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 21 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) 22 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that IWM
Tuesday and Thursday Short Term
Daily Expirations will allow market
participants to purchase IWM 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 IWM listed
pursuant to the Short Term Option
Series Program, subject to the proposed
limitation of two nearest 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
IWM options, thus allowing them to
better manage their risk exposure. In
20 15
21 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
23 See
Rule 19.6, Interpretation and Policy .05(h).
Rule 19.6, Interpretation and Policy .05(b).
25 See Rule 19.6, Interpretation and Policy .05(h).
24 See
22 Id.
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Fmt 4703
particular, the Exchange believes the
Short Term Option Series Program has
been successful to date and that
Tuesday and Thursday IWM 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 IWM Short Term Daily
Expirations should create greater trading
and hedging opportunities and provide
customers the flexibility to tailor their
investment objectives more effectively.
The Exchange currently lists SPY and
QQQ Tuesday and Thursday Short Term
Daily Expirations.23
With this proposal, Tuesday and
Thursday IWM Expirations would be
treated similar to existing Tuesday and
Thursday SPY and QQQ Expirations
and would expire in the same week that
standard monthly options expire on
Fridays.24 Further, today, Tuesday and
Thursday Short Term Option Daily
Expirations do not expire on a business
day in which monthly options series or
Quarterly Options Series expire.25
Today, all Short Term Option Daily
Expirations 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. There
are no material differences in the
treatment of Tuesday and Thursday SPY
and QQQ Short Term Daily Expirations
as compared to the proposed Tuesday
and Thursday IWM Short Term Daily
Expirations.
Finally, the Exchange represents that
it has an adequate surveillance program
in place to detect manipulative trading
in the proposed Tuesday and Thursday
IWM Short Term Daily Expirations, in
the same way that it monitors trading in
the current Short Term Option Series
and trading in Tuesday and Thursday
SPY and QQQ 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 IWM Short Term Daily
Expirations.
Finally, the Exchange notes the
proposed rule change is substantively
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Federal Register / Vol. 89, No. 79 / Tuesday, April 23, 2024 / Notices
the same as a rule change proposed by
ISE, which the Commission recently
approved.26
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. Similar to
SPY and QQQ Tuesday and Thursday
Expirations, the introduction of IWM
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 IWM Tuesday and
Thursday Short Term Daily Expirations
will allow market participants to
purchase IWM 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 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 IWM
expirations is not a novel proposal, as
SPY and QQQ Tuesday and Thursday
Expirations are currently listed on the
Exchange.27 Additionally, as noted
above, the Commission recently
approved a substantively identical
proposal of another exchange.28 Further,
the Exchange does not believe the
proposal will impose any burden on
intramarket competition, as all market
participants will be treated in the same
manner under this proposal.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
ddrumheller on DSK120RN23PROD with NOTICES1
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
26 See Securities Exchange Act Release No. 99946
(April 11, 2024) (SR–ISE–2024–06).
27 See Rule 19.6, Interpretation and Policy .05(h).
28 See Securities Exchange Act Release No. 99946
(April 11, 2024) (SR–ISE–2024–06).
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19(b)(3)(A)(iii) of the Act 29 and Rule
19b–4(f)(6) thereunder.30 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 31 and
subparagraph (f)(6) of Rule 19b–4
thereunder.32
A proposed rule change filed under
Rule 19b–4(f)(6) 33 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),34 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. According to the Exchange, the
proposed rule change is a competitive
response to a filing submitted by Nasdaq
ISE that was recently approved by the
Commission.35 The Exchange has stated
that waiver of the 30-day operative
delay would permit the Exchange to
implement the proposal at the same
time as its competitor exchanges, thus
creating competition among Short Term
Option Series. 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 30-day
operative delay and designates the
proposed rule change as operative upon
filing.36
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
29 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
31 15 U.S.C. 78s(b)(3)(A)(iii).
32 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.
33 17 CFR 240.19b–4(f)(6).
34 17 CFR 240.19b–4(f)(6)(iii).
35 See supra note 26.
36 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).
30 17
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30407
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBZX–2024–029 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeBZX–2024–029. 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
E:\FR\FM\23APN1.SGM
23APN1
30408
Federal Register / Vol. 89, No. 79 / Tuesday, April 23, 2024 / Notices
SR–CboeBZX–2024–029 and should be
submitted on or before May 14, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–08572 Filed 4–22–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99982; File No. SR–
PEARL–2024–18]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX Pearl
Equities Fee Schedule
April 17, 2024.
Pursuant to 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 April 4,
2024, MIAX PEARL, LLC (‘‘MIAX Pearl’’
or ‘‘Exchange’’) 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 Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
ddrumheller on DSK120RN23PROD with NOTICES1
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the fee schedule (the ‘‘Fee
Schedule’’) applicable to MIAX Pearl
Equities, an equities trading facility of
the Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-equities/pearl-equities/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
37 17
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:48 Apr 22, 2024
Jkt 262001
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to: (1) modify certain
rebates and volume thresholds for the
NBBO Setter Plus Program (referred to
in this filing as the ‘‘NBBO Program’’); 3
(2) modify the NBBO Setter Additive
Rebate under the NBBO Program; (3)
establish a new NBBO First Joiner
Additive Rebate under the NBBO
Program; and (4) establish a new StepUp Rebate. The Exchange initially filed
proposal on March 28, 2024 (SR–
PEARL–2024–16). On April 4, 2024, the
Exchange withdrew SR–PEARL–2024–
16 and refiled this proposal.
Background of the NBBO Program
In general, the NBBO Program
provides enhanced rebates for Equity
Members 4 that add displayed liquidity
(‘‘Added Displayed Volume’’) in
securities priced at or above $1.00 per
share in all Tapes based on increasing
volume thresholds and increasing
market quality levels (described below),
and provides an additive rebate 5
applied to orders that set the NBB or
NBO 6 upon entry.7 The NBBO Program
was implemented beginning September
1, 2023 and subsequently amended
when the Exchange adopted two
additional tiers of rebates, effective
January 1, 2024.8 The NBBO Program
was further amended when the
Exchange adopted an alternative
method for Equity Members to achieve
the enhanced rebate for Tier 5, Level C,
effective March 1, 2024 (described
below).9
Pursuant to the NBBO Setter Plus
Table in Section 1)c) of the Fee
3 See,
generally, Fee Schedule, Section 1)c).
term ‘‘Equity Member’’ is a Member
authorized by the Exchange to transact business on
MIAX Pearl Equities. See Exchange Rule 1901.
5 See Fee Schedule, Section 1)c), NBBO Setter
Additive Rebate.
6 With respect to the trading of equity securities,
the term ‘‘NBB’’ shall mean the national best bid,
the term ‘‘NBO’’ shall mean the national best offer,
and the term ‘‘NBBO’’ shall mean the national best
bid and offer. See Exchange Rule 1901.
7 See supra note 3.
8 See Securities Exchange Act Release Nos. 98472
(September 21, 2023), 88 FR 66533 (September 27,
2023) (SR–PEARL–2023–45) and 99318 (January 11,
2024), 89 FR 3488 (January 18, 2024) (SR–PEARL–
2023–73).
9 See Securities Exchange Act Release No. 99695
(March 8, 2024), 89 FR 18694 (March, 14, 2024)
(SR–PEARL–2024–11).
4 The
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
Schedule, the NBBO Program provides
six volume tiers enhanced by three
market quality levels to provide
increasing rebates in this segment. The
six volume tiers are achievable by
greater volume from the best of three
alternative methods. The three market
quality levels are achievable by greater
NBBO participation in a minimum
number of specific securities (described
below).
MIAX Pearl Equities first determines
the applicable NBBO Program tier based
on three different volume calculation
methods. The three volume-based
methods to determine the Equity
Member’s tier for purposes of the NBBO
Program are calculated in parallel in
each month, and each Equity Member
receives the highest tier achieved from
any of the three methods each month.
All three volume calculation methods
are based on an Equity Member’s
respective ADAV,10 NBBO Set Volume,
or ADV, each as a percent of industry
TCV 11 as the denominator.
Under volume calculation Method 1,
the Exchange provides tiered rebates
based on an Equity Member’s ADAV as
a percentage of TCV. An Equity Member
qualifies for the base rebates in Tier 1
for executions of orders in securities
priced at or above $1.00 per share for
Added Displayed Volume across all
Tapes by achieving an ADAV of at least
0.00% and less than 0.035% of TCV. An
Equity Member qualifies for the
enhanced rebates in Tier 2 for
executions of orders in securities priced
at or above $1.00 per share for Added
Displayed Volume across all Tapes by
achieving an ADAV of at least 0.035%
and less than 0.05% of TCV. An Equity
Member qualifies for the enhanced
10 ‘‘ADAV’’ means average daily added volume
calculated as the number of shares added per day
and ‘‘ADV’’ means average daily volume calculated
as the number of shares added or removed,
combined, per day. ADAV and ADV are calculated
on a monthly basis. ‘‘NBBO Set Volume’’ means the
ADAV in all securities of an Equity Member that
sets the NBB or NBO on MIAX Pearl Equities. The
Exchange excludes from its calculation of ADAV,
ADV, and NBBO Set Volume shares added or
removed on any day that the Exchange’s system
experiences a disruption that lasts for more than 60
minutes during regular trading hours, on any day
with a scheduled early market close, and on the
‘‘Russell Reconstitution Day’’ (typically the last
Friday in June). Routed shares are not included in
the ADAV or ADV calculation. See the Definitions
section of the Fee Schedule.
11 ‘‘TCV’’ means total consolidated volume
calculated as the volume in shares reported by all
exchanges and reporting facilities to a consolidated
transaction reporting plan for the month for which
the fees apply. The Exchange excludes from its
calculation of TCV volume on any given day that
the Exchange’s system experiences a disruption that
lasts for more than 60 minutes during Regular
Trading Hours, on any day with a scheduled early
market close, and on the ‘‘Russell Reconstitution
Day’’ (typically the last Friday in June). See id.
E:\FR\FM\23APN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 79 (Tuesday, April 23, 2024)]
[Notices]
[Pages 30404-30408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08572]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99979; File No. SR-CboeBZX-2024-029]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Short Term Options Series Program in Rule 19.6, Interpretation and
Policy .05
April 17, 2024.
Pursuant to 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 April 15, 2024, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II, which Items have
been prepared by the Exchange. The Exchange filed the proposal as a
``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend the Short Term Options Series Program in Rule 19.6,
Interpretation and Policy .05. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Short Term Option Series Program
in Rule 19.6, Interpretation and Policy .05 (Series of Options
Contracts Open for Trading). Specifically, the Exchange proposes to
expand the Short Term Option Series program to permit the listing and
trading of options series with Tuesday and Thursday expirations for
options on iShares Russell 2000 ETF (``IWM''), specifically permitting
two expiration dates for the proposed Tuesday and Thursday expirations
in IWM.
Currently, Table 1 in Rule 19.6, Interpretation and Policy .05(h),
specifies each symbol that qualifies as a Short Term Option Daily
Expiration.\5\
[[Page 30405]]
Today, Table 1 permits the listing and trading of Monday Short Term
Option Daily Expirations and Wednesday Short Term Option Daily
Expirations for IWM. 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 IWM Short Term Option Daily Expirations
beyond the current week for each of Monday, Tuesday, Wednesday, and
Thursday expirations at one time.\6\ The listing and trading of Tuesday
and Thursday Short Term Option Daily Expirations would be subject to
Rule 19.6, Interpretation and Policy .05.
---------------------------------------------------------------------------
\5\ The Exchange may open for trading on any Thursday or Friday
that is a business day 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 standard expiration
options series, Monthly Options Series, or Quarterly Options Series.
Of these series of options, the Exchange may have no more than a
total of five Short Term Option Expiration Dates. In addition, the
Exchange may open for trading series of options on certain symbols
that expire at the close of business on each of the next two
Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are
business days beyond the current week and are not business days in
which standard expiration options series, Monthly Options Series, or
Quarterly Options Series expire (``Short Term Option Daily
Expirations''). See Rule 19.6, Interpretation and Policy .05.
\6\ The Exchange would amend the Tuesday and Thursday
expirations for IWM in Table 1 Rule 19.6, Interpretation and Policy
.05(h) from ``0'' to ``2'' to permit Tuesday and Thursday
expirations for options on IWM listed pursuant to the Short Term
Option Series.
---------------------------------------------------------------------------
Today, Tuesday Short Term Option Daily Expirations in SPDR S&P 500
ETF Trust (``SPY'') and the INVESCO QQQ TrustSM, Series 1 (``QQQ'') 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 standard expiration options series,
Monthly Options Series, or Quarterly Options Series expire (``Tuesday
Short Term Option Expiration Date'').\7\ Also, today, Thursday Short
Term Option Daily Expirations in SPY and QQQ may open for trading on
any Tuesday or Wednesday 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 Wednesdays that are business days and are not
business days in which standard expiration options series, Monthly
Options Series, or Quarterly Options Series expire (``Wednesday Short
Term Option Expiration Date'').\8\
---------------------------------------------------------------------------
\7\ See Rule 19.6, Interpretation and Policy .05(h).
\8\ Id.
---------------------------------------------------------------------------
In the event that options on IWM expire on a Tuesday or Thursday
and that Tuesday or Thursday is a business day in which standard
expiration options series, Monthly Options Series, or Quarterly Options
Series expire, the Exchange would skip that week's listing and instead
list the following week; the two weeks would therefore not be
consecutive. With this proposal, the Exchange would be able to open for
trading series of options on IWM that expire at the close of business
on each of the next two Mondays, Tuesdays, Wednesdays, and Thursdays,
respectively, that are business days beyond the current week and are
not business days in which standard expiration options series, Monthly
Options Series, or Quarterly Options Series expire.\9\
---------------------------------------------------------------------------
\9\ Today, IWM may trade on Mondays and Wednesdays, in addition
to Fridays, as is the case for all options series.
---------------------------------------------------------------------------
The interval between strike prices for the proposed Tuesday and
Thursday IWM Short Term Option Daily Expirations will be the same as
those for Tuesday and Thursday IWM Short Term Option Daily Expirations
in SPY and QQQ, applicable to the Short Term Option Series Program.\10\
Specifically, the Tuesday and Thursday IWM Short Term Option Daily
Expirations will have a $0.50 strike interval minimum. As is the case
with other equity options series listed pursuant to the Short Term
Option Series Program, the Tuesday and Thursday IWM Short Term Option
Daily Expiration series will be P.M.-settled.
---------------------------------------------------------------------------
\10\ See Rule 19.6, Interpretation and Policy .05(e).
---------------------------------------------------------------------------
Pursuant to Rule 19.6, Interpretation and Policy .05(h), 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.
Currently, for each option class eligible for participation in the
Short Term Option Series Program, the Exchange is limited to opening
thirty (30) series for each expiration date for the specific class.\11\
The thirty (30) series restriction does not include series that are
open by other securities exchanges under their respective weekly rules;
the Exchange may list these additional series that are listed by other
options exchanges.\12\ This thirty (30) series restriction would apply
to Tuesday and Thursday IWM Short Term Option Daily Expiration series
as well. With this proposal, Tuesday and Thursday IWM Expirations would
be treated the same as Tuesday and Thursday Expirations in SPY and QQQ.
With respect to monthly option series, Short Term Option Daily
Expirations expire in the same week in which monthly option series on
the same class expire.\13\ Further, as is the case today with other
Tuesday and Thursday Short Term Option Daily 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.\14\ 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 beyond the current week and are
not business days in which standard expiration options series, Monthly
Options Series, or Quarterly Options Series expire. The Exchange does
not believe that any market disruptions will be encountered with the
introduction of P.M.-settled Tuesday and Thursday IWM 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 Tuesday and Thursday for SPY and QQQ 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 Tuesday and
Thursday for SPY and QQQ.
---------------------------------------------------------------------------
\11\ See Rule 19.6, Interpretation and Policy .05(a).
\12\ See Rule 19.6, Interpretation and Policy .05(a).
\13\ See Rule 19.6, Interpretation and Policy .05(b).
\14\ See Rule 19.6, Interpretation and Policy .05(h).
---------------------------------------------------------------------------
Impact of Proposal
The Exchange notes that listings in the Short Term Option Series
Program comprise a significant part of the standard listing in options
markets. The below table sets forth the percentage of weekly listings
as compared to monthly, quarterly, and Long-Term Option Series in 2023
in the options industry.\15\ The Exchange notes that during this time
period all options exchanges mitigated weekly strike intervals.
---------------------------------------------------------------------------
\15\ Per Nasdaq ISE, LLC (``Nasdaq ISE''), this information was
sourced from The Options Clearing Corporation (``OCC''). The
information includes time averaged data for all 17 options markets
through December 8, 2023. See Securities Exchange Act Release No.
99604 (February 26, 2024), 89 FR 15235 (March 1, 2024) (SR-ISE-2024-
06).
[[Page 30406]]
Number of Strikes--2023
------------------------------------------------------------------------
Percent of
Expiration total series
(percent)
------------------------------------------------------------------------
Monthly................................................. 62.82
Weekly.................................................. 17.22
LEAP.................................................... 17.77
Quarterly............................................... 2.20
------------------------------------------------------------------------
Similar to SPY and QQQ, the Exchange would limit the number of
Short Term Option Daily Expirations for IWM to two expirations for
Tuesday and Thursday expirations while expanding the Short Term Option
Series Program to permit Tuesday, and Thursday expirations for IWM.
Expanding the Short Term Option Series Program to permit the listing of
Tuesday and Thursday expirations in IWM will account for the addition
of 6.77% of strikes for IWM.\16\ With respect to the impact to the
Short Term Option Series Program on IWM overall, the impact would be a
20% increase in strikes.\17\ With respect to the impact to the Short
Term Options Series Program overall, the impact would be a 0.1%
increase in strikes.\18\ Members will continue to be able to expand
hedging tools because all days of the week would be available to permit
Members to tailor their investment and hedging needs more effectively
in IWM.
---------------------------------------------------------------------------
\16\ Nasdaq ISE sourced this information, which are estimates,
from LiveVol[supreg]. The information includes data for all 17
options markets as of January 3, 2024. See id.
\17\ Nasdaq ISE sourced this information, which are estimates,
from LiveVol[supreg]. The information includes data for all 17
options markets as of January 3, 2024. See id.
\18\ Nasdaq ISE sourced this information, which are estimates,
from LiveVol[supreg]. The information includes data for all 17
options markets as of January 3, 2024. See id.
Number of Strikes--2023
------------------------------------------------------------------------
Percent of
Expiration total series
(percent)
------------------------------------------------------------------------
Monthly................................................. 35.13
Weekly.................................................. 48.30
LEAP.................................................... 12.87
Quarterly............................................... 3.70
------------------------------------------------------------------------
Weeklies comprise 48.30% of the total volume of options
contracts.\19\ The Exchange believes that inner weeklies (first two
weeks) represent high volume as compared to outer weeklies (the last
three weeks) and would be more attractive to market participants. The
introduction of IWM Tuesday and Thursday expirations will, among other
things, expand hedging tools available to market participants and
continue the reduction of the premium cost of buying protection. The
Exchange believes that IWM Tuesday and Thursday expirations will allow
market participants to purchase IWM options based on their timing as
needed and allow them to tailor their investment and hedging needs more
effectively.
---------------------------------------------------------------------------
\19\ This table sets forth industry volume. Weeklies comprise
48.30% of volume while only comprising 17.22% of the strikes. Nasdaq
ISE sourced this information from OCC. The information includes data
for all 17 options markets through December 8, 2023. See Securities
Exchange Act Release No. 99604 (February 26, 2024), 89 FR 15235
(March 1, 2024) (SR-ISE-2024-06).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\20\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \21\ 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) \22\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
\22\ Id.
---------------------------------------------------------------------------
The Exchange believes that IWM Tuesday and Thursday Short Term
Daily Expirations will allow market participants to purchase IWM
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
IWM listed pursuant to the Short Term Option Series Program, subject to
the proposed limitation of two nearest 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 IWM options, thus allowing them to
better manage their risk exposure. In particular, the Exchange believes
the Short Term Option Series Program has been successful to date and
that Tuesday and Thursday IWM 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 IWM Short Term Daily Expirations should
create greater trading and hedging opportunities and provide customers
the flexibility to tailor their investment objectives more effectively.
The Exchange currently lists SPY and QQQ Tuesday and Thursday Short
Term Daily Expirations.\23\
---------------------------------------------------------------------------
\23\ See Rule 19.6, Interpretation and Policy .05(h).
---------------------------------------------------------------------------
With this proposal, Tuesday and Thursday IWM Expirations would be
treated similar to existing Tuesday and Thursday SPY and QQQ
Expirations and would expire in the same week that standard monthly
options expire on Fridays.\24\ Further, today, Tuesday and Thursday
Short Term Option Daily Expirations do not expire on a business day in
which monthly options series or Quarterly Options Series expire.\25\
Today, all Short Term Option Daily Expirations 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. There are no material differences in the treatment of Tuesday
and Thursday SPY and QQQ Short Term Daily Expirations as compared to
the proposed Tuesday and Thursday IWM Short Term Daily Expirations.
---------------------------------------------------------------------------
\24\ See Rule 19.6, Interpretation and Policy .05(b).
\25\ See Rule 19.6, Interpretation and Policy .05(h).
---------------------------------------------------------------------------
Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in the
proposed Tuesday and Thursday IWM Short Term Daily Expirations, in the
same way that it monitors trading in the current Short Term Option
Series and trading in Tuesday and Thursday SPY and QQQ 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 IWM Short Term Daily Expirations.
Finally, the Exchange notes the proposed rule change is
substantively
[[Page 30407]]
the same as a rule change proposed by ISE, which the Commission
recently approved.\26\
---------------------------------------------------------------------------
\26\ See Securities Exchange Act Release No. 99946 (April 11,
2024) (SR-ISE-2024-06).
---------------------------------------------------------------------------
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. Similar to SPY and QQQ
Tuesday and Thursday Expirations, the introduction of IWM 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 IWM Tuesday and Thursday Short Term Daily Expirations
will allow market participants to purchase IWM 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 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 IWM expirations is
not a novel proposal, as SPY and QQQ Tuesday and Thursday Expirations
are currently listed on the Exchange.\27\ Additionally, as noted above,
the Commission recently approved a substantively identical proposal of
another exchange.\28\ Further, the Exchange does not believe the
proposal will impose any burden on intramarket competition, as all
market participants will be treated in the same manner under this
proposal.
---------------------------------------------------------------------------
\27\ See Rule 19.6, Interpretation and Policy .05(h).
\28\ See Securities Exchange Act Release No. 99946 (April 11,
2024) (SR-ISE-2024-06).
---------------------------------------------------------------------------
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \29\ and Rule 19b-4(f)(6) thereunder.\30\
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 \31\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\32\
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\29\ 15 U.S.C. 78s(b)(3)(A)(iii).
\30\ 17 CFR 240.19b-4(f)(6).
\31\ 15 U.S.C. 78s(b)(3)(A)(iii).
\32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \33\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\34\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. According to
the Exchange, the proposed rule change is a competitive response to a
filing submitted by Nasdaq ISE that was recently approved by the
Commission.\35\ The Exchange has stated that waiver of the 30-day
operative delay would permit the Exchange to implement the proposal at
the same time as its competitor exchanges, thus creating competition
among Short Term Option Series. 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
30-day operative delay and designates the proposed rule change as
operative upon filing.\36\
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\33\ 17 CFR 240.19b-4(f)(6).
\34\ 17 CFR 240.19b-4(f)(6)(iii).
\35\ See supra note 26.
\36\ 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-CboeBZX-2024-029 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeBZX-2024-029. 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
[[Page 30408]]
SR-CboeBZX-2024-029 and should be submitted on or before May 14, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-08572 Filed 4-22-24; 8:45 am]
BILLING CODE 8011-01-P
