Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.4-O To Allow for the Interval Between Strike Prices of Series of Options on Shares of the SPDR Gold Shares To Be $1 or Greater and To Expand the Short Term Option Series Program To Permit the Listing of Two Monday Expirations For Options on Shares of the SPDR Gold Shares, iShares Silver Trust, and iShares 20+ Year Treasury Bond ETF, 90104-90109 [2024-26417]
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90104
Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices
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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 impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed fee change will not impact
intramarket competition because it will
apply to all similarly situated Members
equally (i.e., all market participants that
choose to purchase the 10 Gb physical
port). Additionally, the Exchange does
not believe its proposed pricing will
impose a barrier to entry to smaller
participants and notes that its proposed
connectivity pricing is associated with
relative usage of the various market
participants. For example, market
participants with modest capacity needs
can continue to buy the less expensive
1 Gb physical port (which cost is not
changing) or may choose to obtain
access via a third-party re-seller. While
pricing may be increased for the larger
capacity physical ports, such options
provide far more capacity and are
purchased by those that consume more
resources from the network.
Accordingly, the proposed connectivity
fees do not favor certain categories of
market participants in a manner that
would impose a burden on competition;
rather, the allocation reflects the
network resources consumed by the
various size of market participants—
lowest bandwidth consuming members
pay the least, and highest bandwidth
consuming members pays the most.
The proposed fee change also does
not impose a burden on competition or
on other Self-Regulatory Organizations
that is not necessary or appropriate. As
described above, the Exchange
evaluated its proposed fee change using
objective and stable metric with limited
volatility. Utilizing Data Processing PPI
over a specified period of time is a
reasonable means of recouping a portion
of the Exchange’s investment in
maintaining and enhancing the
connectivity service identified above.
The Exchange believes utilizing Data
Processing PPI, a tailored measure of
inflation, to increase certain
connectivity fees to recoup the
Exchange’s investment in maintaining
and enhancing its services and products
would not impose a burden on
competition.
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.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 21 and paragraph (f) of Rule
19b–4 22 thereunder. 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 will institute proceedings
to determine whether the proposed rule
change 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–2024–109 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–2024–109. 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–CboeBZX–2024–109 and should be
submitted on or before December 5,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–26194 Filed 11–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101557; File No. SR–
NYSEARCA–2024–92]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 6.4–O To
Allow for the Interval Between Strike
Prices of Series of Options on Shares
of the SPDR Gold Shares To Be $1 or
Greater and To Expand the Short Term
Option Series Program To Permit the
Listing of Two Monday Expirations For
Options on Shares of the SPDR Gold
Shares, iShares Silver Trust, and
iShares 20+ Year Treasury Bond ETF
November 7, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
4, 2024, NYSE Arca, Inc. (‘‘NYSE Arca’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
21 15
22 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 6.4–O (Series of Options Open For
Trading). The proposed rule change is
available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, 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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
ddrumheller on DSK120RN23PROD with NOTICES1
The purpose of this filing is to amend
Rule 6.4–O (Series of Options Open For
Trading). Specifically, the Exchange
proposes to allow for the interval
between strike prices of series of options
on shares of SPDR Gold Shares (‘‘GLD’’)
to be $1 or greater, including where the
strike price is greater than $200, and to
expand the Short Term Option Series
(‘‘STOS’’) Program to permit the listing
of two Monday expirations for options
on GLD, iShares Silver Trust (‘‘SLV’’),
and iShares 20+ Year Treasury Bond
ETF (‘‘TLT’’). Both proposed changes
are competitive and based on proposals
submitted by Nasdaq ISE, LLC (‘‘Nasdaq
ISE’’) and approved by the
Commission.4
4 See Securities Exchange Act Release Nos.
100447 (June 28, 2024), 89 FR 55239 (July 3, 2024)
(SR–ISE–2024–17) (Order Approving a Proposed
Rule Change To Amend the Strike Interval for
Options on Exchange-Traded Fund Shares and To
Allow $1 Strike Price Intervals Above $200 for
Options on SPDR Gold Shares (GLD)) (‘‘Nasdaq ISE
GLD Approval’’); and 100837 (August 27, 2024), 89
FR 71770 (September 3, 2024) (SR–ISE–2024–21)
(Notice of Filing of Amendment No. 1 and Order
Granting Accelerated Approval of a Proposed Rule
Change, as Modified by Amendment No. 1, to
Adopt Rules to Permit the Listing of Two Monday
Expirations for Options on SPDR Gold Shares,
iShares Silver Trust, and iShares 20+ Year Treasury
Bond ETF) (‘‘Nasdaq ISE Monday Approval’’, and
collectively, ‘‘Nasdaq ISE Approval Orders’’).
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Expand $1 Strike Intervals for GLD
First, the Exchange proposes to
amend Rule 6.4–O to allow for the
interval between strike prices of series
of options on GLD to be $1 or greater,
including where the strike price is
greater than $200, which would align
Exchange rules with that of at least one
of its competitors.5
Currently, Commentary .05(a)
provides that for series of options on
Exchange-Traded Fund Shares, ‘‘the
interval of strike prices may be $1 or
greater where the strike price is $200 or
less or $5 or greater where the strike
price is over $200.’’
Further, Commentary .05(d) provides
that, notwithstanding any other
provision of Rule 6.4–O regarding the
interval of strike prices of series of
options on Exchange-Traded Fund
Shares, the interval of strike prices on
options on SPDR® S&P 500® ETF
(‘‘SPY’’), iShares Core S&P 500 ETF
(‘‘IVV’’), PowerShares QQQ Trust
(‘‘QQQ’’), iShares Russell 2000 Index
Fund (‘‘IWM’’), and the SPDR® Dow
Jones® Industrial Average ETF (‘‘DIA’’)
will be $1 or greater.
The Exchange proposes to modify the
interval setting regime to be $1 or
greater for GLD options, which would
align GLD with SPY, IVV, QQQ, IWM
and DIA.6 The Exchange believes that
the proposed rule change would make
GLD options easier for investors and
traders to use and more tailored to their
investment needs. GLD is an ExchangeTraded Fund Shares designed to closely
track the price and performance of the
price of gold bullion. GLD is widely
quoted as an indicator of gold stock
prices and is a significant indicator of
overall economic health. Investors use
GLD to diversify their portfolios and
benefit from market trends.
Additionally, GLD is a leading product
in its asset class that trades within a
‘‘complex’’ where, in addition to the
underlying security, there are multiple
instruments available for hedging such
as, COMEX Gold Futures; Gold Daily
Futures; iShares GOLD Trust; SPDR
GOLD Minishares Trust; Aberdeen
Physical Gold Trust; and GraniteShares
Gold Shares.
Accordingly, the Exchange believes
that offering a wider base of GLD
options affords traders and investors
important hedging and trading
opportunities, particularly in the midst
of current price trends. The Exchange
believes that not having the proposed $1
5 See
Nasdaq ISE GLD Approval.
proposed Rule 6.4–O, Commentary .05(d)
(including GLD in the list of ETFs eligible for strike
prices of $1 or greater, including when the strike
price is greater than $200.
6 See
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90105
strike price intervals above $200 in GLD
significantly constricts investors’
hedging and trading possibilities. The
Exchange therefore believes that by
having smaller strike intervals in GLD,
investors would have more efficient
hedging and trading opportunities due
to the lower $1 interval ascension. The
proposed $1 interval above the $200
strike price, will result in having at-themoney series based upon the underlying
Exchange-Traded Fund Share moving
less than 1%. The Exchange believes
that the proposed strike setting regime
is in line with the slower movements of
broad-based indices. Given that $1
intervals already exist below the $200
price point and that GLD have
consistently inclined in price toward
the $200 level, the Exchange believes
that continuing to maintain the current
$200 level (above which intervals
increase 500% to $5), may have a
negative effect on investing, trading and
hedging opportunities, and volume. The
Exchange believes that the investing,
trading, and hedging opportunities
available with GLD options far
outweighs any potential negative impact
of allowing GLD options to trade in
more finely tailored intervals above the
$200 price point.
The proposed strike setting regime
would permit strikes to be set to more
closely reflect the increasing value in
the underlying and allows investors and
traders to roll open positions from a
lower strike to a higher strike in
conjunction with the price movements
of the underlying ETF. Under the
current rule, where the next higher
available series would be $5 away above
a $200 strike price, the ability to roll
such positions would be impaired.
Accordingly, to move a position from a
$200 strike to a $205 strike under the
current rule, an investor would need for
the underlying product to move 2.5%
and would not be able to execute a roll
up until such a large movement
occurred. The Exchange believes that
with the proposed rule change, the
investor would be in a significantly
safer position of being able to roll his
open options position from a $200 to a
$201 strike price, which is only a 0.5%
move for the underlying. As a result, the
proposed rule change will allow the
Exchange to better respond to customer
demand for GLD strike price more
precisely aligned with the smaller,
longer-term incremental increases in the
underlying ETF. The Exchange believes
that the proposed rule change, like the
other strike price programs currently
offered by the Exchange, will benefit
investors by providing investors the
flexibility to more closely tailor their
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investment and hedging decisions using
GLD options.
Moreover, by allowing series of GLD
options to be listed in $1 intervals
between strike prices over $200, the
proposal will moderately augment the
potential total number of options series
available on the Exchange. However, the
Exchange believes it and the Options
Price Reporting Authority (‘‘OPRA’’)
have the necessary systems capacity to
handle any potential additional traffic
associated with this proposed rule
change. The Exchange also believes that
market participants will not have a
capacity issue due to the proposed rule
change. In addition, the Exchange
represents that it does not believe that
this expansion will cause fragmentation
of liquidity, but rather, believes that
finer strike intervals will serve to
increase liquidity available as well as
price efficiency by providing more
trading opportunities for all market
participants.
Expand STOS Program To Add Monday
Expirations
The Exchange proposes to expand the
Short Term Option Daily Expirations to
permit the listing of two Monday
expirations of options on GLD, SLV, and
TLT (collectively ‘‘Exchange Traded
Products’’ or ‘‘ETPs’’),7 which would
align Exchange rules with that of at least
one of its competitors.8
Currently, as set forth in Rule 6.4–O,
Commentary .07, after an option class
has been approved for listing and
trading on the Exchange, the Exchange
may open for trading on any Thursday
or Friday that is a business day (‘‘Short
Term Option Opening Date’’) series of
options on that class that expire at the
close of business on each of the next
five Fridays that are business days and
are not Fridays on which standard
expiration options series, Monthly
Options Series, or Quarterly Options
Series expire (‘‘Friday Short Term
Option Expiration Dates’’). The
Exchange may have no more than a total
of five Short Term Option Expiration
Dates. Further, if the Exchange is not
open for business on the respective
Thursday or Friday, the Short Term
Option Opening Date for Short Term
Option Weekly Expirations will be the
first business day immediately prior to
that respective Thursday or Friday.
Similarly, if the Exchange is not open
7 Today,
the Exchange permits the listing of two
Wednesday expirations for options on United States
Oil Fund, LP (‘‘USO’’), United States Natural Gas
Fund, LP (‘‘UNG’’), GLD, SLV, and TLT. See
Securities Exchange Act Release No. 100273 (June
4, 2024), 89 FR 48937 (June 10, 2024) (SR–
NYSEARCA–2024–43).
8 See Nasdaq ISE Monday Approval.
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for business on a Friday, the Short Term
Option Expiration Date for Short Term
Option Weekly Expirations will be the
first business day immediately prior to
that Friday.
Additionally, the Exchange may open
for trading series of options on the
symbols provided in Table 1 of
Commentary .07(g) to Rule 6.4–O
(‘‘Table 1’’) that expire at the close of
business on each of the next two
Mondays, Tuesdays, Wednesdays, and
Thursdays, respectively, that are
business days and are not business days
in which monthly options series or
Quarterly Options Series expire (‘‘Short
Term Option Daily Expirations’’).9 For
those symbols listed in Table 1, the
Exchange may have no more than a total
of two Short Term Option Daily
Expirations beyond the current week for
each of Monday, Tuesday, Wednesday,
and Thursday expirations, as applicable,
at one time.
At this time, the Exchange proposes to
expand the Short Term Option Daily
Expirations to permit the listing and
trading of options on GLD, SLV, and
TLT expiring on Mondays. The
Exchange proposes to permit two Short
Term Option Expiration Dates beyond
the current week for each Monday
expiration at one time, and would
update Table 1 for each of those
symbols accordingly.10
The proposed Monday GLD, SLV, and
TLT expirations will be similar to the
current Monday SPY, QQQ, and IWM
Short Term Option Daily Expirations set
forth in Rule 6.4–O, such that the
Exchange may open for trading on any
Friday or Monday that is a business day
(beyond the current week) series of
options on GLD, SLV, and TLT to expire
on any Monday of the month that is a
business day and is not a Monday on
which standard expiration options
series, Monthly Options Series, or
Quarterly Options Series expire,
provided that Monday expirations that
are listed on a Friday must be listed at
least one business week and one
business day prior to the expiration
(‘‘Monday GLD Expirations,’’ ‘‘Monday
SLV Expirations,’’ and ‘‘Monday TLT
Expirations’’) (collectively, ‘‘Monday
ETP Expirations’’).11 In the event Short
Term Option Daily Expirations expire
on a Monday and that Monday is the
same day that a standard expiration
9 As set forth in Table 1, the Exchange currently
only permits Wednesday expirations for USO, UNG,
GLD, SLV, and TLT.
10 See proposed Commentary .07(g) to Rule 6.4–
O (updating Table 1).
11 Today, USO, UNG, GLD, SLV, and TLT may
trade on Wednesdays. See id. They may also trade
on Fridays, as is the case for all options series in
the STOS Program.
PO 00000
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options series, Monthly Options Series,
or Quarterly Options Series expires, the
Exchange would skip that week’s listing
and instead list the following week; the
two weeks would therefore not be
consecutive. Today, Monday expirations
in SPY, QQQ, and IWM similarly skip
the weekly listing in the event the
weekly listing expires on the same day
in the same class as a standard
expiration options series, Monthly
Options Series, or Quarterly Options
Series.
The interval between strike prices for
the proposed Monday ETP Expirations
will be the same as those currently
applicable in the STOS Program.12
Specifically, the Monday ETP
Expirations will have a strike interval of
(i) $0.50 or greater for strike prices
below $100, and $1 or greater for strike
prices between $100 and $150 for all
option classes that participate in the
STOS Program, (ii) $0.50 for option
classes that trade in one dollar
increments and are in the STOS
Program, or (iii) $2.50 or greater for
strike prices above $150.13 As is the case
with other equity options series listed
pursuant to the STOS Program, the
Monday ETP Expirations series will be
P.M.-settled.
Pursuant to Commentary .07(g) to
Rule 6.4–O, with respect to the STOS
Program, if a Monday is not a business
day, the series will expire on the first
business day immediately following that
Monday.
Currently, for each option class
eligible for participation in the STOS
Program, the Exchange is limited to
opening thirty (30) series for each
expiration date for the specific class.14
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.15
With the proposed changes, this thirty
(30) series restriction would apply to
Monday GLD, SLV, and TLT Short Term
Option Daily Expirations as well. In
addition, the Exchange will be able to
list series that are listed by other
exchanges, assuming that they file
similar rules with the Commission to
list Monday ETP Expirations.
With this proposal, Monday ETP
Expirations would be treated similarly
to existing Monday SPY, QQQ, and
IWM Expirations. With respect to
standard expiration options series, Short
Term Option Daily Expirations will be
12 See
Commentary .07(g) to Rule 6.4–O.
Commentary .07(e) to Rule 6.4–O.
14 See Commentary .07(c) to Rule 6.4–O
15 See Commentary .07(d) to Rule 6.4–O.
13 See
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Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices
permitted to expire in the same week in
which Monthly Option Series on the
same class expire. Not listing Short
Term Option Daily Expirations for one
week every month because there was a
monthly on that same class on the
Friday of that week would create
investor confusion.
Further, as with Monday SPY, QQQ,
and IWM Expirations, the Exchange
would not permit Monday ETP
Expirations to expire on a business day
in which standard expiration options
series, Monthly Options Series, or
Quarterly Options Series expire.16
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 option series,
Monthly Options Series, or Quarterly
Options Series expire. The Exchange
believes that it is reasonable to not
permit two expirations on the same day
in which a standard expiration option
series, Monthly Options Series, a
Quarterly Options Series would expire
because those options would be
duplicative of each other.
The Exchange does not believe that
any market disruptions will be
encountered with the introduction of
Monday ETP Expirations. The Exchange
currently trades P.M.-settled Short Term
Option Series that expire on Monday for
SPY, QQQ, and IWM and has not
experienced any market disruptions nor
issues with capacity. In addition, the
Exchange has not experienced any
market disruptions or issues with
capacity in expanding the five ETPs to
the Wednesday expirations.17 Today,
the Exchange has surveillance programs
in place to support and properly
monitor trading in Short Term Option
Series that expire Monday for SPY,
QQQ, and IWM. Further, the Exchange
has the necessary capacity and
surveillance programs in place to
support and properly monitor trading in
the proposed Monday ETP Expirations.
Because the Exchange proposes to
limit the number of Monday Expirations
for options on GLD, SLV, and TLT to
two expirations beyond the current
week, the Exchange believes that the
addition of these Monday ETP
Expirations should encourage MarketMakers to continue to deploy capital
more efficiently and improve displayed
market quality. Similar to SPY, QQQ
Commentary .07(g) to Rule 6.4–O.
currently Exchange permits the listing of
two Wednesday expirations for options on GLD,
SLV, and TLT. See id.
and IWM Monday Expirations, the
introduction of Monday ETP
Expirations will, among other things,
expand hedging tools available to
market participants and allow for a
reduced premium cost of buying
portfolio protection. The Exchange
believes that Monday ETP Expirations
will allow market participants to hedge
their portfolios with options on
commodities (gold and silver) as well as
treasury securities, and tailor their
investment and hedging needs more
effectively.
2. Statutory Basis
The Exchange believes that its
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 that its proposed
rule change is consistent with Section
6(b)(5) 19 requirements in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in, securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
Expand $1 Strike Intervals for GLD
The Exchange believes the proposal to
expand $1 strike intervals for GLD to
include where the strike price is greater
than $200 is consistent with Section
6(b)(5) of the Act and will promote just
and equitable principles of trade
because it will allow investors to use
GLD options more easily, regardless of
the strike price.
The proposal will allow investors to
better trade and hedge positions in GLD
options where the strike price is greater
than $200, thus ensuring that investors
in both options are not at a disadvantage
simply because of the strike price. The
Exchange believes the proposed rule
change is consistent with Section 6(b)(1)
of the Act, which provides that the
Exchange be organized and have the
capacity to be able to carry out the
purposes of the Act and the rules and
regulations thereunder, and the rules of
the Exchange.20 The proposal allows the
Exchange to respond to customer
demand to allow GLD options to trade
16 See
17 The
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20:16 Nov 13, 2024
Jkt 265001
18 15
U.S.C. 78f(b)
U.S.C. 78f(b)(5).
20 15 U.S.C. 78f(b)(1).
in $1 intervals above a $200 strike price.
The Exchange does not believe that the
proposed rule would create additional
capacity issues or affect market
functionality. As noted above, ETF
options trade in wider $5 intervals
above a $200 strike price, whereby
options at or below a $200 strike price
trade in $1 intervals. This creates a
situation where contracts on the same
option class effectively may not be able
to execute certain strategies such as, for
example, rolling to a higher strike price,
simply because of the $200 strike price
above which options intervals increase
by 500%. This proposal remedies the
situation by establishing an exception to
the current ETF interval regime for GLD
options to allow such options to trade
in $1 or greater intervals at all strike
prices.
The Exchange believes that the
proposed rule change, like other strike
price programs currently offered by the
Exchange, will benefit investors by
giving them increased flexibility to more
closely tailor their investment and
hedging decisions. By way of example,
GLD is a leading product in its asset
class and it trades within a ‘‘complex’’
where, in addition to the underlying
security, there are multiple instruments
available for hedging such as, COMEX
Gold Futures; Gold Daily Futures;
iShares GOLD Trust; SPDR GOLD
Minishares Trust; Aberdeen Physical
Gold Trust; and GraniteShares Gold
Shares.
With regard to the impact of this
proposal on system capacity, the
Exchange believes it and OPRA have the
necessary systems capacity to handle
any potential additional traffic
associated with this proposed rule
change. The Exchange believes that its
TPHs will not have a capacity issue as
a result of this proposal. Further, the
Exchange does not believe the proposal
does not unfairly discriminate among
market participants, as all market
participants will be treated in the same
manner under this proposal.
Finally, the Exchange notes the
proposed rule change is substantively
identical to an approved Nasdaq ISE
rule.21
Expand STOS Program To Add Monday
Expirations
Similar to Monday expirations in
SPY, QQQ, and IWM, the proposal to
permit Monday ETP Expirations, subject
to the proposed limitation of two
expirations beyond the current week,
would protect investors and the public
interest by providing the investing
public and other market participants
19 15
PO 00000
Frm 00161
Fmt 4703
21 See
Sfmt 4703
90107
E:\FR\FM\14NON1.SGM
Nasdaq ISE GLD Approval.
14NON1
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90108
Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices
more choice and flexibility to closely
tailor their investment and hedging
decisions in these options and allow for
a reduced premium cost of buying
portfolio protection, thus allowing them
to better manage their risk exposure.
The Exchange believes that there is
general demand for alternative
expirations in these symbols.
The Exchange represents that it has an
adequate surveillance program in place
to detect manipulative trading in the
proposed option expirations, in the
same way that it monitors trading in the
current Short Term Option Series for
Monday SPY, QQQ and IWM
expirations. The Exchange also
represents that it has the necessary
system capacity to support the new
expirations. Finally, the Exchange does
not believe that any market disruptions
will be encountered with the
introduction of these option expirations.
As discussed above, the Exchange
believes that its proposal is a modest
expansion of weekly expiration dates for
GLD, SLV, and TLT given that it will be
limited to two Monday expirations
beyond the current week.
The Exchange believes that the
proposal is consistent with the Act as
the proposal would overall add a small
number of Monday ETP Expirations by
limiting the addition of two Wednesday
expirations beyond the current week.
The addition of Monday ETP
Expirations would remove impediments
to and perfect the mechanism of a free
and open market by encouraging Market
Makers to continue to deploy capital
more efficiently and improve market
quality. The Exchange believes that the
proposal will allow market participants
to expand hedging tools and tailor their
investment and hedging needs more
effectively in GLD, SLV, and TLT as
these funds are most likely to be utilized
by market participants to hedge the
underlying asset classes. The ETPs
currently trade within ‘‘complexes’’
where, in addition to the underlying
security, there are multiple instruments
available for hedging. Given the multiasset class nature of these products and
available hedges in highly correlated
instruments, the Exchange believes that
its proposal to add Monday expirations
on these products will provide market
participants with additional useful
hedging tools for the underlying asset
classes.
Similar to Monday SPY, QQQ, and
IWM expirations, the introduction of
Monday ETP Expirations is consistent
with the Act as it will, among other
things, expand hedging tools available
to market participants and allow for a
reduced premium cost of buying
portfolio protection. The Exchange
VerDate Sep<11>2014
20:16 Nov 13, 2024
Jkt 265001
believes that Monday ETP Expirations
will allow market participants to
purchase options on GLD, SLV, and TLT
based on their timing as needed and
allow them to tailor their investment
and hedging needs more effectively,
thus allowing them to better manage
their risk exposure. Today, the
Exchange lists Monday SPY, QQQ, and
IWM Expirations.22 In particular, the
Exchange believes the STOS Program
has been successful to date and that
Monday ETP 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 STOS
Program has expanded the landscape of
hedging.
There are no material differences in
the treatment of Monday SPY, QQQ,
and IWM expirations compared to the
proposed Monday ETP Expirations.
Given the similarities between Monday
SPY, QQQ, and IWM expirations and
the proposed Monday ETP Expirations,
the Exchange believes that applying the
provisions in Commentary .10(g) to Rule
6.4–O, that currently apply to Monday
SPY, QQQ, and IWM expirations is
justified. For example, the Exchange
believes that allowing Monday ETP
Expirations and monthly ETP
expirations in the same week will
benefit investors and minimize investor
confusion by providing Monday ETP
Expirations in a continuous and
uniform manner.
Finally, the Exchange notes the
proposed rule change is substantively
identical to an approved Nasdaq ISE
rule.23
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
Expand $1 Strike Intervals for GLD
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. Rather, the
Exchange believes that the proposed
rule change will result in additional
investment options and opportunities to
achieve the investment and trading
objectives of market participants seeking
efficient trading and hedging vehicles,
to the benefit of investors, market
participants, and the marketplace in
22 See
23 See
PO 00000
Commentary .07(g) to Rule 6.4–O, Table 1.
Nasdaq ISE Monday Approval.
Frm 00162
Fmt 4703
Sfmt 4703
general. Specifically, the Exchange
believes that GLD options investors and
traders will significantly benefit from
the availability of finer strike price
intervals above a $200 price point. In
addition, the interval setting regime the
Exchange proposes to apply to GLD
options is currently applied to SPY,
IVV, QQQ, IWM and DIA options,
which are similarly popular and widely
traded ETF products and track indexes
at similarly high price levels. Thus, the
proposed strike setting regime for GLD
options will allow options on this
actively traded ETF with index levels at
corresponding price levels to trade
pursuant to the same strike setting
regime. This will permit investors to
employ similar investment and hedging
strategies for each of these options.
The Exchange does not believe the
proposal will impose any burden on
intermarket competition, as nothing
prevents other options exchanges from
proposing similar rules to make a finer
strike price intervals above a $200 price
point available for GLD options. The
Exchange notes that the proposed rule
change is not a novel proposal, as the
Commission recently approved a
substantively identical proposal of
another exchange.6 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.
Expand STOS Program To Add Monday
Expirations
While the proposal will expand the
Short Term Options Expirations to
allow Monday ETP Expirations to be
listed on the Exchange, the Exchange
believes that this limited expansion for
Monday expirations for options on GLD,
SLV, and TLT will not impose an undue
burden on competition; rather, it will
meet customer demand. The Exchange
believes that market participants will
continue to be able to expand hedging
tools and tailor their investment and
hedging needs more effectively in GLD,
SLV, and TLT.
Similar to Monday SPY, QQQ, and
IWM expirations, the introduction of
Monday ETP 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 allow for a reduced
premium cost of buying portfolio
protection. The Exchange believes that
Monday ETP Expirations will allow
market participants to purchase options
on GLD, SLV, and TLT based on their
timing as needed and allow them to
E:\FR\FM\14NON1.SGM
14NON1
Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices
tailor their investment and hedging
needs more effectively.
The Exchange does not believe the
proposal will impose any burden on
inter-market competition, as nothing
prevents the other options exchanges
from proposing similar rules to list and
trade Monday ETP Expirations. As
noted above, the Commission recently
approved a substantively identical
proposal of another exchange.24 Further,
the Exchange does not believe the
proposal will impose any burden on
intramarket competition, as all market
participants will be treated in the same
manner under this proposal.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days 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) of the Act 25 and Rule 19b–
4(f)(6) thereunder.26
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act normally does not become operative
for 30 days after the date of its filing.
However, Rule 19b–4(f)(6)(iii) 27 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 proposal may
become operative immediately upon
filing. According to the Exchange,
waiver of the operative delay will
ensure fair competition among the
exchanges by allowing the Exchange to
implement its proposal without delay,
thus creating competition among Short
Term Option Series throughout the
ddrumheller on DSK120RN23PROD with NOTICES1
24 See
Nasdaq ISE Monday Approval.
U.S.C. 78s(b)(3)(A).
26 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.
27 17 CFR 240.19b–4(f)(6)(iii).
25 15
VerDate Sep<11>2014
20:16 Nov 13, 2024
Jkt 265001
industry, which will ultimately benefit
investors. The proposed rule change
raises no novel legal or regulatory
issues. Thus, the Commission believes
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
operative upon filing.28
At any time within 60 days of the
filing of such 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–
NYSEARCA–2024–92 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–NYSEARCA–2024–92. 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
28 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).
PO 00000
Frm 00163
Fmt 4703
Sfmt 4703
90109
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–NYSEARCA–2024–92 and should be
submitted on or before December 5,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–26417 Filed 11–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101569; File No. SR–FICC–
2024–003]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Order
Approving a Proposed Rule Change,
as Modified by Partial Amendment No.
1, To Adopt a Minimum Margin Amount
at GSD
November 8, 2024.
On February 27, 2024, Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–FICC–2024–003
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder.2
The proposed rule change was
published for comment in the Federal
Register on March 15, 2024.3 On March
29 17
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 99711
(March 11, 2024), 89 FR 18991 (March 15, 2024)
(SR–FICC–2024–003). FICC also filed the proposals
contained in the proposed rule change as advance
notice SR–FICC–2024–801 with the Commission
pursuant to Section 806(e)(1) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act
1 15
E:\FR\FM\14NON1.SGM
Continued
14NON1
]]>Agencies
[Federal Register Volume 89, Number 220 (Thursday, November 14, 2024)]
[Notices]
[Pages 90104-90109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26417]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101557; File No. SR-NYSEARCA-2024-92]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.4-O
To Allow for the Interval Between Strike Prices of Series of Options on
Shares of the SPDR Gold Shares To Be $1 or Greater and To Expand the
Short Term Option Series Program To Permit the Listing of Two Monday
Expirations For Options on Shares of the SPDR Gold Shares, iShares
Silver Trust, and iShares 20+ Year Treasury Bond ETF
November 7, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on November 4, 2024, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 90105]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 6.4-O (Series of Options Open
For Trading). The proposed rule change is available on the Exchange's
website at www.nyse.com, at the principal office of the Exchange, 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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Rule 6.4-O (Series of
Options Open For Trading). Specifically, the Exchange proposes to allow
for the interval between strike prices of series of options on shares
of SPDR Gold Shares (``GLD'') to be $1 or greater, including where the
strike price is greater than $200, and to expand the Short Term Option
Series (``STOS'') Program to permit the listing of two Monday
expirations for options on GLD, iShares Silver Trust (``SLV''), and
iShares 20+ Year Treasury Bond ETF (``TLT''). Both proposed changes are
competitive and based on proposals submitted by Nasdaq ISE, LLC
(``Nasdaq ISE'') and approved by the Commission.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release Nos. 100447 (June 28,
2024), 89 FR 55239 (July 3, 2024) (SR-ISE-2024-17) (Order Approving
a Proposed Rule Change To Amend the Strike Interval for Options on
Exchange-Traded Fund Shares and To Allow $1 Strike Price Intervals
Above $200 for Options on SPDR Gold Shares (GLD)) (``Nasdaq ISE GLD
Approval''); and 100837 (August 27, 2024), 89 FR 71770 (September 3,
2024) (SR-ISE-2024-21) (Notice of Filing of Amendment No. 1 and
Order Granting Accelerated Approval of a Proposed Rule Change, as
Modified by Amendment No. 1, to Adopt Rules to Permit the Listing of
Two Monday Expirations for Options on SPDR Gold Shares, iShares
Silver Trust, and iShares 20+ Year Treasury Bond ETF) (``Nasdaq ISE
Monday Approval'', and collectively, ``Nasdaq ISE Approval
Orders'').
---------------------------------------------------------------------------
Expand $1 Strike Intervals for GLD
First, the Exchange proposes to amend Rule 6.4-O to allow for the
interval between strike prices of series of options on GLD to be $1 or
greater, including where the strike price is greater than $200, which
would align Exchange rules with that of at least one of its
competitors.\5\
---------------------------------------------------------------------------
\5\ See Nasdaq ISE GLD Approval.
---------------------------------------------------------------------------
Currently, Commentary .05(a) provides that for series of options on
Exchange-Traded Fund Shares, ``the interval of strike prices may be $1
or greater where the strike price is $200 or less or $5 or greater
where the strike price is over $200.''
Further, Commentary .05(d) provides that, notwithstanding any other
provision of Rule 6.4-O regarding the interval of strike prices of
series of options on Exchange-Traded Fund Shares, the interval of
strike prices on options on SPDR[supreg] S&P 500[supreg] ETF (``SPY''),
iShares Core S&P 500 ETF (``IVV''), PowerShares QQQ Trust (``QQQ''),
iShares Russell 2000 Index Fund (``IWM''), and the SPDR[supreg] Dow
Jones[supreg] Industrial Average ETF (``DIA'') will be $1 or greater.
The Exchange proposes to modify the interval setting regime to be
$1 or greater for GLD options, which would align GLD with SPY, IVV,
QQQ, IWM and DIA.\6\ The Exchange believes that the proposed rule
change would make GLD options easier for investors and traders to use
and more tailored to their investment needs. GLD is an Exchange-Traded
Fund Shares designed to closely track the price and performance of the
price of gold bullion. GLD is widely quoted as an indicator of gold
stock prices and is a significant indicator of overall economic health.
Investors use GLD to diversify their portfolios and benefit from market
trends. Additionally, GLD is a leading product in its asset class that
trades within a ``complex'' where, in addition to the underlying
security, there are multiple instruments available for hedging such as,
COMEX Gold Futures; Gold Daily Futures; iShares GOLD Trust; SPDR GOLD
Minishares Trust; Aberdeen Physical Gold Trust; and GraniteShares Gold
Shares.
---------------------------------------------------------------------------
\6\ See proposed Rule 6.4-O, Commentary .05(d) (including GLD in
the list of ETFs eligible for strike prices of $1 or greater,
including when the strike price is greater than $200.
---------------------------------------------------------------------------
Accordingly, the Exchange believes that offering a wider base of
GLD options affords traders and investors important hedging and trading
opportunities, particularly in the midst of current price trends. The
Exchange believes that not having the proposed $1 strike price
intervals above $200 in GLD significantly constricts investors' hedging
and trading possibilities. The Exchange therefore believes that by
having smaller strike intervals in GLD, investors would have more
efficient hedging and trading opportunities due to the lower $1
interval ascension. The proposed $1 interval above the $200 strike
price, will result in having at-the-money series based upon the
underlying Exchange-Traded Fund Share moving less than 1%. The Exchange
believes that the proposed strike setting regime is in line with the
slower movements of broad-based indices. Given that $1 intervals
already exist below the $200 price point and that GLD have consistently
inclined in price toward the $200 level, the Exchange believes that
continuing to maintain the current $200 level (above which intervals
increase 500% to $5), may have a negative effect on investing, trading
and hedging opportunities, and volume. The Exchange believes that the
investing, trading, and hedging opportunities available with GLD
options far outweighs any potential negative impact of allowing GLD
options to trade in more finely tailored intervals above the $200 price
point.
The proposed strike setting regime would permit strikes to be set
to more closely reflect the increasing value in the underlying and
allows investors and traders to roll open positions from a lower strike
to a higher strike in conjunction with the price movements of the
underlying ETF. Under the current rule, where the next higher available
series would be $5 away above a $200 strike price, the ability to roll
such positions would be impaired. Accordingly, to move a position from
a $200 strike to a $205 strike under the current rule, an investor
would need for the underlying product to move 2.5% and would not be
able to execute a roll up until such a large movement occurred. The
Exchange believes that with the proposed rule change, the investor
would be in a significantly safer position of being able to roll his
open options position from a $200 to a $201 strike price, which is only
a 0.5% move for the underlying. As a result, the proposed rule change
will allow the Exchange to better respond to customer demand for GLD
strike price more precisely aligned with the smaller, longer-term
incremental increases in the underlying ETF. The Exchange believes that
the proposed rule change, like the other strike price programs
currently offered by the Exchange, will benefit investors by providing
investors the flexibility to more closely tailor their
[[Page 90106]]
investment and hedging decisions using GLD options.
Moreover, by allowing series of GLD options to be listed in $1
intervals between strike prices over $200, the proposal will moderately
augment the potential total number of options series available on the
Exchange. However, the Exchange believes it and the Options Price
Reporting Authority (``OPRA'') have the necessary systems capacity to
handle any potential additional traffic associated with this proposed
rule change. The Exchange also believes that market participants will
not have a capacity issue due to the proposed rule change. In addition,
the Exchange represents that it does not believe that this expansion
will cause fragmentation of liquidity, but rather, believes that finer
strike intervals will serve to increase liquidity available as well as
price efficiency by providing more trading opportunities for all market
participants.
Expand STOS Program To Add Monday Expirations
The Exchange proposes to expand the Short Term Option Daily
Expirations to permit the listing of two Monday expirations of options
on GLD, SLV, and TLT (collectively ``Exchange Traded Products'' or
``ETPs''),\7\ which would align Exchange rules with that of at least
one of its competitors.\8\
---------------------------------------------------------------------------
\7\ Today, the Exchange permits the listing of two Wednesday
expirations for options on United States Oil Fund, LP (``USO''),
United States Natural Gas Fund, LP (``UNG''), GLD, SLV, and TLT. See
Securities Exchange Act Release No. 100273 (June 4, 2024), 89 FR
48937 (June 10, 2024) (SR-NYSEARCA-2024-43).
\8\ See Nasdaq ISE Monday Approval.
---------------------------------------------------------------------------
Currently, as set forth in Rule 6.4-O, Commentary .07, after an
option class has been approved for listing and trading on the Exchange,
the Exchange may open for trading on any Thursday or Friday that is a
business day (``Short Term Option Opening Date'') series of options on
that class that expire at the close of business on each of the next
five Fridays that are business days and are not Fridays on which
standard expiration options series, Monthly Options Series, or
Quarterly Options Series expire (``Friday Short Term Option Expiration
Dates''). The Exchange may have no more than a total of five Short Term
Option Expiration Dates. Further, if the Exchange is not open for
business on the respective Thursday or Friday, the Short Term Option
Opening Date for Short Term Option Weekly Expirations will be the first
business day immediately prior to that respective Thursday or Friday.
Similarly, if the Exchange is not open for business on a Friday, the
Short Term Option Expiration Date for Short Term Option Weekly
Expirations will be the first business day immediately prior to that
Friday.
Additionally, the Exchange may open for trading series of options
on the symbols provided in Table 1 of Commentary .07(g) to Rule 6.4-O
(``Table 1'') that expire at the close of business on each of the next
two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that
are business days and are not business days in which monthly options
series or Quarterly Options Series expire (``Short Term Option Daily
Expirations'').\9\ For those symbols listed in Table 1, the Exchange
may have no more than a total of two Short Term Option Daily
Expirations beyond the current week for each of Monday, Tuesday,
Wednesday, and Thursday expirations, as applicable, at one time.
---------------------------------------------------------------------------
\9\ As set forth in Table 1, the Exchange currently only permits
Wednesday expirations for USO, UNG, GLD, SLV, and TLT.
---------------------------------------------------------------------------
At this time, the Exchange proposes to expand the Short Term Option
Daily Expirations to permit the listing and trading of options on GLD,
SLV, and TLT expiring on Mondays. The Exchange proposes to permit two
Short Term Option Expiration Dates beyond the current week for each
Monday expiration at one time, and would update Table 1 for each of
those symbols accordingly.\10\
---------------------------------------------------------------------------
\10\ See proposed Commentary .07(g) to Rule 6.4-O (updating
Table 1).
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The proposed Monday GLD, SLV, and TLT expirations will be similar
to the current Monday SPY, QQQ, and IWM Short Term Option Daily
Expirations set forth in Rule 6.4-O, such that the Exchange may open
for trading on any Friday or Monday that is a business day (beyond the
current week) series of options on GLD, SLV, and TLT to expire on any
Monday of the month that is a business day and is not a Monday on which
standard expiration options series, Monthly Options Series, or
Quarterly Options Series expire, provided that Monday expirations that
are listed on a Friday must be listed at least one business week and
one business day prior to the expiration (``Monday GLD Expirations,''
``Monday SLV Expirations,'' and ``Monday TLT Expirations'')
(collectively, ``Monday ETP Expirations'').\11\ In the event Short Term
Option Daily Expirations expire on a Monday and that Monday is the same
day that a standard expiration options series, Monthly Options Series,
or Quarterly Options Series expires, the Exchange would skip that
week's listing and instead list the following week; the two weeks would
therefore not be consecutive. Today, Monday expirations in SPY, QQQ,
and IWM similarly skip the weekly listing in the event the weekly
listing expires on the same day in the same class as a standard
expiration options series, Monthly Options Series, or Quarterly Options
Series.
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\11\ Today, USO, UNG, GLD, SLV, and TLT may trade on Wednesdays.
See id. They may also trade on Fridays, as is the case for all
options series in the STOS Program.
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The interval between strike prices for the proposed Monday ETP
Expirations will be the same as those currently applicable in the STOS
Program.\12\ Specifically, the Monday ETP Expirations will have a
strike interval of (i) $0.50 or greater for strike prices below $100,
and $1 or greater for strike prices between $100 and $150 for all
option classes that participate in the STOS Program, (ii) $0.50 for
option classes that trade in one dollar increments and are in the STOS
Program, or (iii) $2.50 or greater for strike prices above $150.\13\ As
is the case with other equity options series listed pursuant to the
STOS Program, the Monday ETP Expirations series will be P.M.-settled.
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\12\ See Commentary .07(g) to Rule 6.4-O.
\13\ See Commentary .07(e) to Rule 6.4-O.
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Pursuant to Commentary .07(g) to Rule 6.4-O, with respect to the
STOS Program, if a Monday is not a business day, the series will expire
on the first business day immediately following that Monday.
Currently, for each option class eligible for participation in the
STOS Program, the Exchange is limited to opening thirty (30) series for
each expiration date for the specific class.\14\ 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.\15\
With the proposed changes, this thirty (30) series restriction would
apply to Monday GLD, SLV, and TLT Short Term Option Daily Expirations
as well. In addition, the Exchange will be able to list series that are
listed by other exchanges, assuming that they file similar rules with
the Commission to list Monday ETP Expirations.
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\14\ See Commentary .07(c) to Rule 6.4-O
\15\ See Commentary .07(d) to Rule 6.4-O.
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With this proposal, Monday ETP Expirations would be treated
similarly to existing Monday SPY, QQQ, and IWM Expirations. With
respect to standard expiration options series, Short Term Option Daily
Expirations will be
[[Page 90107]]
permitted to expire in the same week in which Monthly Option Series on
the same class expire. Not listing Short Term Option Daily Expirations
for one week every month because there was a monthly on that same class
on the Friday of that week would create investor confusion.
Further, as with Monday SPY, QQQ, and IWM Expirations, the Exchange
would not permit Monday ETP Expirations to expire on a business day in
which standard expiration options series, Monthly Options Series, or
Quarterly Options Series expire.\16\ 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 option series, Monthly Options
Series, or Quarterly Options Series expire. The Exchange believes that
it is reasonable to not permit two expirations on the same day in which
a standard expiration option series, Monthly Options Series, a
Quarterly Options Series would expire because those options would be
duplicative of each other.
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\16\ See Commentary .07(g) to Rule 6.4-O.
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The Exchange does not believe that any market disruptions will be
encountered with the introduction of Monday ETP Expirations. The
Exchange currently trades P.M.-settled Short Term Option Series that
expire on Monday for SPY, QQQ, and IWM and has not experienced any
market disruptions nor issues with capacity. In addition, the Exchange
has not experienced any market disruptions or issues with capacity in
expanding the five ETPs to the Wednesday expirations.\17\ Today, the
Exchange has surveillance programs in place to support and properly
monitor trading in Short Term Option Series that expire Monday for SPY,
QQQ, and IWM. Further, the Exchange has the necessary capacity and
surveillance programs in place to support and properly monitor trading
in the proposed Monday ETP Expirations.
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\17\ The currently Exchange permits the listing of two Wednesday
expirations for options on GLD, SLV, and TLT. See id.
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Because the Exchange proposes to limit the number of Monday
Expirations for options on GLD, SLV, and TLT to two expirations beyond
the current week, the Exchange believes that the addition of these
Monday ETP Expirations should encourage Market-Makers to continue to
deploy capital more efficiently and improve displayed market quality.
Similar to SPY, QQQ and IWM Monday Expirations, the introduction of
Monday ETP Expirations will, among other things, expand hedging tools
available to market participants and allow for a reduced premium cost
of buying portfolio protection. The Exchange believes that Monday ETP
Expirations will allow market participants to hedge their portfolios
with options on commodities (gold and silver) as well as treasury
securities, and tailor their investment and hedging needs more
effectively.
2. Statutory Basis
The Exchange believes that its 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 that its proposed rule
change is consistent with Section 6(b)(5) \19\ requirements in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in, securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\18\ 15 U.S.C. 78f(b)
\19\ 15 U.S.C. 78f(b)(5).
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Expand $1 Strike Intervals for GLD
The Exchange believes the proposal to expand $1 strike intervals
for GLD to include where the strike price is greater than $200 is
consistent with Section 6(b)(5) of the Act and will promote just and
equitable principles of trade because it will allow investors to use
GLD options more easily, regardless of the strike price.
The proposal will allow investors to better trade and hedge
positions in GLD options where the strike price is greater than $200,
thus ensuring that investors in both options are not at a disadvantage
simply because of the strike price. The Exchange believes the proposed
rule change is consistent with Section 6(b)(1) of the Act, which
provides that the Exchange be organized and have the capacity to be
able to carry out the purposes of the Act and the rules and regulations
thereunder, and the rules of the Exchange.\20\ The proposal allows the
Exchange to respond to customer demand to allow GLD options to trade in
$1 intervals above a $200 strike price. The Exchange does not believe
that the proposed rule would create additional capacity issues or
affect market functionality. As noted above, ETF options trade in wider
$5 intervals above a $200 strike price, whereby options at or below a
$200 strike price trade in $1 intervals. This creates a situation where
contracts on the same option class effectively may not be able to
execute certain strategies such as, for example, rolling to a higher
strike price, simply because of the $200 strike price above which
options intervals increase by 500%. This proposal remedies the
situation by establishing an exception to the current ETF interval
regime for GLD options to allow such options to trade in $1 or greater
intervals at all strike prices.
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\20\ 15 U.S.C. 78f(b)(1).
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The Exchange believes that the proposed rule change, like other
strike price programs currently offered by the Exchange, will benefit
investors by giving them increased flexibility to more closely tailor
their investment and hedging decisions. By way of example, GLD is a
leading product in its asset class and it trades within a ``complex''
where, in addition to the underlying security, there are multiple
instruments available for hedging such as, COMEX Gold Futures; Gold
Daily Futures; iShares GOLD Trust; SPDR GOLD Minishares Trust; Aberdeen
Physical Gold Trust; and GraniteShares Gold Shares.
With regard to the impact of this proposal on system capacity, the
Exchange believes it and OPRA have the necessary systems capacity to
handle any potential additional traffic associated with this proposed
rule change. The Exchange believes that its TPHs will not have a
capacity issue as a result of this proposal. Further, the Exchange does
not believe the proposal does not unfairly discriminate among market
participants, as all market participants will be treated in the same
manner under this proposal.
Finally, the Exchange notes the proposed rule change is
substantively identical to an approved Nasdaq ISE rule.\21\
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\21\ See Nasdaq ISE GLD Approval.
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Expand STOS Program To Add Monday Expirations
Similar to Monday expirations in SPY, QQQ, and IWM, the proposal to
permit Monday ETP Expirations, subject to the proposed limitation of
two expirations beyond the current week, would protect investors and
the public interest by providing the investing public and other market
participants
[[Page 90108]]
more choice and flexibility to closely tailor their investment and
hedging decisions in these options and allow for a reduced premium cost
of buying portfolio protection, thus allowing them to better manage
their risk exposure. The Exchange believes that there is general demand
for alternative expirations in these symbols.
The Exchange represents that it has an adequate surveillance
program in place to detect manipulative trading in the proposed option
expirations, in the same way that it monitors trading in the current
Short Term Option Series for Monday SPY, QQQ and IWM expirations. The
Exchange also represents that it has the necessary system capacity to
support the new expirations. Finally, the Exchange does not believe
that any market disruptions will be encountered with the introduction
of these option expirations. As discussed above, the Exchange believes
that its proposal is a modest expansion of weekly expiration dates for
GLD, SLV, and TLT given that it will be limited to two Monday
expirations beyond the current week.
The Exchange believes that the proposal is consistent with the Act
as the proposal would overall add a small number of Monday ETP
Expirations by limiting the addition of two Wednesday expirations
beyond the current week. The addition of Monday ETP Expirations would
remove impediments to and perfect the mechanism of a free and open
market by encouraging Market Makers to continue to deploy capital more
efficiently and improve market quality. The Exchange believes that the
proposal will allow market participants to expand hedging tools and
tailor their investment and hedging needs more effectively in GLD, SLV,
and TLT as these funds are most likely to be utilized by market
participants to hedge the underlying asset classes. The ETPs currently
trade within ``complexes'' where, in addition to the underlying
security, there are multiple instruments available for hedging. Given
the multi-asset class nature of these products and available hedges in
highly correlated instruments, the Exchange believes that its proposal
to add Monday expirations on these products will provide market
participants with additional useful hedging tools for the underlying
asset classes.
Similar to Monday SPY, QQQ, and IWM expirations, the introduction
of Monday ETP Expirations is consistent with the Act as it will, among
other things, expand hedging tools available to market participants and
allow for a reduced premium cost of buying portfolio protection. The
Exchange believes that Monday ETP Expirations will allow market
participants to purchase options on GLD, SLV, and TLT based on their
timing as needed and allow them to tailor their investment and hedging
needs more effectively, thus allowing them to better manage their risk
exposure. Today, the Exchange lists Monday SPY, QQQ, and IWM
Expirations.\22\ In particular, the Exchange believes the STOS Program
has been successful to date and that Monday ETP 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 STOS Program has expanded
the landscape of hedging.
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\22\ See Commentary .07(g) to Rule 6.4-O, Table 1.
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There are no material differences in the treatment of Monday SPY,
QQQ, and IWM expirations compared to the proposed Monday ETP
Expirations. Given the similarities between Monday SPY, QQQ, and IWM
expirations and the proposed Monday ETP Expirations, the Exchange
believes that applying the provisions in Commentary .10(g) to Rule 6.4-
O, that currently apply to Monday SPY, QQQ, and IWM expirations is
justified. For example, the Exchange believes that allowing Monday ETP
Expirations and monthly ETP expirations in the same week will benefit
investors and minimize investor confusion by providing Monday ETP
Expirations in a continuous and uniform manner.
Finally, the Exchange notes the proposed rule change is
substantively identical to an approved Nasdaq ISE rule.\23\
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\23\ See Nasdaq ISE Monday Approval.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
Expand $1 Strike Intervals for GLD
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. Rather, the Exchange
believes that the proposed rule change will result in additional
investment options and opportunities to achieve the investment and
trading objectives of market participants seeking efficient trading and
hedging vehicles, to the benefit of investors, market participants, and
the marketplace in general. Specifically, the Exchange believes that
GLD options investors and traders will significantly benefit from the
availability of finer strike price intervals above a $200 price point.
In addition, the interval setting regime the Exchange proposes to apply
to GLD options is currently applied to SPY, IVV, QQQ, IWM and DIA
options, which are similarly popular and widely traded ETF products and
track indexes at similarly high price levels. Thus, the proposed strike
setting regime for GLD options will allow options on this actively
traded ETF with index levels at corresponding price levels to trade
pursuant to the same strike setting regime. This will permit investors
to employ similar investment and hedging strategies for each of these
options.
The Exchange does not believe the proposal will impose any burden
on intermarket competition, as nothing prevents other options exchanges
from proposing similar rules to make a finer strike price intervals
above a $200 price point available for GLD options. The Exchange notes
that the proposed rule change is not a novel proposal, as the
Commission recently approved a substantively identical proposal of
another exchange.\6\ 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.
Expand STOS Program To Add Monday Expirations
While the proposal will expand the Short Term Options Expirations
to allow Monday ETP Expirations to be listed on the Exchange, the
Exchange believes that this limited expansion for Monday expirations
for options on GLD, SLV, and TLT will not impose an undue burden on
competition; rather, it will meet customer demand. The Exchange
believes that market participants will continue to be able to expand
hedging tools and tailor their investment and hedging needs more
effectively in GLD, SLV, and TLT.
Similar to Monday SPY, QQQ, and IWM expirations, the introduction
of Monday ETP 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 allow for a
reduced premium cost of buying portfolio protection. The Exchange
believes that Monday ETP Expirations will allow market participants to
purchase options on GLD, SLV, and TLT based on their timing as needed
and allow them to
[[Page 90109]]
tailor their investment and hedging needs more effectively.
The Exchange does not believe the proposal will impose any burden
on inter-market competition, as nothing prevents the other options
exchanges from proposing similar rules to list and trade Monday ETP
Expirations. As noted above, the Commission recently approved a
substantively identical proposal of another exchange.\24\ Further, the
Exchange does not believe the proposal will impose any burden on
intramarket competition, as all market participants will be treated in
the same manner under this proposal.
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\24\ See Nasdaq ISE Monday Approval.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days 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) of the Act \25\ and Rule 19b-
4(f)(6) thereunder.\26\
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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 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 normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \27\ 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 proposal may become operative immediately upon filing. According to
the Exchange, waiver of the operative delay will ensure fair
competition among the exchanges by allowing the Exchange to implement
its proposal without delay, thus creating competition among Short Term
Option Series throughout the industry, which will ultimately benefit
investors. The proposed rule change raises no novel legal or regulatory
issues. Thus, the Commission believes 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 operative upon
filing.\28\
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\27\ 17 CFR 240.19b-4(f)(6)(iii).
\28\ 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 such 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-NYSEARCA-2024-92 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-NYSEARCA-2024-92. 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-NYSEARCA-2024-92 and should
be submitted on or before December 5, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-26417 Filed 11-13-24; 8:45 am]
BILLING CODE 8011-01-P
