Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposal To Amend Rules 18.7 (Position Limits) and 18.9 (Exercise Limits), 20731-20734 [2025-08546]

Download as PDF Federal Register / Vol. 90, No. 93 / Thursday, May 15, 2025 / Notices 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– EMERALD–2025–10 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. khammond on DSK9W7S144PROD with NOTICES All submissions should refer to file number SR–EMERALD–2025–10. 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–EMERALD–2025–10 and should be submitted on or before June 5, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Stephanie J. Fouse, Assistant Secretary. [FR Doc. 2025–08552 Filed 5–14–25; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–103014; File No. SR– MEMX–2025–12] Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposal To Amend Rules 18.7 (Position Limits) and 18.9 (Exercise Limits) May 9, 2025. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 6, 2025, MEMX LLC (‘‘MEMX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing with the Commission a proposed rule change to amend Rules 18.7 and 18.9 (Position Limits and Exercise Limits, respectively). The text of the proposed rule change is provided in Exhibit 5 and is available on the Exchange’s website at https://info.memxtrading.com/ regulation/rules-and-filings/. 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. BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4. 2 17 26 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:47 May 14, 2025 Jkt 265001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 20731 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 Rules 18.7 (Position Limits) and 18.9 (Exercise Limits) in order to specifically describe these limits in the rule text, which more closely aligns with the rules of other options exchanges and provides additional clarity and consistency in the Exchange’s rules.5 Currently, Exchange Rule 18.7, Position Limits, and Rule 18.9, Exercise Limits provide that Options Members may not exceed the applicable position and exercise limits, respectively, fixed from time to time by the Exchange for any options contract traded on MEMX Options. The Exchange provided a notice to Members upon the launch of MEMX Options that provided the specific position limits applicable to options trading on the Exchange, which are those calculated and disseminated by the Options Clearing Corporation (‘‘OCC’’).6 The Exchange is now proposing to amend Rules 18.7 and 18.9 by codifying these specific position and exercise limits in the rule text so that the entirety of the applicable information related to position and exercise limits is available in the text of the rules themselves, providing more clarity to Exchange Members. The Exchange notes that it is not proposing to make any changes to the position and exercise limits applicable to its Members, it is simply adding additional detail to the applicable rules. Further, each of the newly proposed provisions are substantively identical to the rules of other options exchanges, including Cboe, ISE, MIAX and BOX, as more fully described below. As such, the Exchange believes that the proposed changes will add clarity and uniformity to the rules related to position and 5 See, e.g., Cboe Options Exchange (‘‘Cboe’’) Rule 8.30, Position Limits, and Rule 8.42, Exercise Limits; MIAX Options Exchange (‘‘MIAX’’) Rule 307, Position Limits, and Rule 309, Exercise Limits; Nasdaq ISE, LLC (‘‘ISE’’) Options 9, Section 13, Position Limits, and Section 15, Exercise Limits; BOX Options Exchange (‘‘BOX’’) Rule 3120, Position Limits, and Rule 3140, Exercise Limits. 6 See Regulatory Notice 23–12, available at: https://info.memxtrading.com/wp-content/uploads/ 2023/09/RegNotice-23-12-Options-PositionLimits.pdf, which informed Exchange members of the specific position limits applicable to options trading on MEMX Options, pursuant to Rule 18.7, as those position limits calculated and disseminated by the OCC, published daily and which can be found at: https://www.theocc.com/ market-data/market-data-reports/series-andtrading-data/position-limits. E:\FR\FM\15MYN1.SGM 15MYN1 20732 Federal Register / Vol. 90, No. 93 / Thursday, May 15, 2025 / Notices khammond on DSK9W7S144PROD with NOTICES exercise limits amongst options exchanges. Position and exercise limits are designed to limit the number of options contracts traded in an underlying security that an investor, acting alone or in concert with other directly or indirectly, may control. These limits are intended to address potential manipulative schemes and adverse market impact surrounding the use of options, such as disrupting the market in the security underlying the options. The potential manipulative schemes and adverse market impact are balanced against the potential of setting the limits so low as to discourage participation in the options market. Position and exercise limits do not limit the total number of options that may be held, but rather, they limit the number of positions a single customer may hold or exercise at one time. The current position (and exercise limit) structure which the Exchange is proposing to codify into Rules 18.7 and 18.9 incorporates five categories of limits ranging from 25,000 to 250,000 contracts, based on two criteria: (1) the securities trading volume over the prior six months and (2) the number of shares outstanding. More specifically, proposed Rule 18.7(a) 7 provides in relevant part, that no Options Member may: (1) control an aggregate position in an options contract traded on the Exchange in excess of 25,000 or 50,000 or 75,000 or 200,000 or 250,000 options contracts (whether long or short), of the put type and the call type on the same side of the market respecting the same underlying security, combining for purposes of this position limit long positions in put options with short positions in call options, and short positions in put options with long positions in call options, or such other number of options contracts as may be fixed from time to time by the Exchange as the position limit for one or more classes or series of options; or (2) exceed the applicable position limit fixed from time to time by another exchange for an options contract not traded on the Exchange, when the Options Member is not a member of the other exchange on which the transaction was effected. 7 The Exchange is also proposing to insert the phrase ‘‘Except with the prior permission of an Exchange Official or his designee, to be confirmed in writing’’ at the beginning of Rules 18.7 and 18.9, in order to conform to the rules of other exchanges, including Cboe Rule 8.30 and 8.42(a), MIAX Rules 307(a) and 309(a), BOX Rule 3120(a) and 3140(a), and ISE Options 9, Sections 13(a) and 15(a). VerDate Sep<11>2014 16:47 May 14, 2025 Jkt 265001 Proposed Rule 18.7(c) provides that reasonable notice shall be given for each new position limit fixed by the Exchange and proposed Rules 18.7(d)(1)–(5) specify the criteria for each position limit. For example, proposed Rule 18.7(d)(5) indicates that to be eligible for the 250,000 option contract limit, either the most recent six (6) month trading volume of the underlying security must have totaled at least 100 million shares or the most recent six-month trading volume of the underlying security must have totaled at least seventy-five (75) million shares and the underlying security must have at least 300 million shares currently outstanding. Proposed Rule 18.7(e) contains standard language regarding the Exchange’s bi-annual review of the status of underlying securities to determine which limit should apply. Proposed Rule 18.7(f) defines the situations in which a Member would be considered to ‘‘control’’ a position for purposes of compliance with the rule. Lastly, the Exchange is proposing to adopt Interpretations and Policies to Rule 18.7. Interpretation and Policy .01 contains a table denoting the specific position limits that apply to 21 underlying securities, including, for example, the Invesco QQQ Trust Series 1 (‘‘QQQ’’) and the iShares Russell 2000 ETF (‘‘IWM’’), notwithstanding the criteria specified in Rule 18.7(d). Again, this provision is identical to other options exchanges,8 and codifies into Rule 18.7 what the Exchange currently relies upon with respect to options position limits on these specific securities. Interpretation and Policy .02 indicates that positions in Short Term Option Series, Monthly Options Series, and Quarterly Options Series shall be aggregated with positions in options contracts on the same underlying security.9 8 To the extent other options exchanges have received Commission approval to list and trade options on certain securities that the Exchange has not yet done so, there are additional position limits identified in the corresponding tables of those other exchanges. See, e.g., MIAX Rule 307, Interpretation and Policy .01 which contains the same position limits proposed in the Exchange’s table with the addition of four securities, the Fidelity Ethereum Fund, Bitwise Ethereum Fund, Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust, all recently approved to list and trade options upon in April 2025. See Securities Exchange Act Release No. 102821 (April 11, 2025), 90 FR 16339 (April 17, 2025) (SR–MIAX–2025–20), and Securities Exchange Act Release No. 102846 (April 11, 2025), 90 FR 16272 (April 17, 2025) (SR–MIAX–2025–21). The Exchange is in the process of completing similar proposals to list and trade options on the same securities and will similarly propose to amend the table in Rule 18.7, Interpretation and Policy .01 related to the position and exercise limits of options on these securities in connection with that rule filing. 9 This provision is identical to Cboe Rule 8.30, Interpretation and Policy .09. PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 With respect to Rule 18.9, Exercise Limits, the Exchange is proposing to make the same changes conforming the rule to that of other options exchanges, which include among other additions: (1) replacing the general language in 18.9(a)(1) which states that no Options Member shall have ‘‘ . . . exceeded the applicable exercise limit fixed from time to time by the Exchange for any options contract traded on MEMX Options’’ with the more specific language: ‘‘ . . . have exercised within any five (5) consecutive business days aggregate long positions in any class of options traded on the Exchange in excess of 25,000, or 50000 or 75,000 or 200,000 or 250,000 option contracts or such other number of option contracts as may be fixed from time to time by the Exchange as the exercise limit for that class of options; (2) proposed Rule 18.9(b) indicating that reasonable notice shall be given of each new exercise limit fixed by the Exchange by posting notice thereof by the Exchange; 10 (3) proposed Rule 18.9(c) indicating that Limits shall be determined in the manner described in Rule 18.7; and (4), proposed Rule 18.9, Interpretation and Policy .01 which provides the applicable exercise limits for the same 20 securities identified in the table in proposed Rule 18.7, Interpretation and Policy .01. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.11 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 12 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) 13 requirement that 10 The Exchange is also proposing to make a minor, non-substantive change to current Rule 18.9(b), which will be re-named Rule 18.9(d), by replacing the word ‘‘Market Maker’’ with ‘‘Member’’, in order to conform to the rules of other options exchanges. See, e.g., ISE Options 9, Section 15(c) and MIAX Rule 309(d). 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). 13 Id. E:\FR\FM\15MYN1.SGM 15MYN1 Federal Register / Vol. 90, No. 93 / Thursday, May 15, 2025 / Notices khammond on DSK9W7S144PROD with NOTICES the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes that the proposed modification of Rules 18.7 and 18.9 to list the specific position and exercise limits applicable to Options Members would better align the Exchange’s rules with other options exchanges, thereby protecting investors by providing more clarity and consistency with respect to position and exercise limits that are standard to all options exchanges. The Exchange further believes that the proposed change would remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest, and add clarity, transparency and consistency to the Exchange’s rules. The Exchange believes that market participants would benefit from the increased clarity, thereby reducing potential confusion. In addition, the proposed changes would align Rule 2.4 [sic] with the equivalent rules of other options exchanges, including Cboe, BOX, ISE and MIAX,14 as described above. 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 Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act as the proposed rule changes provide greater clarity regarding the position and exercise limits applicable to Options Members as the limits are effectively not changing under this proposal, they are simply being codified in the rules. Further, the rules of the Exchange apply equally to all Members of the Exchange and all Members of the Exchange are required to adhere to the position and exercise limits established by the Exchange’s rules. The Exchange does not believe that the proposal to amend Rules 18.7 and 18.9 will impose any burden on intermarket competition as the proposal is not competitive in nature, it is designed to codify specific position and exercise limits within the Exchange’s rules which are identical to that of other options exchanges, creating uniformity amongst options exchanges with respect to rules related to position and exercise limits. 14 See supra note 5. VerDate Sep<11>2014 16:47 May 14, 2025 Jkt 265001 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 proposed rule change is filed for immediate effectiveness pursuant to Section 19(b)(3)(A) of Act 15 and Rule 19b–4(f)(6) 16 thereunder. The Exchange designates that the proposed rule change effects a change that (i) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Additionally, the Exchange has given 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. A proposed rule change filed under Rule 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 17 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 period so that the Exchange may conform to the rules of other exchanges without delay since the proposed changes are not novel or unique. The proposal will provide clarity with respect to rules related to position and exercise limits to market participants and does not raise any novel issues. For these reasons, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest and designates the proposed rule change to be operative upon filing with the Commission.18 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 18 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 16 17 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 20733 At any time within 60 days of the filing of this 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.19 If the Commission takes such action, the Commission shall 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– MEMX–2025–12 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–MEMX–2025–12. 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 19 15 E:\FR\FM\15MYN1.SGM U.S.C. 78s(b)(3)(C). 15MYN1 20734 Federal Register / Vol. 90, No. 93 / Thursday, May 15, 2025 / Notices 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–MEMX–2025–12 and should be submitted on or before June 5, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Stephanie J. Fouse, Assistant Secretary. [FR Doc. 2025–08546 Filed 5–14–25; 8:45 am] BILLING CODE 8011–01–P SELECTIVE SERVICE SYSTEM Registration, Compliance and Verification (RCV) System as a result of being refactored from an on-premises application to an AWS Cloud-hosted application. No changes are being made to the underlying data or what is stored. In addition to the SSS–19 Registration, Compliance and Verification (RCV) system’s Safeguard, employees access the application through a secure, rolebased user interface. Access is managed using unique user IDs and strong, multifactored authentication (MFA) credentials, with passwords adhering to modern security standards. All authentication data is encrypted in transit and at rest, and access is governed by least-privilege principles to ensure compliance with current data security best practices. SYSTEM NAME AND NUMBER: Privacy Act of 1974; System of Records Registration, Compliance and Verification (RCV) System, SSS–19. Selective Service System Notice of a modified system of AGENCY: ACTION: records. SECURITY CLASSIFICATION: Unclassified. SYSTEM LOCATION: POLICIES AND PRACTICES FOR STORAGE OF RECORDS: Electronic records are stored in the RCV database on Amazon cloud. Old supporting documents for the registrants are stored: (a) in a microfilm and (b) scanned and uploaded in the Electronic Management System (ECM). ADMINISTRATIVE, TECHNICAL, AND PHYSICAL SAFEGUARDS: Employees access the application through a secure, role-based user interface. Access is managed using unique user IDs and strong, multifactored authentication (MFA) credentials, with passwords adhering to modern security standards. All authentication data is encrypted in transit and at rest, and access is governed by least-privilege principles to ensure compliance with current data security best practices. Selective Service System (SSS) has amended an existing system of records subject to the Privacy Act of 1974. This action is necessary to meet the requirements of the Privacy Act to publish in the Federal Register notice of the existence and character of the system of records maintained by the agency. The Registration, Compliance and Verification (RCV) system is an intranet application used by only authorized SSS’ personnel. It provides a central repository for all data related to active registrants and potential violators. National Headquarters, Selective Service System, 1501 Wilson Boulevard, Arlington, VA 22209–2425. FedRAMP Authorized Amazon Web Services (AWS) US East/West cloud services facility at 410 Terry Ave. N, Seattle, WA 98109–5210. HISTORY: SYSTEM MANAGER(S): [FR Doc. 2025–08659 Filed 5–14–25; 8:45 am] The changes will become effective on May 15, 2025. ADDRESSES: Written comments must be sent to Acting Chief Information Officer, Office of the Information Technology Operations Directorate, Selective Service System, 1501 Wilson Boulevard, Arlington, Virginia 22209–2425. FOR FURTHER INFORMATION CONTACT: For further inquiries regarding this amended SORN, you may contact Mr. Daniel A. Lauretano, Sr., General Counsel and Federal Register Liaison, Phone: (703) 605–4012. Email: Daniel.Lauretano@ sss.gov, Selective Service System, 1501 Wilson Boulevard, Arlington, Virginia 22209–2425. SUPPLEMENTARY INFORMATION: This notice serves to update and amend the (a) Current Registrants—individuals who are registered with SSS, (b) differed Registrants—individuals who have submitted the request to register but have not reached the minimum registration age and are in a delayed status, (c) not-in-Compliance Potential Registrants—individuals who have not registered yet but still have a chance to do so until they reach a maximum registration age, (d) not-in-Compliance Potential Violators—individuals who have not registered and have already reached a maximum registration age, and (e) Exempt records—individuals who were granted an exemption from registration. SUMMARY: DATES: khammond on DSK9W7S144PROD with NOTICES Security Number, (f) Date of Birth, (g) Street Address, (h) Email Address, (i) Selective Service Number, and (j) Phone number. 20 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:47 May 14, 2025 Jkt 265001 Director of Selective Service, 1501 Wilson Boulevard, Arlington, VA 22209–2425, Attn: Records Manager Document Citation: 82 FR 29971 Document Number: 2017–13771. Dated: May 12, 2025. Alma Cruz, Senior Agency Official for Privacy, Selective Service System. BILLING CODE P SMALL BUSINESS ADMINISTRATION CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM: CATEGORIES OF RECORDS IN THE SYSTEM: Maintains the following information: (a) First Name, (b) Last Name, (c) Middle Name, (d) Suffix, (e) Social PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 SBIC License Issuance U.S. Small Business Administration. ACTION: Notice of Small Business Investment Company (SBIC) Licenses. AGENCY: Pursuant to the authority granted to the United States Small Business Administration under section 301(c) of the Small Business Investment Act of 1958, as amended, to grant Small Business Investment Company licenses under the Small Business Investment Company Program, this notice satisfies the requirement effective August 17, 2023 under 13 CFR 107.501(a) to publish in the Federal Register the names of SBICs with date of licensure and Total Intended Leverage Commitments. The following SBICs received SBIC licenses as of the date indicated below: E:\FR\FM\15MYN1.SGM 15MYN1

Agencies

[Federal Register Volume 90, Number 93 (Thursday, May 15, 2025)]
[Notices]
[Pages 20731-20734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08546]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103014; File No. SR-MEMX-2025-12]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposal To Amend Rules 18.7 (Position 
Limits) and 18.9 (Exercise Limits)

May 9, 2025.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on May 6, 2025, MEMX LLC (``MEMX'' or the ``Exchange'') filed with 
the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposal as 
a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing with the Commission a proposed rule change 
to amend Rules 18.7 and 18.9 (Position Limits and Exercise Limits, 
respectively). The text of the proposed rule change is provided in 
Exhibit 5 and is available on the Exchange's website at https://info.memxtrading.com/regulation/rules-and-filings/.

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 Rules 18.7 (Position Limits) and 
18.9 (Exercise Limits) in order to specifically describe these limits 
in the rule text, which more closely aligns with the rules of other 
options exchanges and provides additional clarity and consistency in 
the Exchange's rules.\5\
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    \5\ See, e.g., Cboe Options Exchange (``Cboe'') Rule 8.30, 
Position Limits, and Rule 8.42, Exercise Limits; MIAX Options 
Exchange (``MIAX'') Rule 307, Position Limits, and Rule 309, 
Exercise Limits; Nasdaq ISE, LLC (``ISE'') Options 9, Section 13, 
Position Limits, and Section 15, Exercise Limits; BOX Options 
Exchange (``BOX'') Rule 3120, Position Limits, and Rule 3140, 
Exercise Limits.
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    Currently, Exchange Rule 18.7, Position Limits, and Rule 18.9, 
Exercise Limits provide that Options Members may not exceed the 
applicable position and exercise limits, respectively, fixed from time 
to time by the Exchange for any options contract traded on MEMX 
Options. The Exchange provided a notice to Members upon the launch of 
MEMX Options that provided the specific position limits applicable to 
options trading on the Exchange, which are those calculated and 
disseminated by the Options Clearing Corporation (``OCC'').\6\ The 
Exchange is now proposing to amend Rules 18.7 and 18.9 by codifying 
these specific position and exercise limits in the rule text so that 
the entirety of the applicable information related to position and 
exercise limits is available in the text of the rules themselves, 
providing more clarity to Exchange Members. The Exchange notes that it 
is not proposing to make any changes to the position and exercise 
limits applicable to its Members, it is simply adding additional detail 
to the applicable rules. Further, each of the newly proposed provisions 
are substantively identical to the rules of other options exchanges, 
including Cboe, ISE, MIAX and BOX, as more fully described below. As 
such, the Exchange believes that the proposed changes will add clarity 
and uniformity to the rules related to position and

[[Page 20732]]

exercise limits amongst options exchanges.
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    \6\ See Regulatory Notice 23-12, available at: https://info.memxtrading.com/wp-content/uploads/2023/09/RegNotice-23-12-Options-Position-Limits.pdf, which informed Exchange members of the 
specific position limits applicable to options trading on MEMX 
Options, pursuant to Rule 18.7, as those position limits calculated 
and disseminated by the OCC, published daily and which can be found 
at: https://www.theocc.com/market-data/market-data-reports/series-and-trading-data/position-limits.
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    Position and exercise limits are designed to limit the number of 
options contracts traded in an underlying security that an investor, 
acting alone or in concert with other directly or indirectly, may 
control. These limits are intended to address potential manipulative 
schemes and adverse market impact surrounding the use of options, such 
as disrupting the market in the security underlying the options. The 
potential manipulative schemes and adverse market impact are balanced 
against the potential of setting the limits so low as to discourage 
participation in the options market. Position and exercise limits do 
not limit the total number of options that may be held, but rather, 
they limit the number of positions a single customer may hold or 
exercise at one time.
    The current position (and exercise limit) structure which the 
Exchange is proposing to codify into Rules 18.7 and 18.9 incorporates 
five categories of limits ranging from 25,000 to 250,000 contracts, 
based on two criteria: (1) the securities trading volume over the prior 
six months and (2) the number of shares outstanding. More specifically, 
proposed Rule 18.7(a) \7\ provides in relevant part, that no Options 
Member may: (1) control an aggregate position in an options contract 
traded on the Exchange in excess of 25,000 or 50,000 or 75,000 or 
200,000 or 250,000 options contracts (whether long or short), of the 
put type and the call type on the same side of the market respecting 
the same underlying security, combining for purposes of this position 
limit long positions in put options with short positions in call 
options, and short positions in put options with long positions in call 
options, or such other number of options contracts as may be fixed from 
time to time by the Exchange as the position limit for one or more 
classes or series of options; or (2) exceed the applicable position 
limit fixed from time to time by another exchange for an options 
contract not traded on the Exchange, when the Options Member is not a 
member of the other exchange on which the transaction was effected.
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    \7\ The Exchange is also proposing to insert the phrase ``Except 
with the prior permission of an Exchange Official or his designee, 
to be confirmed in writing'' at the beginning of Rules 18.7 and 
18.9, in order to conform to the rules of other exchanges, including 
Cboe Rule 8.30 and 8.42(a), MIAX Rules 307(a) and 309(a), BOX Rule 
3120(a) and 3140(a), and ISE Options 9, Sections 13(a) and 15(a).
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    Proposed Rule 18.7(c) provides that reasonable notice shall be 
given for each new position limit fixed by the Exchange and proposed 
Rules 18.7(d)(1)-(5) specify the criteria for each position limit. For 
example, proposed Rule 18.7(d)(5) indicates that to be eligible for the 
250,000 option contract limit, either the most recent six (6) month 
trading volume of the underlying security must have totaled at least 
100 million shares or the most recent six-month trading volume of the 
underlying security must have totaled at least seventy-five (75) 
million shares and the underlying security must have at least 300 
million shares currently outstanding.
    Proposed Rule 18.7(e) contains standard language regarding the 
Exchange's bi-annual review of the status of underlying securities to 
determine which limit should apply. Proposed Rule 18.7(f) defines the 
situations in which a Member would be considered to ``control'' a 
position for purposes of compliance with the rule. Lastly, the Exchange 
is proposing to adopt Interpretations and Policies to Rule 18.7. 
Interpretation and Policy .01 contains a table denoting the specific 
position limits that apply to 21 underlying securities, including, for 
example, the Invesco QQQ Trust Series 1 (``QQQ'') and the iShares 
Russell 2000 ETF (``IWM''), notwithstanding the criteria specified in 
Rule 18.7(d). Again, this provision is identical to other options 
exchanges,\8\ and codifies into Rule 18.7 what the Exchange currently 
relies upon with respect to options position limits on these specific 
securities. Interpretation and Policy .02 indicates that positions in 
Short Term Option Series, Monthly Options Series, and Quarterly Options 
Series shall be aggregated with positions in options contracts on the 
same underlying security.\9\
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    \8\ To the extent other options exchanges have received 
Commission approval to list and trade options on certain securities 
that the Exchange has not yet done so, there are additional position 
limits identified in the corresponding tables of those other 
exchanges. See, e.g., MIAX Rule 307, Interpretation and Policy .01 
which contains the same position limits proposed in the Exchange's 
table with the addition of four securities, the Fidelity Ethereum 
Fund, Bitwise Ethereum Fund, Grayscale Ethereum Trust, and the 
Grayscale Ethereum Mini Trust, all recently approved to list and 
trade options upon in April 2025. See Securities Exchange Act 
Release No. 102821 (April 11, 2025), 90 FR 16339 (April 17, 2025) 
(SR-MIAX-2025-20), and Securities Exchange Act Release No. 102846 
(April 11, 2025), 90 FR 16272 (April 17, 2025) (SR-MIAX-2025-21). 
The Exchange is in the process of completing similar proposals to 
list and trade options on the same securities and will similarly 
propose to amend the table in Rule 18.7, Interpretation and Policy 
.01 related to the position and exercise limits of options on these 
securities in connection with that rule filing.
    \9\ This provision is identical to Cboe Rule 8.30, 
Interpretation and Policy .09.
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    With respect to Rule 18.9, Exercise Limits, the Exchange is 
proposing to make the same changes conforming the rule to that of other 
options exchanges, which include among other additions: (1) replacing 
the general language in 18.9(a)(1) which states that no Options Member 
shall have `` . . . exceeded the applicable exercise limit fixed from 
time to time by the Exchange for any options contract traded on MEMX 
Options'' with the more specific language: `` . . . have exercised 
within any five (5) consecutive business days aggregate long positions 
in any class of options traded on the Exchange in excess of 25,000, or 
50000 or 75,000 or 200,000 or 250,000 option contracts or such other 
number of option contracts as may be fixed from time to time by the 
Exchange as the exercise limit for that class of options; (2) proposed 
Rule 18.9(b) indicating that reasonable notice shall be given of each 
new exercise limit fixed by the Exchange by posting notice thereof by 
the Exchange; \10\ (3) proposed Rule 18.9(c) indicating that Limits 
shall be determined in the manner described in Rule 18.7; and (4), 
proposed Rule 18.9, Interpretation and Policy .01 which provides the 
applicable exercise limits for the same 20 securities identified in the 
table in proposed Rule 18.7, Interpretation and Policy .01.
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    \10\ The Exchange is also proposing to make a minor, non-
substantive change to current Rule 18.9(b), which will be re-named 
Rule 18.9(d), by replacing the word ``Market Maker'' with 
``Member'', in order to conform to the rules of other options 
exchanges. See, e.g., ISE Options 9, Section 15(c) and MIAX Rule 
309(d).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\11\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \12\ 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) \13\ requirement that

[[Page 20733]]

the rules of an exchange not be designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposed modification 
of Rules 18.7 and 18.9 to list the specific position and exercise 
limits applicable to Options Members would better align the Exchange's 
rules with other options exchanges, thereby protecting investors by 
providing more clarity and consistency with respect to position and 
exercise limits that are standard to all options exchanges. The 
Exchange further believes that the proposed change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and, in general, protect investors and the 
public interest, and add clarity, transparency and consistency to the 
Exchange's rules. The Exchange believes that market participants would 
benefit from the increased clarity, thereby reducing potential 
confusion. In addition, the proposed changes would align Rule 2.4 [sic] 
with the equivalent rules of other options exchanges, including Cboe, 
BOX, ISE and MIAX,\14\ as described above.
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    \14\ See supra note 5.
---------------------------------------------------------------------------

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 Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act as the proposed rule changes 
provide greater clarity regarding the position and exercise limits 
applicable to Options Members as the limits are effectively not 
changing under this proposal, they are simply being codified in the 
rules. Further, the rules of the Exchange apply equally to all Members 
of the Exchange and all Members of the Exchange are required to adhere 
to the position and exercise limits established by the Exchange's 
rules.
    The Exchange does not believe that the proposal to amend Rules 18.7 
and 18.9 will impose any burden on intermarket competition as the 
proposal is not competitive in nature, it is designed to codify 
specific position and exercise limits within the Exchange's rules which 
are identical to that of other options exchanges, creating uniformity 
amongst options exchanges with respect to rules related to position and 
exercise limits.

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 proposed rule change is filed for immediate effectiveness 
pursuant to Section 19(b)(3)(A) of Act \15\ and Rule 19b-4(f)(6) \16\ 
thereunder. The Exchange designates that the proposed rule change 
effects a change that (i) does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest. Additionally, the 
Exchange has given 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \17\ 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 period so that the Exchange 
may conform to the rules of other exchanges without delay since the 
proposed changes are not novel or unique. The proposal will provide 
clarity with respect to rules related to position and exercise limits 
to market participants and does not raise any novel issues. For these 
reasons, the Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest and designates the proposed rule change to be operative upon 
filing with the Commission.\18\
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    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of this 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.\19\ If the 
Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-MEMX-2025-12 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-MEMX-2025-12. 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

[[Page 20734]]

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-MEMX-2025-12 and should be submitted on or 
before June 5, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2025-08546 Filed 5-14-25; 8:45 am]
BILLING CODE 8011-01-P
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