[Federal Register Volume 88, Number 151 (Tuesday, August 8, 2023)]
[Notices]
[Pages 53548-53555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16885]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98044; File No. SR-CBOE-2023-036]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Allow
Certain Flexible Exchange Equity Options To Be Cash Settled
August 2, 2023.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 1, 2023, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 4.21 and 8.35 related to
Flexible Exchange (``FLEX'') Options. The text of the proposed rule
change is available on the Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of
the Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rules 4.21 and 8.35 related to FLEX
Options. FLEX Options are customized equity or index contracts that
allow investors to tailor contract terms for exchange-listed equity and
index options. The Exchange proposes to amend Rule 4.21 to allow for
cash settlement of certain FLEX Equity Options.\3\ Generally, FLEX
Equity Options are settled by physical delivery of the underlying
security,\4\ while all FLEX Index Options are currently settled by
delivery in cash.\5\ As proposed, FLEX Equity Options where the
underlying security is an Exchange-Traded Fund (``ETF'') would be
permitted to be settled by delivery in cash if the underlying security
meets prescribed criteria. The Exchange notes that cash-settled FLEX
ETF Options will be subject to the same trading rules and procedures
that currently govern the trading of other FLEX Options on the
Exchange, with the exception of the rules to accommodate the cash-
settlement feature proposed in this rule filing.
---------------------------------------------------------------------------
\3\ A ``FLEX Equity Option'' is an option on a specified
underlying equity security. See Cboe Options Rule 1.1.
\4\ See Rule 4.21(b)(5)(A)(i).
\5\ See Rule 4.21(b)(5)(B). As discussed below, cash settlement
is also permitted in the over-the-counter (``OTC'') market.
---------------------------------------------------------------------------
To permit cash settlement of certain FLEX ETF Options, the Exchange
proposes new subparagraph (ii) to Rule 4.21(b)(5)(A). Proposed Rule
4.21(b)(5)(A)(ii) would provide that the exercise settlement for a FLEX
ETF Option may be by physical delivery of the underlying ETF or by
delivery in cash if the underlying security, measured over the prior
six-month period, has an average daily notional value of $500 million
or more and a national average daily volume (``ADV'') of at least
4,680,000 shares.\6\
---------------------------------------------------------------------------
\6\ See proposed Rule 4.21(b)(5)(A)(ii). The Exchange also
proposes a corresponding nonsubstantive amendment to Rule
4.21(b)(5)(A)(i) and a nonsubstantive amendment to Rule 4.21 to
renumber current Rule 4.21(b)(5)(A)(ii) as new Rule
4.21(b)(5)(A)(iii).
---------------------------------------------------------------------------
The Exchange also proposes in the introductory paragraph of Rule
4.21(b) that a FLEX Equity Option overlying an ETF (cash- or physically
settled) may not be the same type (put or call) and may not have the
same exercise style, expiration date, and exercise price as a non-FLEX
Equity Option overlying the same ETF.\7\ In other words, regardless of
whether a FLEX Equity Option overlying an ETF is cash- or physically
settled, at least one of the exercise style (i.e., American-style or
European-style), expiration date, and exercise price of that FLEX
Option must differ from those terms of a non-FLEX Option overlying the
same ETF in order to list such a FLEX Equity Option. For example,
suppose a non-FLEX SPY option (which is physically settled, p.m.-
settled and American-style) with a September expiration and exercise
price of 475 is listed for trading. A FLEX Trader could not submit an
order to trade a FLEX SPY option (which is p.m.-settled) that is cash-
settled (or physically settled) and American-style with a September
expiration and exercise price of 475.
---------------------------------------------------------------------------
\7\ All non-FLEX Equity Options (including on ETFs) are
physically settled. Note all FLEX and non-FLEX Equity Options
(including ETFs) are p.m.-settled.
---------------------------------------------------------------------------
In addition, the Exchange proposes new subparagraph (a) to Rule
4.21(b)(5)(A)(ii), which would provide that the Exchange will determine
bi-annually the underlying ETFs that satisfy the notional value and
trading volume requirements in proposed Rule 4.21(b)(5)(A)(ii) by using
trading statistics for the previous six-months.\8\ The proposed rule
would further provide that the Exchange will permit cash settlement as
a contract term on no
[[Page 53549]]
more than 50 underlying ETFs that meet the criteria in Rule
4.21(b)(5)(A)(ii), and that if more than 50 underlying ETFs satisfy the
notional value and trading volume requirements, then the Exchange would
select the top 50 ETFs that have the highest average daily volume.\9\
---------------------------------------------------------------------------
\8\ See proposed Rule 4.21(b)(5)(A)(ii)(a). The Exchange will
announce the implementation date of the proposed rule change via
Exchange Notice. The Exchange plans to conduct the bi-annual review
on January 1 and July 1 of each year. The results of the bi-annual
review will be announced via Exchange Notice and any new securities
that qualify would be permitted to have cash settlement as a
contract term beginning on February 1 and August 1 of each year. If
the Exchange initially begins listing cash-settled FLEX Options on a
different date (e.g., September 1), it would initially list
securities that qualified as of the last bi-annual review (e.g., the
one conducted on July 1).
\9\ See proposed Rule 4.21(b)(5)(A)(ii)(a).
---------------------------------------------------------------------------
Proposed new subparagraph (b) to Rule 4.21(b)(5)(A)(ii) would
further provide that if the Exchange determines pursuant to the bi-
annual review that an underlying ETF ceases to satisfy the requirements
under Rule 4.21(b)(5)(A)(ii), any new position overlying such ETF
entered into will be required to have exercise settlement by physical
delivery, and any open cash-settled FLEX ETF Option positions may be
traded only to close the position.\10\
---------------------------------------------------------------------------
\10\ See proposed Rule 4.21(b)(5)(A)(ii)(b). A TPH that is
acting as a Market Maker may enter into an opening transaction in
order to accommodate closing transactions of other market
participants in option series that are restricted to closing-only
transactions. See Cboe Options Rule 4.4; see also Cboe Options Rule
8.46 (which authorizes the Exchange to impose, from time to time in
its discretion, such restrictions on Exchange option transactions or
the exercise of option contracts in one or more series of options of
any class dealt on the Exchange as it deems advisable in the
interests of maintaining a fair and orderly market). Consistent with
a Market Maker's duty to maintain fair and orderly markets under
Rule 5.51, the Exchange will provide guidance to reflect that a TPH
acting as a Market Maker in cash-settled FLEX ETF Options can enter
into an opening transaction to facilitate closing only transactions
of another market participant in cash-settled FLEX ETF Option series
that are restricted to closing-only transactions.
---------------------------------------------------------------------------
The Exchange believes it is appropriate to introduce cash
settlement as an alternative contract term to the select group of ETFs
because they are among the most highly liquid and actively traded
securities. As described more fully below, the Exchange believes that
the deep liquidity and robust trading activity in the ETFs identified
by the Exchange as meeting the criteria mitigate against historic
concerns regarding susceptibility to manipulation.
Characteristics of ETFs
ETFs are funds that have their value derived from assets owned. The
net asset value (``NAV'') of an ETF is a daily calculation that is
based off the most recent closing prices of the assets in the fund and
an actual accounting of the total cash in the fund at the time of
calculation. The NAV of an ETF is calculated by taking the sum of the
assets in the fund, including any securities and cash, subtracting out
any liabilities, and dividing that by the number of shares outstanding.
Additionally, each ETF is subject to a creation and redemption
mechanism to ensure the price of the ETF does not fluctuate too far
away from its NAV, which mechanisms reduce the potential for
manipulative activity. Each business day, ETFs are required to make
publicly available a portfolio composition file that describes the
makeup of their creation and redemption ``baskets'' (i.e., a specific
list of names and quantities of securities or other assets designed to
track the performance of the portfolio as a whole). ETF shares are
created when an Authorized Participant, typically a market maker or
other large institutional investor, deposits the daily creation basket
or cash with the ETF issuer. In return for the creation basket or cash
(or both), the ETF issues to the Authorized Participant a ``creation
unit'' that consists of a specified number of ETF shares. For instance,
IWM is designed to track the performance of the Russell 2000 Index. An
Authorized Participant will purchase all the Russell 2000 constituent
securities in the exact same weight as the index prescribes, then
deliver those shares to the ETF issuer. In exchange, the ETF issuer
gives the Authorized Participant a block of equally valued ETF shares,
on a one-for-one fair value basis. This process can also work in
reverse. A redemption is achieved when the Authorized Participant
accumulates a sufficient number of shares of the ETF to constitute a
creation unit and then exchanges these ETF shares with the ETF issuer,
thereby decreasing the supply of ETF shares in the market.
The principal, and perhaps most important, feature of ETFs is their
reliance on an ``arbitrage function'' performed by market participants
that influences the supply and demand of ETF shares and, thus, trading
prices relative to NAV. As noted above, new ETF shares can be created
and existing shares redeemed based on investor demand; thus, ETF supply
is open-ended. This arbitrage function helps to keep an ETF's price in
line with the value of its underlying portfolio, i.e., it minimizes
deviation from NAV. Generally, in the Exchange's view, the higher the
liquidity and trading volume of an ETF, the more likely the price of
the ETF will not deviate from the value of its underlying portfolio,
making such ETFs less susceptible to price manipulation.
Trading Data for the ETFs Proposed for Cash Settlement
The Exchange believes that average daily notional value is an
appropriate proxy for selecting underlying securities that are not
readily susceptible to manipulation for purposes of establishing a
settlement price. Average daily notional value considers both the
trading activity and the price of an underlying security. As a general
matter, the more expensive an underlying security's price, the less
cost-effective manipulation could become. Further, manipulation of the
price of a security encounters greater difficulty the more volume that
is traded. To calculate average daily notional value (provided in the
table below), the Exchange summed the notional value of each trade for
each symbol (i.e., the number of shares times the price for each
execution in the security) and divided that total by the number of
trading days in the six-month period (from January 1, 2023 through June
30, 2023) reviewed by the Exchange.
Further, the Exchange proposes that qualifying ETFs also meet an
ADV standard. The purpose for this second criteria is to prevent
unusually expensive underlying securities from qualifying under the
average daily notional value standard while not being one of the most
actively traded securities. The Exchange believes an ADV requirement of
4,680,000 shares a day is appropriate because it represents average
trading in the underlying ETF of 200 shares per second. While no
security is immune from all manipulation, the Exchange believes that
the combination of average daily notional value and ADV as prerequisite
requirements would limit cash settlement of FLEX ETF Options to those
underlying ETFs that would be less susceptible to manipulation in order
to establish a settlement price.
The Exchange believes that the proposed objective criteria would
ensure that only the most robustly traded and deeply liquid ETFs would
qualify to have cash settlement as a contract term. As provided in the
table below, as of June 30, 2023, the Exchange would be able to provide
cash settlement as a contract term for FLEX ETF Options on 39
underlying ETFs, as only this group of securities would currently meet
the requirement of 500 Million or more average daily notional value and
a minimum ADV of 4,680,000 shares. The table below provides the list of
the 39 ETFs that, as of June 30, 2023, would be eligible to have cash
settlement as a contract term.
[[Page 53550]]
----------------------------------------------------------------------------------------------------------------
Average daily Average daily
notional value volume (in
Symbol Security name (in dollars) (1/1/ shares) (1/1/23-6/
23-6/30/23) 30/23)
----------------------------------------------------------------------------------------------------------------
AGG..................................... ISHARES TR CORE US AGGBD ET..... $703,126,857 7,116,525
ARKK.................................... ARK ETF TR INNOVATION ETF....... 858,537,852 22,026,750
BIL..................................... SPDR SER TR BLOOMBERG 1-3 MO.... 691,090,219 7,543,846
EEM..................................... ISHARES TR MSCI EMG MKT ETF..... 1,284,326,169 32,458,368
EFA..................................... ISHARES TR MSCI EAFE ETF........ 1,308,724,046 18,457,234
EMB..................................... ISHARES TR JPMORGAN USD EMG..... 559,160,916 6,510,071
EWZ..................................... ISHARES INC MSCI BRAZIL ETF..... 756,467,915 26,179,000
FXI..................................... ISHARES TR CHINA LG-CAP ETF..... 953,344,257 32,659,170
GDX..................................... VANECK ETF TRUST GOLD MINERS ETF 717,525,246 22,888,829
GLD..................................... SPDR GOLD TR GOLD SHS........... 1,373,373,829 7,600,698
HYG..................................... ISHARES TR IBOXX HI YD ETF...... 3,038,710,673 40,690,044
IEF..................................... ISHARES TR 7-10 YR TRSY BD...... 833,776,310 8,506,605
IEFA.................................... ISHARES CORE MSCI EAFE ETF...... 640,740,104 9,645,504
IEMG.................................... ISHARES INC CORE MSCI EMKT...... 610,571,206 12,458,329
IWM..................................... ISHARES TR RUSSELL 2000 ETF..... 5,402,906,722 29,985,329
IYR..................................... ISHARES TR U.S. REAL ES ETF..... 575,694,782 6,749,049
JNK..................................... SPDR SER TR BLOOMBERG HIGH Y.... 809,645,750 8,834,914
KRE..................................... SPDR S&P REGIONAL BANKING ETF... 1,020,754,439 22,996,273
KWEB.................................... KRANESHARES TR CSI CHI INTERNET. 556,570,098 18,594,683
LQD..................................... ISHARES TR IBOXX INV CP ETF..... 2,209,277,519 20,444,446
QQQ..................................... INVESCO QQQ TR UNIT SER 1....... 17,517,678,522 55,508,283
SMH..................................... VANECK SEMICONDUCTOR ETF........ 954,728,520 4,827,785
SOXL.................................... DIREXION SHS ETF TR DLY SCOND 1,240,910,219 76,587,443
3XBU.
SOXS.................................... DIREXION SHS ETF TR DLY 832,524,309 45,142,015
SEMICNDTR BR.
SPXL.................................... DIREXION SHS ETF TR DRX 946,357,247 13,134,890
S&P500BULL.
SPY..................................... SPDR S&P 500 ETF TR TR UNIT..... 34,975,824,706 85,701,074
SQQQ.................................... PROSHARES TR ULTRAPRO SHT QQQ... 4,273,866,273 130,095,374
TLT..................................... ISHARES TR 20 YR TR BD ETF...... 2,246,375,199 21,559,136
TQQQ.................................... PROSHARES TR ULTRAPRO QQQ....... 3,902,736,049 149,675,087
XBI..................................... SPDR SER TR S&P BIOTECH......... 709,508,423 8,539,337
XLE..................................... SELECT SECTOR SPDR TR ENERGY.... 1,648,556,002 19,872,930
XLF..................................... SELECT SECTOR SPDR TR FINANCIAL. 1,699,571,786 51,002,077
XLI..................................... SELECT SECTOR SPDR TR SBI INT- 1,190,848,482 11,870,935
INDS.
XLK..................................... SELECT SECTOR SPDR TR TECHNOLOGY 1,006,555,659 6,839,312
XLP..................................... SELECT SECTOR SPDR TR SBI CONS 855,296,387 11,569,373
STPLS.
XLU..................................... SELECT SECTOR SPDR TR SBI INT- 879,471,277 13,077,264
UTILS.
XLV..................................... SELECT SECTOR SPDR TR SBI 1,187,391,938 9,085,631
HEALTHCARE.
XLY..................................... SELECT SECTOR SPDR TR SBI CONS 742,561,935 5,018,636
DISCR.
XOP..................................... SPDR SER TR S&P OILGAS EXP...... 619,413,460 4,826,441
----------------------------------------------------------------------------------------------------------------
The Exchange believes that permitting cash settlement as a contract
term for FLEX ETF Options for the ETFs in the above table would broaden
the base of investors that use FLEX Options to manage their trading and
investment risk, including investors that currently trade in the over-
the-counter (``OTC'') market for customized options, where settlement
restrictions do not apply.
Today, equity options are settled physically at The Options
Clearing Corporation (``OCC''), i.e., upon exercise, shares of the
underlying security must be assumed or delivered. Physical settlement
may possess certain risks with respect to volatility and movement of
the underlying security at expiration against which market participants
may need to hedge. The Exchange believes cash settlement may be
preferable to physical delivery in some circumstances as it does not
present the same risk. If an issue with the delivery of the underlying
security arises, it may become more expensive (and time consuming) to
reverse the delivery because the price of the underlying security would
almost certainly have changed. Reversing a cash payment, on the other
hand, would not involve any such issue because reversing a cash
delivery would simply involve the exchange of cash. Additionally, with
physical settlement, market participants that have a need to generate
cash would have to sell the underlying security while incurring the
costs associated with liquidating their position as well as the risk of
an adverse movement in the price of the underlying security.
The Exchange notes that the Securities and Exchange Commission (the
``Commission'') has previously approved a rule filing of another
exchange that allowed for the trading of cash-settled options \11\ and,
specifically, cash-settled FLEX ETF Options (which the Exchange
proposes to list in the same manner as that exchange).\12\
---------------------------------------------------------------------------
\11\ See, e.g., PHLX FX Options traded on Nasdaq PHLX and S&P
500[supreg] Index Options traded on Cboe Options Exchange. The
Commission approved, on a pilot basis, the listing and trading of
RealDayTM Options on the SPDR S&P 500 Trust on the BOX
Options Exchange LLC (``BOX''). See Securities Exchange Act Release
No. 79936 (February 2, 2017), 82 FR 9886 (February 8, 2017)
(``RealDay Pilot Program''). The RealDay Pilot Program was extended
until February 2, 2019. See Securities Exchange Act Release No.
82414 (December 28, 2017), 83 FR 577 (January 4, 2018) (SR-BOX-2017-
38). The RealDay Pilot Program was never implemented by BOX. See
also Securities Exchange Act Release Nos. 56251 (August 14, 2007),
72 FR 46523 (August 20, 2007) (SR-Amex-2004-27) (Order approving
listing of cash-settled Fixed Return Options (``FROs'')); and 71957
(April 16, 2014), 79 FR 22563 (April 22, 2014) (SR-NYSEMKT-2014-06)
(Order approving name change from FROs to ByRDs and re-launch of
these products, with certain modifications).
\12\ See Securities Exchange Act Release Nos. 88131 (February 5,
2020), 85 FR 7806 (February 11, 2020) (SR-NYSEAMER-2019-38) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, to
Allow Certain Flexible Equity Options To Be Cash Settled); and 97231
(March 31, 2023), 88 FR 20587 (April 6, 2023) (SR-NYSEAMER-2023-22)
(Notice of Filing and Immediate Effectiveness of Proposed Change to
Make a Clarifying Change to the Term Settlement Style Applicable to
Flexible Exchange Options).
---------------------------------------------------------------------------
[[Page 53551]]
With respect to position and exercise limits, cash-settled FLEX ETF
Options would be subject to the position limits set forth in Rule 8.35.
Accordingly, the Exchange proposes new Rule 8.35(c)(1)(B), which would
provide that a position in FLEX Equity Options where the underlying
security is an ETF and that is settled in cash pursuant to Rule
4.21(b)(5)(A)(ii) would be subject to the position limits set forth in
Rule 8.30, and subject to the exercise limits set forth in Rule
8.42.\13\ The proposed rule further states that positions in such cash-
settled FLEX Equity Options shall be aggregated with positions in
physically settled options on the same underlying ETF for the purpose
of calculating the position limits set forth in Rule 8.30, and the
exercise limits set forth in Rule 8.42.\14\ Given that each of the
underlying ETFs that would currently be eligible to have cash-
settlement as a contract term have established position and exercise
limits applicable to physically settled options, the Exchange believes
it is appropriate for the same position and exercise limits to also
apply to cash-settled options. Accordingly, of the 39 underlying
securities that would currently be eligible to have cash settlement as
a FLEX contract term, 25 would have a position limit of 250,000
contracts pursuant to Rule 8.30, Interpretation and Policy .02.\15\
Further, pursuant to Rule 8.30, Interpretation and Policy .07, eight
would have a position limit of 500,000 contracts; four (EEM, FXI, IWM,
and EFA) would have a position limit of 1,000,000 contracts; one (QQQ)
would have a position limit of 1,800,000 contracts; and one (SPY) would
have a position limit of 3,600,000.\16\
---------------------------------------------------------------------------
\13\ The Exchange proposes to add to proposed Rule 8.35(c)(1)(A)
a cross-reference to paragraph (d) of Rule 8.35, as Rule 8.35(d)
also contains provisions about position limits for FLEX Equity
Options that would be exceptions to the statement in Rule 8.35(c)
that FLEX Equity Options have no position limits (in addition to the
language in proposed Rule 8.35(c)(1)(B)). The Exchange also proposes
to add to Rule 8.35(d) a cross-reference to proposed Rule
8.35(c)(1)(B), as the proposed rule adds language regarding
aggregation of positions for purposes of position limits, which is
currently covered in paragraph (d). Further, the Exchange proposes
other nonsubstantive changes to Rule 8.35(c) to add a corresponding
change to proposed Rule 8.35(c)(1)(A) and to add paragraph numbering
and lettering, add subheadings, and delete certain introductory
words that are, as a result of the paragraph reorganization, no
longer necessary.
\14\ See proposed Rule 8.35(c)(1)(B). The aggregation of
position and exercise limits would include all positions on
physically settled FLEX and non-FLEX options on the same underlying
ETFs.
\15\ Rule 8.30, Interpretation and Policy .02(e) provides that
the position limit shall be 250,000 contracts for options: (i) on an
underlying security that had trading volume of at least 100,000,000
shares during the most recent six-month trading period; or (ii) on
an underlying security that had trading volume of at least
75,000,000 shares during the most recent six-month trading period
and has at least 300,000,000 shares currently outstanding. Twenty-
five of the thirty-nine underlying ETFs currently meet the
requirements under Interpretation and Policy .02(e).
\16\ These were based on position limits as of July 28, 2023.
Position limits are available on at OCC--Position Limits
(theocc.com). Position limits for ETFs are always determined in
accordance with the Exchange's Rules regarding position limits.
---------------------------------------------------------------------------
The Exchange understands that cash-settled ETF options are
currently traded in the OTC market by a variety of market participants,
e.g., hedge funds, proprietary trading firms, and pension funds.\17\
These options are not fungible with the exchange listed options. The
Exchange believes some of these market participants would prefer to
trade comparable instruments on an exchange, where they would be
cleared and settled through a regulated clearing agency. The Exchange
expects that users of these OTC products would be among the primary
users of exchange-traded cash-settled FLEX ETF Options. The Exchange
also believes that the trading of cash-settled FLEX ETF Options would
allow these same market participants to better manage the risk
associated with the volatility of underlying equity positions given the
enhanced liquidity that an exchange-traded product would bring.
---------------------------------------------------------------------------
\17\ As noted above, another option exchange received approval
to list certain cash-settled FLEX ETF Options. See supra note 12.
---------------------------------------------------------------------------
In the Exchange's view, cash-settled FLEX ETF Options traded on the
Exchange would have three important advantages over the contracts that
are traded in the OTC market. First, as a result of greater
standardization of contract terms, exchange-traded contracts should
develop more liquidity. Second, counter-party credit risk would be
mitigated by the fact that the contracts are issued and guaranteed by
OCC. Finally, the price discovery and dissemination provided by the
Exchange and its members would lead to more transparent markets. The
Exchange believes that its ability to offer cash-settled FLEX ETF
Options would aid it in competing with the OTC market and at the same
time expand the universe of products available to interested market
participants. The Exchange believes that an exchange-traded alternative
may provide a useful risk management and trading vehicle for market
participants and their customers. Further, the Exchange believes
listing cash-settled FLEX ETF Options would provide investors with
competition on an exchange platform, as another exchange as received
Commission approval to list the same options.\18\
---------------------------------------------------------------------------
\18\ See supra note 12.
---------------------------------------------------------------------------
The Exchange notes that OCC has received approval from the
Commission for rule changes that will accommodate the clearance and
settlement of cash-settled ETF Options.\19\ The Exchange has also
analyzed its capacity and represents that it and The Options Price
Reporting Authority (OPRA) have the necessary systems capacity to
handle the additional traffic associated with the listing of cash-
settled FLEX ETF Options. The Exchange believes any additional traffic
that would be generated from the introduction of cash-settled FLEX ETF
Options would be manageable. The Exchange expects that Trading Permit
Holders (``TPHs'') will not have a capacity issue as a result of this
proposed rule change. The Exchange also does not believe this proposed
rule change will cause fragmentation of liquidity. The Exchange will
monitor the trading volume associated with the additional options
series listed as a result of this proposed rule change and the effect
(if any) of these additional series on market fragmentation and on the
capacity of the Exchange's automated systems.
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 34-94910 (May 13,
2022), 87 FR 30531 (May 19, 2022) (SR-OCC-2022-003).
---------------------------------------------------------------------------
The Exchange does not believe that allowing cash settlement as a
contract term would render the marketplace for equity options more
susceptible to manipulative practices. The Exchange believes that
manipulating the settlement price of cash-settled FLEX ETF Options
would be difficult based on the size of the market for the underlying
ETFs that are the subject of this proposed rule change. The Exchange
notes that each underlying ETF in the table above is sufficiently
active to alleviate concerns about potential manipulative activity.
Further, in the Exchange's view, the vast liquidity in the 39
underlying ETFs that would currently be eligible to be traded as cash-
settled FLEX options under the proposal ensures a multitude of market
participants at any given time. Moreover, given the high level of
participation among market participants that enter quotes and/or orders
in physically settled options on these ETFs, the Exchange believes it
would be very difficult for a single participant to alter the price of
the underlying ETF or options overlying such ETF in any significant way
without exposing the would-be manipulator to regulatory scrutiny. The
Exchange further believes any attempt to manipulate the price of
[[Page 53552]]
the underlying ETF or options overlying such ETF would also be cost
prohibitive. As a result, the Exchange believes there is significant
participation among market participants to prevent manipulation of
cash-settled FLEX ETF Options.
Still, the Exchange believes it has an adequate surveillance
program in place and intends to apply the same program procedures to
cash-settled FLEX ETF Options that it applies to the Exchange's other
options products.\20\ FLEX options products and their respective
symbols are integrated into the Exchange's existing surveillance system
architecture and are thus subject to the relevant surveillance
processes. The Exchange believes that the existing surveillance
procedures at the Exchange are capable of properly identifying unusual
and/or illegal trading activity, which procedures the Exchange would
utilize to surveil for aberrant trading in cash-settled FLEX ETF
Options.
---------------------------------------------------------------------------
\20\ For example, the regulatory program for the Exchange
includes surveillance designed to identify manipulative and other
improper options trading, including, spoofing, marking the close,
front running, wash sales, etc.
---------------------------------------------------------------------------
With respect to regulatory scrutiny, the Exchange believes its
existing surveillance technologies and procedures adequately address
potential concerns regarding possible manipulation of the settlement
value at or near the close of the market. The Exchange notes that the
regulatory program operated by and overseen by the Cboe Global Markets,
the Exchange's parent company (``Cboe''), Regulatory Division (which
regulates the Exchange and its affiliated national securities
exchanges) \21\ includes cross-market surveillance designed to identify
manipulative and other improper trading, including spoofing, algorithm
gaming, marking the close and open, as well as more general, abusive
behavior related to front running, wash sales, quoting/routing, and Reg
SHO violations, that may occur on the Exchange or other markets. These
cross-market patterns incorporate relevant data from various markets
beyond the Exchange and its affiliates and from markets not affiliated
with the Exchange. The Exchange represents that its existing trading
surveillances and those of its affiliated markets are adequate to
monitor trading in the underlying ETFs and subsequent trading of
options on those securities on the Exchange, including cash-settled
FLEX ETF Options.\22\
---------------------------------------------------------------------------
\21\ Cboe and its affiliated securities exchanges maintain
regulatory services agreements with Financial Industry Regulatory
Authority, Inc. (``FINRA'') whereby FINRA provides certain
regulatory services to the exchanges, including cross-market
surveillance, investigation, and enforcement services.
\22\ Such surveillance procedures generally focus on detecting
securities trading subject to opening price manipulation, closing
price manipulation, layering, spoofing or other unlawful activity
impacting an underlying security, the option, or both. The Exchange
has price movement alerts, unusual market activity and order book
alerts active for all trading symbols.
---------------------------------------------------------------------------
Additionally, for options, the Exchange utilizes an array of
patterns that monitor manipulation of options, or manipulation of
equity securities (regardless of venue) for the purpose of impacting
options prices on the Exchange (i.e., mini-manipulation strategies).
That surveillance coverage is initiated once options begin trading on
the Exchange. Accordingly, the Exchange believes that the cross-market
surveillance performed by the Exchange or FINRA, on behalf of the
Exchange, coupled with the Cboe Regulatory Division's own monitoring
for violative activity on the Exchange comprise a comprehensive
surveillance program that is adequate to monitor for manipulation of
the underlying ETF and overlying option. Furthermore, the Exchange
believes that the existing surveillance procedures at the Exchange are
capable of properly identifying unusual and/or illegal trading
activity, which the Exchange would utilize to surveil for aberrant
trading in cash-settled FLEX ETF Options.
In addition to the surveillance procedures and processes described
above, improvements in audit trails (i.e., the Consolidated Audit
Trail), recordkeeping practices, and inter-exchange cooperation over
the last two decades have greatly increased the Exchange's ability to
detect and punish attempted manipulative activities. In addition, the
Exchange is a member of the Intermarket Surveillance Group (``ISG'').
The ISG members work together to coordinate surveillance and
investigative information sharing in the stock and options markets.\23\
For surveillance purposes, the Exchange would therefore have access to
information regarding trading activity in the pertinent underlying
securities.
---------------------------------------------------------------------------
\23\ See, e.g., Cboe Regulatory Circular 20-028, Establishment
of the CMRWG. (April 8, 2020)
---------------------------------------------------------------------------
The proposed rule change is designed to allow investors seeking to
effect cash-settled FLEX ETF Options with the opportunity for a
different method of settling option contracts at expiration if they
choose to do so. As noted above, market participants may choose cash
settlement because physical settlement possesses certain risks with
respect to volatility and movement of the underlying security at
expiration that market participants may need to hedge against. The
Exchange believes that offering innovative products flows to the
benefit of the investing public. A robust and competitive market
requires that exchanges respond to members' evolving needs by
constantly improving their offerings. Such efforts would be stymied if
exchanges were prohibited from offering innovative products for reasons
that are generally debated in academic literature. The Exchange
believes that introducing cash-settled FLEX ETF Options would further
broaden the base of investors that use FLEX Options to manage their
trading and investment risk, including investors that currently trade
in the OTC market for customized options, where settlement restrictions
do not apply. The proposed rule change is also designed to encourage
market makers to shift liquidity from the OTC market onto the Exchange,
which, it believes, would enhance the process of price discovery
conducted on the Exchange through increased order flow. The Exchange
also believes that this may open up cash-settled FLEX ETF Options to
more retail investors. The Exchange does not believe that this proposed
rule change raises any unique regulatory concerns because existing
safeguards--such as position limits (and the aggregation of cash-
settled positions with physically-settled positions), exercise limits
(and the aggregation of cash-settled positions with physically-settled
positions), and reporting requirements--would continue to apply. The
Exchange believes the proposed position and exercise limits may further
help mitigate the concerns that the limits are designed to address
about the potential for manipulation and market disruption in the
options and the underlying securities.\24\
---------------------------------------------------------------------------
\24\ See supra note 16.
---------------------------------------------------------------------------
Given the novel characteristics of cash-settled FLEX ETF Options,
the Exchange will conduct a review of the trading in cash-settled FLEX
ETF Options over an initial five-year period. The Exchange will furnish
five reports to the Commission based on this review, the first of which
would be provided within 60 days after the first anniversary of the
initial listing date of the first cash-settled FLEX ETF Option under
the proposed rule and each subsequent annual report to be provided
within 60 days after the second, third, fourth and fifth anniversary of
such initial listing. At a minimum, each report will provide a
comparison between the trading volume of all cash-settled FLEX ETF
Options listed under the proposed rule and physically settled options
on the
[[Page 53553]]
same underlying security, the liquidity of the market for such options
products and the underlying ETF, and any manipulation concerns arising
in connection with the trading of cash-settled FLEX ETF Options under
the proposed rule. The Exchange will also provide additional data as
requested by the Commission during this five-year period. The reports
will also discuss any recommendations the Exchange may have for
enhancements to the listing standards based on its review. The Exchange
believes these reports will allow the Commission and the Exchange to
evaluate, among other things, the impact such options have, and any
potential adverse effects, on price volatility and the market for the
underlying ETFs, the component securities underlying the ETFs, and the
options on the same underlying ETFs and make appropriate
recommendations, if any, in response to the reports.
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.\25\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \26\ 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.
Specifically, the Exchange believes that introducing cash-settled FLEX
ETF Options will increase order flow to the Exchange, increase the
variety of options products available for trading, and provide a
valuable tool for investors to manage risk.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposal to permit cash settlement
as a contract term for options on the specified group of equity
securities would remove impediments to and perfect the mechanism of a
free and open market as cash-settled FLEX ETF Options would enable
market participants to receive cash in lieu of shares of the underlying
security, which would, in turn, provide greater opportunities for
market participants to manage risk through the use of a cash-settled
product to the benefit of investors and the public interest. The
Exchange does not believe that allowing cash settlement as a contract
term for options on the specified group of equity securities would
render the marketplace for equity options more susceptible to
manipulative practices. As illustrated in the table above, each of the
qualifying underlying securities is actively traded and highly liquid
and thus would not be susceptible to manipulation because, over a six-
month period, each security had an average daily notional value of at
least $500 million and an ADV of at least 4,680,000 shares, which
indicates that there is substantial liquidity present in the trading of
these securities, and that there is significant depth and breadth of
market participants providing liquidity and of investor interest. The
Exchange believes the proposed bi-annual review to determine
eligibility for an underlying ETF to have cash settlement as a contract
term would remove impediments to and perfect the mechanism of a free
and open market as it would permit the Exchange to select only those
underlying ETFs that are actively traded and have robust liquidity as
each qualifying ETF would be required to meet the average daily
notional value and average daily volume requirements, as well as to
select the same underlying ETFs on which another exchange may list
cash-settled FLEX ETF Options.\27\
---------------------------------------------------------------------------
\27\ See supra note 12.
---------------------------------------------------------------------------
The Exchange believes the proposed change that, for FLEX ETF
Options, at least one of exercise style, expiration date, and exercise
price must differ from options in the non-FLEX market will provide
clarity and eliminate confusion regarding permissible terms of FLEX ETF
Options, including the proposed cash-settled FLEX ETF Options.
The Exchange believes that the data provided by the Exchange
supports the supposition that permitting cash settlement as a FLEX term
for the 39 underlying ETFs that would currently qualify to have cash
settlement as a contract term would broaden the base of investors that
use FLEX Options to manage their trading and investment risk, including
investors that currently trade in the OTC market for customized
options, where settlement restrictions do not apply.
The Exchange believes that the proposal to permit cash settlement
for certain FLEX ETF options would remove impediments to and perfect
the mechanism of a free and open market because the proposed rule
change would provide TPHs with enhanced methods to manage risk by
receiving cash if they choose to do so instead of the underlying
security. In addition, this proposal would promote just and equitable
principles of trade and protect investors and the general public
because cash settlement would provide investors with an additional tool
to manage their risk. Further, the Exchange notes that other exchanges
have previously received approval that allow for the trading of cash-
settled options \28\ and, specifically, cash-settled FLEX ETF Options
in an identical manner as the Exchange proposes to list them pursuant
to this rule filing.\29\ The proposed rule change therefore should not
raise issues for the Commission that it has not previously addressed.
---------------------------------------------------------------------------
\28\ See supra note 11.
\29\ See supra note 12.
---------------------------------------------------------------------------
The proposed rule change to permit cash settlement as a contract
term for options on up to 50 ETFs is designed to promote just and
equitable principles of trade in that the availability of cash
settlement as a contract term would give market participants an
alternative to trading similar products in the OTC market. By trading a
product in an exchange-traded environment (that is currently traded in
the OTC market), the Exchange would be able to compete more effectively
with the OTC market. The Exchange believes the proposed rule change is
designed to prevent fraudulent and manipulative acts and practices in
that it would lead to the migration of options currently trading in the
OTC market to trading on the Exchange. Also, any migration to the
Exchange from the OTC market would result in increased market
transparency. Additionally, the Exchange believes the proposed rule
change is designed to remove impediments to and to perfect the
mechanism for a free and open market and a national market system, and,
in general, to protect investors and the public interest in that it
should create greater trading and hedging opportunities and
flexibility. The proposed rule change should also result in enhanced
efficiency in initiating and closing out positions and heightened
contra-party creditworthiness due to the role of OCC as issuer and
guarantor of the proposed cash-settled options. Further, the proposed
rule change would result in increased competition by permitting the
Exchange to offer products that are currently available for trading
only in the OTC market and are approved to trade on another options
exchange.
[[Page 53554]]
The Exchange believes that establishing position limits for cash-
settled FLEX ETF Options to be the same as physically settled options
on the same underlying security, and aggregating positions in cash-
settled FLEX ETF Options with physically settled options on the same
underlying security for purposes of calculating position limits is
reasonable and consistent with the Act. By establishing the same
position limits for cash-settled FLEX ETF Options as for physically
settled options on the same underlying security and, importantly,
aggregating such positions, the Exchange believes that the position
limit requirements for cash-settled FLEX ETF Options should help to
ensure that the trading of cash-settled FLEX ETF Options would not
increase the potential for manipulation or market disruption and could
help to minimize such incentives. For the same reasons, the Exchange
believes the proposed exercise limits are reasonable and consistent
with the Act.
Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in cash-
settled FLEX ETF Options and the underlying ETFs. Regarding the
proposed cash settlement, the Exchange would use the same surveillance
procedures currently utilized for the Exchange's other FLEX Options.
For surveillance purposes, the Exchange would have access to
information regarding trading activity in the pertinent underlying
ETFs. The Exchange believes that limiting cash settlement to no more
than 50 underlying ETFs (currently, 39 ETFs would be eligible to have
cash-settlement as a contract term) would minimize the possibility of
manipulation due to the robust liquidity in both the equities and
options markets.
As a self-regulatory organization, the Exchange recognizes the
importance of surveillance, among other things, to detect and deter
fraudulent and manipulative trading activity as well as other
violations of Exchange rules and the federal securities laws. As
discussed above, the Cboe Regulatory Division has adequate surveillance
procedures in place to monitor trading in cash-settled FLEX ETF Options
and the underlying securities, including to detect manipulative trading
activity in both the options and the underlying ETF.\30\ The Exchange
further notes the liquidity and active markets in the underlying ETFs,
and the high number of market participants in both the underlying ETFs
and existing options on the ETFs, helps to minimize the possibility of
manipulation. The Exchange further notes that under Section 19(g) of
the Act, the Exchange, as a self-regulatory organization, is required
to enforce compliance by its members and persons associated with its
members with the Act, the rules and regulations thereunder, and the
rules of the Exchange.\31\ The Exchange believes its surveillance,
along with the liquidity criteria and position and exercise limits
requirements, are reasonably designed to mitigate manipulation and
market disruption concerns and will permit it to enforce compliance
with the proposed rules and other Exchange rules in accordance with
Section 19(g) of the Act. The Exchange performs ongoing evaluations of
its surveillance program to ensure its continued effectiveness and will
continue to review its surveillance procedures on an ongoing basis and
make any necessary enhancements and/or modifications that may be needed
for the cash settlement of FLEX ETF Options.
---------------------------------------------------------------------------
\30\ Among other things, the Cboe Regulatory Division's
regulatory program include cross-market surveillance designed to
identify manipulative and other improper trading, including
spoofing, algorithm gaming, marking the close and open, as well as
more general abusive behavior related to front running, wash sales,
quoting/routing, and Reg SHO violations, that may occur on the
Exchange and other markets. Furthermore, the Exchange stated that it
has access to information regarding trading activity in the
pertinent underlying securities as a member of ISG.
\31\ 15 U.S.C. 78s(g).
---------------------------------------------------------------------------
Additionally, the Exchange will monitor any effect additional
options series listed under the proposed rule change will have on
market fragmentation and the capacity of the Exchange's automated
systems. The Exchange will take prompt action, including timely
communication with the Commission and with other self-regulatory
organizations responsible for oversight of trading in options, the
underlying ETFs, and the ETFs' component securities, should any
unanticipated adverse market effects develop.
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 all TPHs that are registered
as FLEX Traders in accordance with the Exchange's Rules will be able to
trade cash-settled FLEX ETF Options in the same manner. This includes
the proposed change that, for FLEX ETF Options, at least one of
exercise style, expiration date, and exercise price must differ from
options in the non-FLEX market, which will provide clarity and
eliminate confusion regarding permissible terms of FLEX ETF Options,
including the proposed cash-settled FLEX ETF Options, with which all
FLEX Traders must comply. Additionally, positions in cash-settled FLEX
ETF Options of all FLEX Traders will be subject to the same position
limits, and such positions will be aggregated with positions in
physically settled options on the same underlying in the same manner.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as the proposal
is designed to increase competition for order flow on the Exchange in a
manner that is beneficial to investors because it is designed to
provide investors seeking to transact in FLEX ETF Options with the
opportunity for an alternative method of settling their option
contracts at expiration. The Exchange believes the proposed rule change
will encourage competition, as it may broaden the base of investors
that use FLEX Options to manage their trading and investment risk,
including investors that currently trade in the OTC market for
customized options, where settlement restrictions do not apply. The
proposed rule change would give market participants an alternative to
trading similar products in the OTC market. By trading a product in an
exchange-traded environment (that is currently traded in the OTC
market), the Exchange would be able to compete more effectively with
the OTC market. The Exchange believes the proposed rule change may
increase competition as it may lead to the migration of options
currently trading in the OTC market to trading on the Exchange. Also,
any migration to the Exchange from the OTC market would result in
increased market transparency and thus increased price competition.
The Exchange further notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues who offer similar functionality. The Exchange believes
the proposed rule change encourages competition amongst market
participants to provide tailored cash-settled FLEX ETF Option
contracts, as another exchange has received approval to list these
contracts (subject to the same position and
[[Page 53555]]
exercise limits as proposed).\32\ Therefore, the Exchange believes the
proposed rule change will enhance intermarket competition by providing
investors with a choice of exchange venues on which to trade cash-
settled FLEX ETF Options.
---------------------------------------------------------------------------
\32\ See supra note 12.
---------------------------------------------------------------------------
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
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 \33\ and Rule 19b-
4(f)(6)(iii) thereunder.\34\
---------------------------------------------------------------------------
\33\ 15 U.S.C. 78s(b)(3)(A).
\34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \35\ normally
does not become operative prior to 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\36\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange states,
among other things, that waiver of the 30-day operative delay will
protect investors by providing them with an immediate choice and an
additional venue where they can trade cash-settled FLEX ETF Options.
The Commission approved a substantially similar proposal by another
exchange that was subject to notice and comment and found consistent
with the Act.\37\ For these reasons, and because the proposed rule
change does not raise any novel regulatory issues that have not been
addressed, the Commission believes waiving the 30-day operative delay
is consistent with the protection of investors and the public interest.
Therefore, the Commission hereby waives the operative delay and
designates the proposal operative upon filing.\38\
---------------------------------------------------------------------------
\35\ 17 CFR 240.19b-4(f)(6).
\36\ 17 CFR 240.19b-4(f)(6)(iii).
\37\ See supra note 12.
\38\ For purposes only of waiving the 30-day operative delay,
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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CBOE-2023-036 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-CBOE-2023-036. 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-CBOE-2023-036 and should be
submitted on or before August 29, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------
\39\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16885 Filed 8-7-23; 8:45 am]
BILLING CODE 8011-01-P