[Federal Register Volume 89, Number 79 (Tuesday, April 23, 2024)]
[Notices]
[Pages 30401-30404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08570]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99975; File No. SR-BOX-2024-11]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Permit the 
Listing and Trading of Options Series With Tuesday and Thursday 
Expirations for Options on iShares Russell 2000 ETF (IWM)

April 17, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 12, 2024, BOX Exchange LLC (``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been 
prepared by the 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule 5050 (Series of Options 
Contracts Open for Trading) to permit the listing and trading of 
options series with Tuesday and Thursday expirations for options on 
iShares Russell 2000 ETF (IWM), specifically permitting two expiration 
dates for the proposed Tuesday and Thursday expirations in IWM. The 
text of the proposed rule change is available from the principal office 
of the Exchange, at the Commission's Public Reference Room and also on 
the Exchange's internet website at https://rules.boxexchange.com/rulefilings.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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 BOX Rule 5050 (Series of Options 
Contracts Open for Trading) to permit the listing and trading of 
options series with Tuesday and Thursday expirations for options on 
iShares Russell 2000 ETF (IWM), specifically permitting two expiration 
dates for the proposed Tuesday and Thursday expirations in IWM. This is 
a competitive filing that is based on a proposal submitted by NASDAQ 
ISE, LLC (``ISE'') and approved by the Commission.\5\
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    \5\ See Securities Exchange Act Release No. 99946 (April 11, 
2024) (Order Approving SR-ISE-2024-06).
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    Currently, Table 1 in IM-5050-6 specifies each symbol that 
qualifies as a Short Term Option Daily Expiration.\6\ Today, Table 1 
permits the listing and trading of Monday Short Term Option Daily 
Expirations and Wednesday Short Term Option Daily Expirations for IWM. 
At this time, the Exchange proposes to expand the Short Term Option 
Series Program to permit the listing and trading of no more than a 
total of two IWM Short Term Option Daily Expirations beyond the current 
week for each of Monday, Tuesday, Wednesday, and Thursday expirations 
at one time.\7\ The listing and trading of Tuesday and

[[Page 30402]]

Thursday Short Term Option Daily Expirations would be subject to IM-
5050-6.
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    \6\ The Exchange may open for trading on any Thursday or Friday 
that is a business day series of options on that class that expire 
at the close of business on each of the next five Fridays that are 
business days and are not Fridays in which standard expiration 
options series, Monthly Options Series, or Quarterly Options Series. 
Of these series of options, the Exchange may have no more than a 
total of five Short Term Option Expiration Dates. In addition, the 
Exchange may open for trading series of options on certain symbols 
that expire at the close of business on each of the next two 
Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are 
business days beyond the current week and are not business days in 
which standard expiration options series, Monthly Options Series, or 
Quarterly Options Series expire (``Short Term Option Daily 
Expirations''). See BOX IM-5050-6.
    \7\ The Exchange would amend the Tuesday and Thursday 
expirations for IWM in Table 1 in IM-5050-6 from ``0'' to ``2'' to 
permit Tuesday and Thursday expirations for options on IWM listed 
pursuant to the Short Term Option Series Program. The Exchange notes 
that Cboe Exchange, Inc. (``Cboe'') began listing Tuesday and 
Thursday expirations in the Russell 2000 Index Weeklys[supreg] 
(``RUTW'') and Mini-Russell 2000 Index Weeklys[supreg] (``MRUT'') on 
January 8, 2024.
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    Today, Tuesday Short Term Option Daily Expirations in SPDR S&P 500 
ETF Trust (SPY) and the INVESCO QQQ Trust\SM\, Series 1 (QQQ) may open 
for trading on any Monday or Tuesday that is a business day series of 
options on the symbols provided in Table 1 that expire at the close of 
business on each of the next two Tuesdays that are business days and 
are not business days in which standard expiration options series, 
Monthly Options Series, or Quarterly Options Series expire (``Tuesday 
Short Term Option Expiration Date'').\8\ Also, today, Thursday Short 
Term Option Daily Expirations in SPY and QQQ may open for trading on 
any Tuesday or Wednesday that is a business day series of options on 
the symbols provided in Table 1 that expire at the close of business on 
each of the next two Wednesdays that are business days and are not 
business days in which standard expiration options series, Monthly 
Options Series, or Quarterly Options Series expire (``Wednesday Short 
Term Option Expiration Date''). In the event that options on IWM expire 
on a Tuesday or Thursday and that Tuesday or Thursday is a business day 
in which standard expiration options series, Monthly Options Series, or 
Quarterly Options Series expire, the Exchange would skip that week's 
listing and instead list the following week; the two weeks would 
therefore not be consecutive. With this proposal, the Exchange would be 
able to open for trading series of options on IWM that expire at the 
close of business on each of the next two Mondays, Tuesdays, 
Wednesdays, and Thursdays, respectively, that are business days beyond 
the current week and are not business days in which standard expiration 
options series, Monthly Options Series, or Quarterly Options Series 
expire.\9\ The interval between strike prices for the proposed Tuesday 
and Thursday IWM Short Term Option Daily Expirations will be the same 
as those for Tuesday and Thursday IWM Short Term Option Daily 
Expirations in SPY and QQQ, applicable to the Short Term Option Series 
Program.\10\ IM-5050-1(b) provides that, notwithstanding any other 
provision regarding the interval of strike prices of series of options 
on Exchange-Traded Fund Shares in BOX Rule 5050, the interval of strike 
prices on options on IWM will be $1 or greater.\11\ Further, IM-5050-
6(b)(5) provides that the interval between strike prices on Short Term 
Option Series may be (i) $0.50 or greater where the strike price is 
less than $100, and $1 or greater where the strike price is between 
$100 and $150 for all option classes that participate in the Short Term 
Options Series Program; (ii) $0.50 for option classes that trade in one 
dollar increments in Related non-short Term Options and are in the 
Short Term Option Series Program; or (iii) $2.50 or greater where the 
strike price is above $150. Specifically, the Tuesday and Thursday IWM 
Short Term Option Daily Expirations will have a $0.50 strike interval 
minimum. As is the case with other equity options series listed 
pursuant to the Short Term Option Series Program, the Tuesday and 
Thursday IWM Short Term Option Daily Expiration series will be P.M.-
settled.
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    \8\ See BOX IM-5050-6.
    \9\ Today, IWM may trade on Mondays and Wednesdays, in addition 
to Fridays, as is the case for all options series.
    \10\ See BOX IM-5050-6(b)(5).
    \11\ Options on SPY, iShares Core S&P 500 ETF (``IVV''), QQQ, 
IWM, and the SPDR Dow Jones Industrial Average ETF (``DIA'') are 
also subject to IM-5050-1(b) strike intervals.
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    Pursuant to BOX Rule 100(a)(66),\12\ with respect to the Short Term 
Option Series Program, a Tuesday or Thursday expiration series shall 
expire on the first business day immediately prior to that Tuesday or 
Thursday, e.g., Monday or Wednesday of that week, respectively, if the 
Tuesday or Thursday is not a business day.
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    \12\ BOX Rule 100(a)(66) provides, ``The term `Short Term Option 
Series' means a series in an option class that is approved for 
listing and trading on BOX in which the series is opened for trading 
on any Monday, Tuesday, Wednesday, Thursday or Friday that is a 
business day and that expires on the Monday, Tuesday, Wednesday, 
Thursday, or Friday of the next business week, or, in the case of a 
series that is listed on a Friday and expires on a Monday, is listed 
one business week and one business day prior to that expiration. If 
a Tuesday, Wednesday, Thursday or Friday is not a business day, the 
series may be opened (or shall expire) on the first business day 
immediately prior to that Tuesday, Wednesday, Thursday or Friday, 
respectively. For a series listed pursuant to this section for 
Monday expiration, if a Monday is not a business day, the series 
shall expire on the first business day immediately following that 
Monday.''
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    Currently, for each option class eligible for participation in the 
Short Term Option Series Program, the Exchange is limited to opening 
thirty (30) series for each expiration date for the specific class.\13\ 
The thirty (30) series restriction does not include series that are 
open by other securities exchanges under their respective weekly rules; 
the Exchange may list these additional series that are listed by other 
options exchanges.\14\ This thirty (30) series restriction would apply 
to Tuesday and Thursday IWM Short Term Option Daily Expiration series 
as well.
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    \13\ See BOX IM-5050-6(b)(3) and (4).
    \14\ See BOX IM-5050-6(b)(1).
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    With this proposal, Tuesday and Thursday IWM Expirations would be 
treated the same as Tuesday and Thursday Expirations in SPY and QQQ. 
With respect to standard option series, Short Term Option Daily 
Expirations may expire in the same week in which standard option series 
on the same class expire.\15\ Further, as is the case today with other 
Tuesday and Thursday Short Term Option Daily Expirations, the Exchange 
would not permit Tuesday and Thursday Short Term Option Daily 
Expirations to expire on the same day in which standard expiration 
options series, Monthly Options Series, or Quarterly Options Series on 
the same class expire.\16\ Therefore, all Short Term Option Daily 
Expirations would expire at the close of business on each of the next 
two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that 
are business days beyond the current week and are not business days in 
which standard expiration options series, Monthly Options Series, or 
Quarterly Options Series expire.
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    \15\ See BOX IM-5050-6(b)(2).
    \16\ Id.
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    The Exchange does not believe that any market disruptions will be 
encountered with the introduction of P.M.-settled Tuesday and Thursday 
IWM Short Term Option Daily Expirations. The Exchange has the necessary 
capacity and surveillance programs in place to support and properly 
monitor trading in the proposed Tuesday and Thursday Short Term Option 
Daily Expirations. The Exchange currently trades P.M.-settled Short 
Term Option Series that expire Tuesday and Thursday for SPY and QQQ and 
has not experienced any market disruptions nor issues with capacity. 
Today, the Exchange has surveillance programs in place to support and 
properly monitor trading in Short Term Option Series that expire 
Tuesday and Thursday for SPY and QQQ.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Securities Exchange Act of 1934 
(the ``Act''),\17\ in general, and Section 6(b)(5) of the Act,\18\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and

[[Page 30403]]

coordination with persons engaged in 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. In particular, the Exchange 
believes that IWM Tuesday and Thursday Short Term Option Daily 
Expirations will allow market participants to purchase IWM options 
based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively. Further, the proposal to 
permit Tuesday and Thursday Short Term Option Daily Expirations for 
options on IWM listed pursuant to the Short Term Option Series Program, 
subject to the proposed limitation of two nearest expirations, would 
protect investors and the public interest by providing the investing 
public and other market participants more flexibility to closely tailor 
their investment and hedging decisions in IWM options, thus allowing 
them to better manage their risk exposure. In particular, the Exchange 
believes the Short Term Option Series Program has been successful to 
date and that Tuesday and Thursday IWM Short Term Daily Expirations 
should simply expand the ability of investors to hedge risk against 
market movements stemming from economic releases or market events that 
occur throughout the month in the same way that the Short Term Option 
Series Program has expanded the landscape of hedging. Similarly, the 
Exchange believes Tuesday and Thursday IWM Short Term Option Daily 
Expirations should create greater trading and hedging opportunities and 
provide customers the flexibility to tailor their investment objectives 
more effectively. BOX currently lists SPY and QQQ Tuesday and Thursday 
Short Term Option Daily Expirations.\19\
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ See BOX IM-5050-6(a).
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    With this proposal, Tuesday and Thursday IWM Expirations would be 
treated similarly to existing Tuesday and Thursday SPY and QQQ 
Expirations and would expire in the same week that standard monthly 
options expire on Fridays.\20\ Further, today, Tuesday and Thursday 
Short Term Option Daily Expirations do not expire on the same day in 
which standard expiration options series, Monthly Options Series or 
Quarterly Options Series expire.\21\ Today, all Short Term Option Daily 
Expirations expire at the close of business on each of the next two 
Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are 
business days and are not business days in which standard expiration 
options series, Monthly Options Series or Quarterly Options Series 
expire. There are no material differences in the treatment of Tuesday 
and Thursday SPY and QQQ Short Term Option Daily Expirations as 
compared to the proposed Tuesday and Thursday IWM Short Term Option 
Daily Expirations.
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    \20\ See BOX IM-5050-6(b)(2).
    \21\ Id.
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    Finally, the Exchange represents that it has an adequate 
surveillance program in place to detect manipulative trading in the 
proposed Tuesday and Thursday IWM Short Term Option Daily Expirations, 
in the same way that it monitors trading in the current Short Term 
Option Series and trading in Tuesday and Thursday SPY and QQQ 
Expirations. The Exchange also represents that it has the necessary 
systems capacity to support the new options series. Finally, the 
Exchange does not believe that any market disruptions will be 
encountered with the introduction of Tuesday and Thursday IWM Short 
Term Option Daily Expirations.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. In this regard and as indicated 
above, the Exchange notes that the rule change is being proposed as a 
competitive response to a filing submitted by ISE that was recently 
approved by the Commission.\22\ Similar to SPY and QQQ Tuesday and 
Thursday Expirations, the introduction of IWM Tuesday and Thursday 
Short Term Option Daily Expirations does not impose an undue burden on 
competition. The Exchange believes that it will, among other things, 
expand hedging tools available to market participants and continue the 
reduction of the premium cost of buying protection. The Exchange 
believes that IWM Tuesday and Thursday Short Term Option Daily 
Expirations will allow market participants to purchase IWM options 
based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively. The Exchange notes that 
Cboe began listing Tuesday and Thursday expirations in RUTW and MRUT on 
January 8, 2024.
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    \22\ See supra, note 3.
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    The Exchange does not believe the proposal will impose any burden 
on inter-market competition, as nothing prevents other options 
exchanges from proposing similar rules to list and trade Short Term 
Option Series with Tuesday and Thursday Short Term Option Daily 
Expirations. The Exchange notes that having Tuesday and Thursday IWM 
expirations is not a novel proposal, as SPY and QQQ Tuesday and 
Thursday Expirations are currently listed on BOX.\23\
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    \23\ See BOX IM-5050-6(a).
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    Further, the Exchange does not believe the proposal will impose any 
burden on intramarket competition, as all market participants will be 
treated in the same manner under this proposal.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \24\ and Rule 19b-4(f)(6) thereunder.\25\ 
Because the foregoing proposed rule change does not: (i) significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act \26\ and subparagraph (f)(6) of 
Rule 19b-4 thereunder.\27\
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    \24\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \28\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\29\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. According to 
the Exchange, the proposed rule change is a competitive

[[Page 30404]]

response to a filing submitted by Nasdaq ISE that was recently approved 
by the Commission.\30\ The Exchange has stated that waiver of the 30-
day operative delay would permit the Exchange to implement the proposal 
at the same time as its competitor exchanges, thus creating competition 
among Short Term Option Series. The Commission believes that the 
proposed rule change presents no novel issues and that waiver of the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Accordingly, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change as 
operative upon filing.\31\
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    \28\ 17 CFR 240.19b-4(f)(6).
    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ See supra note 5.
    \31\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-BOX-2024-11 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-BOX-2024-11. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-BOX-2024-11 and should be 
submitted on or before May 14, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-08570 Filed 4-22-24; 8:45 am]
BILLING CODE 8011-01-P