[Federal Register Volume 89, Number 156 (Tuesday, August 13, 2024)]
[Notices]
[Pages 65946-65957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17953]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100670; File No. SR-SAPPHIRE-2024-02]


Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 404, Series of Option Contracts Open for Trading

August 7, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on July 24, 2024, MIAX Sapphire, LLC (``MIAX Sapphire'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the 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\ 15 U.S.C. 78a.
    \3\ 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 Exchange Rule 404, Series of Option 
Contracts Open for Trading.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings, at the Exchange's principal office, and at the 
Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
Background
    In preparation for the launch of the MIAX Sapphire Exchange,\4\ the 
Exchange proposes to update Rule 404, Series of Option Contracts \5\ 
Open for Trading, in order to update the Rule to reflect changes that 
have occurred within the industry, and that were made to the Exchange's 
affiliate, MIAX Pearl Options, Rule 404, while MIAX Sapphire's Form 1 
Application to register as a national securities exchange was pending 
approval.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 100539 (July 15, 
2024), 89 FR 58848 (July 19, 2024) (File No. 10-240) (order 
approving application of MIAX Sapphire, LLC for registration as a 
national securities exchange).
    \5\ The term ``option contract'' means a put or a call issued, 
or subject to issuance, by the Clearing Corporation pursuant to the 
Rules of the Clearing Corporation. See Exchange Rule 100.
---------------------------------------------------------------------------

    The Exchange proposes to (i) copy a proposal originally submitted 
by Nasdaq ISE to adopt two Wednesday expirations for options on certain 
Exchange Traded Products (``Wednesday Expirations''); \6\ (ii) copy a 
proposal originally submitted by the Cboe Exchange to adopt the listing 
of option series \7\ that would expire at the close of business on the 
last business day of a calendar month (``Monthly Options Series''); \8\ 
(iii) copy a proposal originally submitted by Nasdaq ISE to permit the 
listing and trading of option series with Tuesday and Thursday 
expirations for options on iShares Russell 2000 ETF (IWM) (``Tuesday 
and Thursday IWM Expirations''); \9\ and (iv) copy a proposal

[[Page 65947]]

originally submitted by the Exchange's affiliate, MIAX Options, to 
adopt a new strike interval program (``Low Priced Stock Strike Price 
Interval Program'').\10\ Additionally, the Exchange notes that all the 
changes contained in the aforementioned proposals have been adopted by 
the Exchange's affiliate, MIAX Pearl Options,\11\ and are currently 
operative in MIAX Pearl Options Rule 404.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 98905 (November 13, 
2023), 88 FR 80348 (November 17, 2023) (SR-ISE-2023-11) (Order 
Approving a Proposed Rule Change to Amend the Short Term Option 
Series Program to Permit the Listing of Two Wednesday Expirations 
for Options on Certain Exchange Traded Products).
    \7\ The term ``series of options'' means all option contracts of 
the same class having the same exercise price and expiration date. 
See Exchange Rule 100.
    \8\ See Securities Exchange Act Release No. 98915 (Nov. 13, 
2023), 88 FR 80356 (November 17, 2023) (SR-CBOE-2023-049) (Order 
Approving a Proposed Rule Change To Adopt Monthly Options Series).
    \9\ See Securities Exchange Act Release No. 99946 (April 11, 
2024), 89 FR 27471 (April 17, 2024) (SR-ISE-2024-06) (Order 
Approving a Proposed Rule Change to Amend the Short Term Option 
Series Program).
    \10\ See Securities Exchange Release Act No. 98917 (November 13, 
2023), 88 FR 80361 (November 17, 2023) (SR-MIAX-2023-36) (Order 
Approving a Proposed Rule Change to Amend Exchange Rule 404, Series 
of Option Contracts Open for Trading).
    \11\ See Securities Exchange Release Act Nos. 99180 (December 
14, 2023), 88 FR 88148 (December 20, 2023) (SR-PEARL-2023-70); 99251 
(December 29, 2023), 89 FR 819 (January 5, 2024) (SR-PEARL-2023-72); 
99997 (April 19, 2024), 89 FR 32480 (April 26, 2024) (SR-PEARL-2024-
21); and 99034 (November 29, 2023), 88 FR 84379 (December 5, 2023) 
(SR-PEARL-2023-66).
---------------------------------------------------------------------------

Proposal
Wednesday Expirations
    The Exchange proposes to amend Interpretations and Policies .02 to 
expand the Short Term Option Series Program to permit the listing of 
two Wednesday expirations for options on United States Oil Fund, LP 
(``USO''), United States Natural Gas Fund, LP (``UNG''), SPDR Gold 
Shares (``GLD''), iShares Silver Trust (``SLV''), and iShares 20+ Year 
Treasury Bond ETF (``TLT'') (collectively ``Exchange Traded Products'' 
or ``ETPs'').
    Currently, as set forth in Policy .02 of Rule 404, after an option 
class \12\ has been approved for listing and trading on the Exchange, 
the Exchange may open for trading on any Thursday or Friday that is a 
business day (``Short Term Option Opening Date'') series of options on 
that class that expire at the close of business on each of the next 
five Fridays that are business days and are not Fridays in which 
monthly options series or Quarterly Options Series expire (``Friday 
Short Term Option Expiration Dates''). The Exchange may have no more 
than a total of five Short Term Option Friday Expiration Dates (``Short 
Term Option Weekly Expirations''). If the Exchange is not open for 
business on the respective Thursday or Friday, the Short Term Option 
Opening Date for Short Term Option Weekly Expirations will be the first 
business day immediately prior to that respective Thursday or Friday. 
Similarly, if the Exchange is not open for business on a Friday, the 
Short Term Option Expiration Date for Short Term Option Weekly 
Expirations will be the first business day immediately prior to that 
Friday.
---------------------------------------------------------------------------

    \12\ The terms ``class of options'' or ``option class'' means 
all option contracts covering the same underlying security. See 
Exchange Rule 100.
---------------------------------------------------------------------------

    Additionally, the Exchange may open for trading series of options 
on the symbols provided in Table 1 of Policy .02 of Rule 404 that 
expire at the close of business on each of the next two Mondays, 
Tuesdays, Wednesdays, and Thursdays, respectively, that are business 
days and are not business days in which monthly options series or 
Quarterly Options Series expire (``Short Term Option Daily 
Expirations''). For those symbols listed in Table 1, the Exchange may 
have no more than a total of two Short Term Option Daily Expirations 
for each of Monday, Tuesday, Wednesday, and Thursday expirations at one 
time.
    At this time, the Exchange proposes to expand the Short Term Option 
Daily Expirations to permit the listing and trading of options on USO, 
UNG, GLD, SLV, and TLT expiring on Wednesdays. The Exchange proposes to 
permit two Short Term Option Expiration Dates beyond the current week 
for each Wednesday expiration at one time.\13\ In order to effectuate 
the proposed changes, the Exchange would add USO, UNG, GLD, SLV, and 
TLT to Table 1 of Policy .02 of Rule 404, which specifies each symbol 
that qualifies as a Short Term Option Daily Expiration.
---------------------------------------------------------------------------

    \13\ Consistent with the current operation of the rule, the 
Exchange notes that if it adds a Wednesday expiration on a Tuesday, 
it could technically list three outstanding Wednesday expirations at 
one time. The Exchange will therefore clarify the rule text in 
Policy .02 of Rule 404 to specify that it can list two Short Term 
Option Expiration Dates beyond the current week for each Monday, 
Tuesday, Wednesday, and Thursday expiration.
---------------------------------------------------------------------------

    The proposed Wednesday USO, UNG, GLD, SLV, and TLT expirations will 
be similar to the current Wednesday SPY, QQQ, and IWM Short Term Option 
Daily Expirations set forth in Policy .02 of Rule 404, such that the 
Exchange may open for trading on any Tuesday or Wednesday that is a 
business day (beyond the current week) series of options on USO, UNG, 
GLD, SLV, and TLT to expire on any Wednesday of the month that is a 
business day and is not a Wednesday in which Quarterly Options Series 
expire (``Wednesday USO Expirations,'' ``Wednesday UNG Expirations,'' 
``Wednesday GLD Expirations,'' ``Wednesday SLV Expirations,'' and 
``Wednesday TLT Expirations'') (collectively, ``Wednesday ETP 
Expirations'').\14\ In the event Short Term Option Daily Expirations 
expire on a Wednesday and that Wednesday is the same day that a 
Quarterly Options Series expires, the Exchange would skip that week's 
listing and instead list the following week; the two weeks would 
therefore not be consecutive. Today, Wednesday expirations in SPY, QQQ, 
and IWM similarly skip the weekly listing in the event the weekly 
listing expires on the same day in the same class as a Quarterly Option 
Series.
---------------------------------------------------------------------------

    \14\ While the relevant rule text in Policy .02 of Rule 404 also 
indicates that the Exchange will not list such expirations on a 
Wednesday that is a business day in which monthly options series 
expire, practically speaking this would not occur, as the Exchange 
would not list any ``Wednesday Expirations'' that would expire on 
the close of business on a Wednesday that is a business day where 
standard expiration option series, Monthly Option Series, or 
Quarterly Options Series expire.
---------------------------------------------------------------------------

    USO, UNG, GLD, SLV, and TLT Friday expirations would continue to 
have a total of five Short Term Option Expiration Dates provided those 
Friday expirations are not Fridays in which monthly options series or 
Quarterly Options Series expire (``Friday Short Term Option Expiration 
Dates'').
    Similar to Wednesday SPY, QQQ, and IWM Short Term Option Daily 
Expirations within Policy .02 of Rule 404, the Exchange proposes that 
it may open for trading on any Tuesday or Wednesday that is a business 
day series of options on USO, UNG, GLD, SLV, and TLT 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 Quarterly Options Series 
expire.
    The interval between strike prices for the proposed Wednesday ETP 
Expirations will be the same as those for the current Short Term Option 
Series for Friday expirations applicable to the Short Term Option 
Series Program.\15\ Specifically, the Wednesday ETP Expirations will 
have a strike interval of $0.50 or greater for strike prices below 
$100, $1 or greater for strike prices between $100 and $150, and $2.50 
or greater for strike prices above $150.\16\ As is the case with other 
equity options listed pursuant to the Short Term Option Series Program, 
the Wednesday ETP Expirations series will be P.M.-settled.
---------------------------------------------------------------------------

    \15\ See Policy .02(e) of Rule 404.
    \16\ Id.
---------------------------------------------------------------------------

    With respect to Wednesday Expirations, the Exchange may open for 
trading on any Tuesday or Wednesday that is a business day series of 
options on the symbols provided in Table 1 of Interpretations and 
Policies .02 of Rule 404, that expire at the close of business on each 
of the next two Wednesdays.\17\ If that Wednesday is not a business 
day, the series shall expire on the first business day immediately 
prior to that

[[Page 65948]]

Wednesday, e.g., Tuesday of that week.\18\
---------------------------------------------------------------------------

    \17\ See Interpretation and Policy .02 of Exchange Rule 404.
    \18\ See Exchange Rule 100, ``Short Term Option Series.''
---------------------------------------------------------------------------

    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.\19\ 
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.\20\ With the proposed changes, this thirty (30) 
series restriction would apply to Wednesday USO, UNG, GLD, SLV, and TLT 
Short Term Option Daily Expirations as well. In addition, the Exchange 
will be able to list series that are listed by other exchanges, 
assuming that they file similar rules with the Commission to list 
Wednesday ETP Expirations.
---------------------------------------------------------------------------

    \19\ See Policy .02(c) of Rule 404.
    \20\ Id.
---------------------------------------------------------------------------

    Further, as with Wednesday SPY, QQQ, and IWM Expirations, the 
Exchange would not permit Wednesday ETP Expirations to expire on a 
business day in which monthly options series or Quarterly Options 
Series expire. Therefore, all Short Term Option Daily Expirations would 
expire at the close of business on each of the next two Wednesdays that 
are business days and are not business days in which monthly options 
series or Quarterly Options Series expire. The Exchange believes that 
it is reasonable to not permit two expirations on the same day in which 
a monthly options series or a Quarterly Options Series would expire 
because those options would be duplicative of each other.
    The Exchange does not believe that any market disruptions will be 
encountered with the introduction of Wednesday ETP Expirations. The 
Exchange has the necessary capacity and surveillance programs in place 
to support and properly monitor trading in the proposed Wednesday ETP 
Expirations. The Exchange currently trades P.M.-settled Short Term 
Option Series that expire on Wednesday for SPY, QQQ, and IWM 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 Wednesday for 
SPY, QQQ, and IWM. Additionally, the Exchange notes that this change is 
substantively identical to a proposal adopted by the Exchange's 
affiliate, MIAX Pearl Options.\21\
---------------------------------------------------------------------------

    \21\ See Securities Exchange Release Act No. 99180 (December 14, 
2023), 88 FR 88148 (December 20, 2023) (SR-PEARL-2023-70).
---------------------------------------------------------------------------

Monthly Options Series
    The Exchange proposes to amend Rule 404 to accommodate the listing 
of options series that would expire at the close of business on the 
last business day of a calendar month (``Monthly Options Series'').
    Pursuant to new proposed Interpretations and Policies .13 to 
Exchange Rule 404, the Exchange may list Monthly Options Series for up 
to five currently listed option classes that are either index options 
or options on exchange-traded funds (``ETFs'').\22\ In addition, the 
Exchange may also list Monthly Options Series on any options classes 
that are selected by other securities exchanges that employ a similar 
program under their respective rules.\23\ The Exchange may list 12 
expirations for Monthly Options Series. Monthly Options Series need not 
be for consecutive months; however, the expiration date of a 
nonconsecutive expiration may not be beyond what would be considered 
the last expiration date if the maximum number of expirations were 
listed consecutively.\24\ Other expirations in the same class are not 
counted as part of the maximum numbers of Monthly Options Series 
expirations for a class.\25\ Monthly Options Series will be P.M.-
settled.\26\
---------------------------------------------------------------------------

    \22\ The Exchange proposes to amend Exchange Rule 404(a) to 
provide that proposed Interpretation and Policy .13 to Exchange Rule 
404 will describe how the Exchange will fix a specific expiration 
date and exercise price for Monthly Options Series and that proposed 
Interpretation and Policy .13 to Exchange Rule 404 will govern the 
procedures for opening Monthly Options Series, respectively. This is 
consistent with language in current Exchange Rules 404(a) for other 
Short Term Options Series and Quarterly Options Series.
    \23\ Currently, Cboe Exchange, Inc. has a substantively 
identical program. See Securities Exchange Act Release No. 98915 
(Nov. 13, 2023) (SR-CBOE-2023-049) (Order Approving a Proposed Rule 
Change To Adopt Monthly Options Series). See also Cboe Exchange Rule 
4.5(g).
    \24\ The Exchange notes this provision considers consecutive 
monthly listings. In other words, as other expirations (such as 
Quarterly Options Series) are not counted as part of the maximum, 
those expirations would not be considered when considering when the 
last expiration date would be if the maximum number were listed 
consecutively. For example, if it is January 2024 and the Exchange 
lists Quarterly Options Series in class ABC with expirations in 
March, June, September, December, and the following March, the 
Exchange could also list Monthly Options Series in class ABC with 
expirations in January, February, April, May, July, August, October, 
and November 2024 and January and February of 2025. This is because, 
if Quarterly Options Series, for example, were counted, the Exchange 
would otherwise never be able to list the maximum number of Monthly 
Options Series. This is consistent with the listing provisions for 
Quarterly Options Series, which permit calendar quarter expirations. 
The need to list series with the same expiration in the current 
calendar year and the following calendar year (whether Monthly or 
Quarterly expiration) is to allow market participants to execute 
one-year strategies pursuant to which they may not roll their 
exposures in the longer-dated options (e.g., January 2025) prior to 
the expiration of the nearer-dated option (e.g., January 2024).
    \25\ See proposed Interpretation and Policy .13(b) to Exchange 
Rule 404.
    \26\ See proposed Interpretation and Policy .13(c) to Exchange 
Rule 404.
---------------------------------------------------------------------------

    The strike price of each Monthly Options Series will be fixed at a 
price per share, with at least two, but no more than five, strike 
prices above and at least two, but no more than five, strike prices 
below the value of the underlying index or price of the underlying 
security at about the time that a Monthly Options Series is opened for 
trading on the Exchange. The Exchange will list strike prices for 
Monthly Options Series that are reasonably related to the current price 
of the underlying security or current index value of the underlying 
index to which such series relates at about the time such series of 
options is first opened for trading on the Exchange. The term 
``reasonably related to the current price of the underlying security or 
index value of the underlying index'' means that the exercise price is 
within 30% of the current underlying security price or index value.\27\ 
Additional Monthly Options Series of the same class may be open for 
trading on the Exchange when the Exchange deems it necessary to 
maintain an orderly market, to meet Member \28\ demand, or when the 
market price of the underlying security moves substantially from the 
initial exercise price or prices. To the extent that any additional 
strike prices are listed by the Exchange, such additional strike prices 
will be within 30% above or below the closing price of the underlying 
index or security on the preceding day. The Exchange may also open 
additional strike prices of Monthly Options Series that are more than 
30% above or below the current price of the underlying

[[Page 65949]]

security, provided that demonstrated Member interest exists for such 
series, as expressed by institutional, corporate, Members or their 
brokers. Market Makers trading for their own account will not be 
considered when determining Member interest under this provision. The 
opening of the new Monthly Options Series will not affect the series of 
options of the same class previously opened.\29\ The interval between 
strike prices on Monthly Options Series will be the same as the 
interval for strike prices for series in that same options class that 
expire in accordance with the normal monthly expiration cycle.\30\
---------------------------------------------------------------------------

    \27\ See proposed Interpretation and Policy .13(d). The Exchange 
notes these proposed provisions are consistent with the initial 
series provision for the Quarterly Options Series program in 
Interpretation and Policy .03 to Exchange Rule 404. While different 
than the initial strike listing provision for the Quarterly Options 
Series program in current Interpretation and Policy .03 to Exchange 
Rule 404, the Exchange believes the proposed provision is 
appropriate, as it contemplates classes that may have strike 
intervals of $5 or greater.
    \28\ The term ``Member'' means an individual or organization 
that is registered with the Exchange pursuant to Chapter II of MIAX 
Pearl Rules for purposes of trading on the Exchange as an 
``Electronic Exchange Member'' or ``Market Maker.'' Members are 
deemed ``members'' under the Exchange Act. See Exchange Rule 100.
    \29\ See proposed Interpretation and Policy .13(e) to Exchange 
Rule 404.
    \30\ See proposed Interpretation and Policy .13(f) to Exchange 
Rule 404; see also Interpretations and Policies .01 and .04, .06, 
.08, .09, .10 to Exchange Rule 404 (permissible strike prices for 
ETF classes) and Interpretations and Policies .05, .07, .11 to 
Exchange Rule 404 (permissible strike prices for index options).
---------------------------------------------------------------------------

    By definition, Monthly Options Series can never expire in the same 
week that a standard options series that expires on the third Friday of 
a month in the same class expires. The same, however, is not the case 
with respect to Short Term Options Series or Quarterly Options Series. 
Therefore, to avoid any confusion in the marketplace, the Exchange 
proposes to amend Interpretation and Policy .02 to Exchange Rule 404 to 
provide that the Exchange will not list a Short Term Options Series in 
a class on a date on which a Monthly Options Series or Quarterly 
Options Series expires.\31\ Similarly, proposed Interpretation and 
Policy .13(b) to Exchange Rule 404 provides that no Monthly Options 
Series may expire on a date that coincides with an expiration date of a 
Quarterly Options Series in the same index or ETF class. In other 
words, the Exchange will not list a Short Terms Options Series on an 
index or ETF if a Monthly Options Series on that index or ETF were to 
expire on the same date, nor will the Exchange list a Monthly Options 
Series on an index or ETF if a Quarterly Options Series on that ETF 
were to expire on the same date to prevent the listing of series with 
concurrent expirations.\32\
---------------------------------------------------------------------------

    \31\ The Exchange also proposes to make a non-substantive change 
to Interpretation and Policy .02 to Exchange Rule 404 to change 
current references to ``monthly options series'' to ``standard 
expiration options series'' (i.e., series that expire on the third 
Friday of a month), to eliminate potential confusion. The current 
references to ``monthly options series'' are intended to refer to 
those series that expire on the third Friday of a month, which are 
generally referred to in the industry as standard expirations.
    \32\ The Exchange notes this would not prevent the Exchange from 
listing a P.M.-settled Monthly Options Series on an index with the 
same expiration date as an A.M.-settled Short Term Options Series on 
the same index, both of which may expire on a Friday. The Exchange 
believes this concurrent listing would provide investors with yet 
another hedging mechanism and is reasonable given these series would 
not be identical (unlike if they were both P.M.-settled). This could 
not occur with respect to ETFs, as all Short Term Options Series on 
ETFs are P.M.-settled.
---------------------------------------------------------------------------

    With respect to Monthly Options Series added pursuant to proposed 
Interpretation and Policy .13(a)-(f) to Exchange Rule 404, the Exchange 
will, on a monthly basis, review series that are outside a range of 
five strikes above and five strikes below the current price of the 
underlying index or security, and delist series with no open interest 
in both the put and the call series having a strike: (i) higher than 
the highest strike price with open interest in the put and/or call 
series for a given expiration month; and (ii) lower than the lowest 
strike price with open interest in the put and/or call series for a 
given expiration month. Notwithstanding this delisting policy, Member 
requests to add strikes and/or maintain strikes in Monthly Options 
Series in series eligible for delisting will be granted. In connection 
with this delisting policy, if the Exchange identifies series for 
delisting, the Exchange will notify other options exchanges with 
similar delisting policies regarding eligible series for delisting and 
will work with such other exchanges to develop a uniform list of series 
to be delisted, so as to ensure uniform series delisting of multiply 
listed Monthly Options Series.
    The Exchange believes that Monthly Options Series will provide 
investors with another flexible and valuable tool to manage risk 
exposure, minimize capital outlays, and be more responsive to the 
timing of events affecting the securities that underlie options 
contracts. The Exchange believes limiting Monthly Options Series to 
five classes will ensure the addition of these new series will have a 
negligible impact on the Options Price Reporting Authority (``OPRA'') 
and the Exchange's quoting capacity. The Exchange represents it has the 
necessary systems capacity to support new options series that will 
result from the introduction of Monthly Options Series.
    The Exchange also represents its current surveillance programs will 
apply to Monthly Options Series and will properly monitor trading in 
the proposed Monthly Options Series. The Exchange currently lists 
Quarterly Options Series in certain ETF classes,\33\ which expire at 
the close of business at the end of four calendar months (i.e., the end 
of each calendar quarter), and has not experienced any market 
disruptions nor issues with capacity. The Exchange's surveillance 
programs currently in place to support and properly monitor trading in 
these Quarterly Options Series, as well as Short Term Options Series 
and standard expiration series, will apply to the proposed Monthly 
Options Series. The Exchange believes its surveillances continue to be 
designed to deter and detect violations of its Rules, including 
position and exercise limits and possible manipulative behavior, and 
these surveillances will apply to Monthly Options Series that the 
Exchange determines to list for trading. Ultimately, the Exchange does 
not believe the proposed rule change raises any unique regulatory 
concerns because existing safeguards--such as position and exercise 
limits (and the aggregation of options overlying the same index or ETF) 
and reporting requirements--would continue to apply. Additionally, the 
Exchange notes that this change is substantively identical to a 
proposal adopted by the Exchange's affiliate, MIAX Pearl Options.\34\
---------------------------------------------------------------------------

    \33\ The Exchange notes it currently lists quarterly expirations 
on certain ETF options pursuant to Interpretation and Policy .03 to 
Exchange Rule 404.
    \34\ See Securities Exchange Release Act No. 99251 (December 29, 
2023), 89 FR 819 (January 5, 2024) (SR-PEARL-2023-72).
---------------------------------------------------------------------------

Tuesday and Thursday IWM Expirations

    Currently, Table 1 in Interpretations and Policies .02 of Exchange 
Rule 404 specifies each symbol that qualifies as a Short Term Option 
Daily Expiration.\35\ 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,

[[Page 65950]]

and Thursday expirations at one time.\36\ The listing and trading of 
Tuesday and Thursday Short Term Option Daily Expirations would be 
subject to Interpretations and Policies .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    \35\ 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 Interpretations and Policies .02 of Exchange 
Rule 404.
    \36\ The Exchange would amend the Tuesday and Thursday 
expirations for IWM in Table 1 in Interpretations and Policies .02 
of Exchange Rule 404 from ``0'' to ``2'' to permit Tuesday and 
Thursday expirations for options on IWM listed pursuant to the Short 
Term Option Series. 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. See Securities 
Exchange Act Release No. 98621 (September 28, 2023), 88 FR 68896 
(October 4, 2023) (SR-CBOE-2023-054) (a Proposed Rule Change To 
Amend Rule 4.13); Securities Exchange Act Release No. 98957 
(November 15, 2023), 88 FR 81130 (November 21, 2023) (SR-CBOE-2023-
054) (Order Approving a Proposed Rule Change To Amend Rule 4.13 To 
Expand the Nonstandard Expirations Program To Include P.M.-Settled 
Options on Broad-Based Indexes That Expire on Tuesday or Thursday); 
See also Cboe Global Markets, Inc., Cboe To Offer Daily Expiries For 
Russell 2000 Index Options Suite, Beginning January 8, 2024, 
available at https://ir.cboe.com/news/news-details/2023/Cboe-TO-OFFER-DAILY-EXPIRIES-FOR-RUSSELL-2000-INDEX-OPTIONS-SUITE-BEGINNING-JANUARY-8-2024/default.aspx (last visit February 14, 2024).
---------------------------------------------------------------------------

    Today, Tuesday Short Term Option Daily Expirations in SPDR S&P 500 
ETF Trust (``SPY'') and Invesco QQQ Trust\SM\ (``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'').\37\ 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'').
---------------------------------------------------------------------------

    \37\ See Interpretation and Policy .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    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.\38\
---------------------------------------------------------------------------

    \38\ Today, IWM may trade on Mondays and Wednesdays in addition 
to Fridays, as is the case for all options series.
---------------------------------------------------------------------------

    The interval between strike prices for the proposed Tuesday and 
Thursday IWM Short Term Option Daily Expirations will be the same as 
those for Tuesday and Thursday Short Term Option Daily Expirations in 
SPY and QQQ, applicable to the Short Term Option Series Program.\39\
---------------------------------------------------------------------------

    \39\ See Interpretation and Policy .10 of Exchange Rule 404.
---------------------------------------------------------------------------

    Interpretations and Policies .10 of Exchange Rule 404 provides 
that, notwithstanding any other provision regarding the interval of 
strike prices of series of options on Exchange-Traded Fund Shares in 
Exchange Rule 404, the interval of strike prices on options on IWM will 
be $1 or greater.\40\ Further, Interpretations and Policies .02(e) of 
Exchange Rule 404 provides that the strike price interval for Short 
Term Option Series may be $0.50 or greater for option classes that 
trade in $1 strike price intervals and are in the Short Term Option 
Series Program. Therefore, 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.
---------------------------------------------------------------------------

    \40\ 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 Interpretations and Policies .10 of Exchange Rule 
404.
---------------------------------------------------------------------------

    Pursuant to Exchange Rule 100,\41\ 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.
---------------------------------------------------------------------------

    \41\ The term ``Short Term Option Series'' means a series in an 
option class that is approved for listing and trading on the 
Exchange 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. See Exchange 
Rule 100.
---------------------------------------------------------------------------

    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.\42\ 
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.\43\ This thirty (30) series restriction would apply 
to Tuesday and Thursday IWM Short Term Option Daily Expiration series 
as well.
---------------------------------------------------------------------------

    \42\ See Interpretation and Policy .02(c) and (d) of Exchange 
Rule 404.
    \43\ See Interpretation and Policy .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    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 expiration option series, Short Term Option 
Daily Expirations may expire in the same week in which standard 
expiration option series on the same class expire. In the case of 
Monthly Options Series and Quarterly Options Series, no Short Term 
Option Series may expire on the same day as an expiration of a Monthly 
Options Series or Quarterly Options Series, respectively, in the same 
class.\44\ 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.
---------------------------------------------------------------------------

    \44\ See Interpretation and Policy .02(b) of Exchange Rule 404.
---------------------------------------------------------------------------

    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

[[Page 65951]]

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. Additionally, the Exchange 
notes that this change is substantively identical to a proposal adopted 
by the Exchange's affiliate, MIAX Pearl Options.\45\
---------------------------------------------------------------------------

    \45\ See Securities Exchange Release Act No. 99997 (April 19, 
2024), 89 FR 32480 (April 26, 2024) (SR-PEARL-2024-21).
---------------------------------------------------------------------------

Low Priced Stock Strike Price Interval Program
    Currently, Exchange Rule 404, Series of Option Contracts Open for 
Trading, describes the process and procedures for listing and trading 
series of options on the Exchange. Rule 404 provides for a $2.50 Strike 
Price Program, where the Exchange may select up to 60 option classes on 
individual stocks for which the interval of strike prices will be $2.50 
where the strike price is greater than $25.00 but less than $50.00.\46\ 
Rule 404 also provides for a $1 Strike Price Interval Program, where 
the interval between strike prices of series of options on individual 
stocks may be $1.00 or greater provided the strike price is $50.00 or 
less, but not less than $1.00.\47\ Additionally, Rule 404 provides for 
a $0.50 Strike Program.\48\ The interval of strike prices of series of 
options on individual stocks may be $0.50 or greater beginning at $0.50 
where the strike price is $5.50 or less, but only for options classes 
whose underlying security closed at or below $5.00 in its primary 
market on the previous trading day and which have national average 
daily volume that equals or exceeds 1,000 contracts per day as 
determined by The Options Clearing Corporation during the preceding 
three calendar months. The listing of $0.50 strike prices is limited to 
options classes overlying no more than 20 individual stocks (the 
``$0.50 Strike Program'') as specifically designated by the Exchange. 
The Exchange may list $0.50 strike prices on any other option classes 
if those classes are specifically designated by other securities 
exchanges that employ a similar $0.50 Strike Program under their 
respective rules. A stock shall remain in the $0.50 Strike Program 
until otherwise designated by the Exchange.\49\
---------------------------------------------------------------------------

    \46\ See Exchange Rule 404(f).
    \47\ See Interpretation and Policy .01(a) of Rule 404.
    \48\ See Interpretation and Policy .04 of Rule 404.
    \49\ Id.
---------------------------------------------------------------------------

    The Exchange proposes to adopt a new strike interval program for 
underlying stocks that are not in the aforementioned $0.50 Strike 
Program (or the Short Term Option Series Program) \50\ and that close 
below $2.50 and have an average daily trading volume of at least 
1,000,000 shares per day for the three (3) preceding calendar months. 
The $0.50 Strike Program considers stocks that have a closing price at 
or below $5.00 whereas the Exchange's proposal will consider stocks 
that have a closing price below $2.50. Currently, there is a subset of 
stocks that are not included in the $0.50 Strike Program as a result of 
the limitations of that program which provides that the listing of 
$0.50 strike prices shall be limited to option classes overlying no 
more than 20 individual stocks as specifically designated by the 
Exchange and requires a national average daily volume that equals or 
exceeds 1,000 contracts per day as determined by The Options Clearing 
Corporation during the preceding three calendar months.\51\ Therefore, 
the Exchange is proposing to implement a new strike interval program 
termed the ``Low Priced Stock Strike Price Interval Program.''
---------------------------------------------------------------------------

    \50\ See Interpretation and Policy .02 of Rule 404.
    \51\ See Interpretation and Policy .04 of Rule 404.
---------------------------------------------------------------------------

    To be eligible for the inclusion in the Low Priced Stock Strike 
Price Interval Program, an underlying stock must (i) close below $2.50 
in its primary market on the previous trading day; and (ii) have an 
average daily trading volume of at least 1,000,000 shares per day for 
the three (3) preceding calendar months. The Exchange notes that there 
is no limit to the number of classes that will be eligible for 
inclusion in the proposed program, provided, of course, that the 
underlying stocks satisfy both the price and average daily trading 
volume requirements of the proposed program.
    The Exchange also proposes that after a stock is added to the Low 
Priced Stock Strike Price Interval Program, the Exchange may list $0.50 
strike price intervals from $0.50 up to $2.00.\52\ For the purpose of 
adding strikes under the Low Priced Stock Strike Price Interval 
Program, the ``price of the underlying stock'' shall be measured in the 
same way as ``the price of the underlying security'' as set forth in 
Rule 404A(b)(1).\53\ Further, no additional series in $0.50 intervals 
may be listed if the underlying stock closes at or above $2.50 in its 
primary market. Additional series in $0.50 intervals may not be added 
until the underlying stock again closes below $2.50.
---------------------------------------------------------------------------

    \52\ While the Exchange may list new strikes on underlying 
stocks that meet the eligibility requirements of the new program the 
Exchange will exercise its discretion and will not list strikes on 
underlying stocks the Exchange believes are subject to imminent 
delisting from their primary exchange.
    \53\ The Exchange notes this is the same methodology used in the 
$1 Strike Price Interval Program. See Interpretation and Policy 
.01(c)(3) of Rule 404.
---------------------------------------------------------------------------

    The Exchange's proposal addresses a gap in strike coverage for low 
priced stocks. The $0.50 Strike Program considers stocks that close 
below $5.00 and limits the number of option classes listed to no more 
than 20 individual stocks (provided that the open interest criteria is 
also satisfied). Whereas, the Exchange's proposal has a narrower focus, 
with respect to the underlying's stock price, and is targeted to those 
stocks that close below $2.50 and does not limit the number of stocks 
that may participate in the program (provided that the average daily 
trading volume is also satisfied). The Exchange does not believe that 
any market disruptions will be encountered with the addition of these 
new strikes. The Exchange represents that it has the necessary capacity 
and surveillance programs in place to support and properly monitor 
trading in the proposed Low Priced Stock Strike Price Interval Program.
    The Exchange believes that its average daily trading volume 
requirement of 1,000,000 shares is a reasonable threshold to ensure 
adequate liquidity in eligible underlying stocks as it is substantially 
greater than the thresholds used for listing options on equities, 
American Depository Receipts, and broad-based indexes. Specifically, 
underlying securities with respect to which put or call option 
contracts are approved for listing and trading on the Exchange must 
meet certain criteria as determined by the Exchange. One of those 
requirements is that trading volume (in all markets in which the 
underlying security is traded) has been at least 2,400,000 shares in 
the preceding twelve (12) months.\54\ Rule 402(f) provides the criteria 
for listing options on American Depositary Receipts (``ADRs'') if they 
meet certain criteria and guidelines set forth in Exchange Rule 402. 
One of the requirements is that the average daily trading volume for 
the security in the U.S. markets over the three (3) months preceding 
the selection of the ADR for options trading is 100,000 or more 
shares.\55\ Finally, the Exchange may trade options on a broad-based 
index pursuant to Rule 19b-4(e) of the Securities Exchange Act of 1934 
provided a number of conditions are satisfied. One of those conditions 
is that each component security that accounts for at least one percent 
(1%) of the weight of the index has an average daily

[[Page 65952]]

trading volume of at least 90,000 shares during the last six month 
period.\56\
---------------------------------------------------------------------------

    \54\ See Exchange Rule 402(b)(4).
    \55\ See Exchange Rule 402(f)(3)(ii).
    \56\ See Exchange Rule 1802(d)(7).
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to amend the table in 
Interpretations and Policies .11 of Rule 404 to insert a new column to 
harmonize the Exchange's proposal to the strike intervals for Short 
Term Options Series as described in Interpretations and Policies .02 of 
Rule 404. The table in Interpretations and Policies .11 is intended to 
limit the intervals between strikes for multiply listed equity options 
within the Short Term Options Series program that have an expiration 
date more than twenty-one days from the listing date.\57\ Specifically, 
the table defines the applicable strike intervals for options on 
underlying stocks given the closing price on the primary market on the 
last day of the calendar quarter, and a corresponding average daily 
volume of the total number of options contracts traded in a given 
security for the applicable calendar quarter divided by the number of 
trading days in the applicable calendar quarter.\58\ However, the 
lowest share price column is titled ``Less than $25.'' The Exchange now 
proposes to insert a column titled ``Less than $2.50'' and to set the 
strike interval at $0.50 for each average daily volume tier represented 
in the table. Also, the Exchange proposes to amend the heading of the 
column currently titled ``Less than $25,'' to ``$2.50 to less than 
$25'' as a result of the adoption of the new proposed column, ``Less 
than $2.50.'' The Exchange believes this change will remove any 
potential conflict between the strike intervals under the Short Term 
Options Series Program and those described herein under the Exchange's 
proposal. Additionally, the Exchange notes that this change is 
substantively identical to a proposal adopted by the Exchange's 
affiliate, MIAX Pearl Options.\59\
---------------------------------------------------------------------------

    \57\ See Securities Exchange Release Act No. 91125 (February 21, 
2021), 86 FR 10375 (February 19, 2021) (SR-BX-2020-032) (Order 
Granting Accelerated Approval of a Proposed Rule Change, as Modified 
by Amendment No. 1, To Amend Options 4, Section 5, To Limit Short 
Term Options Series Intervals Between Strikes That Are Available for 
Quoting and Trading on BX).
    \58\ Id.
    \59\ See Securities Exchange Release Act No. 99034 (November 29, 
2023), 88 FR 84379 (December 5, 2023) (SR-PEARL-2023-66).
---------------------------------------------------------------------------

    The Exchange recognizes that this proposal will introduce new 
strikes in the marketplace and further acknowledges that there has been 
significant effort undertaken by the industry to curb strike 
proliferation. This initiative has been spearheaded by the Nasdaq BX 
who filed an initial proposal focused on the removal, and prevention of 
the listing, of strikes which are extraneous and do not add value to 
the marketplace (the ``Strike Interval Proposal'').\60\ The Strike 
Interval Proposal was intended to remove repetitive and unnecessary 
strike listings across the weekly expiries. Specifically, the Strike 
Interval Proposal aimed to reduce the density of strike intervals that 
would be listed in the later weeks, by creating limitations for 
intervals between strikes which have an expiration date more than 
twenty-one days from the listing date.\61\ The Strike Interval Proposal 
took into account OCC customer-cleared volume, using it as an 
appropriate proxy for demand. The Strike Interval Proposal was designed 
to maintain strikes where there was customer demand and eliminate 
strikes where there wasn't. At the time of its proposal Nasdaq BX 
estimated that the Strike Interval Proposal would reduce the number of 
strikes it listed by 81,000.\62\ The Exchange proposes to amend the 
table to define the strike interval at $0.50 for underlying stocks with 
a share price of less than $2.50. The Exchange believes this amendment 
will harmonize the Exchange's proposal with the Strike Interval 
Proposal described above.
---------------------------------------------------------------------------

    \60\ See Securities Exchange Act No. 91225 (February 12, 2021), 
86 FR 10375 (February 12, 2021) (SR-BX-2020-032) (BX Strike Approval 
Order); see also BX Options Strike Proliferation Proposal (February 
25, 2021) available at: https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal).
    \61\ See Securities Exchange Act No. 91225 (February 12, 2021), 
86 FR 10375 (February 12, 2021) (SR-BX-2020-032).
    \62\ See id.
---------------------------------------------------------------------------

    The Exchange recognizes that its proposal will moderately increase 
the total number of option series available on the Exchange. However, 
the Exchange's proposal is designed to only add strikes where there is 
investor demand \63\ which will improve market quality. Under the 
requirements for the Low Priced Stock Strike Price Interval Program as 
described herein, the Exchange determined that as of August 9, 2023, 
106 symbols met the proposed criteria. Of those symbols 36 are 
currently in the $1 Strike Price Interval Program with $1.00 and $2.00 
strikes listed. Under the Exchange's proposal the Exchange would add 
the $0.50 and $1.50 strikes for these symbols for the current 
expiration terms. The remaining 70 symbols eligible under the 
Exchange's proposal would have $0.50, $1.00, $1.50 and $2.00 strikes 
added to their current expiration terms. Therefore, for the 106 symbols 
eligible for the Low Priced Stock Strike Price Interval Program a total 
of approximately 3,250 options would be added. As of August 9, 2023, 
the Exchange listed 1,106,550 options, therefore the additional options 
that would be listed under this proposal would represent a very minor 
increase of 0.294% in the number of options listed on the Exchange.
---------------------------------------------------------------------------

    \63\ See proposed Interpretation and Policy .12(a) of Rule 404 
which requires that an underlying stock have an average daily 
trading volume of 1,000,000 shares for the three (3) preceding 
months to be eligible for inclusion in the Low Priced Stock Strike 
Price Interval Program. The Exchange continuously evaluates stocks 
that may be eligible for inclusion in the Program.
---------------------------------------------------------------------------

    The Exchange does not believe that its proposal contravenes the 
industry's efforts to curtail unnecessary strikes. The Exchange's 
proposal is targeted to only underlying stocks that close at less than 
$2.50 and that also meet the average daily trading volume requirement. 
Additionally, because the strike increment is $0.50 there are only a 
total of four strikes that may be listed under the program ($0.50, 
$1.00, $1.50, and $2.00) for an eligible underlying stock. Finally, if 
an eligible underlying stock is in another program (e.g., the $0.50 
Strike Program or the $1 Strike Price Interval Program) the number of 
strikes that may be added is further reduced if there are pre-existing 
strikes as part of another strike listing program. Therefore, the 
Exchange does not believe that it will list any unnecessary or 
repetitive strikes as part of its program, and that the strikes that 
will be listed will improve market quality and satisfy investor demand.
    The Exchange further believes that the Options Price Reporting 
Authority (``OPRA''), has the necessary systems capacity to handle any 
additional messaging traffic associated with this proposed rule 
change.\64\ The Exchange also believes that Members will not have a 
capacity issue as a result of the proposed rule change. Finally, the 
Exchange believes that the additional options will serve to increase 
liquidity, provide additional trading and hedging opportunities for all 
market participants, and improve market quality.
---------------------------------------------------------------------------

    \64\ The Exchange conducts periodic testing with OPRA to ensure 
performance and capacity targets are being met.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\65\ Specifically, the Exchange believes that its proposed rule 
change is consistent with Section

[[Page 65953]]

6(b)(5) \66\ requirements in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in, 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \65\ 15 U.S.C. 78f(b).
    \66\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Wednesday Expirations
    Similar to Wednesday expirations in SPY, QQQ, and IWM, the proposal 
to permit Wednesday ETP Expirations, subject to the proposed limitation 
of two expirations beyond the current week, would protect investors and 
the public interest by providing the investing public and other market 
participants more choice and flexibility to closely tailor their 
investment and hedging decisions in these options and allow for a 
reduced premium cost of buying portfolio protection, thus allowing them 
to better manage their risk exposure.
    The Exchange represents that it has an adequate surveillance 
program in place to detect manipulative trading in the proposed option 
expirations, in the same way that it monitors trading in the current 
Short Term Option Series for Wednesday SPY, QQQ and IWM expirations. 
The Exchange also represents that it has the necessary system capacity 
to support the new expirations. Finally, the Exchange does not believe 
that any market disruptions will be encountered with the introduction 
of these option expirations. As discussed above, the Exchange believes 
that its proposal is a modest expansion of weekly expiration dates for 
GLD, SLV, USO, UNG, and TLT given that it will be limited to two 
Wednesday expirations beyond the current week. Lastly, the Exchange 
believes its proposal will not be a strain on liquidity providers 
because of the multi-class nature of GLD, SLV, USO, UNG, and TLT and 
the available hedges in highly correlated instruments, as described 
above.
    The Exchange believes that the proposal is consistent with the Act 
as the proposal would overall add a small number of Wednesday ETP 
Expirations by limiting the addition of two Wednesday expirations 
beyond the current week. The addition of Wednesday ETP Expirations 
would remove impediments to and perfect the mechanism of a free and 
open market by encouraging Market Makers to continue to deploy capital 
more efficiently and improve market quality. The Exchange believes that 
the proposal will allow market participants to expand hedging tools and 
tailor their investment and hedging needs more effectively in USO, UNG, 
GLD, SLV, and TLT as these funds are most likely to be utilized by 
market participants to hedge the underlying asset classes.
    Similar to Wednesday SPY, QQQ, and IWM expirations, the 
introduction of Wednesday ETP Expirations is consistent with the Act as 
it will, among other things, expand hedging tools available to market 
participants and allow for a reduced premium cost of buying portfolio 
protection. The Exchange believes that Wednesday ETP Expirations will 
allow market participants to purchase options on USO, UNG, GLD, SLV, 
and TLT based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively, thus allowing them to 
better manage their risk exposure. Today, the Exchange lists Wednesday 
SPY, QQQ, and IWM Expirations.\67\
---------------------------------------------------------------------------

    \67\ See Interpretation and Policy .02 of Rule 404.
---------------------------------------------------------------------------

    The Exchange believes the Short Term Option Series Program has been 
successful to date and that Wednesday ETP Expirations should simply 
expand the ability of investors to hedge risk against market movements 
stemming from economic releases or market events that occur throughout 
the month in the same way that the Short Term Option Series Program has 
expanded the landscape of hedging. There are no material differences in 
the treatment of Wednesday SPY, QQQ, and IWM expirations compared to 
the proposed Wednesday ETP Expirations. Given the similarities between 
Wednesday SPY, QQQ, and IWM expirations and the proposed Wednesday ETP 
Expirations, the Exchange believes that applying the provisions in 
Policy .02 of Rule 404 that currently apply to Wednesday SPY, QQQ, and 
IWM expirations is justified. For example, the Exchange believes that 
allowing Wednesday ETP Expirations and monthly ETP expirations in the 
same week will benefit investors and minimize investor confusion by 
providing Wednesday ETP Expirations in a continuous and uniform manner. 
The Exchange notes that this change is substantively identical to a 
proposal adopted by the Exchange's affiliate, MIAX Pearl Options.\68\
---------------------------------------------------------------------------

    \68\ See supra note 20.
---------------------------------------------------------------------------

Monthly Options Series
    The Exchange believes the introduction of Monthly Options Series 
will remove impediments to and perfect the mechanism of a free and open 
market and a national market system by expanding hedging tools 
available to market participants. The Exchange believes the proposed 
monthly expirations will allow market participants to transact in the 
index and ETF options listed pursuant to the proposed rule change based 
on their timings as needed and allow them to tailor their investment 
and hedging needs more effectively. Further, the Exchange believes the 
availability of Monthly Options Series would protect investors and the 
public interest by providing investors with more flexibility to closely 
tailor their investment and hedging decisions in these options, thus 
allowing them to better manage their risk exposure.
    The Exchange believes the Quarterly Options Series Program has been 
successful to date and the proposed Monthly Options Series program 
simply expands the ability of investors to hedge risk against market 
movements stemming from economic releases or market events that occur 
at month's end in the same way the Quarterly Options Series Program has 
expanded the landscape of hedging for quarter-end news. Monthly Options 
Series will also complement Short Term Options Series, which will allow 
investors to hedge risk against events that occur throughout a month. 
The Exchange believes the availability of additional expirations should 
create greater trading and hedging opportunities for investors, as well 
as provide investors with the ability to tailor their investment 
objectives more effectively.
    The Exchange notes the proposed terms of Monthly Options Series, 
including the limitation to five index and ETF option classes, are 
substantively the same as the current terms of Quarterly Options 
Series.\69\ Quarterly Options Series expire on the last business day of 
a calendar quarter, which is the last business day of every third 
month. The proposed Monthly Options Series would fills the gaps between 
Quarterly Options Series expirations by permitting series to expire on 
the last business day of every month, rather than every third month. 
The proposed Monthly Options Series may be listed in accordance with 
the same terms as Quarterly Options Series, including permissible 
strikes. As is the

[[Page 65954]]

case with Quarterly Options Series, no Short Term Options Series may 
expire on the same day as a Monthly Options Series. Similarly, as 
proposed, no Monthly Options Series may expire on the same day as a 
Quarterly Options Series. The Exchange believes preventing listing 
series with concurrent expirations in a class will eliminate potential 
investor confusion and thus protect investors and the public interest. 
Given that Quarterly Options Series the Exchange currently lists are 
essentially Monthly Options Series that can expire at the end of only 
certain calendar months, the Exchange believes it is reasonable to list 
Monthly Options Series in accordance with the same terms, as it will 
promote just and equitable principles of trade. The Exchange believes 
limiting Monthly Options Series to five classes will ensure the 
addition of these new series will have a negligible impact on the 
Exchange and OPRA's quoting capacity. The Exchange represents it has 
the necessary systems capacity to support new options series that will 
result from the introduction of Monthly Options Series.
---------------------------------------------------------------------------

    \69\ Compare proposed Interpretation and Policy .13 of Exchange 
Rule 404 to Interpretation and Policy .03 of Exchange Rule 404.
---------------------------------------------------------------------------

    The Exchange also represents its current surveillance programs will 
apply to Monthly Options Series and will properly monitor trading in 
the proposed Monthly Options Series. As mentioned above, the Exchange 
currently trades Quarterly Options Series in certain ETF classes, which 
expire at the close of business at the end of three calendar months 
(i.e., the end of each calendar quarter), and has not experienced any 
market disruptions nor issues with capacity. The Exchange's 
surveillance programs currently in place to support and properly 
monitor trading in these Quarterly Options Series, as well as Short 
Term Options Series, and standard expiration series, will apply to the 
proposed Monthly Options Series. The Exchange believes its 
surveillances continue to be designed to deter and detect violations of 
its Rules, including position and exercise limits and possible 
manipulative behavior, and these surveillances will apply to Monthly 
Options Series that the Exchange determines to list for trading. 
Ultimately, the Exchange does not believe the proposed rule change 
raises any unique regulatory concerns because existing safeguards--such 
as position and exercise limits (and the aggregation of options 
overlying the same ETF or index) and reporting requirements--would 
continue to apply. The Exchange notes that this change is substantively 
identical to a proposal adopted by the Exchange's affiliate, MIAX Pearl 
Options.\70\
---------------------------------------------------------------------------

    \70\ See supra note 33.
---------------------------------------------------------------------------

Tuesday and Thursday IWM Expirations
    The Exchange believes that IWM Tuesday and Thursday Short Term 
Daily Expirations will allow market participants to purchase IWM 
options based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively. Further, the proposal to 
permit Tuesday and Thursday Short Term Daily Expirations for options on 
IWM listed pursuant to the Short Term Option Series Program, subject to 
the proposed limitation of two nearest expirations, would protect 
investors and the public interest by providing the investing public and 
other market participants more flexibility to closely tailor their 
investment and hedging decisions in IWM options, thus allowing them to 
better manage their risk exposure.
    In particular, the Exchange believes the Short Term Option Series 
Program has been successful to date and that Tuesday and Thursday IWM 
Short Term Daily Expirations should simply expand the ability of 
investors to hedge risk against market movements stemming from economic 
releases or market events that occur throughout the month in the same 
way that the Short Term Option Series Program has expanded the 
landscape of hedging. Similarly, the Exchange believes Tuesday and 
Thursday IWM Short Term Daily Expirations should create greater trading 
and hedging opportunities and provide customers the flexibility to 
tailor their investment objectives more effectively. The Exchange 
currently lists SPY and QQQ Tuesday and Thursday Short Term Daily 
Expirations.\71\
---------------------------------------------------------------------------

    \71\ See Interpretation and Policy .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    With this proposal, Tuesday and Thursday IWM Expirations would be 
treated similar to existing Tuesday and Thursday SPY and QQQ 
Expirations and would expire in the same week that standard monthly 
options expire on Fridays.\72\ Further, today, Tuesday and Thursday 
Short Term Option Daily Expirations do not expire on a business day in 
which monthly options series or Quarterly Options Series expire.\73\ 
Today, all Short Term Option Daily Expirations expire at the close of 
business on each of the next two Mondays, Tuesdays, Wednesdays, and 
Thursdays, respectively, that are business days and are not business 
days in which monthly options series or Quarterly Options Series 
expire. There are no material differences in the treatment of Tuesday 
and Thursday SPY and QQQ Short Term Daily Expirations as compared to 
the proposed Tuesday and Thursday IWM Short Term Daily Expirations.
---------------------------------------------------------------------------

    \72\ See Interpretation and Policy .02(b) of Exchange Rule 404.
    \73\ See Interpretation and Policy .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    The Exchange represents that it has an adequate surveillance 
program in place to detect manipulative trading in the proposed Tuesday 
and Thursday IWM Short Term Daily Expirations, in the same way that it 
monitors trading in the current Short Term Option Series and trading in 
Tuesday and Thursday SPY and QQQ Expirations. The Exchange also 
represents that it has the necessary systems capacity to support the 
new options series. Finally, the Exchange does not believe that any 
market disruptions will be encountered with the introduction of Tuesday 
and Thursday IWM Short Term Daily Expirations. The Exchange notes that 
this change is substantively identical to a proposal adopted by the 
Exchange's affiliate, MIAX Pearl Options.\74\
---------------------------------------------------------------------------

    \74\ See supra note 44.
---------------------------------------------------------------------------

Low Priced Stock Strike Price Interval Program
    The Exchange believes its proposal to adopt a new Low Priced Stock 
Strike Price Interval Program promotes just and equitable principles of 
trade and removes impediments to and perfects the mechanisms of a free 
and open market and a national market system as the Exchange has 
identified a subset of stocks that are trading under $2.50 and do not 
have meaningful strikes available. For example, on August 9, 2023, 
symbol SOND closed at $0.50 and had open interest of over 44,000 
contracts and an average daily trading volume in the underlying stock 
of over 1,900,000 shares for the three preceding calendar months.\75\ 
Currently the lowest strike listed is for $2.50, making the lowest 
strike 400% away from the closing stock price. Another symbol, CTXR, 
closed at $0.92 on August 9, 2023, and had open interest of over 63,000 
contracts and an average daily trading volume in the underlying stock 
of over 1,900,000 shares for the three preceding calendar months.\76\ 
Similarly, the lowest strike listed is for $2.50, making the lowest 
strike more than 170% away from the closing stock price. Currently, 
such products have no at-the-money options, as well as no in-the-

[[Page 65955]]

money calls or out-of-the-money puts. The Exchange's proposal will 
provide additional strikes in $0.50 increments from $0.50 up to $2.00 
to provide more meaningful trading and hedging opportunities for this 
subset of stocks. Given the increased granularity of strikes as 
proposed under the Exchange's proposal out-of-the-money puts and in-
the-money calls will be created. The Exchange believes this will allow 
market participants to tailor their investment and hedging needs more 
effectively.
---------------------------------------------------------------------------

    \75\ See Yahoo! Finance, https://finance.yahoo.com/quote/SOND/history?p=SOND (last visited August 10, 2023).
    \76\ See Yahoo! Finance, https://finance.yahoo.com/quote/CTXR/history?p=CTXR (last visited August 10, 2023).
---------------------------------------------------------------------------

    The Exchange believes its proposal promotes just and equitable 
principles of trade and removes impediments to and perfects the 
mechanisms of a free and open market and a national market system and, 
in general, protects investors and the public interest by adding 
strikes that improves market quality and satisfies investor demand. The 
Exchange does not believe that the number of strikes that will be added 
under the program will negatively impact the market. Additionally, the 
proposal does not run counter to the efforts undertaken by the industry 
to curb strike proliferation as that effort focused on the removal and 
prevention of extraneous strikes where there was no investor demand. 
The Exchange's proposal requires the satisfaction of an average daily 
trading volume threshold in addition to the underlying stock closing at 
a price below $2.50 to be eligible for the program. The Exchange 
believes that the average daily trading volume threshold of the program 
ensures that only strikes with investor demand will be listed and fills 
a gap in strike interval coverage as described above. Further, being 
that the strike interval is $0.50, there are only a maximum of four 
strikes that may be added ($0.50, $1.00, $1.50, and $2.00). Therefore, 
the Exchange does not believe that its proposal will undermine the 
industry's efforts to eliminate repetitive and unnecessary strikes in 
any fashion.
    The Exchange believes that its average daily trading volume 
threshold promotes just and equitable principles of trade and removes 
impediments to and perfects the mechanisms of a free and open market 
and a national market system and, in general, protects investors and 
the public interest as it is designed to permit only those stocks with 
demonstrably high levels of trading activity to participate in the 
program. The Exchange notes that its average daily trading volume 
requirement is substantially greater that the average daily trading 
requirement currently in place on the Exchange for options on equity 
underlyings,\77\ ADRs,\78\ and broad-based indexes.\79\
---------------------------------------------------------------------------

    \77\ See supra note 53.
    \78\ See supra note 54.
    \79\ See supra note 55.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(1) of the Act, which provides that the Exchange be 
organized and have the capacity to be able to carry out the purposes of 
the Act and the rules and regulations thereunder, and the rules of the 
Exchange. The proposed rule change allows the Exchange to respond to 
customer demand to provide meaningful strikes for low priced stocks. 
The Exchange does not believe that the proposed rule would create any 
capacity issue or negatively affect market functionality. Additionally, 
the Exchange represents that it has the necessary systems capacity to 
support the new options series and handle additional messaging traffic 
associated with this proposed rule change. The Exchange also believes 
that its Members will not experience any capacity issues as a result of 
this proposal. In addition, the Exchange represents that it believes 
that additional strikes for low priced stocks will serve to increase 
liquidity available as well and improve price efficiency by providing 
more trading opportunities for all market participants. The Exchange 
believes that the proposed rule change will benefit investors by giving 
them increased opportunities to execute their investment and hedging 
decisions.
    Finally, the Exchange believes its proposal is designed to prevent 
fraudulent and manipulative acts and practices as options may only be 
listed on underlyings that satisfy the listing requirements of the 
Exchange as described in Exchange Rule 402, Criteria for Underlying 
Securities. Specifically, Rule 402 requires that underlying securities 
for which put or call option contracts are approved for listing and 
trading on the Exchange must meet the following criteria: (1) the 
security must be registered and be an ``NMS stock'' as defined in Rule 
600 of Regulation NMS under the Exchange Act; (2) the security shall be 
characterized by a substantial number of outstanding shares that are 
widely held and actively traded.\80\ Additionally, Rule 402 provides 
that absent exceptional circumstances, an underlying security will not 
be selected for options transactions unless: (1) there are a minimum of 
seven (7) million shares of the underlying security which are owned by 
persons other than those required to report their stock holdings under 
Section 16(a) of the Exchange Act; (2) there are a minimum of 2,000 
holders of the underlying security; (3) the issuer is in compliance 
with any applicable requirements of the Exchange Act; and (4) trading 
volume (in all markets in which the underlying security is traded) has 
been at least 2,400,000 shares in the preceding twelve (12) months.\81\ 
The Exchange's proposal does not impact the eligibility of an 
underlying stock to have options listed on it, but rather addresses 
only the listing of new additional option classes on an underlying 
listed on the Exchange in accordance to the Exchange's listings rules. 
As such, the Exchange believes that the listing requirements described 
in Exchange Rule 402 address potential concerns regarding possible 
manipulation. Additionally, in conjunction with the proposed Average 
Daily Volume requirement described herein, the Exchange believes any 
possible market manipulation is further mitigated. The Exchange notes 
that this change is substantively identical to a proposal adopted by 
the Exchange's affiliate, MIAX Pearl Options.\82\
---------------------------------------------------------------------------

    \80\ See Exchange Rule 402(a)(1) and (2).
    \81\ See Exchange Rule 402(b)(1), (2), (3) and (4).
    \82\ See supra note 58.
---------------------------------------------------------------------------

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.
Wednesday Expirations
    While the proposal will expand the Short Term Options Expirations 
to allow Wednesday ETP Expirations to be listed on the Exchange, the 
Exchange believes that this limited expansion for Wednesday expirations 
for options on USO, UNG, GLD, SLV, and TLT will not impose an undue 
burden on competition; rather, it will meet customer demand. The 
Exchange believes that market participants will continue to be able to 
expand hedging tools and tailor their investment and hedging needs more 
effectively in USO, UNG, GLD, SLV, and TLT given multi-class nature of 
these products and the available hedges in highly correlated 
instruments, as described above. Similar to Wednesday SPY, QQQ, and IWM 
expirations, the introduction of Wednesday ETP Expirations does not 
impose an undue burden on competition. The Exchange believes that it 
will, among other things, expand hedging tools available to market 
participants and allow for a reduced premium cost of buying portfolio

[[Page 65956]]

protection. The Exchange believes that Wednesday ETP Expirations will 
allow market participants to purchase options on USO, UNG, GLD, SLV, 
and TLT based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively.
    The Exchange does not believe the proposal will impose any burden 
on inter-market competition, as nothing prevents the other options 
exchanges from proposing similar rules to list and trade Wednesday ETP 
Expirations. Further, the Exchange does not believe the proposal will 
impose any burden on intra-market competition, as all market 
participants will be treated in the same manner under this proposal.
Monthly Options Series
    The Exchange does not believe the proposed rule change to list 
Monthly Options Series will impose any burden on intramarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act, as any Monthly Options Series the Exchange lists 
for trading will be available in the same manner for all market 
participants who wish to trade such options. The Exchange notes the 
proposed terms of the Monthly Options Series, including the limitation 
to five index and ETF option classes, are substantively the same as the 
current terms of Quarterly Options Series.\83\ Quarterly Options Series 
expire on the last business day of a calendar quarter, which is the 
last business day of every third month, making the concept of Monthly 
Options Series in a limited number of index and ETF options not novel. 
The proposed Monthly Options Series will fill the gaps between 
Quarterly Options Series expirations by permitting series to expire on 
the last business day of every month, rather than every third month. 
The proposed Monthly Options Series may be listed in accordance with 
the same terms as Quarterly Options Series, including permissible 
strikes. Monthly Options Series will trade on the Exchange in the same 
manner as other options in the same class.
---------------------------------------------------------------------------

    \83\ See Interpretation and Policy .03 to Exchange Rule 404.
---------------------------------------------------------------------------

    The Exchange does not believe the proposed rule change to list 
Monthly Options Series will impose any burden on intermarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act, as nothing prevents other options exchanges from 
proposing similar rules. As discussed above, the proposed rule change 
would permit listing of Monthly Options Series in five index or ETF 
options, as well as any other classes that other exchanges may list 
under similar programs. To the extent that the availability of Monthly 
Options Series makes the Exchange a more attractive marketplace to 
market participants at other exchanges, market participants are free to 
elect to become market participants on the Exchange.
    The Exchange believes that the proposed rule change may relieve any 
burden on, or otherwise promote, competition. Similar to Short Term 
Options Series and Quarterly Options Series, the Exchange believes the 
introduction of Monthly Options Series will not impose an undue burden 
on competition. The Exchange believes that it will, among other things, 
expand hedging tools available to market participants. The Exchange 
believes Monthly Options Series will allow market participants to 
purchase options based on their timing as needed and allow them to 
tailor their investment and hedging needs more effectively.
    Consequently, the Exchange does not believe that the proposed 
change implicates competition at all.
Tuesday and Thursday IWM Expirations
    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    Similar to SPY and QQQ Tuesday and Thursday Expirations, the 
introduction of IWM Tuesday and Thursday Short Term Daily Expirations 
does not impose an undue burden on competition. The Exchange believes 
that it will, among other things, expand hedging tools available to 
market participants and continue the reduction of the premium cost of 
buying protection. The Exchange believes that IWM Tuesday and Thursday 
Short Term Daily Expirations will allow market participants to purchase 
IWM options based on their timing as needed and allow them to tailor 
their investment and hedging needs more effectively. The Exchange notes 
that Cboe began listing Tuesday and Thursday expirations in RUTW and 
MRUT on January 8, 2024.\84\
---------------------------------------------------------------------------

    \84\ See Securities Exchange Act Release No. 98621 (September 
28, 2023), 88 FR 68896 (October 4, 2023) (SR-CBOE-2023-054) (a 
Proposed Rule Change To Amend Rule 4.13); Securities Exchange Act 
Release No. 98957 (November 15, 2023), 88 FR 81130 (November 21, 
2023) (SR-CBOE-2023-054) (Order Approving a Proposed Rule Change To 
Amend Rule 4.13 To Expand the Nonstandard Expirations Program To 
Include P.M.-Settled Options on Broad-Based Indexes That Expire on 
Tuesday or Thursday); See also Cboe Global Markets, Inc., Cboe To 
Offer Daily Expiries For Russell 2000 Index Options Suite, Beginning 
January 8, 2024, available at https://ir.cboe.com/news/news-details/2023/Cboe-TO-OFFER-DAILY-EXPIRIES-FOR-RUSSELL-2000-INDEX-OPTIONS-SUITE-BEGINNING-JANUARY-8-2024/default.aspx (last visited April 25, 
2024).
---------------------------------------------------------------------------

    The Exchange does not believe the proposal will impose any burden 
on inter-market competition, as nothing prevents other options 
exchanges from proposing similar rules to list and trade Short-Term 
Option Series with Tuesday and Thursday Short Term Daily Expirations. 
The Exchange notes that having Tuesday and Thursday IWM expirations is 
not a novel proposal, as SPY and QQQ Tuesday and Thursday Expirations 
are currently listed on the Exchange.\85\
---------------------------------------------------------------------------

    \85\ See Interpretation and Policy .02 of Exchange Rule 404.
---------------------------------------------------------------------------

    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.
Low Priced Stock Strike Price Interval Program
    The Exchange does not believe that its proposed rule change will 
impose any burden on intra-market competition as the Rules of the 
Exchange apply equally to all Members of the Exchange and all Members 
may trade the new proposed strikes if they so choose. Specifically, the 
Exchange believes that investors and market participants will 
significantly benefit from the availability of finer strike price 
intervals for stocks priced below $2.50, which will allow them to 
tailor their investment and hedging needs more effectively.
    The Exchange does not believe that its proposed rule change will 
impose any burden on inter-market competition, as nothing prevents 
other options exchanges from proposing similar rules to list and trade 
options on low priced stocks. Rather the Exchange believes that its 
proposal will promote inter-market competition, as the Exchange's 
proposal will result in additional opportunities for investors to 
achieve their investment and trading objectives, to the benefit of 
investors, market participants, and the marketplace in general.

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

    Written comments were neither solicited nor received.

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

[[Page 65957]]

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, it has become effective pursuant 
to Section 19(b)(3)(A)(iii) of the Act \86\ and Rule 19b-4(f)(6) 
thereunder.\87\
---------------------------------------------------------------------------

    \86\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \87\ 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, 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \88\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\89\ 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 that 
the waiver of the 30-day operative delay would ensure fair competition 
among the exchanges by allowing the Exchange to permit the listing of 
two Wednesday expirations for options on ETPs. The Exchange also states 
that waiver of the operative delay would allow the Exchange to 
immediately offer an additional market to investors to trade Monthly 
Options Series and to compete effectively with at least one other 
exchange that currently lists and trades the same series. The Exchange 
further states that waiver of the operative delay would allow the 
Exchange to immediately adopt the strike interval program and list 
strikes on the Exchange in accordance with this proposal, and thereby 
provide opportunities for investors to select the venue on which to 
trade these strikes. In addition, the Exchange states that the changes 
contained in the proposal are substantively identical to changes that 
have been adopted by the Exchange's affiliate, MIAX Pearl Options.\90\
---------------------------------------------------------------------------

    \88\ 17 CFR 240.19b-4(f0(6).
    \89\ 17 CFR 240.19b-4(f)(6)(iii).
    \90\ See supra note 11 and accompanying text.
---------------------------------------------------------------------------

    For these reasons, and because the proposal does not raise any new 
or novel legal or regulatory issues, the Commission finds that waiver 
of the 30-day operative delay is consistent with the protection of 
investors and the public interest. Accordingly, the Commission hereby 
waives the 30-day operative delay and designates the proposed rule 
change operative upon filing.\91\
---------------------------------------------------------------------------

    \91\ For purposes only of waiver 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).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings under 
Section 19(b)(2)(B) \92\ to determine whether the proposed rule change 
should be approved or disapproved.
---------------------------------------------------------------------------

    \92\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-SAPPHIRE-2024-02 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-SAPPHIRE-2024-02. 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-SAPPHIRE-2024-02 and should 
be submitted on or before September 3, 2024.
---------------------------------------------------------------------------

    \93\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\93\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17953 Filed 8-12-24; 8:45 am]
BILLING CODE 8011-01-P