Notice2023-19845
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Short Term Option Series Program in Rule 19.5, Interpretation and Policy .05 and a Related Definition in Rule 16.1
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 14, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 177 (Thursday, September 14, 2023)</title>
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[Federal Register Volume 88, Number 177 (Thursday, September 14, 2023)]
[Notices]
[Pages 63160-63165]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-19845]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98338; File No. SR-MEMX-2023-19]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the Short
Term Option Series Program in Rule 19.5, Interpretation and Policy .05
and a Related Definition in Rule 16.1
September 8, 2023.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 6, 2023, MEMX LLC (``MEMX'' or the ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by the Exchange. The Exchange filed the
proposal as a ``non-controversial'' proposed rule change pursuant to
section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Short Term Option Series Program
in MEMX Rule 19.5, Interpretation and Policy .05 and a related
definition in Rule 16.1. The text of the proposed rule change is
provided in Exhibit 5.
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.
[[Page 63161]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the Short Term
Option Series Program in Rule 19.5, Interpretation and Policy .05, and
amend the definition of Short Term Option Series in Rule 16.1.
In August 2022, the Commission approved the Exchange's adoption of
rules to govern the trading of options on the Exchange by MEMX
Options,\5\ which will be a facility of the Exchange. The rules adopted
were substantially similar to those of other currently operating
options exchanges, in particular, Cboe BZX Exchange, Inc. (``BZX
Options''). Since that time, BZX Options and other options exchanges,
including Cboe EDGX Exchange, Inc. (``EDGX Options''), have modified
certain of those rules \6\ and, as such, the Exchange wishes to propose
the same modifications in order to conform to those rules at the time
trading begins on MEMX Options.\7\
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\5\ See Securities Exchange Act Release No. 95445 (August 9,
2022), 87 FR 49884 (August 12, 2022) (SR-MEMX-2022-010).
\6\ See Securities Exchange Act Release Nos. 96313 (November 15,
2022), 87 FR 70869 (November 21, 2022) (SR-CboeBZX-2022-056); 96320
(November 15, 2022), 87 FR 70880 (November 21, 2022) (SR-CboeEDGX-
2022-051); see also Securities Exchange Act Release No. 96281
(November 9, 2022), 87 FR 68769 (November 16, 2022) (SR-ISE-2022-
18).
\7\ Currently, the Exchange plans to launch MEMX Options in
September 2023.
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Specifically, the Exchange proposes to amend the Short Term Option
Series Program to: (i) limit the number of Short Term Option Expiration
Dates for options on SPDR S&P 500 ETF Trust (SPY), the INVESCO QQQ
TrustSM, Series 1 (QQQ), and iShares Russell 2000 ETF (IWM) from five
to two expirations for Monday and Wednesday expirations; and (ii)
expand the Short Term Option Series program to permit the listing and
trading of options series with Tuesday and Thursday expirations for
options on SPY and QQQ listed pursuant to the Short Term Option Series
Program, subject to the same proposed limitation of two expirations.
The Exchange also proposes to amend the definition of Short Term Option
Series in Rule 16.1.
Curtail Short Term Option Expiration Dates
Currently, after an option class has been approved for listing and
trading on the Exchange, the Exchange may open for trading on any
Thursday or Friday that is a business day (``Short Term Option Opening
Date'') series of options on that class that expire at the close of
business on each of the next five Fridays that are business days and
are not Fridays on which monthly options series or Quarterly Options
Series expire (``Short Term Option Expiration Dates''). The Exchange
may have no more than a total of five Short Term Option Expiration
Dates not including any Monday or Wednesday SPY, QQQ, and IWM
Expirations. Further, if the Exchange is not open for business on the
respective Thursday or Friday, the Short Term Option Opening Date 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 will be the first
business day immediately prior to that Friday.
Today, with respect to Wednesday SPY, QQQ, and IWM Expirations, the
Exchange may open for trading on any Tuesday or Wednesday that is a
business day series of options on SPY, QQQ, and IWM 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 SPY Expirations,''
``Wednesday QQQ Expirations,'' and ``Wednesday IWM Expirations''). With
respect to Monday SPY, QQQ, and IWM Expirations, the Exchange may open
for trading on any Friday or Monday that is a business day series of
options on the SPY, QQQ, or IWM to expire on any Monday of the month
that is a business day and is not a Monday in which Quarterly Options
Series expire (``Monday SPY Expirations,'' ``Monday QQQ Expirations,''
and ``Monday IWM Expirations''), provided that Monday SPY Expirations,
Monday QQQ Expirations, and Monday IWM Expirations that are listed on a
Friday must be listed at least one business week and one business day
prior to the expiration. The Exchange may list up to five consecutive
Wednesday SPY Expirations, Wednesday QQQ Expirations, and Wednesday IWM
Expirations and five consecutive Monday SPY Expirations, Monday QQQ
Expirations, and Monday IWM Expirations at one time; the Exchange may
have no more than a total of five each of Wednesday SPY Expirations,
Wednesday QQQ Expirations, and Wednesday IWM Expirations and a total of
five each of Monday SPY Expirations, Monday QQQ Expirations, and Monday
IWM Expirations. Monday and Wednesday SPY Expirations, Monday and
Wednesday QQQ Expirations, and Monday and Wednesday IWM Expirations
will be subject to the provisions of Rule 19.5, Interpretation and
Policy .05.
Proposal
At this time, the Exchange proposes to curtail the number of Short
Term Option Expiration Dates from five to two \8\ for Monday and
Wednesday Expirations in SPY, QQQ and IWM, as well as the proposed
Tuesday and Thursday Expirations in SPY and QQQ (``Short Term Option
Daily Expirations''). The Exchange proposes to create a new category of
Short Term Option Expiration Dates called ``Short Term Option Daily
Expirations,'' which will only permit two Short Term Option Expiration
Dates for each of the Monday, Tuesday, Wednesday, and Thursday
expirations at any one time. The Exchange proposes to include a table,
labelled ``Table 1'', within Rule 19.5, Interpretation and Policy
.05(h), which specifies each symbol which qualifies as a Short Term
Option Daily Expiration. The table would note the number of expirations
for each symbol as well as expiration days. The Exchange proposes to
include Monday and Wednesday expirations for SPY, QQQ, and IWM and
Tuesday and Thursday expirations for SPY and QQQ and list the number of
expirations as ``2'' for these symbols. The Exchange's proposal to
permit Tuesday and Thursday expirations for options on SPY and QQQ
listed pursuant to the Short Term Option Series Program is explained
below in more detail. In the event Short Term Option Daily Expirations
expire on the same day in the same class as a monthly options series or
a Quarterly Options Series, the Exchange would skip that week's listing
and instead list the following week; the two weeks of Short Term Option
Expiration Dates would therefore not be consecutive. Specifically, the
Exchange proposes to state within Rule 19.5, Interpretation and Policy
.05(h):
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\8\ The Exchange proposes to list the two front months for Short
Term Option Daily Expirations.
In addition to the above, the Exchange may open for trading
series of options on the symbols provided in Table 1 below 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 on which
monthly options series or Quarterly Options Series expire (``Short
Term Option Daily Expirations''). The Exchange may have no more than
a total of two Short Term Option Daily Expirations beyond the
current week for each of Monday, Tuesday, Wednesday, and Thursday
expirations at one time. Short
[[Page 63162]]
Term Option Daily Expirations would be subject to this
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Interpretation and Policy .05.
SPY, QQQ, and IWM Friday expirations and other option symbols
expiring on a Friday that are not noted in Table 1 will continue to
have a total of five Short Term Option Expiration Dates, provided those
Friday expirations are not Fridays on which monthly options series or
Quarterly Options Series expire (``Friday Short Term Option Expiration
Dates''). These expirations would be referred to as ``Short Term Option
Weekly Expirations'' to distinguish them from the proposed expirations
that would be subject to Short Term Option Daily Expirations. The
Exchange proposes to add rule text to Rule 19.5, Interpretation and
Policy .05(h) which states that Monday Short Term Option Expiration
Dates, Tuesday Short Term Option Expiration Dates, Wednesday Short Term
Option Expiration Dates, and Thursday Short Term Option Expiration
Dates, together with Friday Short Term Option Expiration Dates, are
collectively ``Short Term Option Expiration Dates.'' \9\
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\9\ Defining the term ``Short Term Option Expiration Dates''
will make clear that this term includes expiration dates for each
day Short Term Options are listed.
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Tuesday and Thursday Expirations
At this time, the Exchange proposes to expand the Short Term Option
Series Program for Short Term Option Daily Expirations on Tuesday
(``Tuesday Short Term Option Daily Expirations) and Short Term Option
Daily Expirations on Thursday (``Thursday Short Term Option Daily
Expirations''). No more than a total of two Tuesday Short Term Option
Daily Expirations or Thursday Short Term Option Daily Expirations in
SPY and QQQ will be listed at any one time beyond the current week.
Tuesday and Thursday Short Term Option Daily Expirations would be
subject to Rule 19.5, Interpretation and Policy .05.
A 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,
Wednesday, or Friday of the following business week that is a business
day, 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. 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.
The Exchange proposes to amend this definition in Rule 16.1 to
accommodate the listing of options series that expire on Tuesdays and
Thursdays. Specifically, the Exchange proposes to add Tuesday and
Thursdays to the permitted expiration days, which currently include
Monday, Wednesday, and Friday, that it may open for trading.
The Exchange also proposes corresponding changes within Rule 19.5,
Interpretation and Policy .05, which sets forth the requirements for
SPY and QQQ options that are listed pursuant to the Short Term Option
Series Program as Short Term Option Daily Expirations, to accommodate
the listing of options series that expire on Tuesdays and Thursdays.
Similar to Monday and Wednesday SPY, QQQ, and IWM Short Term Option
Daily Expirations within Rule 19.5, Interpretation and Policy .05, the
Exchange proposes that it 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 beyond the current week that are business days and are not
business days in which monthly options series or Quarterly Options
Series expire (``Tuesday Short Term Option Expiration Date'').
Likewise, the Exchange proposes that it may open for trading on any
Wednesday or Thursday that is a business day series of options on
symbols provided in Table 1 that expire at the close of business on
each of the next two Thursdays that are business days and are not
business days in which monthly options series or Quarterly Options
Series expire (``Thursday Short Term Option Expiration Date'').
In the event that options on SPY and QQQ expire on a Tuesday or
Thursday and that Tuesday or Thursday is the same day that a monthly
option series or Quarterly Options Series expires, the Exchange would
skip that week's listing and instead list the following week; the two
weeks would therefore not be consecutive. Today, Monday and Wednesday
Expirations in SPY, QQQ, and IWM skip the weekly listing in the event
the weekly listing expires on the same day in the same class as a
Quarterly Options Series. Currently, there is no rule text provision
that states that Monday and Wednesday Expirations in SPY, QQQ, and IWM
skip the weekly listing in the event the weekly listing expires on the
same day in the same class as a monthly option series. Practically
speaking, Monday and Wednesday Expirations in SPY, QQQ, and IWM would
not expire on the same day as a monthly expiration.
The interval between strike prices for the proposed Tuesday and
Thursday SPY and QQQ Short Term Option Daily Expirations will be the
same as those for the current Short Term Option Series for Monday,
Wednesday, and Friday expirations applicable to the Short Term Option
Series Program.\10\ Specifically, the Tuesday and Thursday SPY and QQQ
Short Term Option Daily Expirations will have a $0.50 strike interval
minimum.\11\ As is the case with other equity options series listed
pursuant to the Short Term Option Series Program, the Tuesday and
Thursday SPY and QQQ Short Term Option Daily Expiration series will be
P.M.-settled.
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\10\ See Rule 19.5, Interpretation and Policy .05(e)
\11\ See id.
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Pursuant to proposed Rule 19.5, Interpretation and Policy .05, with
respect to the Short Term Option Series Program, a Tuesday or Thursday
expiration series will 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.
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.\12\
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.\13\ This thirty (30) series restriction would apply
to Tuesday and Thursday SPY and QQQ Short Term Option Daily Expiration
series as well. In addition, the Exchange will be able to list series
that are listed by other exchanges, assuming they file similar rules
with the Commission to list SPY and QQQ options expiring on Tuesdays
and Thursdays with a limit of two Tuesday Short Term Daily Expirations
and two Thursday Short Term Daily Expirations beyond the current week.
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\12\ See Rule 19.5, Interpretation and Policy .05(a).
\13\ See id.
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Finally, the Exchange is amending Rule 19.5, Interpretation and
Policy .05(b) to conform the rule text to the usage of the term ``Short
Term Option
[[Page 63163]]
Daily Expirations.'' Today, with the exception of Monday and Wednesday
SPY Expirations, Monday and Wednesday QQQ Expirations, and Monday and
Wednesday IWM Expirations, no Short Term Option Series may expire in
the same week in which monthly option series on the same class expire.
With this proposal, Tuesday and Thursday SPY Expirations and Tuesday
and Thursday QQQ Expirations would be treated similarly to existing
Monday and Wednesday SPY, QQQ, and IWM Expirations. With respect to
monthly option series,
Short Term Option Daily Expirations will be permitted to expire in
the same week in which monthly option series on the same class expire.
Not listing Short Term Option Daily Expirations for one week every
month because there was a monthly on that same class on the Friday of
that week would create investor confusion. Further, as with Monday and
Wednesday SPY, QQQ, and IWM Expirations, the Exchange would not permit
Tuesday and Thursday Short Term Option Daily Expirations to expire on a
business day in which monthly options series or Quarterly Options
Series expire.\14\ 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 and are not business days on which monthly options series or
Quarterly Options Series expire.
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\14\ While the Exchange proposes to add rule text within Rule
19.5, Interpretation and Policy .05 with respect to Monday
Expirations, Tuesday Expirations, and Wednesday Expirations stating
that those expirations would not expire on business days on which
monthly options series expire, practically speaking this would not
occur.
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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.
The Exchange does not believe that any market disruptions will be
encountered with the introduction of P.M.-settled Tuesday and Thursday
Short Term Option Daily Expirations, as other Exchanges have already
adopted identical rules, and the Exchange will have surveillance
programs in place to support and properly monitor trading in Short Term
Option Series that expire Monday and Wednesday for SPY, QQQ and IWM.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the Securities Exchange Act of 1934 (the ``Act'') and the rules
and regulations thereunder applicable to the Exchange and, in
particular, the requirements of section 6(b) of the Act.\15\
Specifically, the Exchange believes the proposed rule change is
consistent with the section 6(b)(5) \16\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the section 6(b)(5) \17\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ Id.
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The proposal is consistent with the Act as the overall reduction
offered by this proposal reduces the number of Short Term Option
Expirations to be listed on the Exchange. This reduction 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 displayed market quality.\18\ Also, the
Exchange's proposal curtails the number of Monday, Tuesday, Wednesday,
and Thursday expirations in SPY, QQQ, and IWM without reducing the
classes of options available for trading on the Exchange. The Exchange
believes that despite the proposed curtailment of expirations, Members
will be able to expand hedging tools and tailor their investment and
hedging needs more effectively in SPY, QQQ, and IWM.
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\18\ Market-Makers are required to quote a specified time in
their assigned options series. See Rule 22.6.
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Similar to SPY, QQQ, and IWM Monday and Wednesday Expirations
(proposed to be SPY, QQQ and IWM Monday and Wednesday Short Term Daily
Expirations), the introduction of SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations is consistent with the Act as 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 SPY and QQQ Tuesday and Thursday
expirations (proposed to be SPY and QQQ Tuesday and Thursday Short Term
Daily Expirations) will allow market participants to purchase SPY and
QQQ 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 SPY and QQQ listed pursuant to the Short Term Option
Series Program, subject to the proposed limitation of two 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 SPY and QQQ
options, thus allowing them to better manage their risk exposure.
In particular, the Exchange believes the Short Term Option Series
Program as implemented by other exchanges has been successful to date
and that Tuesday and Thursday SPY and QQQ 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 SPY and QQQ Short Term Daily
Expirations should create greater trading and hedging opportunities and
flexibility and will provide customers with the ability to tailor their
investment objectives more effectively.
Today, with the exception of Monday and Wednesday SPY Expirations,
Monday and Wednesday QQQ Expirations, and Monday and Wednesday IWM
Expirations, no Short Term Option Series may expire in the same week in
which monthly option series on the same class expire. With this
proposal, Tuesday and Thursday SPY Expirations and Tuesday and Thursday
QQQ Expirations would be treated similarly to existing Monday and
Wednesday SPY, QQQ, and IWM Expirations. The Exchange believes that
permitting Short Term Option Daily Expirations to expire in the same
week that standard monthly options expire on Fridays is consistent with
the Act. Not listing Short Term Option Daily Expirations for one week
every month because there was a monthly on that same class on the
Friday of that week would create investor confusion.
Further, as with Monday and Wednesday SPY, QQQ, and IWM
Expirations, the Exchange would not permit Tuesday and Thursday Short
Term Option Daily Expirations to expire on a business day in which
monthly
[[Page 63164]]
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 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. The Exchange
believes that it is consistent with the Act to not permit two
expirations on the same day in which a monthly options series or a
Quarterly Options Series would expire similar to Monday and Wednesday
SPY, QQQ, and IWM Expirations.
There are no material differences in the treatment of Wednesday SPY
and QQQ expirations for Short Term Option Series as compared to the
proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations.
Given the similarities between Wednesday SPY, QQQ and IWM Expirations
and the proposed Tuesday and Thursday SPY and QQQ Short Term Daily
Expirations, the Exchange believes that applying the provisions in Rule
19.5, Interpretation and Policy .05 that will apply to Wednesday SPY,
QQQ and IWM Expirations to Tuesday and Thursday SPY and QQQ Short Term
Daily Expirations is justified.
The Exchange further represents that it has an adequate
surveillance program in place to detect manipulative trading in the
proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations,
in the same way that it monitors trading in the current Short Term
Option Series and trading in Monday and Wednesday SPY, QQQ, and IWM
Expirations. The Exchange also represents that it has the necessary
systems capacity to support the new options series.
Finally, as previously noted, the proposed rule change is
substantively the same as a rule change proposed by BZX Options and
EDGX Options, which the Commission approved in 2022.\19\
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\19\ See supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposal will provide an
overall reduction in the number of Short Term Option Expirations to be
listed on the Exchange. The Exchange believes this reduction will not
impose an undue burden on competition, rather, it should encourage
Market- Makers to continue to deploy capital more efficiently and
improve displayed market quality.\20\ Also, the Exchange's proposal
curtails the number of weekly expirations in SPY, QQQ, and IWM without
reducing the classes of options available for trading on the Exchange.
The Exchange believes that despite the proposed curtailment of weekly
expirations, Members will be able to expand hedging tools and tailor
their investment and hedging needs more effectively in SPY, QQQ, and
IWM.
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\20\ See supra note 18.
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Similar to SPY, QQQ and IWM Monday and Wednesday Expirations, the
Exchange believes the introduction of SPY and QQQ Tuesday and Thursday
Short Term Daily Expirations will 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 SPY and QQQ Tuesday and Thursday Short Term Daily
Expirations will allow market participants to purchase SPY and QQQ
options 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 intermarket competition,
as other options exchanges have already adopted similar rules to list
and trade Short-Term Option Series with Tuesday and Thursday Short Term
Daily Expirations. Additionally, the Commission recently approved a
substantively identical proposal of another exchange and other
exchanges have filed to modify their rules in a similar fashion.\21\
Further, the Exchange does not believe the proposal will impose any
burden on intramarket competition, as all market participants will be
treated in the same manner under this proposal.
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\21\ See Securities and Exchange Act Release No. 96281 (November
9, 2022) (SR-ISE-2022-18); See also Securities Exchange Act Release
Nos. 96313 (November 15, 2022), 87 FR 70869 (November 21, 2022) (SR-
CboeBZX-2022-056) and 96320 (November 15, 2022), 87 FR 70880
(November 21, 2022) (SR-CboeEDGX-2022-051).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) of the Act \22\ and Rule 19b-
4(f)(6) thereunder.\23\
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\22\ 15 U.S.C. 78s(b)(3)(A).
\23\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposed rule change may become operative upon filing. The proposed
rule change is substantially similar to those of other currently
operating options exchanges.\26\ The Exchange states that it intends to
launch MEMX Options on September 13, 2023 and that waiver of the 30-day
operative delay would allow the Exchange to implement the proposed
change to amend its rules as set forth above prior to launch, thus
ensuring consistency of rules between the Exchange and other options
exchanges. For these reasons, and because the proposed rule change does
not raise any novel legal or regulatory issues, the Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\27\
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\24\ 17 CFR 240.19b-4(f)(6).
\25\ 17 CFR 240.19b-4(f)(6)(iii).
\26\ See supra note 6.
\27\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if
[[Page 63165]]
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#dba9aeb7bef6b8b4b6b6beb5afa89ba8beb8f5bcb4ad"><span class="__cf_email__" data-cfemail="80f2f5ece5ade3efedede5eef4f3c0f3e5e3aee7eff6">[email protected]</span></a>. Please include
file number SR-MEMX-2023-19 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-MEMX-2023-19. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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-MEMX-2023-19 and should be
submitted on or before October 5, 2023.
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\28\ 17 CFR 200.30-3(a)(12), (59).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-19845 Filed 9-13-23; 8:45 am]
BILLING CODE 8011-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.