Notice2023-26591
Self-Regulatory Organizations; MIAX PEARL LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 404, Series of Option Contracts Open for Trading To Adopt New Interpretations and Policies .12
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
December 5, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 232 (Tuesday, December 5, 2023)</title>
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[Federal Register Volume 88, Number 232 (Tuesday, December 5, 2023)]
[Notices]
[Pages 84379-84383]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-26591]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99034; File No. SR-PEARL-2023-66]
Self-Regulatory Organizations; MIAX PEARL LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 404, Series of Option Contracts Open for Trading To Adopt New
Interpretations and Policies .12
November 29, 2023.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 24, 2023, MIAX PEARL LLC (``MIAX Pearl'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt new Interpretations and Policies .12
to Rule 404, Series of Option Contracts Open for Trading, to adopt a
new strike interval program.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings">https://www.miaxglobal.com/markets/us-options/pearl-options/rule-filings</a>, at MIAX Pearl'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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 404, Series of Option Contracts
Open for Trading. Specifically, the Exchange proposes to adopt new
Interpretations and Policies .12 to Rule 404 to implement a new strike
interval program for stocks that are priced less than $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 Exchange also proposes to
amend the table in Interpretations and Policies .11 of Rule 404 to
harmonize the table to the propose change.
Background
Currently, Exchange Rule 404, Series of Option Contracts Open for
Trading, describes the process and procedures for listing and trading
series of options \3\ on the Exchange. Rule 404 provides for a $2.50
Strike Price Program, where the Exchange may select up to 60 option
classes \4\ 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.\5\ Rule 404 also provides for a $1 Strike Price
Interval Program, where the interval between strike prices of series of
options \6\ on individual stocks may be $1.00 or greater provided the
strike price is $50.00 or less, but not less than $1.00.\7\
Additionally, Rule 404 provides for a $0.50 Strike Program.\8\ 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.\9\
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\3\ 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.
\4\ The terms ``class of options'' or ``option class'' means all
option contracts covering the same underlying security. See Exchange
Rule 100.
\5\ See Exchange Rule 404(f).
\6\ 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.
\7\ See Interpretations and Policies .01(a) of Rule 404.
\8\ See Interpretations and Policies .04 of Rule 404.
\9\ Id.
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Proposal
At this time, 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) \10\ 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
[[Page 84380]]
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.\11\ Therefore, the Exchange
is proposing to implement a new strike interval program termed the
``Low Priced Stock Strike Price Interval Program.'' The Exchange notes
that this proposal is substantively identical to a proposal recently
approved on the Exchange's affiliate, MIAX Options Exchange.\12\
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\10\ See Interpretations and Policies .02 of Rule 404.
\11\ See Interpretations and Policies .04 of Rule 404.
\12\ 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).
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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.\13\ 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).\14\ 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.
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\13\ 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.
\14\ The Exchange notes this is the same methodology used in the
$1 Strike Price Interval Program. See Interpretations and Policies
.01(c)(3) of Rule 404.
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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.\15\ 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.\16\ 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 trading volume of
at least 90,000 shares during the last six month period.\17\
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\15\ See Exchange Rule 402(b)(4).
\16\ See Exchange Rule 402(f)(3)(ii).
\17\ See Exchange Rule 1802(d)(7).
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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. 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.\18\ 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.
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\18\ 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).
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Impact of Proposal
The Exchange recognizes that its 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'').\19\ The Strike
Interval Proposal was intended to remove repetitive and unnecessary
[[Page 84381]]
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.\20\ 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.\21\ 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.
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\19\ 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: <a href="https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal">https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal</a>).
\20\ See Securities Exchange Act No. 91225 (February 12, 2021),
86 FR 10375 (February 12, 2021) (SR-BX-2020-032).
\21\ See id.
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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 \22\ 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.
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\22\ See proposed Interpretations and Policies .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.
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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.
The Exchange also believes that Members \23\ 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.
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\23\ 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.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with section 6(b) of the Act \24\ in general, and
furthers the objectives of section 6(b)(4) of the Act \25\ in
particular, in that it is an equitable allocation of reasonable dues,
fees, and other charges among its members and issuers and other persons
using its facilities. The Exchange also believes the proposal furthers
the objectives of section 6(b)(5) of the Act \26\ in that it is
designed to promote just and equitable principles of trade, 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 and is not designed to permit unfair discrimination
between customers, issuers, brokers and dealers.
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\24\ 15 U.S.C. 78f(b).
\25\ 15 U.S.C. 78f(b)(4).
\26\ 15 U.S.C. 78f(b)(5).
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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 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.\27\ 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.\28\ 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-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.
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\27\ See Yahoo! Finance, <a href="https://finance.yahoo.com/quote/SOND/history?p=SOND">https://finance.yahoo.com/quote/SOND/history?p=SOND</a> (last visited August 10, 2023).
\28\ See Yahoo! Finance, <a href="https://finance.yahoo.com/quote/CTXR/history?p=CTXR">https://finance.yahoo.com/quote/CTXR/history?p=CTXR</a> (last visited August 10, 2023).
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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
[[Page 84382]]
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,\29\ ADRs,\30\ and broad-based indexes.\31\
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\29\ See supra note 15.
\30\ See supra note 16.
\31\ See supra note 17.
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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.\32\ 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.\33\
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.
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\32\ See Exchange Rule 402(a)(1) and (2).
\33\ See Exchange Rule 402(b)(1), (2), (3) and (4).
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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 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
Pursuant to section 19(b)(3)(A) of the Act \34\ and Rule 19b-
4(f)(6) \35\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.\36\
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\34\ 15 U.S.C. 78s(b)(3)(A).
\35\ 17 CFR 240.19b-4(f)(6).
\36\ 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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[[Page 84383]]
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \37\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Commission
notes it has approved a proposed rule change substantially identical to
the one proposed by the Exchange.\38\ The proposed change raises no
novel legal or regulatory issues. Therefore, the Commission believes
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.\39\
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\37\ 17 CFR 240.19b-4(f)(6)(iii).
\38\ See supra note 3.
\39\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<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#deacabb2bbf3bdb1b3b3bbb0aaad9eadbbbdf0b9b1a8"><span class="__cf_email__" data-cfemail="ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099">[email protected]</span></a>. Please include
file number SR-PEARL-2023-66 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-PEARL-2023-66. 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-PEARL-2023-66 and should be
submitted on or before December 26, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
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\40\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-26591 Filed 12-4-23; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on December 5, 2023.
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.