Notice2024-04296
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a Low Priced Stock Strike Price Interval Program
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
March 1, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 42 (Friday, March 1, 2024)</title>
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[Federal Register Volume 89, Number 42 (Friday, March 1, 2024)]
[Notices]
[Pages 15229-15233]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-04296]
[[Page 15229]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99599; File No. SR-MEMX-2024-04]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Adopt a Low Priced
Stock Strike Price Interval Program
February 26, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 20, 2024, MEMX LLC (``MEMX'' or the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 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 is filing with the Commission a proposal to adopt a
Low Priced Stock Strike Price Interval Program. 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.
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 19.5 to adopt a Low Priced
Stock Strike Price Interval Program. Miami International Securities
Exchange, LLC (``MIAX'') recently received approval to amend its 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 preceding calendar
months.\5\ At this time, the Exchange proposes to adopt rules
substantively identical to MIAX in proposed Rule 19.5, Interpretation
and Policy .09, amend Rule 19.5(d) to add clarifying text, and amend
Rule 19.5 Interpretation and Policy .05(f) to harmonize the table
within that Rule to the proposed rule text.
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\5\ See Securities Exchange Act Release 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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Currently, Rule 19.5 describes the process and procedures for
listing and trading series of options on the Exchange. Rule 19.5
provides for a $2.50 Strike Price Program, where the Exchange may
select up to 200 option classes on individual stocks for which the
interval of strike prices will be $2.50 where the strike price is
greater than $25 but less than $50.\6\ Rule 19.5, Interpretation and
Policy .02 also provides for a $1 Strike Price 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.\7\ Additionally, Rule 19.5,
Interpretation and Policy .06 provides for a ``$0.50 Strike Program.''
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 (``OCC'') 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 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.\8\ The Exchange
proposes to adopt a new strike interval program for stocks that are not
in the aforementioned $0.50 Strike Program (or the Short Term Option
Series Program) \9\ 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
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 is 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 OCC during the preceding three calendar months.\10\
Therefore, the Exchange is proposing to implement a new strike interval
program termed the ``Low Priced Stock Strike Price Interval Program.''
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\6\ See Rule 19.5, Interpretation and Policy .03(a).
\7\ See Rule 19.5, Interpretation and Policy .02(a).
\8\ See Rule 19.5, Interpretation and Policy .06.
\9\ See Rule 19.5, Interpretation and Policy .05. The proposed
rule change also makes two non-substantive changes to correct
inadvertent errors in the introductory paragraph of Rule 19.5,
Interpretation and Policy .05, by adding the word ``Options'' in the
third sentence so that ``Short Term Weekly Expirations'' becomes
``Short Term Options Weekly Expirations'', and changing the term
``Option'' to ``Options'' in the second to last sentence.
\10\ See Rule 19.5, Interpretation and Policy .06.
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To be eligible for the inclusion in the Low Priced Stock Strike
Price Interval Program, an underlying stock must (1) close below $2.50
in its primary market on the previous trading day; and (2) have an
average daily trading volume of at least 1,000,000 shares per day for
the three 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.\11\ For the purpose of adding strikes under the Low Priced
Stock Strike Price Interval
[[Page 15230]]
Program, the ``price of the underlying stock'' is measured in the same
way as ``the price of the underlying security'' is measured as set
forth in Section 3(g) of the Options Listing Procedures Plan
(``OLPP''). 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. 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 on 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.
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\11\ 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.
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The Exchange believes that the program's 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 (``ADRs''), 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 12 months.\12\ Rule 19.3(f) provides the criteria for
listing options on ADRs if they meet certain criteria and guidelines
set forth in Rule 19.3. One of the requirements is that the average
daily trading volume for the security in the U.S. markets over the
three months preceding the selection of the ADR for options trading is
100,000 or more shares.\13\ Finally, the Exchange may trade options on
a broad-based index pursuant to Rule 19b-4(e) of the Securities
Exchange Act of 1934 (the ``Act'') provided a number of conditions are
satisfied. One of those conditions is that each component security that
accounts for at least 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.\14\
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\12\ See Rule 19.3(b)(4).
\13\ See Rule 19.3(f)(3)(B).
\14\ See Rule 29.3(b)(7).
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Additionally, the Exchange proposes to add non-substantive
clarifying language to Rule 19.5(d), which defines the interval between
strike prices of series of options on individual stocks. Specifically,
in light of the multiple strike intervals allowed under various
provisions of Rule 19.5 and the Interpretations and Policies thereto,
the Exchange proposes to insert ``except as otherwise provided in this
Rule and the Interpretations and Policies hereto . . .'' at the
beginning of Rule 19.5(d). The Staff believes this will eliminate any
potential confusion and further clarify that other strikes not
mentioned in 19.5(d) are permissible under the Exchange's Rules.\15\
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\15\ The Exchange notes that this introductory language appears
in MIAX's similar Rule 404(d).
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Lastly, the Exchange proposes to amend the table in Rule 19.5,
Interpretation and Policy .05(f) to insert a new column to harmonize
the Exchange's proposal to the strike intervals for Short Term Options
Series as described in Rule 19.5, Interpretation and Policy .05. The
table in Rule 19.5, Interpretation and Policy .05(f) 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.\16\ 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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\16\ 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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The Exchange recognizes that its proposal will introduce new
strikes in the marketplace and further acknowledges that there has been
significant effort 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'').\17\ For example, the Exchange filed a 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'').\18\ 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.\19\
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 was not demand. At
the time of its proposal, Nasdaq BX estimated that the Strike Interval
Proposal would reduce the number of listed strikes in the options
market by approximately 81,000 strikes.\20\ 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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\17\ 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>.
\18\ Id.
\19\ Id.
\20\ Id.
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The Exchange recognizes that its proposal will moderately increase
the total number of option series available
[[Page 15231]]
on the Exchange. However, the Exchange's proposal is designed to only
add strikes where there is investor demand \21\ 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, the Exchange notes that 36 were in the $1 Strike Price
Interval Program with $1.00 and $2.00 strikes listed. Under the
Exchange's proposal, the $0.50 and $1.50 strikes for these symbols
would be added for the current expiration terms. The remaining 70
symbols eligible under the proposal would have $0.50, $1.00, $1.50 and
$2.00 strikes added to their current expiration terms. Therefore, the
Exchange notes that for the 106 symbols eligible for the Low Priced
Stock Strike Price Interval Program, a total of approximately 3,250
options would be added. The Exchange is still in the process of listing
underlying option symbols in phases in connection with the launch of
MEMX Options, but once fully rolled out, expects to list over 1,000,000
options, therefore, the additional options that would be listed under
this proposal would represent a relatively minor increase of
approximately 0.325% in the number of options listed.
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\21\ See proposed Rule 19.5, Interpretation and Policy .09(a),
which requires that an underlying stock must (1) close below $2.50
in its primary market on the previous trading day; and (2) have an
average daily trading volume of at least 1,000,000 shares per day
for the three preceding calendar months.
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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 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.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\22\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \23\ 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) \24\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\22\ 15 U.S.C. 78f(b).
\23\ 15 U.S.C. 78f(b)(5).
\24\ Id.
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In particular, 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.\25\ 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 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.\26\ 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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\25\ 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).
\26\ Id.
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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 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 any
previous efforts to eliminate repetitive and unnecessary strikes in any
fashion.
The Exchange believes that the proposed program's average daily
trading volume threshold promotes just and equitable principles of
trade and removes impediments to and perfects
[[Page 15232]]
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
the proposed program's average daily trading volume requirement is
substantially greater than the average daily trading requirement
currently in place on the Exchange for options on equity
underlyings,\27\ ADRs,\28\ and broad-based indexes.\29\
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\27\ See supra note 12.
\28\ See supra note 13.
\29\ See supra note 14.
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The Exchange also believes the proposed rule change is consistent
with Section 6(b)(1) of the Act,\30\ which provides that the Exchange
be organized and have the capacity to be able to carry out the purposes
of the Act and to enforce compliance by the Exchange's Members and
persons associated with its Members with the Act, 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 as 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.
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\30\ 15 U.S.C. 78f(b)(1).
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The Exchange believes that the proposal to add non-substantive
clarifying language to Rule 19.5(d), which defines the interval between
strike prices of series of options on individual stocks, and make other
non-substantive corrective edits to Rule 19.5, 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 eliminate potential Member confusion.
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 19.3. Specifically, Rule 19.3(a) 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 with the
Commission and be an ``NMS stock'' as defined in Rule 600 of Regulation
NMS under the Act; (2) the security shall be characterized by a
substantial number of outstanding shares that are widely held and
actively traded. Additionally, Rule 19.3(b) provides that, subject to
other factors the Exchange may consider, an underlying security will
not be selected for options transactions unless: (1) there are a
minimum of 7,000,000 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 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 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 12 months. 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 with the Exchange's listings rules. As such, the Exchange
believes that the listing requirements described in Rule 19.3 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.
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
intramarket competition as the Rules of the Exchange apply equally to
all Members 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's proposal is substantively identical to MIAX
Interpretations and Policies .11 and .12 to Rule 404.
The Exchange does not believe that its proposed rule change will
impose any burden on intermarket 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 intermarket 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
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
Pursuant to Section 19(b)(3)(A) of the Act \31\ and Rule 19b-
4(f)(6) \32\ 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.\33\
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\31\ 15 U.S.C. 78s(b)(3)(A).
\32\ 17 CFR 240.19b-4(f)(6).
\33\ 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 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) \34\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public
[[Page 15233]]
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.\35\
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.\36\
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\34\ 17 CFR 240.19b-4(f)(6)(iii).
\35\ See supra note 5.
\36\ 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#0c7e796069216f6361616962787f4c7f696f226b637a"><span class="__cf_email__" data-cfemail="186a6d747d357b7775757d766c6b586b7d7b367f776e">[email protected]</span></a>. Please include
file number SR-MEMX-2024-04 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-2024-04. 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-2024-04 and should be
submitted on or before March 22, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-04296 Filed 2-29-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on March 1, 2024.
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.