Notice2024-22026
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Rules To Permit the Listing and Trading of Options Based on 1/100 of the Value of the Nasdaq-100 Index® (“Nasdaq-100”)
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 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 187 (Thursday, September 26, 2024)</title>
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[Federal Register Volume 89, Number 187 (Thursday, September 26, 2024)]
[Notices]
[Pages 78950-78955]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22026]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101120; File No. SR-CBOE-2024-043]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Exchange's Rules To Permit the Listing and Trading of Options Based
on 1/100 of the Value of the Nasdaq-100 Index[supreg] (``Nasdaq-100'')
September 20, 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 September 18, 2024, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') 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
[[Page 78951]]
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
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend the Exchange's rules to permit the listing and trading of
options based on 1/100 of the value of the Nasdaq-100 Index[supreg]
(``Nasdaq-100''). The text of the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx">http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx</a>), at the Exchange's Office of the
Secretary, 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 purpose of this proposed rule change is to amend certain rules
to permit the Exchange to list and trade index options on Nasdaq 100
Micro Index Options (``XND''). The XND options contract is the same in
all respects as the current Nasdaq-100 Index options (``NDX'') \5\
contract listed on the Exchange, except that it is based on 1/100 of
the value of the Nasdaq-100 Index, and will be P.M.-Settled with an
exercise settlement value based on the closing index value of the
Nasdaq-100 Index on the day of expiration.\6\ The Exchange believes
that the proposed contract will be valuable for retail and other
investors that wish to trade micro options on the Nasdaq-100 Index.
Today, Nasdaq Phlx LLC (``Phlx'') \7\ and Nasdaq ISE, LLC (``ISE'') \8\
have approval to list and trade XND options. The proposed rules to list
and trade XND options on the Exchange are substantially similar to
those of Phlx and ISE.
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\5\ See Rule 4.13(a)(3).
\6\ In addition to the current Nasdaq-100 Index value, Nasdaq
disseminates an index value for XND that is 1/100 of the value of
the Nasdaq-100 Index.
\7\ See Securities Exchange Act Release No. 98451 (September 20,
2023), 88 FR 66088 (September 26, 2023) (SR-Phlx-2023-07) (Order
Granting Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Make Permanent Certain P.M.-Settled Pilots).
\8\ See Securities Exchange Act Release No. 98886 (November 8,
2023), 88 FR 78417 (November 15, 2023) (SR-ISE-2023-24) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Permit
the Listing and Trading of XND Options).
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Nasdaq-100 Index
The Nasdaq-100 Index is a modified market capitalization-weighted
index that includes 100 of the largest non-financial companies listed
on The Nasdaq Stock Market LLC (``Nasdaq''), based on market
capitalization.\9\ It does not contain securities of financial
companies, including investment companies. Security types generally
eligible for the Nasdaq-100 Index include common stocks, ordinary
shares, American Depository Receipts, and tracking stocks. Security or
company types not included in the Nasdaq-100 Index are closed-end
funds, convertible debentures, exchange traded funds, limited liability
companies, limited partnership interests, preferred stocks, rights,
shares or units of beneficial interest, warrants, units and other
derivative securities.\10\
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\9\ The Nasdaq-100 Index is a broad-based index. See Rule 4.10.
\10\ A description of the Nasdaq-100 Index is available on
Nasdaq's website at <a href="https://indexes.nasdaqomx.com/docs/methodology_NDX.pdf">https://indexes.nasdaqomx.com/docs/methodology_NDX.pdf</a>.
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XND Options Contract
Currently, the Exchange is permitted to list NDX options that are
based on the full value of the Nasdaq-100 Index. The Exchange now
proposes to amend its Rules to permit the listing of a new micro option
contract based on this index. XND options will trade independently of
and in addition to NDX options, and the XND options will be subject to
the same rules that presently govern the trading of index options based
on the Nasdaq-100 Index, including sales practice rules, margin
requirements, trading rules, and position and exercise limits. Similar
to NDX, XND options will be European-style and cash-settled, and will
have a contract multiplier of 100. The contract specifications for XND
options will mirror in all respects those of the NDX options contract
already permitted to be listed on the Exchange, except that the
Exchange proposes that XND options will be based on 1/100 of the value
of the Nasdaq-100 Index, and will be P.M.-settled pursuant to proposed
Rule 4.13, Interpretation and Policy .14. The Exchange also proposes to
amend Rule 4.13(a)(4) to permit options on the Nasdaq 100 Micro Index
to trade a.m.-settled.
Pursuant to Rule 4.13(e), the Exchange would be permitted to open
for trading Weekly Expirations on XND, as a broad-based index and part
of the Nonstandard Expirations Program, to expire on any Monday,
Tuesday, Wednesday, Thursday or Friday (other than the third Friday-of-
the-month or days that coincide with an EOM expiration). ISE's rules
similarly permit XND to expire on any Monday, Tuesday, Wednesday,
Thursday or Friday.\11\ Weekly Expirations in XND would be subject to
all provisions of Rule 4.13 and treated the same as options on the same
underlying index that expire on the third Friday of the expiration
month; provided, however, that Weekly Expirations shall be P.M.-
settled and new series in Weekly Expirations may be added up to and
including on the expiration date for an expiring Weekly Expiration. The
maximum number of expirations that may be listed for each Weekly
Expiration (i.e., a Monday expiration, Tuesday expiration, Wednesday
expiration, Thursday expiration, or Friday expiration, as applicable)
in a given class is the same as the maximum number of expirations
permitted in Rule 4.13(a)(2) for standard options on the same broad-
based index.
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\11\ See ISE Rules, Options 4A, Section 12, Supplementary
Material .07.
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Further, the Exchange may open for trading EOMs on any broad-based
index eligible for standard options trading to expire on the last
trading day of the month. EOMs shall be subject to all provisions of
Rule 4.13 and treated the same as options on the same underlying index
that expire on the third Friday of the expiration month; provided,
however, that EOMs shall be P.M.-settled and new series in EOMs may be
added up to and including on the expiration date for an expiring
EOM.\12\ Today, XND options on Phlx \13\ and ISE \14\ are part of the
Nonstandard Program.
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\12\ XND is a broad-based index.
\13\ See Phlx Options 4A, Section 12(b)(5).
\14\ See ISE Rules, Options 4A, Section 12, Supplementary
Material .07.
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[[Page 78952]]
The Exchange does not believe that the introduction of a new P.M.-
settled Nasdaq-100 Index contract will cause any market disruptions, as
noted herein, because the proposed rule change is substantially similar
in all material respects to a proposal submitted by Phlx \15\ that was
previously approved by the Commission, as well as a proposal submitted
by ISE \16\ that was subject to Commission review. The Exchange will
monitor for any disruptions caused by P.M.-settlement of the proposed
XND options contract or the development of any factors that could cause
such disruptions. P.M.-settled options predominate in the over-the-
counter (``OTC'') market, and the Exchange is not aware of any adverse
effects in the OTC market attributable to the P.M.-settlement feature.
The Exchange is merely proposing to offer a P.M.-settled product in an
exchange environment, which offers the additional benefits of added
transparency, price discovery, and stability.
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\15\ See Securities Exchange Act Release No. 98451 (September
20, 2023), 88 FR 66088 (September 26, 2023) (SR-Phlx-2023-07) (Order
Granting Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Make Permanent Certain P.M.-Settled Pilots).
\16\ See Securities Exchange Act Release No. 98886 (November 8,
2023), 88 FR 78417 (November 15, 2023) (SR-ISE-2023-24) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Permit
the Listing and Trading of XND Options).
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Additionally, the Exchange proposes to amend Rule 4.12(c) to add
the Nasdaq 100 Mirco [sic] Index to the table regarding reporting
authorities for indexes. The Exchange notes the Nasdaq 100 Index
currently has the same reporting authority, i.e., Nasdaq, Inc.
Trading Hours, Minimum Increments, Expirations and Strike Prices
XND options will be available for trading during the Exchange's
standard trading hours for index options, i.e., from 9:30 a.m. to 4:15
p.m. (Eastern time),\17\ except that that on the last trading day,
transactions in expiring p.m.-settled broad-based index options may be
effected on the Exchange between the hours of 9:30 a.m. (Eastern time)
and 4 p.m. (Eastern time).\18\ The trading hours for XND options will
be the same as the trading hours for options on Nasdaq-100 Index.
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\17\ See Rule 5.1(b)(2).
\18\ See Rule 4.13(e)(3).
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XND options will be permitted to trade with a minimum trading
increment of $0.01 for all options series \19\ similar to Phlx \20\ and
ISE.\21\ The Exchange proposes to amend Rule 5.4(a) to state that for
so long as Invesco QQQ Trust Series 1 (``QQQ'') options participate in
the Penny Interval Program, the minimum increments for XND options
shall be the same as QQQ for all options series (including LEAPS),
which shall be $0.01 for options for all other series.
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\19\ This is the case as long as QQQ options (``QQQ'')
participate in the Penny Interval Program.
\20\ See Phlx Supplementary Material .03 to Options 3, Section
3.
\21\ See ISE Rules, Options 3, Section 3.
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The Exchange proposes that XND options will have monthly expiration
dates on the third Friday of each month (i.e., Expiration Friday), and
the Exchange proposes to list XND options in expiration months
consistent with those of other index option products available on the
Exchange.\22\ In addition, the Exchange may list long-term index
options series (``LEAPS'') that expire from twelve (12) to one-hundred
eighty (180) months from the date of issuance.\23\ There may be up to
ten (10) expiration months, none further out than one-hundred eighty
(180) months. Continuity Rules shall not apply to such options series
until the time to expiration is less than 270 days.\24\ Further, the
Exchange proposes to add ``Nasdaq 100 Micro Index'' to the list of
stock indices for which reduced-value LEAPS are approved for trading on
the Exchange, set forth in Rule 4.13(b)(2)(A). Pursuant to Rule
4.13(b)(2)(B), reduced-value LEAPS may expire at six-month intervals.
When a new expiration month is listed, series may be near or bracketing
the current index value. Additional series may be added when the value
of the underlying index increases or decreases by 10 to 15%. XND
options would also be eligible to be added to the Short Term Option
Series Program (``Weeklies'') and/or Quarterly Options Series Program
(``Quarterlies'') if designated by the Rules 4.13(a)(2)(A) and
(a)(2)(B), respectively.
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\22\ See Rule 4.13(a)(2).
\23\ See Rule 4.13(b).
\24\ See Rule 5.52(d)(2).
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Further, as noted herein, the Exchange proposes to permit XND
options to be listed and traded in accordance with the Nonstandard
Expirations Program, which permits broad-based indexes to list standard
options trading to expire on any Monday, Tuesday, Wednesday, Thursday,
or Friday (other than the third Friday-of-the-month or days that
coincide with an EOM expiration). Weekly Expirations would be subject
to all provisions of Rule 4.13 and would be treated the same as options
on the same underlying index that expire on the third Friday of the
expiration month. New series in Weekly Expirations could be added up to
and including on the expiration date for an expiring Weekly Expiration.
The maximum number of expirations that could be listed for each Weekly
Expiration (i.e., a Monday expiration, Tuesday expiration, Wednesday
expiration, Thursday expiration, or Friday expiration, as applicable)
in a given class would be the same as the maximum number of expirations
permitted for standard options on the same broad-based index.\25\
Further, the Exchange could open for trading EOMs on any broad-based
index eligible for standard options trading to expire on last trading
day of the month. EOMs would be subject to all provisions of Rule 4.13
and treated the same as options on the same underlying index that
expire on the third Friday of the expiration month. However, the EOMs
would be P.M.-settled and new series in EOMs could be added up to and
including on the expiration date for an expiring EOM.\26\ Today, XND
options on Phlx \27\ and ISE \28\ are part of the Nonstandard Program
of each of those exchanges.
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\25\ Weekly Expirations need not be for consecutive Monday,
Tuesday, Wednesday, Thursday, or Friday expirations as applicable;
however, the expiration date of a non-consecutive expiration may not
be beyond what would be considered the last expiration date if the
maximum number of expirations were listed consecutively. Weekly
Expirations that are first listed in a given class may expire up to
four weeks from the actual listing date. If the Exchange lists EOMs
and Weekly Expirations as applicable in a given class, the Exchange
will list an EOM instead of a Weekly Expiration that expires on the
same day in the given class. Other expirations in the same class are
not counted as part of the maximum number of Weekly Expirations for
an applicable broad-based index class. If the Exchange is not open
for business on a respective Monday, the normally Monday expiring
Weekly Expirations will expire on the following business day. If the
Exchange is not open for business on a respective Tuesday,
Wednesday, Thursday, or Friday, the normally Tuesday, Wednesday,
Thursday, or Friday expiring Weekly Expirations will expire on the
previous business day. If two different Weekly Expirations would
expire on the same day because the Exchange is not open for business
on a certain weekday, the Exchange will list only one of such Weekly
Expirations. See Rule 4.13(e)(1).
\26\ The maximum number of expirations that may be listed for
EOMs in a given class is the same as the maximum number of
expirations permitted in Rule 4.13(a)(2) for standard options on the
same broad-based index. EOM expirations need not be for consecutive
end of month expirations; however, the expiration date of a non-
consecutive expiration may not be beyond what would be considered
the last expiration date if the maximum number of expirations were
listed consecutively. EOMs that are first listed in a given class
may expire up to four weeks from the actual listing date. Other
expirations in the same class are not counted as part of the maximum
numbers of EOM expirations for a broad-based index class. See Rule
4.13(e)(2).
\27\ See Phlx Options 4A, Section 12(b)(5).
\28\ See ISE Rules, Options 4A, Section 12, Supplementary
Material .07.
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Generally, pursuant to Rule 4.13, Interpretation and Policy .01,
except as provided in Rule 4.13, Interpretation
[[Page 78953]]
and Policy .01(h), the exercise (strike) price intervals will be no
less than $5, provided that, in the case of certain classes of index
options noted in Rule 4.13, Interpretation and Policy .01(a), the
Exchange may determine to list strike prices at no less than $2.50
intervals. The Exchange proposes to amend Rule 4.13, Interpretation and
Policy .01(a) add XND options to the list of classes where strike price
intervals of no less than $2.50 are generally permitted and note, ``if
the strike price is less than $200.'' \29\ Further, the Exchange
proposes to amend Rule 4.13, Interpretation and Policy .01(h) which
currently provides that the Exchange may also list series at $1 strike
intervals for Mini-Nasdaq-100 Index (``MNX'' or ``Mini-NDX'').
Specifically, the Exchange proposes to amend Rule 4.13, Interpretation
and Policy .01(h) to adopt the same strike price intervals for XND
options as are listed for XND options on ISE \30\ and currently
approved for MNX options within Rule 4.13, Interpretation and Policy
.01(h). Thus, notwithstanding 4.13, Interpretation and Policy .01(a),
the interval between strike prices of series of XND options may be $1
(or greater), subject to the conditions described in Rule 4.13,
Interpretation and Policy .01(h). The Exchange will not list LEAPS on
XND options at intervals less than $2.50. If the Exchange determines to
add XND options to the Weeklies or Quarterlies programs such options
will be listed with expirations and strike prices described in Rule
4.13, Interpretation and Policy .01(h).
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\29\ Reduced-value Nasdaq 100 Index options are currently
included in the list of classes where strike price intervals of no
less than $2.50 are generally permitted. As part of the proposed
changes, the Exchange also proposes to add the same ``if the strike
price is less than $200'' language to the Reduced-value Nasdaq 100
Index, as this language was inadvertently omitted.
\30\ See ISE Rules, Options 4A, Section 12(c)(5).
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Position and Exercise Limits; Margin
The Exchange proposes to amend Rule 8.31(a). As with NDX, in
determining compliance with Rule 8.31 (Position Limits for Broad-Based
Index Options), there will be no position limits for broad-based index
option contracts in the XND class.\31\ Since the Exchange is proposing
to list a micro index contract that is based on 1/100 of the value of
the Nasdaq-100 Index, Rule 8.31(f) would apply. The Exchange proposes
to apply broad-based index margin requirements for the purchase and
sale of XND options that are the same as margin requirements currently
in place for NDX options.
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\31\ See proposed changes to Rule 8.31(a).
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Further, the Exchange proposes to amend Rule 8.35(b) to add XND to
the list of broad-based FLEX index options for which there are no
position limits.
In addition, there would be no exercise limits for XND. As such,
the Exchange proposes to amend Rule 8.42(b) to include XND in the list
of broad-based index options for which there are no exercise limits and
Rule 8.42(g) to include XND in the list broad-based FLEX index options
for which there are no exercise limits. The same rules for position and
exercise limits to XND options on ISE.\32\
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\32\ See ISE Rules, Options 4A, Section 6 (Position Limits) and
Section 10 (Exercise Limits).
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Surveillance and Capacity
The Exchange represents that it has sufficient capacity to handle
additional quotations and message traffic associated with the proposed
listing and trading of XND options. Further, the Exchange has analyzed
its capacity and represents that it believes the Exchange and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle any additional traffic associated with the listing
of the maximum number nonstandard expirations permitted pursuant to
Rule 4.13(e).
Index options are integrated into the Exchange's existing
surveillance system architecture, as well as the Financial Industry
Regulatory Authority's (FINRA'') (which performs certain regulatory
services for the Exchange pursuant to a regulatory services agreement),
and are thus subject to the relevant surveillance processes. The
Exchange represents that it has adequate surveillance procedures to
monitor trading in XND options thereby aiding in the maintenance of a
fair and orderly market.
The Exchange notes that it is amending Rule 4.13 to include the
Nasdaq 100 Micro Index Options within the Rule to conform to the
amendments proposed herein.
2. Statutory Basis
The Exchange believes 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.\33\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \34\ 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) \35\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\33\ 15 U.S.C. 78f(b).
\34\ 15 U.S.C. 78f(b)(5).
\35\ Id.
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The Exchange believes that the proposed rule change will further
the Exchange's goal of introducing new and innovative products to the
marketplace. Specifically, the Exchange believes that XND options would
provide additional opportunities for market participants to trade and
hedge exposure to the Nasdaq-100 Index as it does today on ISE and
Phlx. The proposed XND options product is identical to XND options on
ISE and Phlx. Additionally, the proposed XND options product is similar
to NDX options that are currently permitted to be listed and traded on
the Exchange with two important differences: (1) XND options will be
based on 1/100 the value of the Nasdaq-100 Index, and (2) XND options
will be P.M.-settled (in addition to being A.M.-settled). These
differences are based on the Exchanges experience listing NDX options
and are designed to attract additional participation from retail and
other investors.
The Exchange believes that the proposed contract specifications
will be attractive to market participants and will remove impediments
to and perfect the mechanism of a free and open market and a national
market system. The nonstandard expirations would expand the ability of
investors to hedge risks against market movements stemming from
economic releases or market events that occur during the month and at
the end of the month. Accordingly, the Exchange believes that weekly
expirations and EOMs should create greater trading and hedging
opportunities and flexibility, and provide customers with the ability
to tailor their investment objectives more closely.
The Exchange believes that a micro index option would allow
additional participation from investors. Specifically, the Exchange
believes that basing the contract on a micro value of the Nasdaq-100
Index will encourage
[[Page 78954]]
additional participation by retail and other investors due to the
reduced capital outlay needed to trade these options.
XND options will be subject to the same rules that presently govern
the trading of index options based on the Nasdaq-100 Index, including
sales practice rules, margin requirements, trading rules, and position
and exercise limits. The Exchange therefore believes that the rules
applicable to trading in XND options are consistent with the protection
of investors and the public interest. Furthermore, the Exchange
represents that it has sufficient systems capacity and adequate
surveillance procedures to handle trading in XND options.
With respect to the Exchange's proposal to provide that minimum
increments for bids and offers for XND options be the same as those for
QQQ, regardless of the value at which the option series is quoted, may
promote competition and benefit investors. This proposal aligns the
minimum increments for XND options with those for QQQ options in order
to allow market participants to quote in minimum increments of $0.01 is
consistent with the Act because allowing participants to quote in
smaller increments may provide the opportunity for reduced spreads,
thereby lowering costs to investors. In addition, because both XND and
QQQ are based on the Nasdaq-100 Index it would be reasonable for the
minimum increments of bids and offers to be the same for both types of
options.
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. XND options would be
available for trading to all market participants. The proposed rule
change will facilitate the listing and trading of a new option product
that will enhance competition among market participants, to the benefit
of investors and the marketplace. The listing of XND will enhance
competition by providing investors with an additional investment
vehicle, in a fully-electronic trading environment, through which
investors can gain and hedge exposure to the Nasdaq-100 Index.
Furthermore, this product could offer a competitive alternative to
other existing investment products that seek to allow investors to gain
broad market exposure. Finally, two other exchanges currently list the
same product for trading in accordance with substantially similar
rules.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \36\ and Rule 19b-4(f)(6) thereunder.\37\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \38\ and Rule 19b-
4(f)(6)(iii) thereunder.\39\
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\36\ 15 U.S.C. 78s(b)(3)(A)(iii).
\37\ 17 CFR 240.19b-4(f)(6).
\38\ 15 U.S.C. 78s(b)(3)(A).
\39\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \40\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\41\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. As discussed above, the
Exchange states that this proposed rule change is substantially similar
to a proposal submitted by Phlx \42\ that was previously approved by
the Commission, as well as a proposal submitted by ISE \43\ that was
subject to Commission review. The Exchange also stated that the two
other exchanges currently list the same product for trading in
accordance with substantially similar rules. The Exchange believes that
the waiver of the operative delay will protect investors by allowing
the Exchange to implement the proposal expeditiously, and it will
promote competition by providing an additional venue upon which to
trade this product. The Commission believes that waiver of the
operative delay is consistent with the protection of investors and the
public interest because it will permit the Exchange to remain
competitive with other exchanges and provide immediate choice to market
participants to readily direct order flow to competing venues who offer
similar functionality. Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\44\
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\40\ 17 CFR 240.19b-4(f)(6).
\41\ 17 CFR 240.19b-4(f)(6)(iii).
\42\ See Securities Exchange Act Release No. 98451 (September
20, 2023), 88 FR 66088 (September 26, 2023) (SR-Phlx-2023-07) (Order
Granting Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Make Permanent Certain P.M.-Settled Pilots).
\43\ See Securities Exchange Act Release No. 98886 (November 8,
2023), 88 FR 78417 (November 15, 2023) (SR-ISE-2023-24) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Permit
the Listing and Trading of XND Options).
\44\ For purposes only of waiving the 30-day operative delay,
the Commission has 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 this 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 under
Section 19(b)(2)(B) \45\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\45\ 15 U.S.C. 78s(b)(2)(B).
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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#295b5c454c044a4644444c475d5a695a4c4a074e465f"><span class="__cf_email__" data-cfemail="9ae8eff6ffb7f9f5f7f7fff4eee9dae9fff9b4fdf5ec">[email protected]</span></a>. Please include
file number SR-CBOE-2024-043 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.
[[Page 78955]]
All submissions should refer to file number SR-CBOE-2024-043. 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-CBOE-2024-043 and should be
submitted on or before October 17, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
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\46\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-22026 Filed 9-25-24; 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.