Notice2025-06254
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 1808, Trading Sessions
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Published
April 14, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 70 (Monday, April 14, 2025)</title>
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[Federal Register Volume 90, Number 70 (Monday, April 14, 2025)]
[Notices]
[Pages 15598-15600]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06254]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102788; File No. SR-MIAX-2025-16]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 1808, Trading Sessions
April 8, 2025.
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 March 27, 2025, Miami International Securities Exchange, LLC
(``MIAX'' 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 amend Exchange Rule 1808, Trading
Sessions, subparagraph (g), Pricing When Primary Market Does Not Open,
to now use the last reported sale price of the security from the
previous trading day for purposes of calculating the current index
value at expiration of Exchange listed index options on days when the
primary market for the underlying security does not open.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings">https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings</a>, at MIAX'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 Exchange Rule 1808(g) regarding
determination of the price of component securities for purposes of
calculating the current index value at expiration of Exchange listed
index options on days when the primary market for the underlying
security does not open. At the time of this filing, the proposed rule
change would apply to only to A.M.-settled index options.\3\
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\3\ On March 10, 2025, the Exchange filed SR-MIAX-2025-08 with
the Securities and Exchange Commission (``Commission'') to, among
other things, permit the listing and trading of cash-settled index
options on the Bloomberg US Large Cap Price Return Index (``B500
Index''). See Securities Exchange Act Release No. 102580 (March 11,
2025), 90 FR 12411 (March 17, 2025)(SR-MIAX-2025-08)(Notice of
Filing of a Proposed Rule Change by Miami International Securities
Exchange, LLC To Amend Certain MIAX Options Exchange Rules To Permit
the Listing and Trading of Cash-Settled Index Options on the
Bloomberg US Large Cap Price Return Index (the ``B500 Index''). If
the Commission approves SR-MIAX-2025-08, the Exchange will be
permitted to, among other things, list and trade P.M.-settled index
options on the B500 Index. See id. at proposed Interpretation and
Policy .06 to Exchange Rule 1809. Currently, traditional index
options expiring on the third Friday of the month are A.M.-settled,
meaning that the index option's settlement value is calculated based
upon opening prices of the index's component securities on the last
day of trading in the component securities prior to expiration,
normally on Friday morning. By contrast, the settlement of P.M.-
settled index options (if the Exchange's proposed rules to list such
index options are approved) will be based upon the closing index
value, which will be determined from the last index value reported
on a business day for the expiring P.M.-settled index option.
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Currently, Exchange Rule 1808(g) provides that when the primary
market for a security underlying the current index value of an index
option does not open for trading on a given day, the price of that
security shall be determined, for purposes of calculating the current
index value at expiration, based on the opening price of that security
on the next day that its primary market is open for trading.\4\
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\4\ Exchange Rule 1808(g) provides that this procedure is not to
be used if the current index value at expiration is fixed in
accordance with the Rules and By-Laws of the Options Clearing
Corporation (``OCC'').
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The Exchange now proposes to delete from the rule the language
providing for determination of the price of the component security, for
purposes of calculating the current index value at expiration, based on
the opening price of that security on the next day that its primary
market is open for trading. The Exchange proposes to amend Exchange
Rule 1808(g) so that it provides that
[[Page 15599]]
when the primary market for a security underlying the current index
value of an index option does not open for trading on a given day,
which is an expiration day, for the purposes of calculating the
settlement price at expiration, the last reported sale price of the
security from the previous trading day shall be used.\5\ The Exchange
notes that other options exchanges also use the last reported sale
price of the security from the previous trading day for purposes of
calculating the current index value at expiration of exchange listed
index options on days when the primary market for the underlying
security does not open.\6\ The revised provision would provide Members
\7\ with the certainty of knowing the settlement value on the day on
which the primary market fails to open. Additionally, the proposed rule
change would eliminate the potential difficulties that could arise if
the reporting authority for the index were unwilling or unable to
calculate the settlement value using prices for the relevant
security(ies) on the next day that its primary market is open for
trading.\8\
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\5\ Exchange Rule 1808(g) would continue to apply to A.M.-
settled index options and, if approved, P.M.-settled index options.
\6\ See e.g. Nasdaq ISE, LLC (``ISE'') Rules, ISE Options 4A,
Section 4(b), Pricing When Primary Market Does Not Open, available
at <a href="https://listingcenter.nasdaq.com/rulebook/ise/rules/ISE%20Options%204A">https://listingcenter.nasdaq.com/rulebook/ise/rules/ISE%20Options%204A</a> (last visited March 14, 2025); see also Nasdaq
Stock Market LLC (``Nasdaq'') Rules, Nasdaq Options 4A, Section
11(g), Pricing When Primary Market Does Not Open, available at
<a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Options%204A">https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Options%204A</a> (last visited March 14, 2025); see also Nasdaq
PHLX, LLC (``PHLX'') Rules, PHLX Options 4A, Section 4(b), Pricing
When Primary Market Does Not Open, available at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rules/Phlx%20Options%204A">https://listingcenter.nasdaq.com/rulebook/phlx/rules/Phlx%20Options%204A</a>
(last visited March 14, 2025).
\7\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\8\ See Securities Exchange Act Release No. 102580 (March 11,
2025) (not yet published in the Federal Register) (Bloomberg Index
Services Limited is the reporting authority for the B500 Index).
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The rule would continue to provide that this procedure shall not be
used if the current index value at expiration is fixed in accordance
with OCC rules and by-laws. This language recognizes that OCC is
authorized under its rules and by-laws to take certain actions relating
to settlement in the event of the unavailability or inaccuracy of the
current underlying interest value.\9\ The Exchange proposes to retain
this language in recognition of OCC's authority to establish settlement
prices and procedures in certain circumstances where normal settlement
procedures cannot be followed due unforeseen events, such as the
unanticipated closure of a primary market for a component security on a
day on which it would normally be open for trading. The Exchange would
thus retain the last sentence of Rule 1808(g) which will make clear
that the new procedure would not apply in the event that OCC exercises
its authority to determine settlement prices. Rather, the proposed rule
change would apply only when a primary market does not open and OCC
elects not to exercise its authority to intervene and take action to
establish a settlement price.
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\9\ See OCC By-Laws Article XVII, Section 4(a), which provides
in relevant part that if OCC shall determine that the primary
market(s) (as determined by the Corporation) for one or more index
components did not open or remain open for trading (or that any such
components did not open or remain open for trading on such
market(s)) on a trading day at or before the time when the current
index value for that trading day would ordinarily be determined, or
that a current index value or other value or price to be used as, or
to determine, the exercise settlement amount (a ``required value'')
for a trading day is otherwise unreported, inaccurate, unreliable,
unavailable or inappropriate for purposes of calculating the
exercise settlement amount, then, in addition to any other actions
that OCC may be entitled to take under the By-Laws and Rules, OCC
shall be empowered to do any or all of the following with respect to
any series of options on such index, including fixing the exercise
settlement amount.
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The Exchange notes that Exchange Rule 1808(g) as proposed to be
amended by this filing, is incorporated by reference into the rulebooks
of the Exchange's affiliates, MIAX PEARL, LLC (``MIAX Pearl''), MIAX
Emerald, LLC (``MIAX Emerald''), and MIAX Sapphire, LLC (``MIAX
Sapphire''). As such, the amendment to Exchange Rule 1808(g) proposed
herein will also apply to MIAX Pearl, MIAX Emerald, and MIAX Sapphire
members.
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.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ 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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change is designed to
remove impediments to and perfect the mechanism of a free and open
market and a national market system because it would provide Members
with the certainty of knowing the settlement value on the day on which
the primary market fails to open, and eliminate the potential
difficulties that could arise if the reporting authority for the index
were unwilling or unable to calculate the settlement value using prices
for the relevant security(ies) on the next day that its primary market
is open for trading.
It would also acknowledge clearly, however, that OCC may, under its
rules and by-laws, establish settlement prices for expiring index
options that may differ from the settlement prices that would otherwise
be provided for in Exchange rules, thereby protecting investors and the
public interest by reducing potential for confusion in that regard.
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.
Intra-Market Competition
This proposal does not create an unnecessary or inappropriate
intra-market burden on competition because the proposed change will
apply uniformly to all Members. Further, the proposed change is not
designed to address any competitive issues.
Inter-Market Competition
The Exchange believes that this proposal does not create an
unnecessary or inappropriate inter-market burden on competition. On the
contrary, the Exchange believes that the proposed rule change will
benefit investors, market participants, and the marketplace in general
by providing Members with the certainty of knowing the settlement price
on the day on which the primary market fails to open, eliminating the
potential difficulties that could arise if the reporting authority for
the index were unwilling or unable to calculate the settlement value
using prices for the relevant security(ies) on the next day that its
primary market is open for trading, and retaining the existing
provision stating that the Exchange will defer to OCC in
[[Page 15600]]
the determination of settlement prices when and if OCC exercises its
authority under its own settlement price procedures in accordance with
its rules and by-laws. The Exchange believes this proposal does not
impose any burden on inter-market competition because this is not a
competitive proposal as other options exchanges also use the last
reported sale price of the security from the previous trading day for
purposes of calculating the current index value at expiration of
exchange listed index options on days when the primary market for the
underlying security does not open.\12\
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\12\ See supra note 6.
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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 \13\ and Rule 19b-
4(f)(6) \14\ 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.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. In the filing, the
Exchange stated that other options exchanges similarly use the last
reported sale price of the security from the previous trading day for
purposes of calculating the current index value at expiration of
exchange listed index options on days when the primary market for the
underlying security does not open.\17\ The Exchange also highlighted
that the change will allow investors the certainty of knowing the
settlement price on the day on which the primary market of an
underlying component fails to open, and would mitigate against issues
that could arise if the reporting authority for the index were
unwilling or unable to calculate the settlement value using prices for
the relevant security(ies) on the next day that its primary market is
open for trading. The proposed modification to Rule 1808(g) does not
raise any novel issues and provides clarity to market participants
regarding determination of the price of component securities for
purposes of calculating the current index value at expiration of
Exchange listed index options on days when the primary market for the
underlying security does not open, and therefore, waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\18\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ See supra note 6.
\18\ 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 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#1664637a733b75797b7b737862655665737538717960"><span class="__cf_email__" data-cfemail="b5c7c0d9d098d6dad8d8d0dbc1c6f5c6d0d69bd2dac3">[email protected]</span></a>. Please include
file number SR-MIAX-2025-16 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-MIAX-2025-16. 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-MIAX-2025-16 and should be
submitted on or before May 5, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-06254 Filed 4-11-25; 8:45 am]
BILLING CODE 8011-01-P
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