Notice2025-07810
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Order Granting Approval of a Proposed Rule Change To Amend Certain MIAX Options Exchange Rules To Permit the Listing and Trading of Options on the Bloomberg US Large Cap Price Return Index
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
May 6, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 86 (Tuesday, May 6, 2025)</title>
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[Federal Register Volume 90, Number 86 (Tuesday, May 6, 2025)]
[Notices]
[Pages 19236-19240]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-07810]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102959; File No. SR-MIAX-2025-08]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Order Granting Approval of a Proposed Rule Change To
Amend Certain MIAX Options Exchange Rules To Permit the Listing and
Trading of Options on the Bloomberg US Large Cap Price Return Index
April 30, 2025.
I. Introduction
On March 10, 2025, Miami International Securities Exchange, LLC
(``MIAX'' or the ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to permit the listing and trading
of A.M.- and P.M.-settled index options on the Bloomberg US Large Cap
Price Return Index (``B500 Index''). The proposed rule change was
published for comment in the Federal Register on
[[Page 19237]]
March 17, 2025.\3\ The Commission received one letter from MIAX
regarding the proposed rule change.\4\ As discussed further below, the
Commission is approving the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 102580 (March 11,
2025), 90 FR 12411 (``Notice'').
\4\ See Letter from Joseph W. Ferraro III, SVP, Deputy General
Counsel, MIAX, to Vanessa Countryman, Secretary, Commission, dated
April 2, 2025 (``MIAX Letter'') (stating that the Exchange would not
begin to trade options on the B500 Index until (i) the self-
certification filing to list and trade futures contracts on the B500
Index by MIAX Futures is past the Commodity Futures Trading
Commission's statutory review period, and (ii) MIAX Futures
commences the listing and trading of B500 Index futures).
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II. Description of the Proposal
The Exchange proposes to permit the listing and trading of A.M.-
and P.M.-settled index options on the B500 Index with third Friday-of-
the month expirations, and to allow the Exchange to list broad-based
index options with nonstandard expirations (which are P.M. settled).\5\
According to the Exchange, the B500 Index is a broad-based, float
market-capitalization-weighted benchmark of the 500 most highly
capitalized U.S.-listed companies.\6\ The Exchange further states that
all constituents of the B500 Index are securities consisting of common
stocks, real estate investment trusts, and tracking stocks, which are
primarily listed on a U.S. securities exchange.\7\ Moreover, the
components of the B500 Index are determined from the U.S.-listed
companies that have the largest cumulative free-float market
capitalization. Each component security of the B500 Index must meet
certain minimum eligibility and liquidity screening requirements, and
Bloomberg Index Services Limited (``BISL''), as the administrator of
the B500 Index, monitors and maintains the B500 Index, including
handling the quarterly and semi-annual rebalances.\8\
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\5\ See Notice, supra note 3, at 12411. Pursuant to the proposed
rule change, only options on the B500 Index would be listed and
traded with nonstandard expirations. Id. at 12414. See also infra
note 55.
\6\ See Notice, supra note 3, at 12411.
\7\ Id.
\8\ Id.; see also proposed Exchange Rule 1801, Interpretation
and Policy .01 (identifying BISL as the reporting authority for the
B500 Index).
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According to the Exchange, the proposed A.M.-settled B500 Index
options with third Friday-of-the-month expirations would satisfy the
initial listing criteria for options on a broad-based index as set
forth in Exchange Rule 1802(d), and would be subject to the maintenance
listing standards for such indexes as set forth in Exchange Rule
1802(e).\9\ The Exchange also states that A.M.-settlement is consistent
with the generic listing criteria for broad-based indexes, and thus it
is common for index options to be A.M.-settled.\10\ Accordingly, the
Exchange proposes to amend Exchange Rule 1809(a)(5), A.M.-Settled Index
Options, to specify that the B500 Index options may be A.M.-settled,
cash-settled contracts.\11\ In addition, the Exchange proposes to amend
Exchange Rule 1809 to permit the listing and trading of P.M.-settled,
cash-settled options on the B500 Index with third Friday-of-the-month
expirations, whose exercise settlement value would be based on the
closing index value of the B500 Index on the expiration day.\12\ The
Exchange states that all B500 Index options would be subject to the
same rules that presently govern the trading of index options,
including sales practice rules, margin requirements, and trading
rules.\13\
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\9\ See Notice, supra note 3, at 12412. In the event the B500
Index fails to satisfy the maintenance listing standards, the
Exchange states that it would not open for trading any additional
series of options of that class unless the continued listing of that
class of index options has been approved by the Commission under
Section 19(b)(2) of the Act. Id. at 12412 n.13.
\10\ Id. at 12413 n.20.
\11\ Id. at 12412-13; see also proposed Exchange Rule
1809(a)(5)(B).
\12\ See Notice supra note 3, at 12413; see also proposed
Exchange Rule 1809(a)(6)(i). Proposed Exchange Rule 1809(a)(6) also
sets forth rule text that would apply to P.M.-settled index options
generally, and provides that the last day of trading for such index
options shall be the business day of expiration, or, in the case of
an option contract expiring on a day that is not a business day, on
the last business day before its expiration date; that the current
index value at expiration of the index is determined by the last
reported sale price of each component security; and that in the
event the primary market for an underlying security does not open
for trading on the expiration date, the price of that security shall
be the last reported sale price prior to the expiration date.
\13\ See Notice, supra note 3, at 12420.
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Under the proposed rule change, the Exchange may list up to twelve
(12) standard expiration months for A.M.- and P.M.-settled series of
B500 Index options with third Friday-of-the-month expirations \14\ and
European-style exercise.\15\ The notional value of each A.M.- and P.M.-
settled B500 Index option contract would be calculated using a $100
multiplier, and the minimum trading increment would be $0.05 for
options trading below $3.00 and $0.10 for all other series.\16\ The
Exchange states that strike price intervals would be set at no less
than $5.00.\17\ Further, options on the B500 Index (all expirations)
would not be subject to position or exercise limits.\18\ According to
the Exchange, the B500 Index would settle using published prices from
the 500 most highly capitalized U.S.-listed companies.\19\ Because the
market for each of the underlying component securities of the B500
Index is so large, the Exchange believes that there is minimal risk of
manipulation by virtue of position size in B500 Index options.\20\ The
Exchange also proposes to amend Exchange Rule 1808(a) to establish new
subparagraph (a)(1), to provide that transactions in P.M.-settled B500
Index options may be effected on the Exchange between the hours of 9:30
a.m. and 4:15 p.m. Eastern Time, except on the last trading day, on
which the trading hours would be between 9:30 a.m. and 4:00 p.m.
Eastern Time.\21\ According to the Exchange, the proposed A.M.- and
P.M.-settled B500 Index options would be similar to other broad-based
equity index options that are listed on other exchanges in terms of
expirations listed, exercise style, settlement, and trading hours.\22\
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\14\ Id. at 12413; see also proposed Exchange Rule 1809(a)(3).
\15\ See Notice, supra note 3 at 12412-13; see also proposed
Exchange Rule 1809(a)(4).
\16\ See Notice, supra note 3 at 12413. The Exchange also
proposes to apply the same contract terms to options with
nonstandard expirations. Id. at 12415.
\17\ Id. at 12413. The Exchange also proposes to apply the same
contract terms to options with nonstandard expirations. Id. at
12415.
\18\ Id. at 12417; see also proposed Exchange Rule 1804(a).
\19\ See Notice, supra note 3, at 12417.
\20\ Id. Further, the Exchange believes its reporting and other
requirements will guard against the potential for manipulation.
According to the Exchange, pursuant to Exchange Rule 310(a), Members
would be required to file a report with the Exchange that includes
data related to the option positions held in the aggregate in B500
Index options and, in the case of short positions, whether such
positions were covered or uncovered. The Exchange also states that
it has the ability to impose additional margin requirements for
under hedged positions in B500 Index options pursuant to Exchange
Rule 1504(b). Id. at 12417-18.
\21\ Id. at 12414. Similarly, proposed transactions in P.M.-
settled index options on broad-based indexes with nonstandard
expirations could be effected on the Exchange between the hours of
9:30 a.m. and 4:15 p.m. Eastern Time, except that on the last
trading day, transactions in expiring P.M.-settled index options may
be effected on the Exchange between the hours of 9:30 a.m. and 4:00
p.m. Id. at 12415; Exchange Rule 1809, proposed Interpretation and
Policy .06(c). See also infra note 55.
\22\ See Notice, supra note 3, at 12413-14.
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As noted above, the Exchange also proposes to establish rules to
permit the listing and trading of P.M.-settled index options on broad-
based indexes with nonstandard expiration dates.\23\ Specifically, the
Exchange proposes to establish rules to permit both weekly expirations
(``Weekly Expirations'') and end of month expirations (``EOM
Expirations'').\24\ Pursuant to proposed Interpretation and Policy .06
to
[[Page 19238]]
Exchange Rule 1809, the Exchange would be able to open for trading
Weekly Expirations 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).\25\ In addition, the Exchange
would be able to open for trading EOM Expirations to expire on the last
trading day of the month.\26\ Currently, the only options the Exchange
proposes to list with nonstandard expirations are options on the B500
Index.\27\
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\23\ Id. at 12414; see also infra note 55.
\24\ See Notice, supra note 3, at 12414.
\25\ Id.; see also infra note 55.
\26\ See Notice, supra note 3, at 12414-15; see also infra note
55.
\27\ See Notice, supra note 3, at 12414; see also infra note 55.
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The Exchange states that contract terms for the Weekly Expirations
and EOM Expirations would be similar to those for the A.M.-settled
index options, except that the exercise settlement value would be based
on the index value derived from the closing prices of component stocks
on the expiration date, i.e., for the B500 Index, the closing prices of
the component securities comprising the B500 Index.\28\ Weekly and EOM
Expirations would be subject to all provisions of Exchange Rule 1809
and would be treated the same as options on the same underlying index
that expire on the third Friday of the expiration month,\29\ including
being subject to the same rules that govern the trading of standard
monthly broad-based index options, such as sales practice rules and
margin requirements.\30\ The Exchange further states that option
positions on a broad-based index with nonstandard expirations would be
aggregated for any applicable reporting and other requirements.\31\ For
instance, according to the Exchange, the reporting requirements
described under Exchange Rule 310(a) would apply to a Member's
aggregated position in B500 Index options, which would include all
positions held in A.M.-settled B500 Index options, P.M.-settled B500
Index options with third Friday-of-the-month expirations, B500 Index
options with Weekly Expirations and EOM Expirations, and any other B500
Index option expirations the Exchange may list pursuant to its rules
(e.g., Quarterly Options Series).\32\ In addition, the Exchange
proposes to add nonstandard expirations to its rule regarding position
limits for broad-based index options to reflect the Exchange's default
aggregation requirement for broad-based index option position
holders.\33\ The Exchange states that the proposed aggregation
requirement is consistent with the aggregation requirements for other
types of option series (e.g., quarterly expiring options) that are
listed on the Exchange, which do not expire on the customary third
Friday.\34\ Moreover, the Exchange states that its proposed rule for
Weekly Expirations and EOM Expirations is substantively similar to the
rules approved by the Commission in place at other exchanges.\35\
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\28\ Id. at 12414-15; see also supra notes 16-17 and
accompanying text.
\29\ See Notice, supra note 3, at 12414-15; see also proposed
Exchange Rule 1809, Interpretation and Policy .06(a) and (b).
\30\ See Notice, supra note 3, at 12415.
\31\ Id.
\32\ Id.
\33\ Id.; see also proposed Exchange Rule 1804(d). The Exchange,
however, does not propose to establish position limits or exercise
limits for B500 Index options. Accordingly, the proposed rule text
regarding aggregating positions in nonstandard expirations in
Exchange Rule 1804(d) would not apply to B500 Index options. See
Notice, supra note 3, at 12415 n.45.
\34\ See Notice, supra note 3, at 12415.
\35\ See Notice, supra note 3, at 12414-15, 12418; see also Cboe
Rule 4.13(e) (allowing weekly and end-of-month expirations on broad-
based indexes) and ISE Options 4A, Section 12, Supplementary
Material .07 (allowing weekly and end-of-month expirations on broad-
based indexes).
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The Exchange also represents that it has in place adequate
surveillance procedures to monitor trading in B500 Index options in
order to ensure the maintenance of fair and orderly markets.\36\ The
Exchange states that its surveillance program includes real-time
patterns for price and volume movements and post-trade surveillance
patterns (e.g., spoofing, marking the close, pinging, and phishing) and
that it would apply those same program procedures to trading in B500
Index options, including nonstandard expirations.\37\ The Exchange
further states that it will review activity in the underlying
components of the B500 Index when conducting surveillances for market
abuse or manipulation in the options on the B500 Index.\38\
Additionally, the Exchange states that it is a member of the
Intermarket Surveillance Group (``ISG'') and that members of ISG work
together to coordinate surveillance and investigative information
sharing in the stock, options, and futures markets.\39\ Further, the
Exchange has a Regulatory Services Agreement with the Financial
Industry Regulatory Authority, Inc. (``FINRA''), and pursuant to a
multi-party Rule 17d-2 joint plan, all options exchanges allocate
regulatory responsibilities to FINRA for certain options-related market
surveillance.\40\ The Exchange also represents that it believes the
Exchange and the Options Price Reporting Authority (``OPRA'') have the
necessary systems capacity to handle any additional messages associated
with the listing of the maximum number of expirations permitted for
B500 Index options.\41\
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\36\ See Notice, supra note 3, at 12418.
\37\ Id.
\38\ Id.
\39\ Id.
\40\ Id.
\41\ Id.
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The Exchange also commits to providing an annual report for a
period of five years from the launch of B500 Index options (``Annual
Report'').\42\ The Exchange states that the purpose of the Annual
Report would be to study, among other things, the impact, if any, of
B500 Index options with P.M.-settlement on the underlying securities
that comprise the B500 Index, as well as other linked-markets (e.g.,
hedging instruments for B500 Index options), such as B500 Index futures
and B500 Index ETFs, to the extent possible.\43\ For example, the
Exchange would seek to analyze whether listing and offering P.M.-
settled B500 Index options for trading would increase volatility around
the market close in linked-markets, as well as its underlying component
securities.\44\ The Exchange states that the Annual Report would,
generally, contain an analysis of volume, end-of-day open interest,
exercised contracts, and trading patterns, to the extent possible, in
B500 Index options and B500 Index futures.\45\ Furthermore, as
determined by the Exchange in light of the growth of the B500 Index
option market after launch, or upon request by the Commission, the
Exchange would provide an additional in-depth analysis of volatility
and trading activity around B500 Index options P.M.-settlement (e.g.,
within 15 minutes of the market close with respect to the B500 Index,
component securities of the B500 Index, and other linked-markets (e.g.,
B500 Index futures and B500 Index ETFs)). The Exchange would make all
underlying data of data items included in the Annual Report and in-
depth analysis publicly available in machine-readable format.\46\
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\42\ Id. at 12416. A full description of the Annual Report can
be found in the Notice.
\43\ Id.
\44\ Id.
\45\ Id.
\46\ Id.
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III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change is consistent with Section 6 of the Act.\47\
[[Page 19239]]
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(1) of the Act,\48\ which requires, among
other things, that the Exchange be so organized and have the capacity
to be able to carry out the purposes of the Act and to enforce
compliance by its members and persons associated with its members with
the provisions of the Act, Commission rules and regulations thereunder,
and its own rules; Section 6(b)(5) of the Act,\49\ which requires that
the proposal be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest; and Section (b)(8) of the Act,\50\
which requires that the proposal not impose any burden on competition
not necessary or appropriate in furtherance of the purposes of the Act.
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\47\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\48\ 15 U.S.C. 78f(b)(1).
\49\ 15 U.S.C. 78f(b)(5).
\50\ 15 U.S.C. 78f(b)(8).
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The Commission believes that the listing and trading of the
proposed B500 Index options does not raise unique regulatory concerns.
Options on broad-based indexes are not novel. As discussed above, the
Exchange's rules already allow for the listing of options on certain
broad-based indexes, and the Exchange has represented that the proposed
standard A.M.-settled options on the B500 Index would satisfy the
Exchange's current initial listing criteria for such options as set
forth in Exchange Rule 1802(d).\51\ The proposed options on the B500
Index also would be subject to the same Exchange rules that presently
govern the trading of index options, including sales practice rules,
margin requirements, and trading rules.\52\ Moreover, other options
exchanges currently have rules that allow those exchanges to list and
trade A.M.- and P.M.-settled broad-based index options that expire on
the third Friday-of-the-month, including options on the S&P 500
Index,\53\ which index is comprised of security components nearly
identical to those that comprise the B500 index.\54\ In addition, other
options exchanges set forth rules allowing those exchanges to list and
trade nonstandard expirations (with P.M. settlement) for broad-based
index options that are substantively similar to the Exchange's
proposal.\55\ Further, there would be futures contracts overlying the
same B500 Index, which could be an important hedging instrument for
market makers and other market participants that establish positions in
B500 index options.\56\
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\51\ See supra note 9 and accompanying text. The Commission
notes that certain Exchange rules are being amended to reflect the
listing and trading of A.M.-settled options on the B500 Index,
including the nonapplication of position limits. In addition, the
Exchange's listing standards for a broad-based index option require
the Exchange to reasonably believe that it has adequate system
capacity to support the trading of B500 Index options. See Exchange
Rule 1802(d)(12). As noted above, the Exchange represents that it
believes the Exchange and OPRA have the necessary systems capacity
to handle any additional messages associated with the listing of the
maximum number expirations permitted for B500 Index options. See
Notice, supra note 3, at 12418.
\52\ See Notice, supra note 3, at 12420.
\53\ See e.g., Cboe Rule 4.13(a)(2) (permitting the Exchange to
list up to 12 standard monthly expirations on the S&P 500 Index);
Cboe Rule 4.13(a)(3) (providing for European-Style Exercise for
options on the S&P 500 Stock Index); Cboe Rule 4.13(a)(4) (allowing
A.M.-settled index options on the S&P 500 Index); Cboe Rule 4.13,
Interpretation and Policy .13 (allowing P.M.-settled options on the
S&P 500 Index that expire on the third Friday-of-the-month). See
also Nasdaq ISE, LLC (``ISE'') Options 4A, Section 12(a)(6)
(allowing P.M.-settled options on the Nasdaq-100 Index in addition
to A.M.-settled options on the Nasdaq-100 Index).
\54\ According to the Exchange, as of January 7, 2025, 67
components in the B500 Index were not also components in the S&P 500
Index. The Exchange states that this was due, in part, to the
methodology used to compute the B500 Index. However, even with the
differences in index construction, the Exchange believes that both
indexes are approximately 99% correlated. According to the Exchange,
this is likely due to the lowest weighted securities being the main
different components for each index. See Notice, supra note 3, at
12417 n.65.
\55\ See e.g., Cboe Rule 4.13(e) (allowing weekly and end-of-
month expirations on broad-based indexes) and ISE Options 4A,
Section 12, Supplementary Material .07 (allowing weekly and end-of-
month expirations on broad-based indexes). The generic listing
standards for broad-based index options require A.M. settlement.
See, e.g., Exchange Rule 1802(d)(2). Accordingly, the listing of a
class of broad-based index options with nonstandard expirations and
P.M. settlement pursuant to Exchange Rule 1809, Interpretation and
Policy .06, requires the filing of a proposed rule change to that
effect for the specific broad-based index option, which proposed
rule change must be approved by the Commission under Section 19(b)
of the Act. See Exchange Rule 1802(a). This order therefore approves
nonstandard expirations, pursuant to Exchange Rule 1809,
Interpretation and Policy .06, only for B500 Index options.
\56\ The Exchange has represented that it will not list for
trading B500 Index options until MIAX Futures has commenced the
listing and trading of B500 Index futures. See MIAX Letter, supra
note 4.
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Permitting the trading of options on an index of securities enables
investors to participate in the price movements of the index's
underlying securities and allows investors holding positions in some or
all such securities to hedge the risks associated with their
portfolios. The Exchange's proposal to permit the listing and trading
of options on the B500 Index, including B500 index options with
nonstandard expirations and P.M. settlement, could benefit investors
and enhance competition by providing investors with additional
investment and hedging alternatives on a broad-based index composed of
actively traded, well-capitalized stocks.
Specifically, B500 Index options could benefit investors and
enhance competition by providing new and additional opportunities for
investors to hedge the market risk associated with, and gain
directional exposure to, the broader U.S. equity market. In addition,
the Exchange's proposal to provide B500 Index options with nonstandard
expirations could benefit investors and remove impediments to a free
and open market by allowing market participants to purchase B500 Index
options in a manner more aligned with their specific timing needs and
to roll their positions on more trading days, which may enable market
participants to more precisely spread risk across more trading days and
incorporate daily changes in the markets. Further, the P.M. settlement
feature permits trading in B500 Index options throughout the expiration
day, which should enable market participants to trade out of their
positions up until the time the contract settles and may permit market
participants to more effectively manage overnight risk and reduce
residual risk on the day of expiration.
Importantly, as discussed above, the Exchange has committed to
providing an Annual Report for five years after the launch of B500
Index options, the purpose of which is to study the market impact of
P.M.-settled B500 Index options. Further, as determined by the Exchange
in light of the growth of the B500 Index options market or upon request
by the Commission, the Exchange will provide an additional in-depth
analysis of volatility and trading activity around P.M. settlement of
B500 Index options. These Exchange commitments are designed to protect
investors and the public interest, as they should provide the
Commission with data and analysis that sheds light on the development
of the market for B500 Index options and enables the Commission to
monitor for and assess any potential adverse market effects after the
introduction of B500 Index options to the market.
The Commission believes the Exchange's proposal to impose no
position or exercise limits for options on the B500 Index is
appropriate and consistent with the Act because the potential for
manipulation or market disruption stemming from excessively large B500
Index option positions is mitigated. As discussed above, the B500 Index
consists of 500 of the most highly capitalized U.S.-listed companies.
The
[[Page 19240]]
large number of underlying securities contained in the B500 Index as
well as their enormous capitalization and deep, liquid markets
significantly reduces concerns regarding the potential for market
manipulation or disruption in the market underlying B500 Index options.
In addition, the Exchange has in place reporting and other requirements
that should enable it to guard against the potential for manipulation
or adverse market impact stemming from B500 Index option positions.\57\
Moreover, the Exchange's proposal is consistent with the rules of other
exchanges that do not impose position or exercise limits on certain
broad-based index options, including options on the S&P 500 Index.\58\
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\57\ For example, pursuant to Exchange Rule 310(a), Members are
required to file a report with the Exchange that identifies any
customer, as well as any Member, any general or special partner of
the Member, any officer or director of the Member or any
participant, as such, in any joint, group or syndicate with the
Member or with any partner, officer or director thereof, who, on the
previous business day held aggregate long or short positions of 200
or more option contracts in B500 Index options and, in the case of
short positions, whether covered or uncovered. In addition, pursuant
to Exchange Rule 1504(b), the Exchange has the ability to impose
additional margin requirements for under-hedged positions in B500
Index options.
\58\ See e.g., Cboe Rules 8.31 and 8.42 (providing no position
or exercise limits for certain broad-based index option contracts
including the SPX), and ISE Options 4A, Sections 6 and 10 (providing
no position or exercise limits for certain broad-based index
options, including the Nasdaq 100 Index).
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The Commission also believes that the potential risks of trading
B500 Index options without position and exercise limits are mitigated
by the Exchange's surveillances mechanisms, consistent with Sections
6(b)(1) and 6(b)(5) of the Act.\59\ The Exchange represents that it has
an adequate surveillance program in place for options, that it intends
to apply those same program procedures to B500 Index options, and that
its surveillance procedures are designed to deter and detect
possibility manipulative behavior which might potentially arise from
listing and trading B500 Index options.\60\ The Exchange also
represents that it will review activity in the underlying components of
the B500 Index when conducting surveillances for market abuse or
manipulation in the options on the B500 Index, and that as an ISG
member, it works with other ISG members to coordinate surveillance and
investigative information sharing in the stock, options, and futures
markets.\61\ Further, the Exchange represents that it will implement
any new surveillance procedures it deems necessary to effectively
monitor the trading of B500 Index options.\62\
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\59\ 15 U.S.C. 78f(b)(1), 78f(b)(5).
\60\ See Notice, supra note 3, at 12418, 12420.
\61\ In addition, the Exchange has a Regulatory Services
Agreement with FINRA. Further, pursuant to a multi-party 17d-2 joint
plan, all options exchanges allocate regulatory responsibilities to
FINRA to conduct certain options-related market surveillance that
are common to rules of all options exchanges. See Notice, supra note
3, at 12420.
\62\ Id.
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In light of the foregoing, the Commission believes that the
proposal is consistent with Sections 6(b)(1), 6(b)(5) and 6(b)(8) of
the Act.\63\
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\63\ 15 U.S.C. 78f(b)(1), 78f(b)(5), 78f(b)(8).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\64\ that the proposed rule change (SR-MIAX-2025-08), be, and
hereby is, approved.
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\64\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\65\
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\65\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-07810 Filed 5-5-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on May 6, 2025.
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