Notice2026-07255
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Facilitate the Transfer and Trading of Options That Overlie a Reduced Value of the MSCI World Index (1/100), the Full Value of the MSCI ACWI Index and a Reduced Value of the MSCI USA Index (1/100)
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
April 15, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 72 (Wednesday, April 15, 2026)</title>
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[Federal Register Volume 91, Number 72 (Wednesday, April 15, 2026)]
[Notices]
[Pages 20187-20192]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07255]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105194; File No. SR-NYSEARCA-2026-35]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Facilitate the
Transfer and Trading of Options That Overlie a Reduced Value of the
MSCI World Index (1/100), the Full Value of the MSCI ACWI Index and a
Reduced Value of the MSCI USA Index (1/100)
April 10, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 30, 2026, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the 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 rule amendments to facilitate the transfer
and trading of options that overlie a reduced value of the MSCI World
Index (1/100), the full value of the MSCI ACWI Index and a reduced
value of the MSCI USA Index (1/100). The proposed rule change is
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at the
principal office of the Exchange.
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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes amendments to Rule 5.12-O (Designations of
the Index Broad-Based Index Options), Rule 5.15-O (Position Limits for
Broad-Based Index Options), Rule 5.19-O (Terms of Index Option
Contracts), Rule 5.20-O (Trading Sessions), Rule 5.22-O (Disclaimers),
Rule 5.35-O (Position Limits for FLEX Options), and Rule 6.4-O (Series
of Options Open for Trading) to facilitate the transfer and trading of
options that overlie a reduced value of the MSCI World Index (1/100)
(``WORLD (1/100) options''), the full value of the MSCI ACWI Index
(``ACWI options'') and a reduced value of the MSCI USA Index (1/100)
(``USA (1/100) options''). Each of these indexes is a free float-
adjusted market capitalization index designed to measure equity market
performance throughout the world (MSCI World (1/100) and ACWI Indexes)
or the United States (MSCI USA Index (1/100)). The options overlying
these indexes would be P.M.-, cash-settled contracts with European-
style exercise.
Index Design, Methodology and Dissemination
The MSCI World (1/100), MSCI ACWI, and MSCI USA (1/100) Indexes are
calculated by MSCI Inc. (``MSCI''), which is a provider of investment
support tools.\3\ Each of these indexes is calculated in U.S. dollars
on a real-time basis from the open of the first market on which the
components are traded to the closing of the last market on which the
components are traded. The methodology used to calculate each index is
similar to the methodology used to calculate the value of other
benchmark market-capitalization weighted indexes (including the MSCI
EAFE and EM Indexes, on which the Exchange may currently list
options).\4\
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\3\ See proposed Rule 5.22-O (adding MSCI Inc. as the reporting
authority for the MSCI World Index (1/100), the MSCI ACWI Index and
the MSCI USA Index (1/100)).
\4\ See current Rule 5.22-O Commentary .01. See also Securities
Exchange Act Release No. 104862 (February 18, 2026) 91 FR 6717
(February 23, 2026) (SR-NYSEARCA-2026-13) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to Amendments to
Facilitate the Transfer and Trading of Options that Overlie the MSCI
EAFE Index and the MSCI Emerging Markets Index).
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Specifically, each index is based on the MSCI Global Investable
Market Indexes (``GIMI'') Methodology.\5\ The level of the index
reflects the free float-adjusted market value of the component stocks
relative to a particular base date and is computed by dividing the
total market value of the companies in the index by the index divisor.
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\5\ Summary and comprehensive information about the GIMI
methodology may be reviewed at <a href="https://www.msci.com/index/methodology/latest/GIMI">https://www.msci.com/index/methodology/latest/GIMI</a>.
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MSCI monitors and maintains each of the MSCI World (1/100), ACWI,
and USA (1/100) indexes. Adjustments to each index are made on a daily
basis with respect to corporate events and dividends. MSCI reviews each
index quarterly (February, May, August and November) with the objective
of reflecting the evolution of the underlying equity markets and
segments on a timely basis, while seeking to achieve index continuity,
continuous investability of constituents and replicability of the
indexes, and index stability and low index turnover.\6\ Each quarterly
review of the MSCI World (1/100), ACWI, and USA (1/100) Indexes
[[Page 20188]]
involves, among other things, updating the constituent securities.\7\
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\6\ See id. at Section 3.
\7\ Id.
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For each of the MSCI World (1/100), ACWI, and USA (1/100) Indexes,
real-time data is distributed approximately every 15 seconds while the
indexes are being calculated using MSCI's real-time calculation engine
to Bloomberg L.P. (``Bloomberg''), FactSet Research Systems, Inc.
(``FactSet'') and Thomson Reuters (``Reuters''). End of day data is
distributed daily to clients through MSCI as well as through major
quotation vendors, including Bloomberg, FactSet, and Reuters.
MSCI World Index (1/100)
The MSCI World Index (1/100) is a free float-adjusted market
capitalization index that is designed to measure the equity market
performance of developed markets. The MSCI World Index (1/100) consists
of component stocks from 23 developed markets.\8\ The MSCI World Index
(1/100) consists of large- and mid-cap components across these markets,
has 1,319 constituents, and covers approximately 85% of the free float-
adjusted market capitalization in each country.\9\ The MSCI World Index
(1/100) was launched on March 31, 1986.
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\8\ These developed markets include Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the
United States.
\9\ See MSCI World Index (1/100) fact sheet (dated February 27,
2026), available at MSCI World Index.
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The Exchange notes that the iShares MSCI World ETF exchange-traded
fund (``ETF'') is an actively traded product. The Exchange also lists
options overlying that ETF (``URTH options'') and those options are
actively traded as well. MSCI World Index (1/100) futures contracts
(``MWS futures'') are listed for trading on the ICE Futures U.S.\10\
and other derivatives contracts on the MSCI World Index (1/100) are
listed for trading in Europe.
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\10\ See MWS futures contract specifications, available at MSCI
World NTR Index Future.
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The Exchange proposes to base trading in options on the MSCI World
Index (1/100) on a fraction of the full size of the index. In
particular, the Exchange proposes to list WORLD (1/100) options that
are based on 1/100th of the value of the MSCI World Index (1/100). The
Exchange believes that listing options on the reduced value of the
index will attract a greater source of customer business than if
options were based on the full value of the MSCI World Index (1/100).
The Exchange further believes that listing options on a reduced value
of the index may enhance investors' opportunities to hedge, or
speculate on, the market risk associated with the stocks comprising the
MSCI World Index (1/100). Additionally, by reducing the value of the
MSCI World Index (1/100), investors will be able to use this trading
vehicle while extending a smaller outlay of capital. The Exchange
believes this may attract additional investors and, in turn, create a
more active and liquid trading environment.
MSCI ACWI Index
The MSCI ACWI Index is a free float-adjusted market capitalization
index that is designed to measure the equity performance of developed
markets and emerging markets. The MSCI ACWI Index consists of component
stocks from 23 developed markets \11\ and 24 emerging markets.\12\ The
MSCI ACWI Index consists of large- and mid-cap components across these
markets, has 2,514 constituents, and covers approximately 85% of the
global investable equity opportunity set.\13\ The MSCI ACWI Index was
launched on May 31, 1990.
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\11\ These developed markets include Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong,
Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway,
Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom,
and the United States.
\12\ These emerging markets include Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia,
Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar,
Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and the United
Arab Emirates.
\13\ See MSCI ACWI Index fact sheet (dated February 27, 2026),
available at MSCI ACWI Index.
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The Exchange notes that the iShares MSCI ACWI ETF is an actively
traded product. CBOE lists options overlying that ETF (``ACWI
options'') and those options are actively traded as well. MSCI ACWI
Index futures contracts (``MMW futures'') are listed for trading on the
ICE Futures U.S.\14\ and other derivatives contracts on the MSCI ACWI
Index are listed for trading in Europe.
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\14\ See MMW futures contract specifications, available at MSCI
ACWI NTR Index Future.
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MSCI USA Index (1/100)
The MSCI USA Index (1/100) is a free float-adjusted market
capitalization index that is designed to measure the performance of the
large- and mid-cap segments of the U.S. market. The MSCI USA Index (1/
100) consists of large- and mid-cap components from the United States,
has 544 constituents, and covers approximately 85% of the free float-
adjusted market capitalization in the United States.\15\ The MSCI USA
Index (1/100) was launched on March 31, 1986.
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\15\ See MSCI USA Index (1/100) fact sheet (dated February 27,
2026), available at MSCI USA Index.
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The Exchange notes that the Invesco MSCI USA ETF is an actively
traded product. MSCI USA Index (1/100) futures contracts (``USS
futures'') are listed for trading on the ICE Futures U.S.\16\ and other
derivatives contracts on the MSCI USA Index (1/100) are listed for
trading in Europe.
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\16\ See USS futures contract specifications, available at MSCI
USA GTR Index Futures.
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The Exchange proposes to base trading in options on the MSCI USA
Index (1/100) on a fraction of the full size of the index. In
particular, the Exchange propose to list the USA (1/100) options that
are based on 1/100th of the value of the MSCI USA Index (1/100). The
Exchange believes that listing options on the reduced value of the
index will attract a greater source of customer business than if
options were based on the full value of the MSCI USA Index (1/100). The
Exchange further believes that listing options on a reduced value of
the index may enhance investors' opportunities to hedge, or speculate
on, the market risk associated with the stocks comprising the MSCI USA
Index (1/100). Additionally, by reducing the value of the MSCI USA
Index (1/100), investors will be able to use this trading vehicle while
extending a smaller outlay of capital. The Exchange believes this may
attract additional investors, and, in turn, create a more active and
liquid trading environment.
Initial and Continued Listing Criteria
The Exchange proposes to apply to each of the MSCI World Index (1/
100), MSCI ACWI Index, and MSCI USA Index (1/100) the same initial
listing criteria that currently apply to the MSCI EAFE Index and the
MSCI EM Index.\17\ The MSCI World Index (1/100), the MSCI ACWI Index
and the MSCI USA Index (1/100) each satisfy the initial listing
criteria currently set forth for EAFE and EM options, as set forth in
Rule 5.12-O, Commentary .01. Specifically, with respect to each of the
MSCI World (1/100), ACWI, and USA (1/100) Indexes:
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\17\ See proposed 5.12-O, Commentary .01.
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(1) The index is broad-based, as defined in Rule 5.10-O(b)(23);
(2) Options on the index are designated as P.M.-settled index
options;
(3) The index is capitalization-weighted, price-weighted, modified
capitalization-weighted or equal dollar-weighted;
(4) The index consists of 500 or more component securities;
[[Page 20189]]
(5) All of the component securities of the index have a market
capitalization of greater than $100 million;
(6) No single component security accounts for more than fifteen
percent (15%) of the weight of the index, and the five highest weighted
component securities in the index do not, in the aggregate, account for
more than fifty percent (50%) of the weight of the index;
(7) Non-U.S. component securities (stocks or ADRs) that are not
subject to comprehensive surveillance agreements do not, in the
aggregate, represent more than:
(i) twenty-five percent (25%) of the weight of the EAFE Index (for
EAFE options) (each of the MSCI World (1/100), ACWI, and USA (1/100)
Indexes satisfies this criterium), and
(ii) twenty-seven and a half percent (27.5%) of the weight of the
EM Index (for EM Options);
(8) During the time options on the index are traded on the
Exchange, the current index value is widely disseminated at least once
every fifteen (15) seconds by one or more major market data vendors;
\18\
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\18\ This listing criteria permits the Exchange to continue to
trade EAFE options after trading in all component securities has
closed for the day and the index level is no longer widely
disseminated at least once every fifteen (15) seconds by one or more
major market data vendors, provided that EAFE futures contracts are
trading and prices for those contracts may be used as a proxy for
the current index value. This is inapplicable to WORLD (1/100), ACWI
and USA (1/100) options, as the index level for each index will be
widely disseminated through the end of trading for options on it.
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(9) The Exchange reasonably believes it has adequate system
capacity to support the trading of options on the index, based on a
calculation of the Exchange's current Independent System Capacity
Advisor (ISCA) allocation and the number of new messages per second
expected to be generated by options on such index; and
(10) The Exchange has written surveillance procedures in place with
respect to surveillance of trading of options on the index.
The Exchange also proposes to subject each of the MSCI World (1/
100), MSCI ACWI and MSCI USA (1/100) indexes to the maintenance listing
standards set forth in Commentary .01(b) to Rule 5.12-O which currently
applies to the MSCI EAFE Index and on the MSCI EM Index:
(1) The conditions set forth in Commentary .01(a) (1), (2), (3),
(4), (8), (9) and (10) must continue to be satisfied. The conditions
set forth in Commentary .05(a)(5) and (6) must be satisfied only as of
the first day of January and July in each year. The condition set forth
in Commentary .05(a)(7) must be satisfied as of the first day of the
month following the Reporting Authority's \19\ review of the weighting
of the constituents in the applicable index but in no case less than a
quarterly basis.
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\19\ The term ``reporting authority'' with respect to a
particular index means the institution or reporting service
designated by the Exchange as the official source for (1)
calculating the level of the index from the reported prices of the
underlying securities that are the basis of the index and (2)
reporting such level. See Rule 5.10-O(b)(12).
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(2) The total number of component securities in the index may not
increase or decrease by more than thirty-five percent (35%) from the
number of component securities in the index at the time of its initial
listing,\20\ except for the MSCI EM Index, in which the total number of
component securities in the MSCI EM Index may not increase or decrease
by more than ten percent (10%) over the last six-month period.
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\20\ This maintenance criteria applies a 10% threshold rather
than a 35% threshold to the EM Index. As is the case with other
index options authorized for trading on the Exchange, in the event
the MSCI ACWI Index fails to satisfy the continued listing standards
set forth herein, the Exchange will 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.
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Because the MSCI World Index (1/100), MSCI ACWI Index, and MSCI USA
Index (1/100) each has a large number of component securities and is
based on the same methodology as the MSCI EAFE and EM Indexes, as
discussed above, the Exchange believes it is appropriate for the
initial and maintenance listing criteria (which require continual and
periodic compliance) set forth under Rule 5.12-O, Commentary .01(a)(b)
to also apply to the WORLD (1/100), ACWI and USA (1/100) options.
General Trading
The Exchange proposes that WORLD (1/100), ACWI and USA (1/100)
options will trade during the same trading hours as other index
options, including EAFE options and EM options, which are 9:30 a.m. to
4:00 p.m. (New York time).\21\ Additionally, the last trading day for
expiring WORLD (1/100), ACWI and USA (1/100) options series will be the
business day prior to the expiration date of the specific series.\22\
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\21\ See proposed Rule 5.20-O, Commentary .01.
\22\ See proposed Rule 5.20-O, Commentary .02.
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Trading of WORLD (1/100), ACWI and USA (1/100) options will be
subject to the trading halt procedures applicable to index options
traded on the Exchange \23\ and will continue to be quoted and traded
in U.S. dollars.\24\ Accordingly, all Exchange and The Options Clearing
Corporation (``OCC'') members will continue to be able to accommodate
trading, clearance and settlement of WORLD (1/100), ACWI and USA (1/
100) options without alteration.
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\23\ See Rule 5.20-O(c).
\24\ See Rule 5.19-O(a)(1).
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The contract multiplier for WORLD (1/100), ACWI and USA (1/100)
options would be $100. ACWI options would be quoted in index points and
one point would equal $100. The minimum tick size for series trading
below $3 would be 0.05 ($5.00) and at or above $3, will be 0.10
($10.00).
WORLD (1/100), ACWI and USA (1/100) options will be subject to the
same procedures for adding and deleting strikes for index options as
other index options, including EAFE option series and EM options
series. Additional series may be opened for trading as the underlying
index level moves up or down.\25\ The minimum strike price interval for
WORLD (1/100), ACWI and USA (1/100) options series would be 2.5 points
if the strike price is less than 200. When the strike price is 200 or
above, strike price intervals would be no less than 5 points.\26\ This
is consistent with the current strike intervals of many other index
options, including EAFE and EM options.
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\25\ See Rule 5.19-O(c)(4). The rule sets forth the criteria for
listing additional series of the same class as the current value of
the underlying index moves. Generally, additional series must be
``reasonably related'' to the current index value, which means that
strike prices must be within 30% of the current index value. Series
exceeding the 30% range may be listed based on demonstrated customer
interest index moves. The strike price of must be within 30% of the
current index value. Series exceeding the 30% range may be listed
based on demonstrated customer interest.
\26\ See proposed 5.19-O(c)(5).
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Pursuant to Rule 5.32-O(e)(1), the Exchange may approve and open
for trading any flexible (``FLEX'') options series that is eligible for
non-FLEX options trading under Rules 5.12-O and 5.13-Owith respect to
indexes. Therefore, as proposed, the Exchange may authorize for trading
FLEX Options on the MSCI World Index (1/100), MSCI ACWI Index, and MSCI
USA Index (1/100), which the Exchange may authorize for trading
pursuant to proposed Rules 5.12-O and 5.13-O.
Expiration Months, Settlement, and Exercise Style
Consistent with the expirations for other index options, including
EAFE options and EM options, the Exchange will allow up to twelve near-
term expiration months for the WORLD (1/100), ACWI and USA (1/100)
options.\27\ Additionally, Exchange Rule 5.19-O
[[Page 20190]]
``Long-term Options Series'' permits the listing, with respect to any
class of stock index options, series of options having up to 180 months
to expiration. In addition, as with both the EAFE and EM index options,
WORLD (1/100), ACWI and USA (1/100) options would be eligible for all
other expirations permitted for other broad-based indexes, e.g., Short
Term Option Series and Quarterly Option Series.\28\ Given that the MSCI
World (1/100), MSCI ACWI and MSCI USA (1/100) Indexes are broad-based
indexes and based on the same methodology as the MSCI EAFE and EM
Indexes, as noted above, the Exchange believes it is appropriate for
options on the MSCI World (1/100), MSCI ACWI and MSCI USA (1/100)
Indexes to be eligible for the same expirations for which the options
on other broad-based indexes, including MSCI EAFE and EM Indexes, are
eligible under current rules.
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\27\ See Rule 5.19-O(a)(3)(A).
\28\ See, e.g., Rules 5.19-O(b) (Index LEAPS Options Series);
6.4-O, Commentary .07 (Short Term Option Series); 6.1-O(b)(42)
(Quarterly Option Series).
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WORLD (1/100), ACWI and USA (1/100) options will be P.M.-, cash-
settled contracts with European-style exercise.\29\ The Exchange
believes that P.M.-settlement is appropriate for WORLD (1/100) and ACWI
options due to the nature of the underlying index that encompass
multiple markets around the world. The components of each index open
with the start of trading in certain parts of Asia at approximately
6:00 p.m. (Eastern time) (prior day) and close with the end of trading
in North America at approximately 4:00 p.m. (Eastern time) (next day)
as closing prices from North American countries are accounted for in
the closing calculation.
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\29\ See proposed Rule 5.19-O(a)(4).
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The Exchange further believes that P.M.-settlement is appropriate
for WORLD (1/100) and ACWI options, as well as USA (1/100) options,
because the Exchange understands that investors prefer to be able to
trade out of positions during the entire final day of trading before
settlement. The Exchange notes the Commission has approved proposals to
make other pilots permitting P.M.-settlement of index options permanent
after finding those pilots were consistent with the Act and the options
subject to those pilots had no significant impact on the market.\30\
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\30\ See Securities Exchange Act Release Nos. 98454 (September
20, 2023) (SR-CBOE-2023-005) (order approving proposed rule change
to make permanent the operation of a program that allows CBOE to
list p.m.-settled third Friday-of-the-month SPX options series);
98455 (September 20, 2023) (SR-CBOE-2023-019) (order approving
proposed rule change to make permanent the operation of a program
that allows CBOE to list p.m.-settled third Friday-of-the-month XSP
and MRUT options series); and 98456 (September 20, 2023) (SR-CBOE-
2023-020) (order approving proposed rule change to make the
nonstandard expirations pilot program permanent.
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The Exchange proposes to amend Rule 5.19-O(a)(4) to add WORLD, ACWI
and USA (1/100) options to the list of other European-style (and P.M.-
settled) index options. European-style (and P.M.-settled) exercise is
consistent with many index options and, as set forth in Rule 5.19-
O(a)(4), EAFE and EM options are also P.M.-settled with European-style
exercise. Given that the MSCI World (1/100) (1/100), ACWI, and USA (1/
100) Indexes are broad-based indexes and based on the same methodology
as the MSCI EAFE and EM Indexes, as noted above, the Exchange believes
it is appropriate for options on these three indexes to have the same
settlement and exercise style as the other MSCI Index options.
Like other index options, the exercise settlement amount of WORLD
(1/100), ACWI and USA (1/100) options will be equal to the difference
between the exercise settlement value (with respect to WORLD (1/100)
and USA (1/100) options, 1/100th of the official closing value of the
MSCI World Index (1/100) and MSCI USA Index (1/100), respectively, and,
with respect to ACWI options, the official closing value of the MSCI
ACWI Index (1/100), each as reported by the reporting authority on the
day on which the index option contract is exercised) and the exercise
price of the option (multiplied by the contract multiplier of
$100).\31\
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\31\ See Rule 5.26-O. If the exercise settlement value is not
available or the normal settlement procedure cannot be utilized due
to a trading disruption or other unusual circumstance, the
settlement value would be determined in accordance with the rules
and bylaws of the OCC. See OCC Bylaws, Article XVII, Section 4.
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The proposed WORLD (1/100), ACWI and USA (1/100) options would
expire, as currently, on the third Friday of the expiring month in the
case of regular monthly options and long term options, each Friday in
the case of Short Term options, and the last trading day of the month
in the case of Monthly Options and/or Quarterly Options. As noted
above, the last trading day for expiring series would continue to be
the business day prior to the expiration date of the specific series.
As is currently the case, when the last trading day/expiration date is
moved because of an Exchange holiday or closure, the last trading day/
expiration date for expiring options would be the immediately preceding
business day.
Exercise would result in delivery of cash on the business day
following expiration. ACWI options would be P.M.-settled. The exercise
settlement value would be the official closing values as reported by
MSCI on the last trading day of the expiring contract.\32\
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\32\ See proposed amendment to Rule 5.22-O, to identify MSCI,
Inc. as the Reporting Authority for the MSCI ACWI Index.
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Position and Exercise Limits
The Exchange proposes to amend Rule 5.15-O to apply a position
limit of 50,000 contracts (with no restrictions) to WORLD (1/100), ACWI
and USA (1/100) options. This is the same position limit that currently
exists for other broad-based index options, including EAFE and EM
options.\33\ Pursuant to Rule 5.18-O, the exercise limit for these
options will be equivalent to the proposed limit of 50,000. As set
forth in Rule 5.15-O(c), positions in WORLD (1/100) options and USA (1/
100) options (which are proposed to be reduced-value index options)
will be aggregated with positions in full-value indexes.\34\ All
position limit hedge exemptions would apply.
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\33\ Additionally, the Exchange proposes to amend Rule 5.35-
O(a)(iv) to provide that, like FLEX Options on the MSCI EAFE Index
and MSCI EM Index, the position limits for FLEX options on the MSCI
World Index (1/100), the ACWI Index and the USA Index (1/100) are
equal to the position limits for the non-FLEX options on this index
(which is 50,000, as proposed). Pursuant to 5.36-O the exercise
limit for FLEX index options (which would include FLEX options on
the MSCI World Index (1/100), the ACWI Index and the USA Index (1/
100)) will be equivalent to the FLEX position limits prescribed in
5.35-O. As set forth in proposed Rule 5.35-O(a)(v) in calculating
the applicable contract reporting amount for that rule, reduced-
value contracts (such as the proposed WORLD (1/100) and USA (1/100)
options) will be aggregated with full-value contracts and counted by
the amount by which they equal a full-value contract.
\34\ For example, if an index is reduced by one-tenth, 10
reduced-value contracts equal one contract. If an index is reduced
by 1/100, 100 reduced-value contracts will equal one contract. The
Exchange notes it currently does not plan to list, options on the
full value of the MSCI World Index (1/100) or MSCI USA Index (1/
100).
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Surveillance and Capacity
The Exchange represents that the same surveillance procedures
applicable to all other options currently listed and traded on the
Exchange will apply to WORLD (1/100), ACW and USA (1/100) options and
that it has the necessary systems capacity to support the option
series. The Exchange's existing surveillance and reporting safeguards
are designed to deter and detect possible manipulative behavior and
other improper trading. In addition, the Exchange has a Regulatory
Services Agreement (``RSA'') with the Financial Industry Regulatory
Authority (``FINRA''). Pursuant to a multi-party 17d-2 joint plan, all
options exchanges
[[Page 20191]]
allocate regulatory responsibilities to FINRA to conduct certain
options-related market surveillances.\35\ The Exchange is also a member
of the Intermarket Surveillance Group (``ISG'') under the ISG
Agreement. ISG members work together to coordinate surveillance and
investigative information sharing in the stock, options, and futures
markets. Further, the Exchange will implement any new surveillance
procedures it deems necessary to effectively monitor the trading of
WORLD (1/100), ACWI and USA (1/100) options.
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\35\ Section 19(g)(1) of the Act, among other things, requires
every SRO registered as a national securities exchange or national
securities association to comply with the Act, the rules and
regulations thereunder, and the SRO's own rules, and, absent
reasonable justification or excuse, enforce compliance by its
members and persons associated with its members. See 15 U.S.C.
78q(d)(1) and 17 CFR 240.17d-2. Section 17(d)(1) of the Act allows
the Commission to relieve an SRO of certain responsibilities with
respect to members of the SRO who are also members of another SRO.
Specifically, Section 17(d)(1) allows the Commission to relieve an
SRO of its responsibilities to: (i) receive regulatory reports from
such members; (ii) examine such members for compliance with the Act
and the rules and regulations thereunder, and the rules of the SRO;
or (iii) carry out other specified regulatory responsibilities with
respect to such members.
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Given the enormous liquidity in the underlying components of the
MSCI World Index (1/100), the MSCI ACWI Index and the MSCI USA Index
(1/100) and large number of market participants trading those
components, the Exchange believes that any attempt to manipulate the
price of the underlying security or options overlying such security in
order to affect the price of the indices would be cost prohibitive and
unlikely to succeed. Moreover, the Exchange believes that its existing
surveillances and procedures adequately address potential concerns
regarding possible manipulation of the settlement value at or near the
close of the market.
Finally, given that WORLD (1/100), ACWI and USA (1/100) options
have traded on CBOE for many years without system capacity issues and
that the options would trade the same way on the Exchange, the Exchange
does not believe that the listing and trading of these options would
present any system capacity or message traffic issues for the Exchange
or The Options Price Reporting Authority (OPRA). The Exchange will
monitor the trading volume associated with the additional options
series listed as a result of this proposed rule change and the effect
(if any) of these additional series on the capacity of the Exchange's
automated systems.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\36\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\37\
in particular, in that it is 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; and is not designed to
permit unfair discrimination between customers, issuers, brokers or
dealers. Specifically, the Exchange believes that the listing and
trading of WORLD (1/100), ACWI and USA (1/100) options would increase
order flow to the Exchange, increase the variety of options products
available for trading, and provide a valuable tool for investors to
manage risk.
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\36\ 15 U.S.C. 78f(b).
\37\ 15 U.S.C. 78f(b)(5).
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The proposed change will facilitate the transfer and trading of
WORLD (1/100), ACWI and USA (1/100) options based on the approved rules
of CBOE to prevent fraudulent and manipulative acts and practices and
promote just and equitable principles of trade.
The Exchange believes that the proposal to adopt rules based on
CBOE to list and trade WORLD (1/100), ACWI and USA (1/100) options
would remove impediments to and perfect the mechanism of a free and
open market as these options would continue to provide greater
opportunities for market participants to manage risk through the use of
an index options product to the benefit of investors and the public
interest.
The Exchange believes the proposed rule change is designed to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system, and, in general, to protect
investors and the public interest in that it would continue to create
greater trading and hedging opportunities and flexibility while
providing OTP Firms or OTP Holders with an additional tool to manage
their risk. The proposed rule change should also continue to result in
enhanced efficiency in initiating and closing out positions and
heightened contra-party creditworthiness given OCC's role as issuer and
guarantor of the proposed index option products.
The Exchange believes that the MSCI World Index (1/100), the MSCI
ACWI Index and the MSCI USA Index (1/100) are not easily susceptible to
manipulation. The indexes are broad-based indexes and have high market
capitalizations. As noted, the MSCI World Index (1/100) is currently
comprised of 1,319 component stocks and no single component comprises
more than 5.05% of the index, making it not easily subject to market
manipulation. Similarly, the MSCI ACWI Index and MSCI USA Index (1/100)
are currently comprised of 2,14 and 544 components stocks,
respectively, and the vast majority of components each comprise less
than 5% of the index, making it not easily subject to market
manipulation.
Additionally, the iShares MSCI World ETF, iShares MSCI ACW ETF and
the iShares MSCI USA ETF, which track the MSCI World (1/100), MSCI
ACWI, and the MSCI USA (1/100) indices, are actively traded products,
as are options on those ETFs. Because both indexes have large numbers
of component securities, are representative of many countries and trade
a large volume with respect to ETFs and options on those ETFs, the
Exchange believes that the proposed initial and continued listing
requirements based on CBOE's rules are also appropriate to continue to
trade options on these indexes on the Exchange. Exchange rules
applicable to the trading of other index options currently traded on
the Exchange would also apply to the trading of WORLD (1/100), ACWI and
USA (1/100) options. Additionally, the trading of WORLD (1/100), ACWI
and USA (1/100) options would be subject to, among others, Exchange
rules governing sales practice rules, trading rules and trading halt
procedures.
Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in WORLD
(1/100), ACWI and USA (1/100) options. The Exchange also represents
that it has the necessary systems capacity to support the three new
options series. Additionally, as stated in the filing, the Exchange has
rules in place to protect public customer trading.
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 not necessary or appropriate in
furtherance of the purposes of the Act.
[[Page 20192]]
Intermarket Competition. The Exchange believes that the proposed
rule change would facilitate the transfer to the Exchange and trading
WORLD (1/100), ACWI and USA (1/100) options. In addition, WORLD (1/
100), ACWI and USA (1/100) options will be available to all market
participants and will trade in the same manner as other index options
in accordance with the Exchange's Rules.
Intramarket Competition. The Exchange also believes that the
proposed change would not place any undue burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. WORLD (1/100), ACWI and USA (1/100) options would
continue to be equally available to all market participants who wish to
trade such options. The Exchange rules applicable to the listing and
trading of options will apply in the same manner to the listing and
trading of WORLD (1/100), ACWI and USA (1/100) options. Also, as noted
above, the Exchange already lists and trades index options, including
EAFE options and EM options.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to 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 \38\ and Rule 19b-4(f)(6) thereunder.\39\
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 \40\ and Rule 19b-
4(f)(6)(iii) thereunder.\41\
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\38\ 15 U.S.C. 78s(b)(3)(A)(iii).
\39\ 17 CFR 240.19b-4(f)(6).
\40\ 15 U.S.C. 78s(b)(3)(A).
\41\ 17 CFR 240.19b-4(f)(6). 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, 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) \42\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\43\ 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 Exchange
may list and trade WORLD (1/100), ACWI and USA (1/100) options, which
currently trade on CBOE, without delay once they cease to trade on CBOE
and facilitate continuity in the trading of these index options
products. The Exchange states that the proposed rule change is based on
the approved rules of CBOE, and therefore raises no new or novel issues
that have not been previously considered by the Commission. For these
reasons, and because the proposed rule change does not raise any new or
novel regulatory issues, the Commission finds that waiving 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 as operative
upon filing.\44\
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\42\ 17 CFR 240.19b-4(f)(6).
\43\ 17 CFR 240.19b-4(f)(6)(iii).
\44\ 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 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 will 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#f486819891d9979b9999919a8087b4879197da939b82"><span class="__cf_email__" data-cfemail="9be9eef7feb6f8f4f6f6fef5efe8dbe8fef8b5fcf4ed">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-35 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-NYSEARCA-2026-35. 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 filing 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-NYSEARCA-2026-35 and should be submitted
on or before May 6, 2026
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), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07255 Filed 4-14-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on April 15, 2026.
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