Notice2026-17460
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 404, Series of Option Contracts Open for Trading, To Amend the Short Term Option Series Program With Respect to Qualifying Securities
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
August 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 165 (Thursday, August 27, 2026)</title>
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[Federal Register Volume 91, Number 165 (Thursday, August 27, 2026)]
[Notices]
[Pages 55403-55410]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17460]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106180; File No. SR-SAPPHIRE-2026-33]
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 404, Series of Option Contracts Open for Trading, To
Amend the Short Term Option Series Program With Respect to Qualifying
Securities
August 24, 2026.
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 August 13, 2026, MIAX Sapphire, LLC (``MIAX Sapphire'' 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 the Short Term Option Series Program
with respect to Qualifying Securities.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings">https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings</a>, and at the Exchange's principal office.
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 the Short Term Options Series
Program in Interpretation and Policy .02 to Exchange Rule 404.
Specifically, the Exchange proposes to amend the Qualifying Securities
to: (1) permit the listing of up to two Tuesday and Thursday
Expirations for options on certain Exchange Traded Funds that meet the
current criteria in addition to the existing Monday and Wednesday
Expirations; and (2) permit the listing of up to two Monday and
Wednesday Expirations for options on additional Exchange-Traded Fund
Shares that meet new criteria. The Exchange also proposes to designate
the Exchange-Traded Fund Shares that meet the current criteria in
Interpretation and
[[Page 55404]]
Policy .02 to Exchange Rule 404 as ``Tier 1 Qualifying Securities'' and
designate the Exchange-Traded Fund Shares that meet the proposed new
set of criteria for Qualifying Securities that would only be permitted
to trade up to two Monday and Wednesday Expirations, as ``Tier 2
Qualifying Securities.'' This proposed rule change is based on a
similar proposal submitted by Nasdaq ISE, LLC (``ISE'') and approved by
the Commission.\3\
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\3\ See Securities Exchange Act Release No. 106100 (August 12,
2026) (Self-Regulatory Organizations; Nasdaq ISE, LLC; Order
Approving a Proposed Rule Change to Amend the Short Term Option
Series Program Related to Qualifying Securities) (SR-ISE-2026-34).
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Currently, as set forth in Interpretation and Policy .02 to
Exchange Rule 404, after an option class has been approved for listing
and trading on the Exchange as a Short Term Option Series,\4\ the
Exchange may open for trading on any Thursday or Friday that is a
business day (``Short Term Option Opening Date'') series of options on
that class that expire at the close of business on each of the next
five Fridays that are business days and are not Fridays in which
standard expiration options series, Monthly Options Series, or
Quarterly Options Series expire (``Friday Short Term Option Expiration
Dates''). The Exchange may have no more than a total of five Short Term
Option Expiration Dates (``Short Term Option Weekly Expirations'').
Further, if the Exchange is not open for business on the respective
Thursday or Friday, the Short Term Option Opening Date for Short Term
Option Weekly Expirations will be the first business day immediately
prior to that respective Thursday or Friday. Similarly, if the Exchange
is not open for business on a Friday, the Short Term Option Expiration
Date for Short Term Option Weekly Expirations will be the first
business day immediately prior to that Friday.
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\4\ The term ``Short Term Option Series'' means a series in an
option class that is approved for listing and trading on the
Exchange in which the series is opened for trading on any Monday,
Tuesday, Wednesday, Thursday or Friday that is a business day and
that expires on the Monday, Tuesday, Wednesday, Thursday, or Friday
of the next business week, or, in the case of a series that is
listed on a Friday and expires on a Monday, is listed one business
week and one business day prior to that expiration. If a Tuesday,
Wednesday, Thursday or Friday is not a business day, the series may
be opened (or shall expire) on the first business day immediately
prior to that Tuesday, Wednesday, Thursday or Friday, respectively.
For a series listed pursuant to this section for Monday expiration,
if a Monday is not a business day, the series shall expire on the
first business day immediately following that Monday. See Exchange
Rule 100.
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Additionally, the Exchange may open for trading series of options
on the symbols provided in Table 1 of Interpretation and Policy .02 to
Exchange Rule 404 that expire at the close of business on each of the
next two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively,
that are business days beyond the current week and are not business
days in which standard expiration options series, Monthly Options
Series, or Quarterly Options Series expire (``Short Term Option Daily
Expirations'').\5\ For those symbols listed in Table 1, the Exchange
may have no more than a total of two Short Term Option Daily
Expirations beyond the current week for each of Monday, Tuesday,
Wednesday, and Thursday expirations, as applicable, at one time.
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\5\ As set forth in Table 1 of Interpretation and Policy .02 to
Exchange Rule 404, the Exchange currently permits expirations in
SPY, IWM, QQQ on Mondays, Tuesdays, Wednesdays and Thursdays. Also,
the Exchange permits expirations in GLD, SLV and TLT on Mondays and
Wednesdays. Finally, the Exchange permits expirations in USO and UNG
on Wednesdays.
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Further, the Exchange may open for trading series of options on the
symbols provided in Table 2 of Interpretation and Policy .02 to
Exchange Rule 404 that expire on the close of business on each of the
next two Mondays and Wednesdays, respectively, that are business days
beyond the current week and are not business days in which standard
expiration options series, Monthly Options Series, or Quarterly Options
Series expire (``Qualifying Securities''). For those symbols listed in
Table 2, the Exchange may have no more than a total of two Short Term
Option Daily Expirations beyond the current week for each of Monday and
Wednesday Expirations, at one time. Qualifying Securities may be
eligible individual stocks or Exchange-Traded Fund Shares that meet the
following criteria on a quarterly basis:
(1) an underlying security, as measured on the last day of the
prior calendar quarter, must have:
(A) a market capitalization of greater than 700 billion dollars for
an individual stock based on the closing price,\6\ or
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\6\ The closing price and the opening price shall be that of the
primary exchange where the security is listed.
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(B) Assets under Management (``AUM'') greater than 50 billion
dollars for an Exchange-Traded Fund Share based on net asset value
(``NAV'');
(2) monthly options volume, as measured by sides traded in the last
month preceding the quarter end, of greater than 10 million options;
(3) a position limit of at least 250,000 contracts; and
(4) participate in the Penny Interval Program.
Each calendar quarter, the Exchange will apply the above criteria
to individual stocks and Exchange-Traded Fund Shares to determine
eligibility for the following quarter as a Qualifying Security.
Beginning on the second trading day in the first month of each calendar
quarter, the market capitalization of individual stocks shall be
calculated based on the closing price established on the primary
exchange on the last trading day of the prior calendar quarter and the
AUM for Exchange-Traded Fund Shares shall be calculated based on the
NAV established on the primary exchange on the last trading day of the
prior calendar quarter. The data establishing the volume thresholds
will be established by using data from the last month of the prior
calendar quarter from The Options Clearing Corporation. For options
listed on the first trading day of a given calendar quarter, the volume
shall be calculated using the last month of the quarter prior to that
trading calendar quarter.\7\ The Exchange will make the list of
Qualifying Securities available by the close of business on the first
trading day of the quarter.\8\
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\7\ OCC data becomes available for the end of a quarter on the
first trading day of a new quarter.
\8\ The Exchange makes this information available on its
website.
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Eligible Qualifying Securities would be permitted to list two Short
Term Option Expiration Dates beyond the current week for each Monday
and Wednesday expiration at one time. For Qualifying Securities, the
Exchange would not list an expiry on a day when there will be an
Earnings Announcement that takes place after market close.\9\
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\9\ With respect to individual stock options, the Exchange does
not list an expiry on a day when there will be an Earnings
Announcement that takes place after market close with respect to
individual stock to avoid permitting an additional expiry on a day
where post-close price volatility may be impacted due to the
Earnings Announcement. Pursuant to Interpretation and Policy .02 to
Exchange Rule 404, an Earnings Announcement shall include official
public quarterly or yearly earnings filed with the Securities and
Exchange Commission.
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Qualifying Securities that do not continue to meet the above
criteria would no longer be permitted to list Monday and Wednesday
expiries beginning on the second day of the following quarter.
Proposal
At this time, the Exchange proposes to amend the listing and
trading of Qualifying Securities to: (1) permit the listing of up to
two Tuesday and Thursday Expirations for options on
[[Page 55405]]
certain Exchange-Traded Funds that meet the current criteria in
addition to the existing Monday and Wednesday Expirations; and (2)
permit the listing of up to two Monday and Wednesday Expirations for
options on additional Exchange-Traded Fund Shares that meet new
additional criteria. As noted above, the Exchange proposes to designate
the Exchange-Traded Fund Shares that meet the current criteria in
Interpretation and Policy .02 to Exchange Rule 404 as ``Tier 1
Qualifying Securities'' and designate the Exchange-Traded Fund Shares
that meet the proposed new set of criteria for Qualifying Securities
that would only be permitted to trade up to two Monday and Wednesday
Expirations, as ``Tier 2 Qualifying Securities.''
Expansion of Exchange-Traded Fund Shares Qualifying Securities
In January 2026, the Exchange filed to permit the listing of
Qualifying Securities, and the filing was noticed for immediate
effectiveness.\10\ The Exchange began listing Qualifying Securities on
January 26, 2026 on Tesla, Inc. (TSLA); NVIDIA Corporation (NVDA);
Apple Inc. (AAPL); iShares Bitcoin Trust ETF (IBIT); <a href="http://Amazon.com">Amazon.com</a>, Inc.
(AMZN); Meta Platforms, Inc. (META); Broadcom Inc. (AVGO); Alphabet,
Inc. (GOOGL); and Microsoft Corporation (MSFT).\11\ These securities
continue to trade in the second calendar quarter of 2026.\12\ Based on
the required review, the Exchange changed the list by removing IBIT,
and adding Advanced Micro Devices, Inc.(AMD), Intel Corporation (INTC),
Micron Technology, Inc. (MU), VanEck Semiconductor ETF (SMH), and
Financial Select Sector SPDR Fund (XLF) to the list of securities
qualifying for the program in the third calendar quarter of 2026.\13\
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\10\ See Securities Exchange Act Release No. 104660 (January 22,
2026), 91 FR 3596 (January 27, 2026) (SR-SAPPHIRE-2026-03) (Self-
Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 404, Series of Options Contracts Open for Trading, To Amend the
Short Term Option Series Program).
\11\ <a href="https://www.miaxglobal.com/alert/2026/01/20/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-0">https://www.miaxglobal.com/alert/2026/01/20/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-0</a>.
\12\ <a href="https://www.miaxglobal.com/alert/2026/04/06/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-2">https://www.miaxglobal.com/alert/2026/04/06/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-2</a>.
\13\ <a href="https://www.miaxglobal.com/alert/2026/07/01/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-1">https://www.miaxglobal.com/alert/2026/07/01/miax-exchange-group-options-markets-listing-monday-and-wednesday-weekly-1</a>.
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Tier 1 Expansion
At this time, the Exchange proposes to permit the listing and
trading of Qualifying Securities on Exchange-Traded Fund Shares that
meet the current criteria in Interpretation and Policy .02 to Exchange
Rule 404 to list up to two Tuesday and Thursday Expirations in addition
to the existing Monday and Wednesday Expirations and redesignate them
as Tier 1 Qualifying Securities.
The proposed Tuesday Qualifying Securities expirations on Exchange-
Traded Fund Shares for Tier 1 Qualifying Securities will be similar to
the current Tuesday Expirations in SPDR S&P 500 ETF Trust (``SPY''),
Invesco QQQ Trust (``QQQ''), and iShares Russell 2000 ETF (``IWM'') in
Short Term Option Daily Expirations set forth in Interpretation and
Policy .02 to Exchange Rule 404, such that the Exchange may open for
trading on any Monday or Tuesday that is a business day series of
options on the symbols provided in Table 1 and Table 2 that expire at
the close of business on each of the next two Tuesdays that are
business days and are not business days in which standard expiration
options series, Monthly Options Series, or Quarterly Options Series
expire (``Tuesday Short Term Option Expiration Date'').\14\ In the
event Tier 1 Qualifying Securities expire on a Tuesday and that Tuesday
is the same day that a standard expiration options series, Monthly
Options Series, or Quarterly Options Series expires, the Exchange would
skip that week's listing and instead list the following week; the two
weeks would therefore not be consecutive. Today, Tuesday Expirations in
SPY, QQQ, and IWM similarly skip the weekly listing in the event the
weekly listing expires on the same day in the same class as a standard
expiration options series, Monthly Options Series, or Quarterly Options
Series.
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\14\ They may also trade on Fridays, as is the case for all
options series in the Short Term Option Series Program.
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The proposed Thursday Qualifying Securities expirations on
Exchange-Traded Fund Shares for Tier 1 Qualifying Securities will be
similar to the current Thursday SPY, QQQ, and IWM in Short Term Option
Daily Expirations set forth Interpretation and Policy .02 to Exchange
Rule 404, such that the Exchange may open for trading on any Wednesday
or Thursday that is a business day series of options on the symbols
provided in Table 1 and Table 2 above that expire at the close of
business on each of the next two Thursdays that are business days and
are not business days in which standard expiration options series,
Monthly Options Series, or Quarterly Options Series expire (``Thursday
Short Term Option Expiration Date'').\15\ In the event Tier 1
Qualifying Securities expire on a Thursday and that Thursday is the
same day that a standard expiration options series, Monthly Options
Series, or Quarterly Options Series expires, the Exchange would skip
that week's listing and instead list the following week; the two weeks
would therefore not be consecutive. Today, Thursday Expirations in SPY,
QQQ, and IWM similarly skip the weekly listing in the event the weekly
listing expires on the same day in the same class as a standard
expiration options series, Monthly Options Series, or Quarterly Options
Series.
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\15\ Id.
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The interval between strike prices for the proposed Tuesday and
Thursday Tier 1 Qualifying Securities Expirations will be the same as
those currently applicable for SPY, QQQ, and IWM Tuesday and Thursday
Expirations (among other symbols that may list a Tuesday or Thursday
Expiration) in the Short Term Option Series Program.\16\ Specifically,
the Tuesday and Thursday Tier 1 Qualifying Securities Expirations will
have a strike interval of (i) $0.50 or greater for strike prices below
$100, and $1 or greater for strike prices between $100 and $150 for all
option classes that participate in the Short Term Option Series
Program, (ii) $0.50 for option classes that trade in one dollar
increments and are in the Short Term Option Series Program, or (iii)
$2.50 or greater for strike prices above $150.\17\ As is the case with
other equity options series listed pursuant to the Short Term Option
Series Program, Tuesday and Thursday Tier 1 Qualifying Securities
Expirations series will be P.M.-settled.
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\16\ See Interpretation and Policy .02(e) to Exchange Rule 404.
The Exchange notes that equity options which have an expiration of
more than twenty-one days from the listing date would also be
subject to the intervals as noted within Interpretation and Policy
.02(f) to Exchange Rule 404. See also Interpretation and Policy .11
to Exchange Rule 404.
\17\ Id.
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Pursuant to Exchange Rule 100, with respect to the Short Term
Option Series Program, if a Tuesday is not a business day, the series
shall expire on the first business day immediately prior to that
Tuesday, e.g., Monday of that week if the Tuesday is not a business
day. Also, pursuant to Exchange Rule 100, with respect to the Short
Term Options Series Program, a Thursday expiration series shall expire
on the first business day immediately prior to that Thursday, e.g.,
Wednesday of that week if the Thursday is not a business day.
Currently, for each option class eligible for participation in the
Short
[[Page 55406]]
Term Option Series Program, the Exchange is limited to opening thirty
(30) series for each expiration date for the specific class.\18\ The
thirty (30) series restriction does not include series that are open by
other securities exchanges under their respective weekly rules; the
Exchange may list these additional series that are listed by other
options exchanges.\19\ With the proposed changes, this thirty (30)
series restriction would apply to Tuesday and Thursday Tier 1
Qualifying Securities Expirations as well. In addition, the Exchange
will be able to list series that are listed by other exchanges,
assuming they file similar rules with the Commission to list Tuesday
and Thursday Tier 1 Qualifying Securities Expirations.
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\18\ See Interpretation and Policy .02(c) and (d) to Exchange
Rule 404.
\19\ See Interpretation and Policy.02 to Exchange Rule 404.
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With this proposal, Tuesday and Thursday Tier 1 Qualifying
Securities Expirations would be treated similar to existing SPY, QQQ,
and IWM Tuesday and Thursday Expirations. With respect to standard
expiration option series, Tuesday and Thursday Tier 1 Qualifying
Securities Expirations will be permitted to expire in the same week in
which standard expiration option series on the same class expire.\20\
Not listing Tier 1 Qualifying Securities Tuesday and Thursday
Qualifying Securities Expirations for one week every month because
there was a standard options series on that same class on the Friday of
that week would create investor confusion.
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\20\ See Interpretation and Policy .02(a) to Exchange Rule 404.
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Further, as with SPY, QQQ, and IWM Tuesday and Thursday
Expirations, the Exchange would not permit Tuesday and Thursday Tier 1
Qualifying Securities Expirations to expire on a business day in which
standard expiration option series, Monthly Options Series, or Quarterly
Options Series expire.\21\ Therefore, all Tuesday or Thursday Tier 1
Qualifying Securities Expirations would expire at the close of business
on each of the next two Tuesdays and Thursdays, respectively, that are
business days and are not business days in which standard expiration
option series, Monthly Options Series, or Quarterly Options Series
expire. The Exchange believes that it is reasonable to not permit two
expirations on the same day in which a standard expiration option
series, Monthly Options Series, a Quarterly Options Series would expire
because those options would be duplicative of each other.
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\21\ See Interpretation and Policy .02(a) to Exchange Rule 404.
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The Exchange does not believe that any market disruptions will be
encountered with the introduction of Tuesday or Thursday Tier 1
Qualifying Securities Expirations. The Exchange currently trades P.M.-
settled Short Term Option Series that expire Monday, Tuesday, Wednesday
and Thursday on several symbols \22\ and has not experienced any market
disruptions nor issues with capacity. Today, the Exchange has
surveillance programs in place to support and properly monitor trading
in Short Term Option Series that expire Monday, Tuesday, Wednesday and
Thursday on several symbols.\23\ The Exchange believes that it has the
necessary capacity and surveillance programs in place to support and
properly monitor trading in the proposed Tuesday or Thursday Tier 1
Qualifying Securities Expirations.
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\22\ See supra note 5.
\23\ Id.
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Tier 2 Expansion
The Exchange also proposes to permit the listing of up to two
Monday and Wednesday Expirations for options on additional Exchange-
Traded Fund Shares that meet new additional criteria as Qualifying
Securities. The Exchange proposes a different set of criteria for
Qualifying Securities that are Exchange-Traded Funds that would only be
permitted to trade up to two Monday and Wednesday Expirations as
follows: an underlying security, as measured on the last day of the
prior calendar quarter, must have: AUM greater than 25 billion dollars
for an Exchange-Traded Fund Share based on NAV,\24\ and monthly options
volume, as measured by sides traded in the last month preceding the
quarter end, of greater than 5 million options; a position limit of at
least 250,000 contracts; \25\ and participate in the Penny Interval
Program (``Tier 2 Qualifying Securities'').
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\24\ Currently, Exchange-Traded Fund Shares that are Qualifying
Securities must have an AUM greater than 50 billion dollars based on
NAV.
\25\ Currently, Exchange-Traded Fund Shares that are Qualifying
Securities must have a monthly options volume, as measured by sides
traded in the last month preceding the quarter end, of greater than
10 million options.
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As with any Qualifying Security, each calendar quarter, the
Exchange will apply the above criteria to the proposed new Tier 2
Qualifying Securities to determine eligibility for the following
quarter as a Qualifying Security. Beginning on the second trading day
in the first month of each calendar quarter, the AUM for Exchange-
Traded Fund Shares that are Tier 2 Qualifying Securities shall be
calculated based on the NAV established on the primary exchange on the
last trading day of the prior calendar quarter. As is the case for all
Qualifying Securities, the data establishing the volume thresholds will
be established by using data from the last month of the prior calendar
quarter from OCC. For options listed on the first trading day of a
given calendar quarter, the volume shall be calculated using the last
month of the quarter prior to that calendar quarter.\26\ The Exchange
will make the list of Qualifying Securities available by close of
business on the first trading day of the quarter.\27\
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\26\ OCC data becomes available for the end of a quarter on the
first trading day of a new quarter.
\27\ The Exchange will continue to make this information
available on its website.
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Eligible Qualifying Securities for the proposed Tier 2 Qualifying
Securities would be permitted to list two Short Term Option Expiration
Dates beyond the current week for each Monday and Wednesday Expirations
at one time. Tier 2 Qualifying Securities that do not continue to meet
the above criteria would no longer be permitted to list Monday and
Wednesday Expirations beginning on the second day of the following
quarter.\28\
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\28\ The Exchange has noted the additional expirations in Table
2 of Interpretation and Policy .02 to Exchange Rule 404 along with
the criteria for a Qualifying Security for the proposed Tier 2
Qualifying Securities.
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The proposed Monday Tier 2 Qualifying Securities Expirations will
be similar to the Monday Expirations for the existing Qualifying
Securities (among other symbols that may list a Monday Expiration) in
Short Term Option Daily Expirations set forth in in Interpretation and
Policy .02 to Exchange Rule 404 such that the Exchange may open for
trading on any Friday or Monday that is a business day (beyond the
current week) series of options on Tier 2 Qualifying Securities to
expire on any Monday of the month that is a business day and is not a
Monday in which standard expiration options series, Monthly Options
Series, or Quarterly Options Series expire, provided that Monday
expirations that are listed on a Friday must be listed at least one
business week and one business day prior to the expiration (``Monday
Qualifying Securities Expirations'').\29\ In the event Tier 2
Qualifying Securities would expire on a Monday and that Monday is the
same day that a standard expiration options series, Monthly Options
Series, or Quarterly Options Series expires, the
[[Page 55407]]
Exchange would skip that week's listing and instead list the following
week; the two weeks of Monday Qualifying Securities Expirations would
therefore not be consecutive. Today, Monday expirations in existing
Qualifying Securities similarly skip the weekly listing in the event
the weekly listing would expire on the same day in the same class as a
standard expiration options series, Monthly Options Series, or
Quarterly Options Series.
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\29\ They may also trade on Fridays, as is the case for all
options series in the Short Term Option Series Program.
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The proposed Wednesday Tier 2 Qualifying Securities expirations
will be similar to the current Wednesday Expirations for the existing
Qualifying Securities (among other symbols that may list a Wednesday
Expiration) in Short Term Option Daily Expirations set forth in
Interpretation and Policy .02 to Exchange Rule 404, such that the
Exchange may open for trading on any Tuesday or Wednesday that is a
business day (beyond the current week) series of options on Tier 2
Qualifying Securities to expire on any Wednesday of the month that is a
business day and is not a Wednesday in which standard expiration
options series, Monthly Options Series, or Quarterly Options Series
expire (``Wednesday Qualifying Securities Expirations'').\30\ In the
event Tier 2 Qualifying Securities would expire on a Wednesday and that
Wednesday is the same day that a standard expiration options series,
Monthly Options Series, or Quarterly Options Series expires, the
Exchange would skip that week's listing and instead list the following
week; the two weeks of Wednesday Qualifying Securities Expirations
would therefore not be consecutive. Today, Wednesday Expirations in
existing Qualifying Securities similarly skip the weekly listing in the
event the weekly listing would expire on the same day in the same class
as a standard expiration options series, Monthly Options Series, or
Quarterly Options Series.
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\30\ Id.
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The interval between strike prices for the proposed Monday and
Wednesday Tier 2 Qualifying Securities Expirations will be the same as
those currently Monday and Wednesday Expirations in existing Qualifying
Securities (among other symbols that may list a Monday or Wednesday
Expiration) in the Short Term Option Series Program.\31\ Specifically,
the Monday and Wednesday Tier 2 Qualifying Securities Expirations for
the proposed new Exchange-Traded Fund Shares will have a strike
interval of (i) $0.50 or greater for strike prices below $100, and $1
or greater for strike prices between $100 and $150 for all option
classes that participate in the Short Term Option Series Program, (ii)
$0.50 for option classes that trade in one dollar increments and are in
the Short Term Option Series Program, or (iii) $2.50 or greater for
strike prices above $150.\32\ As is the case with other equity options
series listed pursuant to the Short Term Option Series Program, the
Monday and Wednesday Tier 2 Qualifying Securities Expirations series
will be P.M.-settled.
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\31\ See Interpretation and Policy .02(e) to Exchange Rule 404.
The Exchange notes that equity options which have an expiration of
more than twenty-one days from the listing date would also be
subject to the intervals as noted within Interpretation and Policy
.02(f) to Exchange Rule 404. See also Interpretation and Policy .11
to Exchange Rule 404.
\32\ Id.
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As noted above, pursuant to Exchange Rule 100, with respect to the
Short Term Option Series Program, if a Monday is not a business day,
the series shall expire on the first business day immediately following
that Monday. Also, pursuant to Exchange Rule 100, with respect to the
Short Term Options Series Program, a Wednesday expiration series shall
expire on the first business day immediately prior to that Wednesday,
e.g., Tuesday of that week if the Wednesday is not a business day.
As noted above, currently, for each option class eligible for
participation in the Short Term Option Series Program, the Exchange is
limited to opening thirty (30) series for each expiration date for the
specific class.\33\ The thirty (30) series restriction does not include
series that are open by other securities exchanges under their
respective weekly rules; the Exchange may list these additional series
that are listed by other options exchanges.\34\ With the proposed
changes, this thirty (30) series restriction would apply to Monday and
Wednesday Tier 2 Qualifying Securities Expirations as well. In
addition, the Exchange will be able to list series that are listed by
other exchanges, assuming they file similar rules with the Commission
to list Monday and Wednesday Tier 2 Qualifying Securities Expirations.
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\33\ See Interpretation and Policy .02(c) and (d) to Exchange
Rule 404.
\34\ See Interpretation and Policy.02 to Exchange Rule 404.
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With this proposal, Monday and Wednesday Tier 2 Qualifying
Securities Expirations would be treated similar to existing Monday and
Wednesday Qualifying Securities Expirations. With respect to standard
expiration option series, Monday and Wednesday Tier 2 Qualifying
Securities Expirations will be permitted to expire in the same week in
which standard expiration option series on the same class expire.\35\
Not listing Monday and Wednesday Tier 2 Qualifying Securities
Expirations for one week every month because there was a standard
options series on that same class on the Friday of that week would
create investor confusion.
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\35\ See Interpretation and Policy .02(a) to Exchange Rule 404.
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Further, as with existing Monday and Wednesday Qualifying Security
Expirations, the Exchange would not permit Monday and Wednesday Tier 2
Qualifying Securities Expirations to expire on a business day in which
standard expiration option series, Monthly Options Series, or Quarterly
Options Series expire.\36\ Therefore, all Monday and Wednesday Tier 2
Qualifying Securities Expirations would expire at the close of business
on each of the next two Mondays and Wednesdays, respectively, that are
business days and are not business days in which standard expiration
option series, Monthly Options Series, or Quarterly Options Series
expire. The Exchange believes that it is reasonable to not permit two
expirations for the proposed Tier 2 Qualifying Securities on the same
day in which a standard expiration option series, Monthly Options
Series, or a Quarterly Options Series would expire because those
options would be duplicative of each other.
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\36\ See Interpretation and Policy .02(a) to Exchange Rule 404.
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The Exchange does not believe that any market disruptions will be
encountered with the introduction of Monday and Wednesday Tier 2
Qualifying Securities Expirations. The Exchange currently trades P.M.-
settled Short Term Option Series that expire Monday, Tuesday, Wednesday
and Thursday on several symbols \37\ and has not experienced any market
disruptions nor issues with capacity. Today, the Exchange has
surveillance programs in place to support and properly monitor trading
in Short Term Option Series that expire Monday, Tuesday, Wednesday and
Thursday on several symbols.\38\ The Exchange believes that it has the
necessary capacity and surveillance programs in place to support and
properly monitor trading in the proposed Monday and Wednesday Tier 2
Qualifying Securities Expirations.
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\37\ See supra note 5.
\38\ Id.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\39\ in general, and furthers the
[[Page 55408]]
objectives of Section 6(b)(5) of the Act,\40\ in particular, in that it
is designed 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.
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\39\ 15 U.S.C. 78f(b).
\40\ 15 U.S.C. 78f(b)(5).
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The proposal to permit Tuesday and Thursday Tier 1 Qualifying
Securities Expirations and Monday and Wednesday Tier 2 Qualifying
Security Expirations, subject to the proposed limitation of two
expirations beyond the current week, would protect investors and the
public interest by providing the investing public and other market
participants more choice and flexibility to closely tailor their
investment and hedging decisions in these options and allow for a
reduced premium cost of buying portfolio protection, thus allowing them
to better manage their risk exposure.
The Exchange believes that the proposed criteria for Tier 1
Qualifying Securities requires Exchange-Traded Fund Shares to be highly
liquid. An AUM of 50 billion dollars for an Exchange-Trade Fund Share,
in conjunction with the monthly options volume requirement of greater
than 10 million options as measured by sides traded in the last month
preceding the quarter end, is very restrictive. This requirement
represents substantially less than 1% of Exchange-Traded Fund Shares.
Therefore, an Exchange-Traded Fund Share that meets aforementioned
market capitalization and volume requirements are highly liquid and
could be viewed as stable securities.
Further, with respect to the Tier 2 Qualifying Securities, which
have a lower AUM of 25 billion dollars and monthly options volume as
measured by sides traded in the last month preceding the quarter end,
of greater than 5 million options for an Exchange-Traded Fund Share,
the Exchange believes that despite the lower criteria, these Exchange-
Traded Fund Shares represent highly liquid securities. This requirement
also represents substantially less than 1% of Exchange-Traded Fund
Shares. Therefore, an Exchange-Traded Fund Share that meets the
aforementioned market capitalization and volume requirements would also
be highly liquid and could be viewed as a stable security.
The Exchange notes that with respect to position limits, Exchange
Rule 307(d)(5) provides, that ``[t]o be eligible for the 250,000
contract limit, either the most recent six (6) month trading volume of
the underlying security must have totaled at least 100 million shares
or the most recent six-month trading volume of the underlying security
must have totaled at least seventy-five (75) million shares and the
underlying security must have at least 300 million shares currently
outstanding.'' The 250,000 contract position limit is the highest
position limit by Exchange rules. Options that qualify for the 250,000
position (and exercise) limit are highly liquid securities that have
met the stringent requirements noted in Exchange Rule 307(d)(5) to
qualify for the highest position limit.
Finally, a Qualifying Security must participate in the Penny
Interval Program. In order to qualify for the Penny Interval Program,
an options class must be among the 300 most actively traded multiply
listed option classes overlying securities priced below $200.\41\ The
most actively traded options classes are included in the Penny Interval
Program based on certain objective criteria (trading volume thresholds
and initial price tests).
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\41\ See Exchange Rule 510(c)(2). Each December OCC ranks all
multiply listed option classes based on National Cleared Volume for
the six full calendar month from June 1 through November 30 for
determination of the most actively traded option classes.
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The improvement in price transparency brought about by the existing
Monday and Wednesday Qualifying Security Expirations offers Market
Makers and investors better volatility pricing which will inform
trading on the related products to these indexes. The Exchange believes
that the proposed criteria for Tier 1 Qualifying Securities is
consistent with the protection of investors and the general public
because the criteria targets the most liquid Exchange-Traded Fund
Shares. The addition of Tuesday and Thursday Qualifying Security
Expirations would further provide Market Makers and investors with
volatility pricing clarity. Further, the expansion of the Qualifying
Securities program for Tier 2 would engender the same benefits to a
select few additional Exchange-Traded Fund Shares.
Qualifying Securities that do not continue to meet the above
criteria would no longer be permitted to list Monday, Tuesday,
Wednesday, and Thursday expiries in the following quarter, although the
Qualifying Security would potentially have two weeks of strikes already
listed which will persist. These remaining listings could continue to
be traded until they expire.
With this proposal, overall, the Exchange would add a small number
of additional Tuesday and Thursday Tier 1 Qualifying Security
Expirations and new Monday and Wednesday Tier 2 Qualifying Securities
and would continue to limit the addition of two Monday, Tuesday,
Wednesday, and Thursday expirations beyond the current week. These
additional Monday, Tuesday, Wednesday and Thursday Tier 1 and Tier 2
Qualifying Security Expirations would remove impediments to and perfect
the mechanism of a free and open market by encouraging Market Makers to
continue to deploy capital more efficiently and improve displayed
market quality.\42\ The Exchange believes that the proposal will allow
Members to expand hedging tools and tailor their investment and hedging
needs more effectively in Qualifying Securities as these funds are most
likely to be utilized by market participants to hedge the underlying
asset classes.
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\42\ Today, Market Makers are required to quote a specified time
in their assigned options series. See Exchange Rule 605.
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Similar to SPY, QQQ, and IWM the additional Tuesday and Thursday
Tier 1 Qualifying Securities, as well as the new Monday and Wednesday
Expirations or Tier 2 Qualifying Securities, are consistent with the
Act as they will, among other things, expand hedging tools available to
market participants and allow for a reduced premium cost of buying
portfolio protection. The Exchange believes that Tier 1 and Tier 2
Qualifying Security Expirations will allow market participants to
purchase options on Qualifying Securities based on their timing as
needed and allow them to tailor their investment and hedging needs more
effectively, thus allowing them to better manage their risk exposure.
In particular, the Exchange believes the Short Term Option Series
Program has been successful to date and that the proposed Tier 1 and
Tier 2 Qualifying Security Expirations (Monday, Tuesday, Wednesday and
Thursday) should simply expand the ability of investors to hedge risk
against market movements stemming from economic releases or market
events that occur throughout the month in the same way that the Short
Term Option Series Program has expanded the landscape of hedging.
There are no material differences in the treatment of SPY, QQQ and
IWM Tuesday and Thursday Qualifying Security Expirations compared to
the proposed Tuesday and Thursday Tier 1 Qualifying Security
Expirations. Further, there are no material differences in the
treatment of current Qualifying Securities that will qualify as Tier 1
Monday and Wednesday Expirations compared to the proposed
[[Page 55409]]
Monday and Wednesday Tier 2 Qualifying Security Expirations.
Additionally, market participants that elect to utilize options
receive a copy of the Options Disclosure Document which explains the
risks inherent in options trading. Also, broker-dealers must have a
reasonable basis to believe that a recommended transaction or
investment strategy involving a security or securities is suitable for
the customer.\43\ Suitability rules are intended to distinguish the
trading of customers with those of professional traders who are likely
to have distinct risk/reward profiles, risk tolerance and capital.
Regardless of whether the account is self-directed or options are being
recommended, broker-dealers must perform due diligence on the customer
and collect information about the customer to support a determination
that options trading is appropriate for the customer. Options accounts
are subject to specific supervisory reviews, including, among others,
reviewing the compatibility of options transactions with investment
objectives and with the types of transactions for which the account was
approved, and are subject to other FINRA rules that apply when opening
customer accounts, including among others, customer identification
requirements under anti-money laundering rules.\44\ Therefore, the
Exchange does not believe that listing of up to two Monday and
Wednesday Expirations for options on certain individual stocks or
Exchange-Traded Fund Shares is inconsistent with the Act.
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\43\ See FINRA Rule 2111.
\44\ See <a href="https://www.finra.org/rules-guidance/notices/21-15">https://www.finra.org/rules-guidance/notices/21-15</a>.
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Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in the
proposed option expirations, in the same way that it monitors trading
in the current Qualifying Security expirations. The Exchange also
represents that it has the necessary system capacity to support the new
expirations. Finally, the Exchange does not believe that any market
disruptions will be encountered with the introduction of these option
expirations. As discussed above, the Exchange believes that its
proposal is a modest expansion of weekly expiration dates for
Qualifying Security Expirations given that it will be limited to two
expirations beyond the current week.
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.
While the proposal will expand the Short Term Options Expirations
to allow Tuesday and Thursday Tier 1 Qualifying Securities for
Exchange-Traded Funds to be listed in addition to Monday and Wednesday
Qualifying Securities, the Exchange believes that this limited
expansion for Tuesday and Thursday Tier 1 Qualifying Securities for
Exchange-Traded Funds will not impose an undue burden on competition;
rather, it will meet customer demand. The Exchange would uniformly
apply the Qualifying Security criteria to options in individual stocks
and Exchange-Traded Fund Shares. The Exchange believes that Members
will continue to be able to expand hedging tools and tailor their
investment and hedging needs more effectively in the Qualifying
Securities.
Similar to SPY, QQQ and IWM Tuesday and Thursday Expirations, the
introduction of Tuesday and Thursday Expirations for Tier 1 Qualifying
Security Expirations on Exchange-Traded Fund Shares does not impose an
undue burden on competition. The Exchange believes that it will, among
other things, expand the hedging tools available to market participants
and allow for a reduced premium cost of buying portfolio protection.
The Exchange believes that Tuesday and Thursday Tier 1 Qualifying
Security Expirations will allow market participants to purchase options
on Exchange-Traded Fund Shares based on their timing as needed and
allow them to tailor their investment and hedging needs more
effectively.
The Exchange does not believe the proposal will impose any burden
on intermarket competition, as nothing prevents other options exchanges
from proposing similar rules to list and trade Tuesday and Thursday
Tier 1 Qualifying Security Expirations on Exchange-Traded Fund Shares.
Further, the Exchange does not believe the proposal will impose any
burden on intra market competition, as all market participants will be
treated in the same manner under this proposal.
With respect to the proposed expansion of Monday and Wednesday
Expirations for Tier 2 Qualifying Securities that are Exchange-Traded
Fund Shares, in addition to the current Monday and Wednesday Qualifying
Securities, the Exchange believes that this limited expansion will not
impose an undue burden on competition; rather, it will meet customer
demand. The Exchange would uniformly continue to apply the Qualifying
Security criteria to options in individual stocks and Exchange-Traded
Fund Shares that are Tier 1 and Tier 2 Qualifying Securities. The
Exchange believes that Members will continue to be able to expand
hedging tools and tailor their investment and hedging needs more
effectively in the Qualifying Securities.
Similar to Monday and Wednesday Expirations for Qualifying
Securities for Exchange Traded Funds, the introduction of Monday and
Wednesday Expirations for Tier 2 Qualifying Securities that are
Exchange-Traded Fund Shares does not impose an undue burden on
competition. The Exchange believes that it will, among other things,
expand the hedging tools available to market participants and allow for
a reduced premium cost of buying portfolio protection. The Exchange
believes that Monday and Wednesday Expirations for Tier 2 Qualifying
Securities will allow market participants to purchase options on
Exchange-Traded Fund Shares that meet the criteria based on their
timing as needed and allow them to tailor their investment and hedging
needs more effectively.
The Exchange does not believe the proposal will impose any burden
on intermarket competition, as nothing prevents other options exchanges
from proposing similar rules to list and trade Monday and Wednesday
Expirations for Tier 2 Qualifying Securities that are Exchange Traded
Fund Shares. Further, the Exchange does not believe the proposal will
impose any burden on intra-market competition, as all market
participants will be treated in the same manner under this proposal.
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
Because the foregoing 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
[[Page 55410]]
19(b)(3)(A)(iii) of the Act \45\ and Rule 19b-4(f)(6) thereunder.\46\
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\45\ 15 U.S.C. 78s(b)(3)(A)(iii).
\46\ 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) \47\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\48\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. According to the
Exchange, waiver of the operative delay would allow the Exchange to
compete with at least one other exchange that has approval to list and
trade the same option series.\49\ The Commission believes that the
proposed rule change presents no novel issues and that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\50\
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\47\ See id.
\48\ 17 CFR 240.19b-4(f)(6)(iii).
\49\ See supra note 3.
\50\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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#1361667f763e707c7e7e767d6760536076703d747c65"><span class="__cf_email__" data-cfemail="ff8d8a939ad29c9092929a918b8cbf8c9a9cd1989089">[email protected]</span></a>. Please include
file number SR-SAPPHIRE-2026-33 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-SAPPHIRE-2026-33. 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-SAPPHIRE-2026-33 and should be submitted
on or before September 17, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\51\
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\51\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-17460 Filed 8-26-26; 8:45 am]
BILLING CODE 8011-01-P
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