Notice2026-19132
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing of a Proposed Rule Change To Permit the Listing of Binary KPI Options
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 18, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 180 (Friday, September 18, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 180 (Friday, September 18, 2026)]
[Notices]
[Pages 59217-59234]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19132]
[[Page 59217]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106367; File No. SR-NYSEAMER-2026-82]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing of a Proposed Rule Change To Permit the Listing of Binary KPI
Options
September 15, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on September 3, 2026, NYSE American LLC (``NYSE American'' or the
``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Rules to permit the listing of
binary options overlying key performance indicators (``KPIs'') reported
by certain issuers of stock (``binary KPI options''). 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 to amend its Rules to permit the listing of
binary options overlying KPIs reported by certain issuers of stock
(``binary KPI options'').\4\
---------------------------------------------------------------------------
\4\ The Exchange's proposal is similar to recent proposals filed
by Cboe Exchange, Inc. (``Cboe'') and MEMX LLC (``MEMX''). See
Securities Exchange Act Release No. 105877 (July 10, 2026), 91 FR
43418 (July 15, 2026) (SR-CBOE-2026-061) (``Notice of Filing of a
Proposed Rule Change to Amend its Rules to Permit the Listing of
Binary Options Overlying Key Performance Indicators (``KPIs'')
Reported by Certain Issuers of Stock (``Binary KPI Options'')) and
Securities Exchange Act Release No. 106182 (August 24, 2026) (SR-
MEMX-2026-25).
---------------------------------------------------------------------------
Binary options are based on the same framework as traditional,
standardized options traded on the Exchange, except the payout of a
binary option is an amount contingent upon the occurrence of the option
being in- or at-the-money rather than the degree to which the option is
in-the-money. As a result, payout at expiration of a binary option is
an all-or-nothing occurrence.
Under current Exchange Rules, the Exchange may list binary return
derivatives (``ByRDS'') and binary options on broad-based indexes.\5\
The Exchange proposes to amend its Rules to permit the listing of
binary KPI options. Binary KPI options are European-style, cash-settled
options contracts listed on an underlying KPI of an issuer whose
exercise settlement value is determined not by the market price of the
issuer's stock, but by whether a specific financial or operating metric
reported by the issuer in an earnings-related filing submitted to the
U.S. Securities and Exchange Commission (the ``Commission'') meets or
exceeds a pre-specified strike level.
---------------------------------------------------------------------------
\5\ See NYSE American Rules Section 17 (Binary Return
Derivatives \sm\) and Section 18 (Broad-Based Index Binary Options
\sm\).
---------------------------------------------------------------------------
First, similar to ByRDS and Broad-Based Index Binary Options, the
Exchange proposes to adopt Section 20 (Binary KPI Options) to describe
binary KPI options. The Rules in proposed Section 20 apply only to
binary KPI options. All other Rules apply to the trading of binary KPI
options, except as otherwise provided or the context otherwise
requires.
Specifically, the Exchange proposes to adopt 900KPI (Applicability,
Definitions). Like other standardized options, binary KPI options have
standardized terms that are established by the Exchange. Standardized
terms for binary KPI options include the exercise criteria that is the
condition or criteria of a binary KPI option, the exercise settlement
amount (i.e., payout amount), strike prices, expiration dates,
settlement type as A.M.-settlement or P.M.-settlement, the settlement
style (as European), and the requirements used to determine if the KPI
condition or criteria of a binary KPI option has been met (the ``payout
determination requirement''). The Exchange proposes to establish these
terms in new Rule 900KPI and additional provisions in proposed Rule
900KPI(b), as described below.
The Exchange proposes to define a ``binary KPI option'' in new Rule
900KPI(b) as a cash-settled option contract listed on an underlying KPI
of an issuer with an exercise settlement amount that is established at
the creation of the option and with a settlement value that is
determined by whether a specific KPI disclosed by the issuer in an
earnings-related filing submitted to the Commission meets or exceeds
its exercise price. Binary KPI options are paid out if the reported
value of the applicable KPI (1) equals or is greater than (as the
payout determination requirement) the exercise price for a call binary
KPI option or (2) is less than (as the payout determination
requirement) the exercise price for a put binary KPI option. The
Exchange also proposes to provide that unless the context dictates
otherwise, the terms underlying security, equity, or index, or any
variations of these terms, in the Rules mean KPI for purposes of binary
KPI options.
The Exchange proposes to define a ``call binary KPI option'' as an
option contract that returns an exercise settlement amount if the
settlement value of the underlying KPI is at or above the exercise
price at expiration (i.e., in- or at-the-money).\6\
---------------------------------------------------------------------------
\6\ See proposed Rule 900KPI(b)(2).
---------------------------------------------------------------------------
The term ``Clearing Corporation'' would mean the registered
clearing agency designated by the Exchange to clear binary KPI
options.\7\
---------------------------------------------------------------------------
\7\ See proposed Rule 900KPI(b)(3). The definition of Clearing
Corporation reflects that the Exchange may designate the Options
Clearing Corporation (``OCC'') or another registered clearing agency
to clear binary KPI options. References in this filing to the
Clearing Corporation therefore are intended to be clearing agency-
neutral. The proposed definition does not alter the requirement that
clearing and settlement occur through a registered clearing agency
subject to the applicable provisions of the Act and the rules and
oversight applicable to that clearing agency.
---------------------------------------------------------------------------
The Exchange proposes to define ``exercise price'' (also referred
to as ``strike price'') as the value \8\ to which the settlement value
of the underlying KPI is compared to the exercise settlement amount.
For binary KPI options, the exercise price is the exercise threshold of
an option contract that establishes a number, value, or
[[Page 59218]]
measure that is compared against the price of the settlement value of
the underlying index or the KPI to determine if the cash payout amount
(i.e., the exercise settlement amount) will be paid out. In other
words, binary options will have a threshold number as the exercise
price that will be used to determine if the exercise criteria of the
binary option has been met and the option will be exercised (and if
holders will receive the cash payout amount). For binary KPI options,
the exercise threshold will be a number that reflects or is compared to
the underlying KPI of the binary option.
---------------------------------------------------------------------------
\8\ See proposed Rule 900KPI(b)(4). The value of an exercise
price is measured in the applicable units of the KPI. For example,
some KPIs are measured in U.S. dollars while others may be measured
in percentages or numbers.
---------------------------------------------------------------------------
The Exchange proposes to define the term KPI (or ``key performance
indicator'') as a key financial or operating metric disclosed by an
issuer in its earnings-related filings submitted to the Commission
(i.e., Form 8-K, Form 10-Q, or Form 10-K, as applicable).\9\
---------------------------------------------------------------------------
\9\ See proposed Rule 900KPI(b)(6).
---------------------------------------------------------------------------
The Exchange proposes to define ``put binary KPI option'' as an
option contract that returns an exercise settlement amount if the
settlement value of the underlying KPI is below the exercise price at
expiration (i.e., in-the-money).\10\
---------------------------------------------------------------------------
\10\ See proposed Rule 900KPI(b)(7).
---------------------------------------------------------------------------
The Exchange proposes to define ``settlement value'' as the value
of the underlying KPI that is used to determine whether a binary KPI
option is in-, at-, or out-of-the-money.\11\ The proposed definition
specifies that the ``settlement value'' is the value of the applicable
KPI as disclosed in the applicable issuer's earnings-related filing
submitted to, the Commission on applicable expiration date (for both
A.M.-settled and P.M.-settled binary KPI options). The Exchange
designates the applicable KPI and the relevant reporting period (for
example, a calendar quarter) at the time of listing a binary KPI
option. Proposed paragraph (b) of the settlement value definition
provides if the applicable KPI is not reported or otherwise unavailable
on the expiration date (and will not be reported), settlement
(including any payout of the exercise settlement amount) will occur in
accordance with the Rules of the Clearing Corporation.
---------------------------------------------------------------------------
\11\ See proposed Rule 900KPI(b)(8).
---------------------------------------------------------------------------
Additionally, proposed paragraph (c) of the settlement value
definition states if an applicable KPI is restated after the expiration
date and settlement of a binary KPI option, the settlement value (and
the exercise settlement amount) of the binary KPI option does not
change. In other words, the value of the applicable KPI as reported by
the issuer on the applicable expiration date is final, and the amount
paid (or not paid) at settlement will not change, regardless of whether
it is later restated by the issuer.
The Exchange proposes to adopt Rule 901KPI(a) (Designation of
Binary KPI Option Contracts) to identify the binary KPI options that
may be listed for trading on the Exchange. Pursuant to proposed Rule
901KPI(a), the Exchange may from time to time approve for listing and
trading on the Exchange any of the following binary KPI options
contracts for the following issuers:
------------------------------------------------------------------------
KPI (each financial metric is measured in
Company $ unless otherwise specified)
------------------------------------------------------------------------
Apple, Inc................... Earnings per share: diluted.
Total net sales.
Net sales by category: iPhone.
Net sales by category: Services.
Net sales by reportable segment:
Americas.
Net sales by reportable segment: Greater
China
Advanced Micro Devices, Inc.. GAAP Diluted earnings per share.
GAAP Revenue.
Net Revenue: Data Center Segment.
Net Revenue: Client and Gaming Segment.
GAAP Operating Margin (%)
Alphabet Inc................. Diluted net income per share.
Revenues.
YouTube ads Revenues.
Google Cloud Revenues
<a href="http://Amazon.com">Amazon.com</a>, Inc.............. Diluted earnings per share.
Total Net sales.
AWS: Net sales.
North America: Net sales.
International: Net sales.
Net Sales: Advertising services.
Bank of America Corporation.. Diluted earnings per share.
Total Revenue, net of interest expense.
Net Interest Income.
Provision for credit losses.
Net Income.
Citigroup Inc................ Diluted earnings per share.
Total Revenue, net of interest expense.
Net Interest Income.
Total Provision for credit losses.
Net Income.
Coinbase Global, Inc......... Net income per share--Diluted.
Total Revenue.
Transaction Revenue.
Total Trading Volume.
Subscription and Services Revenue.
[[Page 59219]]
Ford Motor Company........... GAAP Earnings per share--Diluted.
Total Revenues.
Ford Pro Segment: Revenue.
Ford Model e Segment: Revenue.
Ford Blue Segment: Revenue.
Intel Corporation............ GAAP Earnings per share attributable to
Intel--diluted.
Net revenue.
Revenue: Client Computing Group (CCG).
Revenue: Data Center and AI (DCAI).
Revenue: Intel Foundry.
GAAP operating margin (%).
JPMorgan Chase & Co.......... Earnings per share--diluted.
Net revenue--reported.
Net Interest Income.
Provision for credit losses.
Net Income.
Marathon Digital Holdings, Earnings (Net loss) per share of common
Inc. stock--diluted.
Revenues.
Number of Blocks Won (# Bitcoin (BTC)).
Energized Hashrate (EH) (# EH/s).
Total Bitcoin Holdings (# BTC).
BTC Produced (# BTC).
BTC Purchased (# BTC).
Meta Platforms, Inc.......... Earnings per share: Diluted.
Revenue.
Family Daily Active People (DAP) (#).
Revenue: Advertising.
Operating Margin (%).
Microsoft Corporation........ Diluted Earnings per Share.
Revenue.
Intelligent Cloud: Revenue.
Microsoft Cloud revenue.
More Personal Computing: Revenue.
Netflix, Inc................. Earnings per share: Diluted.
Revenues.
United States and Canada (UCAN): Revenue.
Europe, Middle East, and Africa (EMEA):
Revenue Operating Margin (%).
NVIDIA Corporation........... GAAP Diluted earnings per share.
Revenue.
Data Center Revenue.
Edge Computing Revenue.
Automotive Revenue.
Palantir Technologies Inc.... Earnings per share attributable to common
stockholders, diluted.
Revenue.
Net Income.
Closed Deals of at Least $1 Million (#).
Robinhood Markets, Inc....... Net income attributable to Robinhood
common stockholders: Diluted.
Total net revenues.
Funded Customers (#).
Average Revenue Per User (``ARPU'').
Robinhood Gold Subscribers (#).
SoFi Technologies, Inc....... Earnings per share attributable to common
stockholders-diluted.
Total net revenue.
Total net revenue--Technology Platform.
Total net revenue--Financial Services.
Total net revenue--Lending.
Space Exploration Earnings per share: Diluted.
Technologies Corp. Total Revenues.
Super Micro Computer, Inc.... Net income per common share: Diluted.
Net sales.
Gross Margin (%).
Cash flow used in operations.
Net Income.
Target Corporation........... Diluted earnings per share.
Net sales.
Food & Beverage Net sales.
Apparel & Accessories Net sales.
Operating income: Rate (%).
[[Page 59220]]
Tesla, Inc................... Net Income per share of common stocks
attributable to common stockholders:
diluted.
Total Revenues.
Total Automotive Revenue.
Model 3/Y Production (#).
Supercharger Connectors (#).
Free Cash Flow.
The Walt Disney Company...... Diluted earnings per share.
Revenues.
Entertainment Subscription Video On
Demand (SVOD) Operating Income.
Revenues: Experiences.
Segment operating income: Sports.
------------------------------------------------------------------------
The Exchange proposes to add Rule 901KPI(b) to clarify that binary
KPI options are a separate class from other options overlying the stock
of the issuer and are a separate class from other binary KPI options
with differently underlying KPIs for the same issuer. The Exchange
believes this is reasonable given that an individual KPI is the
specific underlying of binary KPI options, and generally options with
different underlyings (e.g., different underlying security or index)
are different option classes.
Next, the Exchange proposes to adopt Rule 902KPI (Terms of Binary
KPI Option Contracts) to describe the permissible terms of binary KPI
option series. Proposed Rule 902KPI provides that binary KPI options
listed and traded on the Exchange are designated as to expiration date,
exercise price, settlement type, settlement style, exercise settlement
amount, contract multiplier, and underlying KPI. After approving a
particular binary KPI option class for listing and trading on the
Exchange, the Exchange from time to time may open for trading series of
options in that binary KPI option class.
Proposed Rule 902KPI(a) states binary KPI options have European-
style settlement, which is consistent with the rules regarding binary
index options, as noted above. Proposed Rule 902KPI(a) further provides
that the Exchange may designate the settlement type for binary KPI
options as A.M.-settled or P.M.-settled. Binary KPI options for issuers
\12\ that disclose their earnings results before the open of the Core
Trading Session on a given trading day are designated as A.M.-settled
binary KPI options, and binary KPI options for issuers that disclose
their earnings results after the close of the Core Trading Session on a
given trading day are designated as P.M.-settled binary KPI options.
The Exchange notes that the proposed concepts of A.M.-settlement and
P.M.-settlement for binary KPI options differ compared to traditional
options, for which ``P.M.-settled'' generally means that the expiration
of an option so designated will settle to the closing price of the
underlying security or index value and ``A.M.-settled'' generally means
that the expiration of an option so designated will settle to the
opening price of the underlying. While different than how these terms
apply to standard and binary index options, the Exchange believes the
proposed description of A.M.-settlement and P.M.-settlement
appropriately reflect the earnings disclosure practices of issuers.
Additionally, while the timing of the event that will determine whether
the Exchange designates a binary KPI option as A.M.-settled or P.M.-
settled is different than that for traditional options and binary index
options, the trading hours on expiration dates for each of A.M.-settled
and P.M.-settled binary KPI options are consistent with those of A.M.-
settled and P.M.-settled index options (traditional and binary) today.
---------------------------------------------------------------------------
\12\ The Exchange determines whether an issuer discloses its
earnings results before or after the close of the Core Trading
Session on a given trading day based on publicly available
information regarding the issuer's disclosure practice.
---------------------------------------------------------------------------
Proposed Rule 902KPI(b) describes permissible expirations for
binary KPI options. Specifically, the proposed rule change will permit
the Exchange to list series that expire on the date the issuer
announces its earnings results for the applicable reporting period
(such as calendar quarter). The expiration date for a binary KPI option
will be the date on which an issuer discloses the applicable KPI in its
earnings results (for example, the date on which it issues an earnings
results press release) for the specified reporting period (with the
specific expiration date to be finalized when an issuer announces the
date on which it will disclose its earnings results for that reporting
period).\13\ If that date is a Tuesday, Wednesday, Thursday, or Friday
and the Exchange is not open for business on that date, the expiration
date will be the first business day immediately prior to that day. If
that date is a Monday and the Exchange is not open for business on that
date, the expiration date will be the first business day immediately
following that Monday. The disclosed KPIs relate to a specific
reporting period (such as a calendar quarter), which KPIs an issuer
publicly announces on a date following the end of that reporting
period.
---------------------------------------------------------------------------
\13\ For example, for a binary KPI option series, the Exchange
may designate the reporting period for a series to be the fourth
quarter of 2026. The expiration date for that series would be the
date on which the applicable issuer establishes as the date it will
announce earnings results for that quarter. The Exchange will issue
a Trader Update when the specific expiration date for a binary KPI
option is finalized. Additionally, the Exchange will maintain a
reference data file for each issuer KPI on which the Exchange lists
binary KPI options (as will be described in the Exchange's technical
specifications available on its public website), and that reference
data file will be updated with the specific expiration date for a
binary KPI option once known.
---------------------------------------------------------------------------
While an expiration date for a binary KPI option will be a specific
date, as is the case for traditional options and binary index options,
the Exchange's proposed designation of expiration dates for binary KPI
options will differ to reflect standard issuer disclosure practices. In
some instances, an issuer might not establish the specific date on
which it will announce its earnings results for a reporting period
until weeks prior to the release date. Consequently, unlike standard
equity and index options that have an exact expiration date when
strikes are first listed, a binary KPI option will be listed for
trading with a placeholder expiration date if the date the KPI
information will be released by the issuer is not publicly known. If a
placeholder expiration date is required, it will be set as the first
trading day that is three months following the date of the prior
quarterly release date for a KPI (for KPIs announced quarterly) and six
months following the date of the prior semiannual release date for a
KPI (for KPIs announced semiannually, if the Commission approves
proposed rules that would permit such reporting). Once
[[Page 59221]]
the KPI issuer announces the release date of the KPI information, the
expiration date will be updated as the finalized expiration date of the
option contract. Ultimately, however, the expiration date for a binary
KPI option is an issuer's earnings release date at the time the series
is listed (even if the exact date is unknown) until expiration.
The Exchange may designate binary KPI option series to expire up to
12 months from the time they are listed and may list up to two
expirations at one time for a binary KPI option (per KPI per issuer).
The Exchange may open for trading a series of binary KPI options at
least one business week prior to the expiration date of a binary KPI
option. The proposed permissible expirations for binary KPI options are
similar to current Rules. First, the proposed rule change permits the
Exchange to list binary KPI options to expire up to 12 months from the
time they are listed. Current rules regarding binary index options
permit these expirations, in addition to expirations out more than 12
months up to 36 months from the time they are listed.\14\ The proposed
rule change also limits the Exchange to list up to two expirations at
one time for binary KPI options. Therefore, the proposed scope of
permissible expirations for binary KPI options is narrower than that
permitted for binary index options under current Rules (as previously
approved by the Commission).
---------------------------------------------------------------------------
\14\ See Rule 901BIN(c).
---------------------------------------------------------------------------
The proposal to list expirations at least one business week prior
to the expiration date of binary KPI option (as well as the proposed
language regarding shifting an expiration date to the immediately
business day before or after an expiration date that falls on a day the
Exchange is not open for business) is substantially similar to current
Exchange rules applicable to binary equity options,\15\ as well as the
rules of another options exchange applicable to short term equity
options series.\16\ The Exchange believes it is appropriate to permit
listing of binary KPI options that expire up to 12 months from the time
they are listed to accommodate different issuer reporting periods
(including semiannual reporting if the Commission approves recently
proposed rules to permit such reporting), as well as to permit the
Exchange to list expirations for consecutive calendar quarter periods
or for a calendar quarter and annual reporting period at the same time.
As discussed above, issuers disclose KPIs in their periodic reports
submitted to the Commission.
---------------------------------------------------------------------------
\15\ See Rule 903ByRDS(b).
\16\ See Cboe Rule 4.5(d).
---------------------------------------------------------------------------
Proposed Rule 902KPI(c) describes the automatic exercise feature of
binary KPI options. Specifically, the proposed rule states that binary
KPI options will be automatically exercised at expiration if the
settlement value of the underlying KPI is equal to or greater than the
exercise price of a call binary KPI option or less than the exercise
price in the case of a put binary KPI option.
Proposed Rule 902KPI(d) describes the permissible exercise prices
(or strike prices) the Exchange may designate for series of binary KPI
options. Proposed Rule 902KPI(d)(1) describes how the value of exercise
prices of binary KPI options are measured. Specifically, the exercise
price of each binary KPI option series will be fixed at an amount equal
to a value of the underlying KPI. Because the value of certain KPIs may
be very large (e.g., billions of dollars), the Exchange proposes that
the exercise price value of the underlying KPI will be divided by a
scaling factor based on the value of the KPI in the issuer's most
recent earnings-related disclosure as of the time a binary KPI option
class is listed) as follows:
<bullet> if the most recently disclosed KPI value is greater than
or equal to one trillion, the exercise price equals that value divided
by one trillion (e.g., for such KPIs, an exercise price of 27.00 is
equivalent to a KPI value of 27,000,000,000,000.00);
<bullet> if the most recently disclosed KPI value is greater than
or equal to one billion but less than one trillion, the exercise price
equals that value divided by one billion (e.g., for such KPIs, an
exercise price of 112.00 is equivalent to a KPI value of
112,000,000,000.00);
<bullet> if the most recently disclosed KPI value is greater than
or equal to one million but less than one billion, the exercise price
equals that value divided by one million (e.g., for such KPIs, an
exercise price of 900.00 is equivalent to a KPI value of
900,000,000.00);
<bullet> if the most recently disclosed KPI value is greater than
or equal to one thousand but less than one million, the exercise price
equals that value divided by one thousand (e.g., for such KPIs, an
exercise price of 42.00 is equivalent to a KPI value of 42,000.00); and
<bullet> if the most recently disclosed KPI value is less than one
thousand, the exercise price equals that value and is not divided by a
scaling factor (e.g., for such KPIs, an exercise price of 774.00 is
equivalent to a KPI value of 774.00).\17\
---------------------------------------------------------------------------
\17\ When applying the scaling factor, the Exchange will not
round the scaled KPI value and instead will truncate the value so
the scaled strike price value fits within standard strike listing
format.
---------------------------------------------------------------------------
The Exchange will apply a different scaling factor to newly listed
binary KPI option series for a new expiration only after the value of
the KPI in the issuer's earnings-related disclosures has a value in a
different scaling tier for four consecutive reporting periods or if the
Exchange deems it necessary in the interests of a fair and orderly
market. Application of a different scaling factor will not affect the
exercise prices of any series of the binary KPI options previously
opened. For example, if the Exchange begins listing a new class of
binary KPI options and the most recently disclosed KPI value for the
issuer at the time of that listing was for the third quarter of 2026
and was $892,000, the exercise prices for that class of binary KPI
options will be scaled by 1,000, and thus exercise prices of 895, 995,
and 1005, would represent $895,000, $995,000, and $1,005,000,
respectively. If the issuer discloses a KPI value of $1,020,000 in its
fourth quarter 2026 earnings disclosure, the Exchange will continue to
list exercise prices scaled by 1,000. If the issuer then discloses KPI
values of $1,112,000, $1,237,000, and $1,064,000 for the first, second,
and third quarters, respectively, of 2027, the Exchange will begin
scaling the exercise prices by 1,000,000 for the fourth quarter 2027
expirations (or for the first quarter 2028 expirations if the Exchange
had already listed fourth quarter 2027 expirations prior to the
disclosure of the third quarter 2027 KPI value). The Exchange believes
this will permit consistency for listing scaled KPI values while
allowing the Exchange to update strike prices to reflect long-term
changes to an issuer's KPI values.
The Exchange will announce via Trader Update if the scaling factor
applied to a binary KPI options changes (for example, the KPIs will be
scaled in billions rather than in millions). Additionally, the Exchange
will update this information in the Exchange's technical specifications
regarding binary KPI options and reference data file that describes the
terms of binary KPI options, both of which will be available on the
Exchange's website (customers receive notifications of such updates).
This is consistent with how the Exchange provides information regarding
product information (including updates) for all options the Exchange
lists for trading.
It is possible for a KPI to have a negative value, such as earnings
per share (which is equivalent to a loss per share). Proposed Rule
902KPI(d)(1)(B) provides the Exchange may list binary KPI options
series with exercise prices representing negative KPI values. For these
series, the exercise price will
[[Page 59222]]
equal the absolute value of the KPI and will be scaled as described
above. For example, if an issuer's earnings per share in the last
reporting period was -$3.52 (and thus was a loss per share), a binary
KPI option for such issuer with a strike of 3.58 will reflect an
expected loss of $3.58 per share. The Exchange will incorporate into
symbology for binary KPI options whether the value of the strike price
is positive or negative, including if the Exchange lists binary KPI
option series with both positive and negative strike prices. Whether a
symbol reflects a positive or negative value will be available on
contract specifications as well as the reference data file for the
specific binary KPI option on the Exchange's public website.
Proposed Rule 902KPI(d)(2) provides the minimum interval between
strike prices for binary KPI options series is:
<bullet> 0.01 where the strike price is less than 10;
<bullet> 0.10 where the strike price is 10 or greater but less than
100;
<bullet> 1.00 where the strike price is 100 or greater but less
than 1,000;
<bullet> 10.00 where the strike price is 1,000 or greater but less
than 10,000; and
<bullet> 100.00 where the strike price is 10,000 or greater.
As discussed above, while KPI values above 1,000 are generally
scaled, there may be circumstances in which the Exchange lists strikes
above 1,000 or even 10,000 given the Exchange's proposal to maintain a
lower scale level until a KPI value is consistently above a certain
level (e.g., above one billion for four consecutive quarters). This may
occur when a KPI value is near the top of a scaling range; for
continuity, the Exchange will continue listing strike prices using the
lower scaling factor and not change to a higher scaling factor until
the KPI value is regularly within that higher range. Suppose a KPI
value is 995,000,000; in this case, strike prices will be scaled by
1,000,000. Thus, the Exchange may list binary KPI options above and
below 995 (995,000,000 divided by 1,000,000). However, there is
potential that the KPI may increase to above 1,000,000,000. As
proposed, the Exchange may list strike prices, for example, of 1,000
(representing 1,000,000,000) and above, for expirations until the KPI
value is above 1,000,000,000 for four consecutive reporting periods. To
reduce confusion, the Exchange would not scale strike prices using
different scaling factors within a single expiration (and would not
change the scale until the KPI value is consistently at the higher
level). Therefore, it is possible the Exchange may list strikes greater
than 1,000. Similarly, while strikes above 10,000 may be rare, given
the Exchange proposes to maintain a lower scale level until a KPI value
is consistently above a certain level (e.g., above one billion for four
consecutive quarters, as proposed), depending on market factors and
demand, it is possible (although unlikely) the Exchange may determine
it is appropriate to list strikes above 10,000 if market factors or
expectations signify a significant increase of the KPI value. The
proposed strike intervals accommodate the listing of binary KPI options
in these circumstances before the Exchange shifts the strike prices for
an issuer's KPI to a different scaling level.
The proposed strike intervals are generally consistent with current
Exchange Rules for other options, which provide for larger strike
intervals as the values of strike prices increase. Given the scaling
factor for larger KPI values, it may appear the proposed rule change
will permit smaller strike intervals for larger KPI values if those
intervals are considered solely on a nominal basis. However, that is
not the case if the actual values of the strike intervals are
considered. The corresponding actual value of the strike interval for a
strike price that was subject to a larger scale value is higher than
the actual value of the strike interval for a strike price that was
subject to a smaller scale value. For example, suppose a strike price
of 950 represents $950 million. The proposed rule change would permit
strike intervals of $1.00. However, that $1.00 corresponds to
$1,000,000. In other words, if the Exchange listed strikes of 950, 951,
and 952, the difference in values of those strikes are $1 million, not
$1 (i.e., the strikes represent values of $950,000,000, $951,000,000,
and $952,000,000). Similarly, suppose a strike price of 3 represents
$3,000,000,000. The proposed rule change would permit strike intervals
of $0.01. However, that corresponds to $10,000,000. If the Exchange
listed strikes of 3.00, 3.01, and 3.02, the difference in values of
those strikes are $10,000,000, not $0.01 (i.e., the strikes represent
values of $3,000,000,000, $3,010,000,000, and $3,020,000,000,
respectively). As a result, the permissible strike intervals for strike
prices representing values in the billions are actually larger than the
permissible strike intervals for strike prices representing values in
the millions. This is consistent with the general premise underlying
current strike intervals that larger strike intervals apply to larger
strike values.
Proposed Rule 902KPI(e) addresses bid and offer conventions for
binary options with multipliers other than 100. It will provide clarity
and consistency in market quotations relative to the notional size of
the option, promotes investor understanding of the cost and value of
binary KPI option contracts. Therefore, the Exchange believes the
proposed rule change is consistent with just and equitable principles
of trade because it creates a pricing structure that reflects the
notional value of an option based on its multiplier.
Proposed Rule 902KPI(f) describes the initial series of a binary
KPI option the Exchange may open for trading. Specifically, the
Exchange may open for trading one or more binary KPI option series with
a fixed KPI value as the strike price, with approximately the same
number of strike prices being opened above and below the at-the-money
KPI value (i.e., the value of the KPI in the issuer's most recent
earnings-related disclosure) at the time the binary KPI options are
opened. The Exchange will list strike prices for binary KPI option
series that are reasonably close to the at-the-money KPI value at the
time of listing. A strike is ``reasonably close'' to the at-the-money
KPI value if (1) for KPIs less than or equal to 10, it is no more than
100% above or below the at-the-money KPI value; and (2) for KPIs
greater than 10, it is no more than 30% above or below the at-the-money
KPI value. The Exchange may also open binary KPI option series that are
more than 30% above or below the at-the-money KPI value (if the KPI is
greater than 10) provided demonstrated customer interest exists for
such series, as expressed by institutional, corporate or individual
customers or their brokers.
The Exchange may add new series of binary KPI options series when
the Exchange deems it necessary to maintain a fair and orderly market
or to meet customer demand. To the extent the Exchange lists binary KPI
options series for an expiration before then-currently listed binary
KPI options expire (and thus before the applicable issuer has disclosed
the KPI value for the reporting period immediately preceding the
reporting period for these newly listed options), the Exchange may list
additional series after the KPI value for the immediately preceding
reporting period is disclosed using that disclosed KPI value as the at-
the-money KPI. For example, before expiration of a binary KPI options
series set to expire on the date of an issuer's disclosure of its third
quarter earnings results, the Exchange lists series of that binary KPI
option to expire on the date of an issuer's disclosure of its fourth
quarter earnings results (using the KPI from the second quarter
earnings results as the at-the-money KPI value). After the issuer
[[Page 59223]]
discloses its third quarter earnings results, including the applicable
KPI, the Exchange may list additional series for the fourth quarter
binary KPI options using the third quarter KPI result as the at-the-
money KPI value. Any additional strike prices the Exchange lists will
be reasonably close (as defined above) to the at-the-money KPI value at
the time of listing.
Continuing the above example, suppose the Exchange lists binary KPI
options for the fourth quarter before the binary KPI options for the
third quarter have expired. As proposed, the Exchange would list
strikes above and below the at-the-money strike, which at the time of
listing would be the settlement value KPI from the issuer's second
quarter earnings results disclosure, as that is the most recently
available KPI. If the KPI for the option was net sales, and the second
quarter value was $45.093 billion, the at-the-money strike would be
45.10, and the Exchange could list strikes within 50% of that value,
and additional series based on customer demand or market changes. After
the Exchange lists those series, the issuer announces its third quarter
earnings results, including net sales of $57.241 billion. As proposed,
after that announcement, the Exchange may list additional strikes
within 50% of $57.24 to reflect the change in value of the underlying
(as well as additional series based on customer demand or market
changes).
This proposed framework for listing and adding series is similar to
the framework in current Rules for listing and adding series of equity
options. While the proposed strike intervals are narrower than these
rules, the permissible ranges are also narrower. The Exchange
acknowledges the proposed framework would still permit the Exchange to
list a large number of strikes per KPI per expiration. However, the
Exchange intends to apply its standard strike listing practices to
binary KPI options. Specifically, the Exchange generally lists strikes
at wider intervals as they move farther away from the at-the-money
value, while listing more granular intervals for strikes closer to the
at-the-money value. The Exchange also generally delists granular
strikes that are deep out-of-the-money if the Exchange determines they
are sufficiently covered by wider strike intervals that are close in
value.
These proposed provisions regarding the listing of binary KPI
option series are similar to provisions regarding permissible series of
other options. The Exchange believes it is reasonable to list binary
KPI options for a new reporting period prior to the expiration of then-
listed binary KPI options for the immediately preceding reporting
period (e.g., listing binary KPI options for the fourth quarter before
expiration of binary KPI options for the third quarter), and thus
before the settlement value of the applicable KPI is known for the
immediately preceding reporting period for these options, to permit
investors to roll positions from one expiration to the next. As
proposed, once the settlement value for the immediately preceding
reporting period is known (the third quarter in this example), the
Exchange may list additional series of the binary KPI options that
reflect that KPI value. This is consistent with current practice if
there is a change (including a substantial change) in the price of
underlying security or value of an underlying index. For example, Rule
903(d) provides that the Exchange may open additional series of a
short-term option series overlying a security when the market price of
the underlying security moves substantially from the exercise price or
prices of the series already opened, subject to the ``reasonably
close'' parameters set forth in that rule. Disclosure of, as an
example, the third quarter KPI value after the fourth quarter binary
KPI options series were listed based on the second quarter KPI value
(if the third quarter KPI value differs from the second quarter KPI
value) is similar to the move in the price of an underlying security,
which may result in the Exchange listing additional series based on the
updated price of the underlying security. Similarly consistent with
current practice for other options (as set forth in Rule 903,
Commentary .10(c), for example), opening of binary KPI options based on
this later-disclosed KPI value will not affect any other series of
options of the same binary KPI options class previously opened.
Proposed Rule 902KPI(h) provides that the contract multiplier for
each class of binary KPI options is one.
The Exchange proposes to add new Rule 903KPI (Determination of
Settlement Value) to establish that binary KPI options that are ``at-
the-money,'' ``in-the-money,'' or ``out-of-the-money'' are a function
of the settlement value of the underlying KPI in relation to the type
of binary KPI option (i.e., put or call) and the exercise price. As
described above, the settlement value for a binary KPI option is the
value of the KPI as disclosed in the applicable issuer's earnings
related filing. While the timing of an announcement of a KPI value
factor into the determination of whether the Exchange lists a binary
KPI option as A.M.-settled or P.M.- settled, the Exchange will source
the settlement value from the filing the issuers submits to the
Commission. Generally, companies issue press releases that contain
earnings results and near contemporaneously submit a Form 8-K to the
Commission with the press release as an exhibit. Therefore, it is
unlikely the value of the KPI in the Commission filing will differ from
the value in the initial announcement; however, the value in the
Commission filing will be the ultimate settlement value.
Proposed Rule 904KPI (Adjustment) provides that binary KPI options
are subject to adjustment only in accordance with and to the extent
specified in the Rules of the Clearing Corporation. When any such
adjustment has been determined, the Exchange will announce this
adjustment via Trader Update, which will become effective as of the
time specified in that announcement.
As described above, binary KPI options would be cleared by the
Clearing Corporation, which would serve as the central counterparty to
each transaction and facilitate standardized clearing, settlement, and
contract administration processes pursuant to its Rules. Consistent
with this centralized clearing framework, proposed Rule 904KPI provides
that binary KPI options would be subject to adjustment only in
accordance with and to the extent specified in the Rules of the
Clearing Corporation. When any such adjustment has been determined, the
Exchange will announce this adjustment via Trader Update, which will
become effective at the time specified in that announcement. The
Exchange believes that limiting contract adjustments to those provided
under the Rules of the Clearing Corporation provides a clear and
transparent framework under which any adjustments to binary KPI options
would be administered. A registered clearing agency designated to clear
binary KPI options would be subject to Commission oversight and would
possess expertise in the clearance and settlement of financial
products. Because binary KPI options represent a novel product type,
the Exchange anticipates that the Clearing Corporation would develop
adjustment procedures designed to address the unique characteristics of
these contracts and the types of events that may require adjustment. To
the extent the Clearing Corporation adopts new adjustment procedures
for binary KPI options, those procedures would be subject to the
applicable regulatory process, including review and approval by the
Commission, as applicable, before the
[[Page 59224]]
Exchange commences trading in the product.
Next, the Exchange proposes to Rule 905KPI to provide that binary
KPI options, may be traded on the Exchange from 9:30 a.m. to 4:00
p.m.\18\ Further, the last day of trading for P.M.-settled binary KPI
options is the day of expiration, and the last day of trading for A.M.-
settled binary KPI options is the trading day prior to expiration.
---------------------------------------------------------------------------
\18\ Unless otherwise specified, all times in this proposal are
Eastern Time.
---------------------------------------------------------------------------
The Exchange recognizes it is possible, although unusual and
unlikely, that KPI information may become available at unexpected
times. The proposed rules address the impact on trading and expiration
that such disclosure may have. First, the proposed rule change provides
if the Exchange confirms an issuer discloses the KPI prior to the
expiration date, trading in the applicable binary KPI options series
will cease, and the expiration date for the option accelerates to a
date on or shortly after the date of that disclosure in accordance with
the Rules of the OCC.\19\ This may occur if, for example, the
applicable issuer releases the KPI information in advance of the
expiration date of the option. If the issuer releases KPI information
after the expiration date, which may be the case if, for example, the
issuer's earnings are delayed, trading in the option will not be
impacted and will cease as of the expiration date. While the expiration
date will not change, expiration processing of such options will be
delayed until the KPI information becomes available, in accordance with
the rules of the Clearing Corporation. Additionally, the proposed rule
change provides if there is an unofficial disclosure of the KPI prior
to the expiration date, the Exchange may determine to halt (and resume)
trading in the applicable binary KPI options series in accordance with
Rule 953NY. In certain circumstances, the expiration date for the
option may accelerate in accordance with the Clearing Corporation
rules; if this occurs, trading in the binary KPI will cease. This
proposed provision addresses the unlikely event that KPI information
becomes available through sources other than the issuer in advance of
the expiration date. If the Exchange determines the KPI information
reported from the unofficial source is unreliable, trading in the
binary KPI option may resume until it expires.
---------------------------------------------------------------------------
\19\ The proposed acceleration of binary KPI options is similar
to the existing acceleration process for equity options when the
underlying security of such options has been converted entirely to
cash. See OCC Rule 807.
---------------------------------------------------------------------------
The Exchange believes proposed Rule 905KPI(f), which provides that
for binary KPI options, the System initiates the opening rotation at
9:30 a.m., is consistent with the opening auction framework already
applicable to other index options listed on the Exchange and ensures
that binary KPI options open for trading in an orderly and transparent
manner.
The Exchange proposes to amend Rule 960NY to establish the minimum
increment for bids and offers on orders for binary KPI options, which
may not be less than $0.01.
The Exchange proposes to adopt Rule 906KPI (Position Limits for
Binary KPI Options) to set forth position limit requirements for binary
KPI options. The Exchange proposes to adopt Rule 906KPI(a) to provide
that in determining compliance with Rule 904 (Position Limits), the
position limit for binary KPI options is the same as the applicable
position limit for the stock of the issuer per expiration and 100
binary KPI option contracts equal one standard option contract.
Per proposed rule 906KPI(b), positions in binary KPI options on the
same KPI that have different expiration dates are not aggregated, and
positions in binary KPI options for the same issuer with different
underlying KPIs are not aggregated. In addition, the Exchange proposes
to adopt Rule 906KPI(c) to provide that Binary KPI options are not
aggregated with non-binary options contracts overlying the stock of the
issuer. Finally, per Rule 906KPI(d), with respect to binary KPI
options, a binary KPI option short position coupled with a binary KPI
option short call position, regardless of the KPI option strike, shall
be exempt from the established position limits proscribed in Rule 904.
The Exchange also proposes to adopt Rule 907KPI (Reporting of
Positions) Positions in binary KPI options shall be reported pursuant
to Rule 904, except, in computing reportable binary KPI options
thereunder, aggregation of positions shall be in accordance with Rule
906KPI. The proposed Rule 907KPI further provides that for purposes of
this report, 100 binary KPI option contracts equal one standard option
contract. The Exchange believes this is reasonable given that binary
KPI options have a multiplier of 1 while standard equity option
contracts have a multiplier of 100.
Except as otherwise described above, all binary KPI options will be
listed and traded on the Exchange in a substantially similar manner as
standard equity and index options and binary index options are
permitted to be listed and traded under current Rules. The Rules that
apply to the listing and trading of non-binary options on the Exchange,
including those related to customer accounts, margin requirements and
trading halt procedures,\20\ which are designed to prevent fraudulent
and manipulative acts and practices, will apply to the listing and
trading of binary KPI options. The Exchange has analyzed its capacity
and represents that it believes the Exchange has the necessary systems
capacity to handle any potential additional message traffic associated
with the listing of binary KPI options.
---------------------------------------------------------------------------
\20\ Binary KPI options will not be tied to the trading state of
the underlying issuer stock and thus, trading in binary KPI options
will not be affected by halts in the underlying issuer stock. The
binary KPI options will halt in accordance with Rule 953NY.
---------------------------------------------------------------------------
The Exchange will support electronic trading, floor trading, and
complex orders. Trading in Flexible Execution (``FLEX'') options will
not be offered. The Exchange may determine to support particular order
types, order instructions, or times-in-force on a class-by-class basis.
Consistent with current practice, if the Exchange modifies the
applicability of any functionality or order instructions for binary KPI
options, it will notify ATP Holders via Trader Update.
The Exchange will send quotation and transaction price information
for binary KPI options to The Options Price Reporting Authority
(``OPRA'') in the same manner it sends this information to OPRA for all
other options the Exchange lists. Additionally, the Exchange
understands from OPRA that it will disseminate information regarding
binary KPI options in the same manner it does for all other options the
Exchange lists. The Exchange intends to follow OPRA's standard capacity
monitoring process for binary KPI options (in accordance with OPRA
instructions), which includes submission of quarterly capacity
projections (the Exchange will include its projected binary KPI option
volume in the applicable submission). Further, the Exchange understands
from OPRA that no technical changes are required to accommodate the
reporting to OPRA of quotation and transaction information regarding
binary KPI options (the Exchange represents, if later required by OPRA,
it will adhere to any new technical requirements OPRA deems necessary
to accommodate binary KPI options).\21\
---------------------------------------------------------------------------
\21\ The Exchange understands OPRA may need to update how it
disseminates open interest information for binary KPI options, as
its current process incorporates information from OCC and references
in this filing are clearing agency-neutral.
---------------------------------------------------------------------------
[[Page 59225]]
The Exchange does not believe American Trade Permit (``ATP'')
Holders will experience any capacity issues as a result of this
proposal and represents that it will monitor the trading volume
associated with binary options and the effect (if any) of binary
options on market fragmentation and the capacity of the Exchange's
automated system.
The Exchange represents that the same surveillance procedures
applicable to all other options currently listed and traded on the
Exchange will apply to binary KPI 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 with the
Financial Industry Regulatory Authority, Inc. (``FINRA''). Pursuant to
a multi-party 17d-2 joint plan, all options exchanges allocate
regulatory responsibilities to FINRA to conduct certain options-related
market surveillances.\22\ 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 binary KPI
options.
---------------------------------------------------------------------------
\22\ Section 19(g)(1) of the Act, among other things, requires
every self-regulatory organization (``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.
---------------------------------------------------------------------------
The Exchange will report any information regarding binary KPI
options required to be reported to the Consolidated Audit Trail
(``CAT'') in the same manner it reports this information to CAT for all
other options the Exchange lists.\23\ The Exchange represents, if later
required by FINRA CAT, it will adhere to any new technical requirements
FINRA CAT deems necessary to accommodate binary KPI options).
---------------------------------------------------------------------------
\23\ CAT reporting requirements will apply to broker-dealers
with respect to binary KPI options in the same manner as they apply
to any other options the Exchange lists. The Exchange understands
from FINRA CAT there will be no changes to the reporting
specifications for broker-dealers to accommodate the reporting of
information regarding binary KPI options to CAT.
---------------------------------------------------------------------------
Pursuant to the Options Order Protection and Locked/Crossed Market
Plan (``Linkage Plan''),\24\ participant exchanges to the Linkage Plan
established a framework to provide order protection. The Linkage Plan
(and Exchange Rules 990NY through 993NY regarding intermarket linkage)
applies during all trading sessions during which multiply listed
options trade. Rule 993NY addresses order routing away from the
Exchange to promote compliance with the Linkage Plan. If the proposed
binary KPI options become multiply listed options, Users may designate
an order for routing (or not available for routing), and the Exchange
System is designed to, at all times, prevent trade-throughs and avoid
displaying locked/crossed markets in accordance with the Linkage Plan
(and Exchange Rules 990NY through 993NY regarding intermarket linkage).
---------------------------------------------------------------------------
\24\ The Linkage Plan requires U.S. options exchanges to
establish a framework for providing order protection and addressing
locked and crossed markets in eligible options classes. The Linkage
Plan is a national market system plan approved by the Commission
pursuant to Section 11A of the Act and Rule 608 thereunder. The full
text of the Linkage Plan is available at <a href="https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf">https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf</a>.
---------------------------------------------------------------------------
Upon launch, binary KPI options will clear through the Clearing
Corporation as that term is defined in proposed Rule 900KPI(b). In
doing so, the proposal would bring these securities products within the
established regulatory infrastructure applicable to listed options,
including exchange trading and surveillance, standardized disclosure,
and centralized clearance and settlement through a registered clearing
agency, as further described below. Additionally, binary KPI options
would be cleared through a registered clearing agency, which would
serve as the central counterparty to each transaction and facilitate
risk mitigation through established clearing, settlement, contract
adjustment, and other standardized operational processes.
The Options Listings Procedure Plan (the ``OLPP'') sets forth
procedures to facilitate the listing and trading of standardized
options. This plan currently describes procedures with respect to
options issued by and cleared at the OCC. If the Exchange ultimately
does not designate the OCC as the Clearing Corporation for the purposes
of the definition set forth in proposed Rule 900KPI(b), the Exchange
will take steps necessary and within its authority to amend the OLPP to
reflect listing procedures applicable to binary KPI options to the
extent not cleared by the OCC.
The Exchange represents it will not list for trading binary KPI
options until the registered clearing agency designated as the Clearing
Corporation is authorized and operationally ready to clear the
contracts and until all applicable filings and documents of the
Clearing Corporation related to binary KPI options being cleared
through the Clearing Corporation are approved by the Commission or
effective after review by the Commission, as applicable.
As discussed in further detail below, the Exchange intends for
binary KPI options to be treated as listed standardized options. Rule
9b-1 under the Act establishes a disclosure framework for standardized
options pursuant to which investors receive a disclosure document
describing the terms, characteristics, and risks of the product before
trading. Depending on which registered clearing agency is designated as
the Clearing Corporation, the applicable Rule 9b-1 disclosure document
may be based on an existing options disclosure document utilized by
that clearing agency, as modified or supplemented, as appropriate, or
another comparable disclosure document prepared in connection with the
clearance of binary KPI options. In either case, the disclosure
document would contain substantially similar information regarding the
terms, characteristics, risks, settlement mechanics, and other material
features of binary KPI options and would be tailored, as necessary, to
address the product's unique features and distinctions from traditional
listed options. The Exchange believes that disclosure through the Rule
9b-1 framework would better serve the informational needs of investors
than a traditional prospectus because binary KPI options are
standardized options for which the principal investor considerations
relate to the contract's terms, payout structure, settlement mechanics,
and trading characteristics rather than the disclosure typically
provided in connection with an offering of a corporate issuer's
securities.
The Exchange will not commence listing and trading of binary KPI
options until a registered clearing agency is authorized and
operationally ready to clear the contracts; the applicable disclosure
document under Rule 9b-1 is in place; any necessary changes relating
[[Page 59226]]
to CAT, FINRA, OPRA, the Linkage Plan, and OLPP have been completed;
and the Exchange has issued an implementation notice to Members.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\25\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\26\ 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 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. In addition, the Exchange
believes that the proposed rule change is consistent with the Section
6(b)(5) \27\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
\27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Binary KPI Options Are Securities and Standardized Options
As an initial matter, the Exchange's proposal is identical to the
proposal made by the Cboe to list binary KPI options.\28\ The Exchange
believes that the binary KPI options proposed herein would be
``securities'' under the Act.\29\ Section 3(a)(10) of the Act \30\
defines the term ``security'' to include, among other instruments,
``any . . . option . . . on any security . . . including any interest
therein or based on the value thereof.'' \31\
---------------------------------------------------------------------------
\28\ See Securities Exchange Act Release No. 105877 (July 10,
2026) (SR-CBOE-2026-061) (``Notice of Filing of a Proposed Rule
Change to Amend its Rules to Permit the Listing of Binary Options
Overlying Key Performance Indicators (``KPIs'') Reported by Certain
Issuers of Stock (``Binary KPI Options'')).
\29\ The Exchange also believes that binary KPI options are also
``securities'' under the Securities Act of 1933, as amended (the
``Securities Act''). See 15 U.S.C. 77b(a)(1).
\30\ 15 U.S.C. 78c(a)(10).
\31\ Id.
---------------------------------------------------------------------------
Standardized options are generally offered based on the price of
the underlying security or index and include puts, calls, and other
complex instruments whose value is based on the price of the underlying
security or securities. The binary KPI options will operate in
substantially the same manner as these binary options but with a
different underlying. The Exchange's proposal would expand the universe
of listed options to include contracts based on proposed KPIs,
including net income, net sales, net interest income, provision for
credit losses, and specified expense metrics, that relate to the
valuation of the issuer's stock. Such options contracts would reference
financial metrics that are material to the value of the underlying
security and are therefore included in the issuer's financial reports
submitted to the Commission, including Form 8-K, Form 10-K and Form 10-
Q filings.
In addition, the Exchange believes that trading such instruments as
binary KPI options would promote a fair and orderly market and
facilitate new investment and hedging opportunities on a Commission-
regulated exchange. In certain cases, financial instruments may contain
features similar to both options contracts and security-based swaps. As
compared to characterizing an instrument as a security-based swap,
which would typically be traded bilaterally in the over-the-counter
(``OTC'') market, categorizing an instrument as an options contract
comes with a more robust set of regulatory requirements and market
practices that the Exchange believes would aid in the development of
such binary KPI options. To the extent there is uncertainty regarding
how best to characterize these contracts under the statute, the
Exchange believes that the best interpretation is the one that promotes
innovation and competition while providing robust investor protection
guardrails on a regulated exchange.
As discussed above, the Exchange is proposing to list and trade
binary KPI options. The Exchange currently trades standardized options
(puts and calls) based on the price of an underlying NMS stock. Binary
KPI options would be different from these contracts in primarily two
respects: (1) binary KPI options contracts would have a fixed or
``binary'' payout at expiration, regardless of the magnitude of the
difference between the option's exercise price and the settlement value
for the underlying; and (2) the price of such contracts would be based
on the issuer achieving financial metrics that are material to the
price of the underlying stock rather than the stock's share price
itself. The Exchange does not believe that either of those differences
is germane to whether this product is an options contract as defined in
the Act.
The Exchange notes that options as defined in Section 3(a)(10)
encompass not only options on a security but further include options on
any interest in a security or based on the value thereof. This broad
statutory language is sufficient to support the trading of binary KPI
options on a Commission-regulated options exchange, including contracts
that reference an issuer's earnings, revenues, sales, or other
financial metrics on which investors traditionally base investment
decisions. Such options contracts would reference financial metrics
that are material to the value of the underlying security and are
therefore included in the issuer's financial reports submitted to the
Commission, including Form 8-K, Form 10-K and Form 10-Q filings.
This is consistent with the Commission's own interpretation of the
statute when analyzing its application to similar products offered by
another national securities exchange. Consider the Commission's
approval of proposals by Cboe to list and trade: (1) credit default
options; \32\ and (2) credit default basket options.\33\ As the
Commission explained in its order approving credit default options for
trading on Cboe, ``credit default options . . . are binary options that
are automatically exercised upon the occurrence of specified credit
events or expire worthless.'' \34\ While such products were therefore
different in certain important respects from existing options
contracts, ``[a]fter careful analysis, the Commission [found] that
credit default options are options based on the value of a security or
securities'' \35\ and also ``options on an interest in, or based on the
value of an interest in, a security or securities.'' The Commission
made a similar finding when it later approved Cboe's proposal to
introduce credit default basket options.
---------------------------------------------------------------------------
\32\ See Securities Exchange Act Release No. 55871 (June 6,
2007), 72 FR 32372 (June 12, 2007) (SR-CBOE-2006-84).
\33\ See Securities Exchange Act Release No. 56275 (August 17,
2007), 72 FR 47097 (August 22, 2007) (SR-CBOE-2007-26).
\34\ See supra note 34.
\35\ Id.
---------------------------------------------------------------------------
All of this would also be true of the proposed binary KPI options.
Similar to Cboe's credit default options and credit default basket
options, the proposed binary KPI options are ``binary options that are
automatically exercised upon the occurrence of specified . . . events
or expire worthless.'' \36\ The Commission has repeatedly found that
contracts with a binary payout structure may nevertheless be properly
classified as options contracts under the Act and, while most options
contracts have historically had a variable payment structure, such a
structure is not required by the Act, which does not specify a
particular payment structure. In addition, while in some cases binary
options offered by other securities
[[Page 59227]]
exchanges have referenced the price of some underlying security or
index, such binary options also encompass contracts like the ones
discussed above.
---------------------------------------------------------------------------
\36\ Id.
---------------------------------------------------------------------------
The Commodity Exchange Act's (``CEA'') lends further support to the
classification of binary KPI options as securities. Specifically,
pursuant to Section 3(a)(68) of the Act,\37\ a ``security-based swap''
\38\ is a ``swap'' \39\ as defined in the Commodity Exchange Act that
is based on: (1) ``an index that is a narrow-based security index,
including any interest therein or on the value thereof;'' \40\ (2) ``a
single security or loan, including any interest therein or on the value
thereof;'' \41\ or (3) ``the occurrence, nonoccurrence, or extent of
the occurrence of an event relating to a single issuer of a security or
the issuers of securities in a narrow-based security index, provided
that such event directly affects the financial statements, financial
condition, or financial obligations of the issuer.'' \42\ In turn, the
Commodity Exchange Act defines ``swap'' to include ``any agreement,
contract, or transaction . . . that is a put, call, cap floor, collar,
or similar option of any kind that is for the purchase or sale, or
based on the value, of 1 or more . . . securities.'' \43\
---------------------------------------------------------------------------
\37\ 15 U.S.C. 78c(a)(68).
\38\ Id.
\39\ 7 U.S.C. 1a(47).
\40\ 15 U.S.C. 78c(a)(68)(A)(ii)(I).
\41\ 15 U.S.C. 78c(a)(68)(A)(ii)(II).
\42\ 15 U.S.C. 78c(a)(68)(A)(ii)(III).
\43\ 15 U.S.C. 78c(a)(68)(A)(ii)(III).
---------------------------------------------------------------------------
This is also the case with the binary KPI options identified in the
proposal. The KPIs selected are ``material to the value'' of a
particular security, and payouts of binary KPI options are conditioned
on those terms. Indeed, the nexus between the proposed KPIs and the
value of the underlying security is, if anything, more direct than in
the case of CD options. Whereas CD options reference a credit event (a
contingency that may or may not affect the market value of the
reference security depending on recovery rates and market conditions),
binary KPI options reference the issuer's actual reported financial or
operating performance and are the metrics investors consider when
determining the value of a stock. Unlike an external event that merely
holds the potential to trigger potential financial consequence for a
security, each of the proposed KPIs (whether measured at the
consolidated or segment level) ultimately constitutes a material
component of the issuer's financial results that itself forms the basis
for investors' measurements of a company's (and its stock's) intrinsic
value.
Each binary KPI option proposed herein provides a cash payout based
on the disclosed KPI, some of which are directly tied to a pecuniary
interest in a security, such as earnings per share and others of which
are indirectly tied to the pecuniary interest of a security, such as
the issuer's net revenue and income, which determine the issuer's
capacity to generate returns for security holders. A stockholder's
pecuniary interest in a security is not limited to contractual payment
rights (such as declared dividends) but encompasses the right to
benefit from the issuer's earnings capacity, as reflected in the market
price of the security. Binary KPI options based on earnings metrics
therefore reference a core component of the stockholder's pecuniary
interest.
Classifying binary KPI options as securities options under the Act
is consistent with the Commission's established regulatory framework
for binary options, including investor protection objectives, and
preserves the integrity of antimanipulation restrictions, insider
trading prohibitions, and material nonpublic information controls. More
specifically, because these contracts are tied to Commission disclosure
rules and regulations and material nonpublic information (``MNPI'')
risks that are substantially identical to those present in traditional
securities trading, aligning binary KPI options with the securities
regulatory framework preserves the integrity of insider trading
prohibitions and the Commission's disclosure regime. Listing binary KPI
options on a registered national securities exchange subjects trading
activity to SRO and Commission surveillance for, among other things,
manipulative trading and insider trading, affording investors the full
protections of the federal securities laws. Further, classifying binary
KPI options as security options under the Act allows these contracts to
be offered by the same liquidity providers that offer listed options
today, all of whom are Commission-registered and regulated broker-
dealers who are also subject to FINRA and exchange SRO oversight, and
allows such contracts to be traded by the same retail customer base
that trade binary options (and KPI-related contracts) today.
For these reasons, the Exchange believes that binary KPI options,
as proposed, are appropriately classified as binary options eligible to
trade on a registered national securities exchange and as standardized
options subject to the disclosure framework established by Rule 9b-1.
This classification reflects the economic substance and standardized
structure of the product, is consistent with the Act and the
Commission's prior interpretations, and is designed to prevent
fraudulent and manipulative acts and practices, promote just and
equitable principles of trade, foster regulatory and clearing
coordination, and protect investors and the public interest consistent
with Section 6(b)(5) of the Act.\44\
---------------------------------------------------------------------------
\44\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------
Proposal
The Exchange believes the proposal is consistent with Section 6(b)
of the Act, in general, and furthers the objectives of Section 6(b)(5)
of the Act,\45\ 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 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.
---------------------------------------------------------------------------
\45\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------
Specifically, the Exchange believes the proposed rule change will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, protect investors
and the public interest because it establishes a clear and transparent
framework for a new category of listed options (binary KPI options)
that are tied to financial and operating metrics of issuers that are
publicly disclosed in required Commission reports. Currently, investors
wishing to position their investment strategies around earnings
announcements must rely primarily on equity options, whose pricing is
affected by a wide range of variables beyond the reported financial or
operating measure of interest (e.g., implied volatility, delta, time
value, and general market movement). Binary KPI options allow investors
to take a targeted, defined-risk position directly on a specific
financial or operating measure (i.e., a KPI) for a particular reporting
period. The Exchange believes this additional investment tool will
protect investors and the public interest because it will promote
market efficiency, enable more precise price discovery around earnings
events, allow investors to hedge against potential idiosyncratic risks,
and remove a gap in current national securities exchange-listed
products available to market participants.
The Exchange believes the proposed list of issuers and KPIs on
which the Exchange may list binary KPI options
[[Page 59228]]
will prevent fraudulent and manipulative acts and practices, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, protect investors and the
public interest. First, as noted above, the Exchange is proposing to
list binary KPI contracts based on specific financial and operating
metrics reported by the following issuers in their earnings-related
disclosures submitted to the Commission: Apple, Inc.; Advanced Micro
Devices, Inc.; Alphabet Inc.; <a href="http://Amazon.com">Amazon.com</a>, Inc.; Bank of America
Corporation; Citigroup Inc.; Coinbase Global, Inc.; Ford Motor Company;
Intel Corporation; JPMorgan Chase & Co.; Marathon Digital Holdings,
Inc.; Meta Platforms, Inc.; Microsoft Corporation; Netflix, Inc.;
NVIDIA Corporation; Palantir Technologies Inc.; SoFi Technologies,
Inc.; Space Exploration Technologies Corp.; Super Micro Computer, Inc.;
Target Corporation; Tesla, Inc.; and The Walt Disney Company. The
Exchange believes offering investors an additional investment tool on a
national securities exchange related to some of the most actively
traded stocks and options will perfect the mechanism of a free and open
market and benefit investors by allowing them to further refine their
investment strategies, including using these options to hedge
idiosyncratic, even-specific risk embedded in the specific KPIs (as
further discussed below), for these actively traded companies.
The Exchange believes the proposed universe of issuers will prevent
fraudulent and manipulative acts and practices, because the proposed
issuers are large, well-capitalized, and widely followed issuers with
highly liquid underlying securities and options markets. During May
2026, each of the issuers exceeded $3 billion in market capitalization
and ranked among the top 200 U.S. companies by average daily options or
stock volume, with the exception of Space Exploration Technologies Corp
(commonly referred to as SpaceX), which had not been trading for a full
calendar month but which the Exchange believes will satisfy these
measures with its first month of trading results based on its volumes
since it began trading.\46\
---------------------------------------------------------------------------
\46\ The ADV of SpaceX stock between June 12 and June 22, 2026
was approximately 290,009,963 shares. The market capitalization of
SpaceX as of June 22, 2026 was $2.145 trillion.
---------------------------------------------------------------------------
Securities with high market capitalizations and liquid markets are
generally less susceptible to manipulation because of the substantial
capital required to artificially influence prices of those securities.
The depth and breadth of trading activity for securities with
significant market capitalizations, such as the stocks of the proposed
issuers, make it unlikely that a single market participant would be
able to exert undue influence on the price of such a stock, as large
volumes of buyers and sellers are what ultimately continuously reflect
the true market value of the stock. The Exchange believes the KPIs of
issuers with high market capitalizations proposed to underlie binary
KPI options are similarly less susceptible to manipulation because any
attempt to distort a financial metric of such an issuer would require
an enormous and economically impractical deployment of capital, which
would likely exceed the fixed payout of a binary KPI option. Therefore,
like stocks of large-cap issuers, KPIs of large-cap issuers are less
susceptible to manipulation due to the structural barriers that would
make manipulating KPI values operationally difficult and financially
irrational (in addition to the rigorous financial oversight to which
these issuers are subject, as further discussed below).
In addition to the proposed issuers being highly capitalized and
having actively traded stocks and options on such stocks, the Exchange
also believes the proposed limited universe of issuers for binary KPI
options to those proposed will prevent fraudulent and manipulative acts
and practices because each issuer is subject to periodic reporting
requirements under the Act. Therefore, each of the proposed issuers
must file annual reports on Form 10-K, quarterly reports on Form 10-Q,
and current reports on Form 8-K with the Commission, which as discussed
above disclose information the issuer believes is necessary for an
investor to understand its financial condition, changes in financial
condition and results of operations, which can include KPIs. Further,
each issuer maintains audited financial statements prepared in
accordance with U.S. Generally Accepted Accounting Principles
(``GAAP'') and is subject to executive certification requirements under
the Sarbanes-Oxley Act. As a result, the settlement-determining KPI
values for each eligible issuer are produced within the Commission's
supervisory jurisdiction, are publicly verifiable from a Commission-
regulated source and are subject to relevant anti-fraud provisions
under the Act, which the Exchange believes will reduce the potential
for manipulation of the underlying KPIs as well as the applicable
issuer's stock.
Further, the Exchange believes the proposed limited universe of
issuers will introduce binary KPI options in a well-developed, well-
understood, and transparent Commission-regulated market environment.
Each issuer is among the most widely followed, actively traded, and
extensively analyzed issuers in its respective sector, with deep and
liquid equity and derivatives markets and a broad institutional and
retail investor base. The depth of existing market activity surrounding
these issuers supports fair and orderly pricing by ensuring that binary
KPI options are listed in markets where price discovery is well-
established, liquidity is readily available, and participants have
broad access to the information necessary to form and express informed
views on KPI outcomes. The Exchange believes the continuous public
scrutiny to which these issuers are subject substantially reduces the
likelihood that any market participant could obtain or maintain an
informational advantage sufficient to manipulate the settlement value
of the binary KPI options.
The Exchange believes the proposed KPI metrics will similarly
prevent fraudulent and manipulative acts and practices, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, protect investors and the
public interest. The Exchange's proposal limits eligible KPIs to GAAP
and non-GAAP measures and other statistics related to an issuer's
financial condition and operational results, all of which the proposed
issuers disclose in their earnings-related filings (i.e., Forms 8-K,
10-Q, and 10-K) submitted to the Commission. As such, the settlement
values of the proposed binary KPI options are derived exclusively from
information that issuers deem as material information required to be
disclosed in reports submitted to the Commission. These metrics are
routinely referenced and tracked in the investment community and are
figures that the market recognizes as a meaningful and central
indicator of issuer performance. The Exchange believes that the
inclusion of well-established metrics as eligible KPIs expands the
value of binary KPI options for investors without compromising the
integrity of trading processes, including the settlement process.
The proposed KPI metrics are among the most widely followed and
extensively analyzed measures for the proposed issuers. Specifically,
the Exchange proposes to be able to list a binary KPI option on
earnings per share (prepared in accordance with GAAP) for
[[Page 59229]]
each proposed issuer. This metric is among the most widely followed and
extensively analyzed figures in public company financial disclosure and
is disclosed in each issuer's periodic Commission filings. Similarly,
the Exchange proposes to list binary KPI options on revenue, prepared
in accordance with the applicable GAAP, for each issuer. As is the case
for earnings per share, revenue is a widely followed financial metric
for publicly reporting companies and is the subject of extensive
analyst coverage.
The Exchange proposes KPIs representing revenues broken out by
appliable reportable segment, business unit, or product category,
including cloud and artificial intelligence infrastructure revenues,
streaming and geographic subscription revenues, automotive segment
revenues, financial services segment revenues, consumer product
category revenues, and digital asset exchange transaction and
subscription revenues, among others, for several of the proposed
issuers. Each such metric is a GAAP-defined figure required to be
disclosed in the issuer's periodic Commission filings. The Exchange
understands these metrics enable market participants to express views
on specific high-profile business lines that are extensively covered by
analysts and subject to a high volume of publicly available forecasts.
The Exchange proposes KPIs for the proposed financial institution
issuers that are specific to financial institution income statement
presentation, including net interest income, provision for credit
losses, and net income. Each such metric reflects the distinct GAAP
reporting framework applicable to banking institutions and is subject
to the same periodic disclosures as other proposed KPIs.
The proposed rule change also includes operating margin, gross
margin, or cash flow from operations KPIs for several issuers, each of
which is computed directly from GAAP financial statement line items
disclosed in the issuer's periodic Commission filings. These metrics
provide market participants with insight into issuer profitability and
capital generation and complement other revenue and earnings figures
when market participants are evaluating the value of an issuer and its
stock.
The Exchange also proposes several non-financial operational KPIs
that issuers disclosed in their periodic Commission filings, including
relevant production volumes, network and infrastructure counts, user
engagement metrics, deal counts, digital asset trading volume, and
digital asset mining and holdings metrics. Each designated non-
financial operational metric is closely tied to the core economic
activity of the respective issuer's business and is a figure that the
issuer has affirmatively chosen to disclose to the public as a key
indicator of business performance. Issuers typically designate and
disclose such metrics precisely because they are understood by the
market to be among the most meaningful measures of their business
activities. As discussed above, this is consistent with Commission
guidance that an issuer should include KPIs in these report that the
issuer believes an investor needs to gain understanding of its
financial condition, changes in financial condition and results of
operations, as such KPIs present the ``pulse'' of the issuer's
business. The market significance of these metrics is further reflected
in the extensive analyst coverage and investor attention, particularly
near each reporting date. Each metric is subject to executive
certification as part of the periodic report in which it appears and is
widely tracked by financial data services and equity research analysts.
Overall, the Exchange believes that the proposed well-established,
publicly reported metrics as eligible KPIs will expand the value of
binary KPI options for investors without compromising the integrity of
trading processes, including the settlement process. As a result, the
Exchange believes the proposed KPIs will protect investors and the
public interest as it will permit the Exchange to offer investors
additional investment and hedging tools on the Exchange that investors
can incorporate into their investment strategies regarding the proposed
issuers.
The Exchange believes the proposed contract terms for binary KPI
options will promote just and equitable principles of trade, remove
impediments to and perfect a free and open market and national market
system, and protect investors. As discussed above, the Exchange
believes the proposed contract terms for binary KPI options are
standardized option terms. Like standard option contracts and binary
index option contracts currently listed for trading on the Exchange,
each proposed binary KPI option will be a call or a put, will have an
underlying, exercise price, an expiration date, a settlement type, a
settlement style, and a multiplier. As is the case for binary index
options, each proposed binary KPI option will have an exercise
settlement amount paid depending on how the settlement value of the
underlying compares to the exercise price.
The proposed binary KPI options will function in a substantially
similar manner to binary index options, with the proposed contract
terms substantially similar to the contract terms of binary index
options. The proposed definitions of binary KPI option, call binary KPI
option, exercise price, and put binary KPI option are the same as those
terms for binary index options (as previously approved by the
Commission), differing only in reference to the underlying (KPI v.
index).
The proposed definition of settlement value for binary KPI options
is generally similar to the definition for binary index options (as
previously approved by the Commission), with certain differences
necessary to be addressed due to the different nature of a KPI as the
underlying. The Exchange believes the proposed $1 exercise settlement
amount is reasonable given the retail nature of the proposed binary KPI
options and merely adds specificity to the Rules for binary KPI
options. The Exchange notes binary KPI options differ from standardized
index options (which are also cash-settled) in that the exercise
settlement amount is $1.00 rather than the cash difference amount
between the settlement value of the index and the strike price of an
option. Since the $1.00 exercise settlement amount will be paid out to
the option holder if the criteria of the binary KPI option have been
met, binary KPI options utilize a fixed exercise settlement amount.
The Exchange proposes new Rule 901KPI to list the specific binary
KPI contracts with the KPI criteria for each option contract. Such KPI
criteria are established as the set KPI events that will be used to
determine an option contract should be exercised by comparing the
strike price of the binary KPI option to the KPI value. The Exchange
believes these proposed contracts (including the issuers and KPIs) are
consistent with the Act for the reasons set forth above.
The Exchange believes the proposed expirations for binary KPI
options will remove impediments to and perfect the mechanism of a free
and open market and a national market system because they will align
with the reporting periods for which the proposed issuers disclose
earnings results and submit corresponding reports to the Commission.
These expirations will, therefore, permit investors to incorporate
binary KPI options into their investment strategies that correspond to
issuers' earnings results. Further, as discussed above, the Exchange
believes aligning expirations with Commission-regulated sources will
reduce the potential for manipulation of
[[Page 59230]]
the underlying KPIs, which will ultimately protect investors and the
public interest.
The proposed rule establishes a strike regime for binary KPI
options similar to that for traditional options and binary index
options. As is the case for traditional options and binary index
options, the proposed rule change establishes permissible strike
intervals, the amounts of which increase as the value of the strike
increases. Additionally, the Exchange proposes to list initial and
additional series pursuant to a similar framework as traditional equity
options. The differences in the proposed strike regime compared to that
of standard equity and index options are necessary and appropriate to
reflect the static nature of KPIs (unlike underlying equities and
indexes, the values of which change throughout the trading day) and the
timing of their disclosure. As noted above, the Exchange intends to
list binary KPI options aligned with the cadence of the KPI
announcements as their expiration cycle (generally quarterly). The
Exchange intends to list for trading binary KPI options with
expirations for the then-current reporting period (e.g., third quarter)
as well as the following period (e.g., fourth quarter) prior to the
expiration of the binary KPI options for the then-current reporting
period.
As the Exchange does for standard options, as well as binary index
options, the Exchange lists strikes (subject to its Rules) based on
relevant market information--including the then-current value of the
underlying--and customer demand. As described above, the Exchange
intends to do the same for binary KPI options by listing strikes
relative to the then current value of the underlying KPI. The Exchange
believes it is consistent with just and equitable principles of trade
to permit the Exchange to list strikes for a new expiration based on
the most recently disclosed KPI value, which may not be for the
immediately preceding reporting period, and then add strikes based on
the disclosed KPI for the immediately preceding reporting period (which
would be the settlement value for binary KPI options that expire in the
prior reporting period). This will enable the Exchange to respond to
changes in market conditions in the same manner it is able to do today
to respond to changes in values of (and market conditions related to)
other underlyings. The Exchange believes this flexibility is
appropriate for binary KPI options because the value of a KPI changes
only when an issuer discloses that KPI, which generally happens every
three months, unlike other underlyings that change every trading day.
While this proposed strike listing regime differs from that of other
options, the concept is the same, which is to permit the Exchange to
list strikes reflective of the then-current value of the underlying. It
is possible the changed value of an underlying KPI may be more sudden
and pronounced than changes in the value of an underlying equity or
index (which are susceptible to sudden value changes); however, like
the listing rules for equity and index options, the proposed rules
permit the Exchange to list strikes to reflect potentially significant
changes in the value of the underlying.
The Exchange believes the proposed scaling of strike prices is
reasonable and will protect investors, as it will permit the Exchange
to list strike values in amounts similar to current strike values for
other options. As noted above, values of certain KPIs may be large
(e.g., in the billions). The proposed scaling will permit the Exchange,
for example, to list a strike of 27 rather than 27,000,000,000, which
the Exchange believes will be simpler for investors to understand (as
it will be made clear that 27 will reflect billions in this example)
and consistent with current strike levels. The proposed scaling also
permits the strike prices for binary KPI options to fit within current
system capabilities regarding strike price values. The Exchange
believes scaling rather than modifying its systems (and potentially
causing investors to modify their systems) will benefit investors by
allowing them to trade binary KPI options in the same manner as they
trade other options today.
The Exchange believes the proposed strike intervals promote just
and equitable principles of trade because it will permit the Exchange
to list commercially meaningful strikes that will permit investors to
tailor their trading strategies with precision. The Exchange
acknowledges the proposed strike intervals are smaller than those in
current Rules for other types of options. However, the Exchange
believes the precision is appropriate and necessary given the nature of
KPIs and the proposed options. The purpose of binary KPI options is to
permit investors to take discrete and precise positions on KPIs.
Therefore, the Exchange needs the ability to list strikes with the
precision necessary to permit investors to take these positions. For
example, earnings per share is generally a relatively small number
(under $10). While strike intervals for other options are limited to
$0.50 intervals, that would not be meaningful in the context of binary
KPI options when investors are looking to take positions for a specific
KPI, which will be measured in penny intervals. Therefore, the Exchange
believes smaller strike intervals will benefit investors because they
will allow the Exchange to list binary KPI options that will enable
investors to use these options in the precise nature for which they are
intended and provide sufficient flexibility for the Exchange to list
series to respond to changes in market conditions and customer demand,
while other rules will place bounds around the strikes the Exchange may
list.
Further, as discussed above, the proposed strike intervals are
consistent with current rules for other options, which provide for
larger strike intervals as the value of strike prices increases. Given
the scaling factor for larger KPI values, while it may appear the
proposed rule change will permit smaller strike intervals for larger
KPI values, that may be true on a nominal basis but is not the case if
the actual value of the strike intervals is considered. The
corresponding actual value of the strike interval for a strike price
that was subject to a larger scale value is higher than the actual
value of the strike interval for a strike price that was subject to a
smaller scale value. As a result, the permissible strike intervals for
strike prices representing higher KPI values are actually larger than
the permissible strike intervals for strike prices representing lower
KPI values. This is consistent with general premise underlying current
strike intervals that larger strike intervals apply to larger strike
values and, therefore, the Exchange believes the proposed rule change
will promote just and equitable principles of trade.
The Exchange believes this proposed rule change clearly describes
the proposed terms of binary KPI options, such as with respect to
expirations (including the Exchange's announcement of the specific
expiration date after binary KPI options series for that expiration are
listed) and exercise prices (including the scaling factor, negative
values, and potential changes to that scaling factor for a binary KPI
option class) for all investors. As discussed above, these terms and
changes to such terms will be described in Exchange notices, technical
specifications (including binary KPI option reference data files), and
contract specifications (all of which are posted on the Exchange's
public website and thus available to all investors). Exchange ATP
Holders and retail brokerage firms are highly sophisticated investors
that intake information regarding other Exchange-listed options
[[Page 59231]]
(including changes) in the same manner that the Exchange plans to
release this information for binary KPI options. Therefore, the
Exchange expects retail customers to have access to all relevant
information regarding the terms of binary KPI options they choose to
trade, including changes to expiration dates and exercise price values
as announced by the Exchange.
The proposed rule change specifies a multiplier of one for binary
KPI options rather than require the Exchange to designate a multiplier
of at least one as the rules for binary index options do. This proposed
multiplier is consistent with the definition of contract multiplier for
binary index options (as that requires a multiplier of at least one)
and merely adds specificity to the Rules.
The Exchange believes proposed Rule 905KPI, which establishes
Regular Trading Hours for binary KPI options is consistent with the
Act, protects investors, and prevents fraudulent and manipulative
practices. The Exchange believes the proposed structure ensures that
trading in binary KPI options ceases before the earnings announcement
that determines settlement. The distinction between A.M.- and P.M.-
settled contracts mirrors the settlement terms already applicable to
binary index options, as well as other Exchange products.
The Exchange believes proposed Rule 905KPI(e), which provides that
for binary KPI options, the System initiates the opening rotation at
9:30 a.m., removes impediments to a free and open market by applying
the same proven opening process to binary KPI options that governs
other listed options classes on the Exchange. Additionally, unlike
equity options, for which the underlying opens for trading and can
trigger the opening rotation, KPIs do not trade, so triggering the
opening rotation based on a set time is reasonable for binary KPI
options.
The Exchange believes excluding binary KPI options from the obvious
error provisions in Rule 975NY is consistent with the Act and promotes
just and equitable principles of trade because the standard obvious
error framework, which evaluates whether an execution price deviates
from a ``theoretical value'' by a prescribed amount, is incompatible
with the structure of binary KPI options. Binary KPI options have no
continuously observable theoretical value (unlike equity and index
options) prior to the date of the earnings-related disclosure. Rather,
their exercise settlement amount is fixed at either a pre-specified
dollar amount or zero, depending entirely on whether the reported KPI
satisfies the exercise condition, which itself is based on a single,
publicly verifiable metric, disclosed in Commission filings. Applying
an obvious error framework premised on theoretical value calculations
to a product with a binary, fixed payout would be technically
inapplicable and could produce unjust or arbitrary results. Moreover,
because settlement of binary KPI options is determined by issuer-
reported metrics disclosed through Commission filings (i.e., figures
produced pursuant to established accounting standards, subject to
independent audit, and certified under the Sarbanes-Oxley Act), the
settlement process is itself governed by a comprehensive external
regulatory framework. The Exchange believes that establishing any
alternative dispute mechanism in this context would be not only
unnecessary, but potentially disruptive to market integrity, as it may
introduce an element of post-hoc discretion into a settlement process
that is expressly designed to be objective, verifiable, and rule-bound.
The Exchange believes the proposed amendments related to position
limits for binary KPI options are consistent with the Act because they
establish a rational position limit framework for binary KPI options
that protects against manipulation while facilitating legitimate
trading activity in a novel product. The Exchange believes that setting
the position limit for binary KPI options as the same as the applicable
position limit for the stock of the issuer, with 100 binary KPI option
contracts equaling one standard option contract, is appropriate. As
proposed, binary KPI options with a multiplier of one will count toward
applicable limits on a proportional basis relative to standard equity
options on the issuer's stock, which carry a multiplier of 100.
The Exchange further believes the proposal is reasonable given the
nature of binary KPI options and their relationship to the underlying
issuer. Because binary KPI options have a fixed maximum notional value
and settle on an all-or-nothing basis based on a KPI of the issuer
rather than the price of the issuer's stock as with a standard equity
option, the Exchange believes the proposed position limits
appropriately reflects the distinct structure of these contracts and
limits the potential for any single market participant to exert undue
influence over binary KPI option settlement. With respect to binary KPI
options, the economic risk of a position is binary, in that the
contract either settles in-the-money at $1.00 or out-of-the money at
$0.00. Additionally, with respect to binary KPI options, the maximum
notional exposure per contract is fixed in advance; it cannot exceed
$1.00 multiplied by the contract multiplier. Moreover, unlike stock
prices or index values, binary KPI option positions would not influence
a company's financial or operational outcomes; the number of option
contracts outstanding or trading volume, for instance, has no effect on
revenue or operational metrics.
Further, the Exchange's proposal to provide that positions in
binary KPI options on the same KPI with different expiration dates and
positions in binary KPI options for the same issuer with different
underlying KPIs are not aggregated reflects the distinct structure of
binary KPI options. Each binary KPI option expiration corresponds to a
separate event tied to a specific issuer reporting period. Thus, the
Exchange believes aggregating positions across different expiration
dates would not accurately reflect the risk profile of these positions
and would impose an unnecessary burden on market participants seeking
exposure to company KPI events across different reporting periods. In
determining that position limits should not be aggregated across all
binary KPI options referencing a single issuer, the Exchange analyzed
the degree to which KPIs of a given issuer are correlated with one
another.
Similarly, the Exchange believes it is reasonable to provide that
binary KPI options are not aggregated with non-binary options contracts
overlying the stock of the issuer. Because binary KPI options and
equity options overlying the same issuer have different risk profile
(i.e., binary KPI options settle based on a KPI of the issuer rather
than its stock price), the Exchange believes it would be inappropriate
and misleading to require aggregation of these positions for purposes
of position limits. As noted above, binary KPI options are based solely
on whether a single, specified-issuer KPI meets a discrete threshold at
a defined future date, and their value reflects the market's
probability assessment of that singular outcome. Standard equity
options, on the other hand, reflect a broad array of factors bearing on
the price of the underlying security, including macroeconomic
conditions and sector dynamics, of which any individual KPI is only one
component. Because the two products are not priced off of a common
reference and do not represent economically equivalent or fungible
exposures, aggregating positions across them would not meaningfully
advance the prevention of manipulative practices with respect to the
underlying security.
The Exchange further notes that this proposed non-aggregation
framework is
[[Page 59232]]
not unprecedented. Rule 904ByRDs provides that positions in binary
return derivatives shall not be aggregated with options contracts on
the same or similar underlying security. The Exchange believes that
there was no need to aggregate positions across the two product types
to prevent manipulative practices involving the underlying.
Finally, the Exchange believes the amendments to the hedge
exemption provision in proposed Rule 906KPI(d) is consistent with the
Act because it facilitates legitimate hedging activity in binary KPI
options. Because a market participant simultaneously holding a short
put and short call position in binary KPI options has taken opposing
sides of the potential binary outcome (i.e., the short call is at risk
if the KPI is met and the short put is at risk if the KPI is not met),
the Exchange believes such a position represents a defined, bounded
risk profile that does not present the same potential for manipulation
or market disruption that position limits are designed to prevent. The
Exchange therefore believes the hedge exemption as proposed will
encourage market-making activity and liquidity provision in binary KPI
options while protecting investors and the public.
The Exchange also believes the proposed adoption of Rule 907KPI
consistent with the Act. By establishing tailored reporting
requirements for binary KPI options, the Exchange will be able to
monitor ATP Holder positions effectively and detect any accumulation of
positions that may approach or exceed applicable limits, to the benefit
of investors. The Exchange believes it is consistent with just and
equitable principles of trade for 100 binary KPI option contracts to
equal one standard option contract for purposes of determining whether
the report in proposed Rule 907KPI is required given the size of binary
KPI contracts. As discussed above, proposed binary KPI options have a
multiplier of one, while standard option contracts have a multiplier of
100. Therefore, the notional value of a binary KPI option is
significantly less than the notional value of standard option
contracts. For example, 200 contracts with a value of $1.00 with a
multiplier of 100 would equate to $20,000 notional value, while 200
binary KPI option contracts with a value of $1.00 (which is the fixed
maximum value of a binary KPI option contract) with a multiplier of one
would equate to $200 notional value. Counting 100 binary KPI contracts
as one standard option contract for purposes of this report effectively
calibrates the reporting requirement so that investors are required to
submit the report for an economically equivalent number of contracts,
which promotes just and equitable principles of trade.
The Exchange believes the proposal will provide the Exchange and
regulators with visibility into large position concentrations in binary
KPI options, preserving the ability to identify unusual activity and
respond to any unforeseen concerns, while calibrating the threshold to
a metric that is meaningful for this contract given its smaller
multiplier relative to that of standard equity options. The Exchange
believes this reporting framework, coupled with the position limits
amendments, provides a fully adequate regulatory framework for these
instruments.
Further, as noted above, the Exchange believes it has an adequate
surveillance program in place to detect potentially manipulative
trading in binary KPI options. The Exchange notes that manipulation of
the reported KPI would constitute securities fraud and expose the
issuer to liability under federal securities law, separate and apart
from any exchange-related violation.
The Exchange believes the proposed binary KPI options will serve as
a vehicle to hedge idiosyncratic, event-specific risk embedded in the
specific KPIs. Standard equity options are calibrated to the price of
the underlying security and capture a full spectrum of factors or risks
which may affect issue value, such as macroeconomic conditions or
sector dynamics. Because equity option pricing incorporates this full
spectrum, a participant seeking to hedge exposure to a single, discrete
KPI outcome cannot do so precisely using standard equity options.
Because settlement of a binary KPI option is determined solely by
whether a specified-issuer KPI meets a defined threshold, the contract
effectively isolates certain individual risks an investor may seek to
manage. For example, consider an investor holding a long-term position
in a particular issuer stock, who believes the issuer's quarterly
revenue will fall short of expectations (for reasons unrelated to the
issuer's long-term prospects). The investor may utilize the binary KPI
option to hedge precisely against the near-term risk without disruption
to the underlying equity position. This targeted hedging utility
represents a distinct and additive function relative to existing listed
products, which the Exchange believes will serve the interests of
investors and provide an efficient mechanism for managing event-
specific, KPI-driven risk.
The Exchange believes the proposed rule change will facilitate
transactions in securities, remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, protect investors and the public interest, because it will
provide investors with a securities exchange-listed investment choice
for these instruments, offering price transparency and the regulatory
protections of a national securities exchange. The Exchange believes
the proposed rule change will permit investors to manage their risk
exposures and carry out their investment objectives on a securities
exchange with more flexibility and broader applicability. The Exchange
also believes the proposed rule change will promote competition, as it
will meet demands of investors that currently may trade products
structured in substantively the same manner as the proposed binary KPI
options in other markets (as further discussed below). Binary KPI
options would provide investors with a straightforward means of
expressing a directional view on key financial and operating metrics.
The Exchange further believes the proposed rule change is consistent
with the protection of investors and the public interest, as binary KPI
options would be subject to the Exchange's existing rules governing the
listing and trading of options. The Exchange believes expanding the
universe of binary options will benefit investors, particularly retail
investors and other investors who prefer simplicity, as a complementary
offering to current exchange-traded options.
The proposed rule change will permit the Exchange to list binary
KPI options on a national securities exchange as alternatives to
products that are structured in substantially the same manner as binary
options currently available in the OTC market and on other platforms.
The Exchange understands investors have traded binary options similar
to the proposed binary options in OTC markets for many years but may
prefer to trade such options in a listed environment to receive the
benefits of trading listing options. These benefits include: (1)
enhanced efficiency in initiating and closing out positions; (2)
increased market transparency; and (3) heightened contra-party
creditworthiness. The Exchange believes the proposed rule change may
encourage liquidity to shift from the OTC market onto the Exchange,
which the Exchange believes would increase market transparency as well
as enhance the process of price
[[Page 59233]]
discovery conducted on the Exchange through increased order flow. The
proposed rule change is intended to provide a market for binary KPI
options as a standardized product without the credit risk of an
individual issuer. By providing a listed and standardized market for
more classes of binary options, the Exchange seeks to attract investors
who desire the simplicity of a binary option with the certainty and
safeguards of a regulated and standardized marketplace. Additionally,
unlike an OTC binary option, counter-party credit risk for Exchange-
listed binary KPI options is significantly reduced through the issuance
and guarantee of the contracts by a registered clearing agency.
Further, as an exchange-traded option, binary options will have the
advantage of liquidity provided by Market-Makers, which the Exchange
believes may lead to tighter spreads than those in the OTC market. The
Exchange also believes that standardization will enable more interested
parties to become market participants.
In addition to the OTC market, various market platforms that are
not registered as national securities exchanges currently offer
products structured in substantively the same manner as binary options
that the Exchange may list pursuant to current Rules and as proposed.
These platforms offer binary option products overlying securities
indexes, which may be settled at varying points of the day (not just at
the open and close of the trading day). However, as these venues are
not national securities exchanges, they do not offer investors the
benefits of centralized liquidity, market transparency, or securities
regulations intended to protect investors. The Exchange believes
listing competitive products on a national securities exchange would
create a centralized and standardized marketplace for these products,
which promotes price discovery and transparency, within an established
regulatory framework designed to afford investors in securities with
important protections. In other words, the Exchange believes its
proposal offers a more transparent platform than the OTC market or
other market platforms offer. It would contribute to leveling the
playing field with these alternative markets and provide investors with
safeguards associated with Commission and SRO oversight of the trading
activity in these exchange-listed binary KPI options.
Ultimately, the Exchange believes the proposed rule change will
provide investors with greater trading tools and opportunities and
flexibility, resulting in investors having additional means to carry
out their investment objectives and manage their risk exposures through
products listed and traded on a national securities exchange. The
Exchange believes the proposed rule change will offer market
participants a simplified, transparent, and limited risk investment
choice overlying securities and securities indexes, which may be more
aligned with their specific timing needs and investment and hedging
strategies and risk tolerances. The Exchange believes it benefits the
investing public to continue to enhance its listed product offerings to
respond to continuously changing needs of investors and to a
continuously changing competitive environment.
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. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act, because binary KPI options will
be available to all market participants who wish to trade such options
on the same terms and in the same manner (including with respect to the
payout terms and amount). All market participants will be subject to
the same rules applicable to binary KPI options, as described in this
proposed rule change. Except as set forth in the proposed rule change,
binary KPI options will trade in the same manner as other options,
including binary index options, on the Exchange.
The Exchange does not believe the proposed rule change will impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act, because other
options exchanges may propose similar products. Additionally, as noted
above, substantively similar products to binary KPI options, as
proposed, are available in the OTC market and various other markets.
The Exchange notes that it operates in a highly competitive market
in which market participants can readily direct order flow to competing
venues who offer similar products. The Exchange believes the proposed
rule change will provide investors with a comparable alternative to the
OTC market and other venues. The Exchange believes it may be a more
attractive alternative to the OTC market and these other venues, as
market participants will benefit from being able to trade these options
in an exchange environment, which provides, among other things: (1)
enhanced efficiency in initiating and closing out positions; (2)
increased market transparency; and (3) heightened contra-party
creditworthiness. As a result, the Exchange believes that the proposed
rule change may relieve any burden on, or otherwise promote,
competition, as it will allow the Exchange to offer a securities
exchange-listed alternative to the products currently available in
these other markets.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1d6f687178307e7270707873696e5d6e787e337a726b"><span class="__cf_email__" data-cfemail="5e2c2b323b733d3133333b302a2d1e2d3b3d70393128">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-82 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-NYSEAMER-2026-82. This
file number should be included on the subject line if email is used. To
help the Commission process and review your
[[Page 59234]]
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-NYSEAMER-2026-82 and
should be submitted on or before October 9, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
---------------------------------------------------------------------------
\47\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19132 Filed 9-17-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 18, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.