61642 Federal Register / Vol. 88, No. 172 / Thursday, September 7, 2023 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 97899 

(July 13, 2023), 88 FR 46249. Comments on the 

proposed rule change, as modified by Amendment 

No. 2, are available at: https://www.sec.gov/ 

comments/sr-cboebzx-2023-044/ 

srcboebzx2023044.htm. 

4 15 U.S.C. 78s(b)(2). 

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98013 

(July 27, 2023) 88 FR 50927 (August 2, 2023)(SR– 

NYSEAMER–2023–27)(Order Granting Approval of 

a Proposed Rule Change to Amend Rule 915 

(Criteria for Underlying Securities) to Accelerate the 

Listing of Options on Certain IPOs). 

4 Id. 

5Rule 402(a) requires that, for underlying 

securities to be eligible for option transactions, such 

securities must be duly registered and be an ‘‘NMS 

stock’’ as defined in Rule 600 of Regulation NMS 

under the Act and will be characterized by a 

substantial number of outstanding shares which are 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98263; File No. SRCboeBZX–2023–044] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change, as Modified by 

Amendment No. 2, To List and Trade 

Shares of the Wise Origin Bitcoin Trust 

Under BZX Rule 14.11(e)(4), 

Commodity-Based Trust Shares 

August 31, 2023. 

On June 30, 2023, Cboe BZX 

Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares of the 

Wise Origin Bitcoin Trust under BZX 

Rule 14.11(e)(4), Commodity-Based 

Trust Shares. On July 11, 2023, the 

Exchange filed Amendment No. 1, 

which amended and replaced the 

proposed rule change in its entirety, and 

on July 13, 2023, the Exchange filed 

Amendment No. 2, which amended and 

replaced the proposed rule change, as 

modified by Amendment No. 1, in its 

entirety. The proposed rule change, as 

modified by Amendment No. 2, was 

published for comment in the Federal 

Register on July 19, 2023.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is September 2, 

2023. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change 

and the issues raised therein. 

Accordingly, the Commission, pursuant 

to section 19(b)(2) of the Act,5

designates October 17, 2023, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR-CboeBZX–2023–044), as 

modified by Amendment No. 2. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19237 Filed 9–6–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98261; File No. SR– 

PEARL–2023–38] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 402 (Criteria for Underlying 

Securities) To Accelerate the Listing of 

Options on Certain IPOs 

August 31, 2023. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

23, 2023, MIAX PEARL, LLC (‘‘MIAX 

Pearl’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend Exchange Rule 402. The text of 

the proposed rule change is available on 

the Exchange’s website at https://

www.miaxglobal.com/markets/usoptions/pearl-options/rule-filings, at 

MIAX Pearl’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities, to permit an 

underlying security having a market 

capitalization of at least $3 billion based 

upon the offering price of its initial 

public offering, to be listed and traded 

starting on or after the second business 

day following the initial public offering 

day. The Exchange is proposing a listing 

rule change that is substantially similar 

in all material respects to the proposal 

approved for NYSE American LLC 

(‘‘NYSE American’’).3 Following 

discussions with other exchanges and a 

cross-section of industry participants 

and in coordination with the Listed 

Options Market Structure Working 

Group (‘‘LOMSWG’’) (collectively, the 

‘‘Industry Working Group’’), NYSE 

American filed a proposed rule change,4

which was recently approved, to modify 

the standard for the listing and trading 

of options on ‘‘covered securities’’ to 

reduce the time to market. At this time, 

the Exchange proposes to adopt an 

identical rule. 

Rule 402 sets forth the guidelines to 

be considered in evaluating for option 

transactions underlying securities that 

are ‘‘covered securities,’’ as defined in 

section 18(b)(1)(A) of the Securities Act 

of 1933 (hereinafter ‘‘covered security’’ 

or ‘‘covered securities’’).5 Currently, the 


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Federal Register / Vol. 88, No. 172 / Thursday, September 7, 2023 / Notices 61643 

widely held and actively traded. See Rule 402(a)(1) 

and (2). 

6See Rule 402(b)(5)(i). The Exchange is not 

proposing to make any changes to the guidelines for 

listing securities that are not a ‘‘covered security.’’ 

See Rule 402(b)(5)(ii). 

7See proposed Rule 402(b)(5)(i). The Exchange 

proposes a non-substantive change to number the 

existing and proposed criteria for covered securities 

as (A) and (B) of paragraph (5)(i). See proposed Rule 

402(b)(5)(i). 

8While the Exchange acknowledges that market 

participants may utilize options for speculative 

purposes (in addition to as a hedging tool), the 

Exchange believes (as set forth below) that its 

existing surveillance technologies and procedures 

adequately address potential violations of exchange 

rules and federal securities laws applicable to 

trading on the Exchange. 

9The Exchange acknowledges that the Options 

Listing Procedures Plan (‘‘OLPP’’) requires that the 

listing certificate be provided to OCC no earlier 

than 12:01 a.m. and no later than 11:00 a.m. 

(Chicago time) on the trading day prior to the day 

on which trading is to begin. See the OLPP, at p. 

3., available here: https://

ncuoccblobdev.blob.core.windows.net/media/ 

theocc/media/clearing-services/services/options_

listing_procedures_plan.pdf. The OLPP is a national 

market system plan that, among other things, sets 

forth procedures governing the listing of new 

options series. 

10FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 

11See supra note 8. 

12The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(1). 

15The term ‘‘Equity Member’’ is a Member 

authorized by the Exchange to transact business on 

MIAX Pearl Equities. See Exchange Rule 1901. 

Exchange permits the listing of an 

option on an underlying covered 

security that, amongst other things, has 

a market price of at least $3.00 per share 

for the previous three consecutive 

business days preceding the date on 

which the Exchange submits a 

certificate to The Options Clearing 

Corporation (‘‘OCC’’) to list and trade 

options on the underlying security (the 

‘‘three-day lookback period’’).6 Under 

the current rule, if an initial public 

offering (‘‘IPO’’) occurs on a Monday, 

the earliest date the Exchange could 

submit its listing certificate to OCC 

would be on Thursday, with the market 

price determined by the closing price 

over the three-day lookback period from 

Monday through Wednesday. The 

option on the IPO’d security would then 

be eligible for trading on the Exchange 

on Friday (i.e., within four business 

days of the IPO inclusive of the day the 

listing certificate is submitted to OCC).7

The Exchange notes that the three-day 

look back period helps ensure that 

options on underlying securities may be 

listed and traded in a timely manner 

while also allowing time for OCC to 

accommodate the certification request. 

However, there are certain large IPOs 

that issue high-priced securities—well 

above the $3.00 per share threshold— 

that would obviate the need for the 

three-day lookback period. In this 

regard, the Industry Working Group has 

recently identified proposed changes to 

Rule 402(b)(5)(i) that would help 

options on covered securities that have 

a market capitalization of at least $3 

billion based upon the offering price of 

its IPO come to market earlier. The 

proposed change, which is intended to 

be harmonized across options 

exchanges, is designed to provide 

investors the opportunity to hedge their 

interest in IPO investments in a shorter 

amount of time than what is currently 

permitted.8 The Exchange believes that 

options serve a valuable tool to the 

trading community and help markets 

function efficiently by mitigating risk. 

To that end, the Exchange believes that 

the absence of options in the early days 

after an IPO may heighten volatility in 

the trading of IPO’d securities. 

Accordingly, the Exchange proposes 

to modify Rule 402 to waive the threeday lookback period for covered 

securities that have a market 

capitalization of at least $3 billion based 

upon the offering price of the IPO of 

such securities and to allow options on 

such securities to be listed and traded 

starting on or after the second business 

day following the initial public offering 

day (i.e., not inclusive of the day of the 

IPO).9 NYSE American has stated that it 

has reviewed trading data for IPO’d 

securities dating back to 2017 and is 

unaware of any such security that 

achieved a market capitalization of $3 

billion based upon the offering price of 

its IPO that would not have also 

qualified for listing options based on the 

three-day lookback requirement. 

Specifically, NYSE American has 

determined that 202 of the 1,179 IPOs 

that took place between January 1, 2017, 

and October 21, 2022, met the $3 billion 

market capitalization/IPO offering price 

threshold. Options on all 202 of those 

IPO shares subsequently satisfied the 

three-day lookback requirement for 

listing and trading, i.e., none of these 

large IPOs closed below the $3.00/share 

threshold during its first three days of 

its trading. As such, the Exchange 

believes the proposed capitalization 

threshold of $3 billion based upon the 

offering price of its IPO is appropriate. 

Under the proposed rule, if an IPO for 

a company with a market capitalization 

of $3 billion based upon the offering 

price of its IPO occurs on a Monday, the 

Exchange could submit its listing 

certificate to OCC (to list and trade 

options on the IPO’d security) as soon 

as all the other requirements for listing 

are satisfied. If, on Tuesday, all 

requirements are deemed satisfied, the 

IPO’d security could then be eligible for 

trading on the Exchange on Wednesday 

(i.e., starting on or after the second 

business day following the IPO day). 

Thus, the proposal could potentially 

accelerate the listing of options on IPO’d 

securities by two days. 

The Exchange believes the proposed 

change would allow options on IPO’d 

securities to come to market sooner 

without sacrificing investor protection. 

The Exchange represents that trading in 

IPO’d securities—like all other 

securities traded on the Exchange—is 

subject to surveillances administered by 

the Exchange and to cross-market 

surveillances administered by FINRA on 

behalf of the Exchange. Those 

surveillances are designed to detect 

violations of Exchange rules and 

applicable federal securities laws.10 The 

Exchange represents that those 

surveillances are adequate to reasonably 

monitor Exchange trading of IPO’d 

securities in all trading sessions and to 

reasonably deter and detect violations of 

Exchange rules and federal securities 

laws applicable to trading on the 

Exchange.11 As such, the Exchange 

believes that its existing surveillance 

technologies and procedures, coupled 

with NYSE American’s findings related 

to the IPOs reviewed as described 

herein, adequately address potential 

concerns regarding possible 

manipulation or price stability. 

Implementation Date 

The Exchange will announce the 

effective date of the proposed change by 

Notice distributed to all Members.12 The 

Exchange will coordinate the effective 

date to coincide with the 

implementation of the proposed change 

on the other options exchanges. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with section 6(b) of the Act 13 in general, 

and furthers the objectives of section 

6(b)(1) of the Act 14 in particular, in that 

they are designed to enforce compliance 

by the Exchange’s Equity Members 15

and persons associated with its Equity 

Members, with the provisions of the 

rules of MIAX Pearl Equities. In 

particular, the Exchange believes that 

the proposed rule changes will provide 

greater clarity to Equity Members and 

the public regarding the Exchange’s 


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61644 Federal Register / Vol. 88, No. 172 / Thursday, September 7, 2023 / Notices 

16The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

17 15 U.S.C. 78s(b)(3)(A)(iii). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires the Exchange to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

21For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 22 17 CFR 200.30–3(a)(12). 

Rules by providing consistency within 

the Exchange’s Rulebook. The proposed 

changes will ensure the hierarchical 

heading scheme aligns throughout the 

Exchange’s Rulebook. The proposed 

changes will also make it easier for 

Equity Members to interpret the 

Exchange’s Rulebook. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Exchange believes the proposed 

changes will not impose any burden on 

intra-market competition as there is no 

functional change to the Exchange’s 

System 16 and because the rules of the 

Exchange apply to all MIAX Pearl 

Equities participants equally. The 

proposed rule change will have no 

impact on competition as it is not 

designed to address any competitive 

issue but rather is designed to remedy 

minor non-substantive issues and 

provide added clarity to the rule text of 

Exchange Rules 2614, 2617, and 2626. 

In addition, the Exchange does not 

believe the proposal will impose any 

burden on inter-market competition as 

the proposal does not address any 

competitive issues and is intended to 

protect investors by providing further 

transparency regarding the Exchange’s 

functionality. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to section 19(b)(3)(A) of the 

Act 17 and Rule 19b–4(f)(6) 18

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),20 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange states that a waiver 

of the operative delay is consistent with 

the protection of investors and the 

public interest because it will ensure 

fair competition among the exchanges 

by allowing the Exchange to allow 

options on IPO’d securities to come to 

market sooner (i.e., at least two business 

days post-IPO not inclusive of the day 

of the IPO) without sacrificing investor 

protection. The Commission believes 

that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest 

because the proposed rule change does 

not raise any new or novel issues. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change as 

operative upon filing.21

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

PEARL–2023–38 on the subject line. 

Paper Comments 

• 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–PEARL–2023–38. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–PEARL–2023–38 and should be 

submitted on or before September 28, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19235 Filed 9–6–23; 8:45 am] 

BILLING CODE 8011–01–P 


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