Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68819 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5Securities Exchange Act Release No. 61439 

(January 28, 2010), 75 FR 5831 (February 4, 2010) 

(SR–CBOE–2009–087) (‘‘Approval Order’’). The 

initial pilot period was set to expire on March 28, 

2011, which date was added to the rules in 2010. 

See Securities Exchange Act Release No. 61676 

(March 9, 2010), 75 FR 13191 (March 18, 2010) (SR– 

CBOE–2010–026). 

6See Securities Exchange Act Release Nos. 64110 

(March 23, 2011), 76 FR 17463 (March 29, 2011) 

(SR–CBOE–2011–024); 66701 (March 30, 2012), 77 

FR 20673 (April 5, 2012) (SR–CBOE–2012–027); 

68145 (November 2, 2012), 77 FR 67044 (November 

8, 2012) (SR–CBOE–2012–102); 70752 (October 24, 

2013), 78 FR 65023 (October 30, 2013) (SR–CBOE– 

2013–099); 73460 (October 29, 2014), 79 FR 65464 

(November 4, 2014) (SR–CBOE–2014–080); 77742 

(April 29, 2016), 81 FR 26857 (May 4, 2016) (SR– 

CBOE–2016–032); 80443 (April 12, 2017), 82 FR 

18331 (April 18, 2017) (SR–CBOE–2017–032); 

83175 (May 4, 2018), 83 FR 21808 (May 10, 2018) 

Continued 

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–NYSE–2023–09 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22041 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98637; File No. SR–CBOE– 

2023–057] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the Operation 

of Its Flexible Exchange Options 

(‘‘FLEX Options’’) Pilot Program 

Regarding Permissible Exercise 

Settlement Values for FLEX Index 

Options 

September 28, 2023. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on 

September 28, 2023, Cboe Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘Cboe 

Options’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to extend 

the operation of its Flexible Exchange 

Options (‘‘FLEX Options’’) pilot 

program regarding permissible exercise 

settlement values for FLEX Index 

Options. The text of the proposed rule 

change is provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 4.21. Series of FLEX Options 

(a) No change. 

(b) Terms. When submitting a FLEX Order 

for a FLEX Option series to the System, the 

submitting FLEX Trader must include one of 

each of the following terms in the FLEX 

Order (all other terms of a FLEX Option 

series are the same as those that apply to 

non-FLEX Options), provided that a FLEX 

Index Option with an index multiplier of one 

may not be the same type (put or call) and 

may not have the same exercise style, 

expiration date, settlement type, and exercise 

price as a non-FLEX Index Option overlying 

the same index listed for trading (regardless 

of the index multiplier of the non-FLEX 

Index Option), which terms constitute the 

FLEX Option series: 

(1)–(4) No change. 

(5) settlement type: 

(A) No change. 

(B) FLEX Index Options. FLEX Index 

Options are settled in U.S. dollars, and may 

be: 

(i) No change. 

(ii) p.m.-settled (with exercise settlement 

value determined by reference to the reported 

level of the index derived from the reported 

closing prices of the component securities), 

except for a FLEX Index Option that expires 

on any business day that falls on or within 

two business days of a third Friday-of-themonth expiration day for a non-FLEX Option 

(other than a QIX option) may only be a.m.- 

settled; however, for a pilot period ending 

the earlier of [November 6, 2023] May 6, 2024 

or the date on which the pilot program is 

approved on a permanent basis, a FLEX 

Index Option with an expiration date on the 

third-Friday of the month may be p.m.- 

settled; 

(iii)–(iv) No change. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 

On January 28, 2010, the Securities 

and Exchange Commission (the 

‘‘Commission’’) approved a Cboe 

Options rule change that, among other 

things, established a pilot program 

regarding permissible exercise 

settlement values for FLEX Index 

Options.5 The Exchange has extended 

the pilot period numerous times, which 

is currently set to expire on the earlier 

of November 6, 2023 or the date on 

which the pilot program is approved on 

a permanent basis.6 The purpose of this 


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(SR–CBOE–2018–037); 84537 (November 5, 2018), 

83 FR 56113 (November 9, 2018) (SR–CBOE–2018– 

071); 85707 (April 23, 2019), 84 FR 18100 (April 29, 

2019) (SR–CBOE–2019–021); 87515 (November 13, 

2020), 84 FR 63945 (November 19, 2019) (SR– 

CBOE–2019–108); 88782 (April 30, 2020), 85 FR 

27004 (May 6, 2020) (SR–CBOE–2020–039); 90279 

(October 28, 2020), 85 FR 69667 (November 3, 2020) 

(SR–CBOE–2020–103); 91782 (May 5, 2021), 86 FR 

25915 (May 11, 2021) (SR–CBOE–2021–031); 93500 

(November 1, 2021), 86 FR 61340 (November 5, 

2021) (SR–CBOE–2021–064); 94812 (April 28, 

2022), 87 FR 26381 (May 4, 2022) (SR–CBOE–2022– 

020); 96239 (November 4, 2022), 87 FR 67985 

(November 10, 2022) (SR–CBOE–2022–053) and 

97452 (May 8, 2023), 88 FR 30821 (May 12, 2023) 

(SR–CBOE–2023–025) (extending the pilot program 

through the earlier of November 6, 2023 or the date 

on which the pilot program is approved on a 

permanent basis). At the same time the permissible 

exercise settlement values pilot was established for 

FLEX Index Options, the Exchange also established 

a pilot program eliminating the minimum value size 

requirements for all FLEX Options. See Approval 

Order, supra note 1. The pilot program eliminating 

the minimum value size requirements was extended 

twice pursuant to the same rule filings that 

extended the permissible exercise settlement values 

(for the same extended periods) and was approved 

on a permanent basis in a separate rule change 

filing. See id; and Securities Exchange Act Release 

No. 67624 (August 8, 2012), 77 FR 48580 (August 

14, 2012) (SR–CBOE–2012–040) (Order Granting 

Approval of Proposed Rule Change Related to 

Permanent Approval of Its Pilot on FLEX Minimum 

Value Sizes). 

7The Exchange recently proposed to make the 

pilot program permanent. See Securities Exchange 

Act Release No. 97368 (April 24, 2023) (SR–CBOE– 

2023–018). 

8 In 2019, prior Rule 24A.4.01, covering the pilot 

program, was relocated to current Rule 4.21(b)(5). 

See Securities Exchange Act Release No. 87235 

(October 4, 2019), 84 FR 54671 (October 10, 2019) 

(SR–CBOE–2019–084). 

9Except an Asian-settled or Cliquet-settled FLEX 

Option series, which must have an expiration date 

that is a business day but may only expire 350 to 

371 days (which is approximately 50 to 53 calendar 

weeks) from the date on which a FLEX Trader 

submits a FLEX Order to the System. 

10See Rule 4.21(b)(5)(B); see also Securities 

Exchange Act Release No. 87235 (October 4, 2019), 

84 FR 54671 (October 10, 2019) (SR–CBOE–2019– 

084). The rule change removed the provision 

regarding the exercise settlement value of FLEX 

Index Options on the NYSE Composite Index, as the 

Exchange no longer lists options on that index for 

trading, and included the provisions regarding how 

the exercise settlement value is determined for each 

settlement type, as how the exercise settlement 

value is determined is dependent on the settlement 

type. 

11For example, notwithstanding the pilot, the 

exercise settlement value of a FLEX Index Option 

that expires on the Tuesday before the third Fridayof-the-month could be a.m. or p.m. settled. 

However, the exercise settlement value of a FLEX 

Index Option that expires on the Wednesday before 

the third Friday-of-the-month could only be a.m. 

settled. 

12No change was necessary or requested with 

respect to FLEX Equity Options. Regardless of the 

expiration date, FLEX Equity Options are settled by 

physical delivery of the underlying. 

13The annual reports also contained certain pilot 

period and pre-pilot period analyses of volume and 

open interest for third Friday-of-the-month 

expiration days, a.m.-settled FLEX Index series and 

third Friday-of-the-month expiration day Non-FLEX 

Index series overlying the same index as a third 

Friday-of-the-month expiration day, p.m.-settled 

FLEX Index option. 

14 In further support, the Exchange also notes that 

the p.m. settlements are already permitted for FLEX 

Index Options on any other business day except on, 

or within two business days of, the third Friday-ofthe-month. The Exchange is not aware of any 

market disruptions or problems caused by the use 

of these settlement methodologies on these 

expiration dates (or on the expiration dates 

addressed under the pilot program). The Exchange 

is also not aware of any market disruptions or 

problems caused by the use of customized options 

in the over-the-counter (‘‘OTC’’) markets that expire 

on or near the third Friday-of-the-month and are 

p.m. settled. In addition, the Exchange believes the 

reasons for limiting expirations to a.m. settlement, 

which is something the SEC has imposed since the 

early 1990s for Non-FLEX Options, revolved around 

a concern about expiration pressure on the New 

York Stock Exchange (‘‘NYSE’’) at the close that are 

no longer relevant in today’s market. Today, the 

Exchange believes stock exchanges are able to better 

handle volume. There are multiple primary listing 

and unlisted trading privilege (‘‘UTP’’) markets, and 

trading is dispersed among several exchanges and 

alternative trading systems. In addition, the 

Exchange believes that surveillance techniques are 

much more robust and automated. In the early 

1990s, it was also thought by some that opening 

procedures allow more time to attract contra-side 

interest to reduce imbalances. The Exchange 

believes, however, that today, order flow is 

predominantly electronic and the ability to smooth 

out openings and closes is greatly reduced (e.g., 

market-on-close procedures work just as well as 

openings). Also, other markets, such as the 

NASDAQ Stock Exchange, do not have the same 

type of pre-opening imbalance disseminations as 

NYSE, so many stocks are not subject to the same 

procedures on the third Friday-of-the-month. In 

addition, the Exchange believes that NYSE has 

reduced the required time a specialist has to wait 

after disseminating a pre-opening indication. So, in 

this respect, the Exchange believes there is less time 

to react in the opening than in the close. Moreover, 

to the extent there may be a risk of adverse market 

effects attributable to p.m. settled options that 

rule change filing is to extend the pilot 

program through the earlier of May 6, 

2024 or the date on which the pilot 

program is approved on a permanent 

basis.7 This filing simply seeks to 

extend the operation of the pilot 

program and does not propose any 

substantive changes to the pilot 

program. 

Under Rule 4.21(b), Series of FLEX 

Options (regarding terms of a FLEX 

Option),8 a FLEX Option may expire on 

any business day (specified to day, 

month and year) no more than 15 years 

from the date on which a FLEX Trader 

submits a FLEX Order to the System.9

FLEX Index Options are settled in U.S. 

dollars, and may be a.m.-settled (with 

exercise settlement value determined by 

reference to the reported level of the 

index derived from the reported 

opening prices of the component 

securities) or p.m.-settled (with exercise 

settlement value determined by 

reference to the reported level of the 

index derived from the reported closing 

prices of the component securities).10

Specifically, a FLEX Index Option that 

expires on, or within two business days 

of, a third Friday-of-the-month 

expiration day for a non-FLEX Option 

(other than a QIX option), may only be 

a.m. settled.11 However, under the 

exercise settlement values pilot, this 

restriction on p.m.-settled FLEX Index 

Options was eliminated.12 As stated, the 

exercise settlement values pilot is 

currently set to expire on the earlier of 

November 6, 2023 or the date on which 

the pilot program is approved on a 

permanent basis. 

Cboe Options is proposing to extend 

the pilot program through the earlier of 

November 6, 2023 [sic] or the date on 

which the pilot program is approved on 

a permanent basis. Cboe Options 

believes the pilot program has been 

successful and well received by its 

Trading Permit Holders and the 

investing public for the period that it 

has been in operation as a pilot. In 

support of the proposed extension of the 

pilot program, and as required by the 

pilot program’s Approval Order, the 

Exchange has submitted to the 

Commission pilot program reports 

regarding the pilot, which detail the 

Exchange’s experience with the 

program. Specifically, the Exchange 

provided the Commission with annual 

reports analyzing volume and open 

interest for each broad-based FLEX 

Index Options class overlying a third 

Friday-of-the-month expiration day, 

p.m.-settled FLEX Index Options 

series.13 The annual reports also 

contained information and analysis of 

FLEX Index Options trading patterns. 

The Exchange also provided the 

Commission, on a periodic basis, 

interim reports of volume and open 

interest. 

The Exchange believes there is 

sufficient investor interest and demand 

in the pilot program to warrant its 

extension. The Exchange believes that, 

for the period that the pilot has been in 

operation, the program has provided 

investors with additional means of 

managing their risk exposures and 

carrying out their investment objectives. 

Furthermore, the Exchange believes that 

it has not experienced any adverse 

market effects with respect to the pilot 

program, including any adverse market 

volatility effects that might occur as a 

result of large FLEX exercises in FLEX 

Option series that expire near NonFLEX expirations and use a p.m. 

settlement (as discussed below). 

In that regard, based on the 

Exchange’s experience in trading FLEX 

Options to date and over the pilot 

period, Cboe Options continues to 

believe that the restrictions on exercise 

settlement values are no longer 

necessary to insulate Non-FLEX 

expirations from the potential adverse 

market impacts of FLEX expirations.14


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would otherwise be traded in a non-transparent 

fashion in the OTC market, the Exchange continues 

to believe that such risk would be lessened by 

making these customized options eligible for 

trading in an exchange environment because of the 

added transparency, price discovery, liquidity, and 

financial stability available. 

15Rule 8.43(a) provides that ‘‘[i]n a manner and 

form prescribed by the Exchange, each Trading 

Permit Holder shall report to the Exchange, the 

name, address, and social security or tax 

identification number of any customer who, acting 

alone, or in concert with others, on the previous 

business day maintained aggregate long or short 

positions on the same side of the market of 200 or 

more contracts of any single class of option 

contracts dealt in on the Exchange. The report shall 

indicate for each such class of options, the number 

of option contracts comprising each such position 

and, in the case of short positions, whether covered 

or uncovered.’’ For purposes of Rule 8.43, the term 

‘‘customer’’ in respect of any Trading Permit Holder 

includes ‘‘the Trading Permit Holder, any general 

or special partner of the Trading Permit Holder, any 

officer or director of the Trading Permit Holder, or 

any participant, as such, in any joint, group or 

syndicate account with the Trading Permit Holder 

or with any partner, officer or director thereof.’’ 

Rule 8.43(d). 

16For example, if the Exchange plans on 

submitting a proposal in April 2023 requesting 

permanent approval of the pilot program expiring 

May 8, 2023, the Exchange would have to submit 

an annual report no later than March 8, 2023 

covering the full prior year. 

17The Exchange is required to submit the interim 

reports on a quarterly basis within 15 days of the 

end of each calendar quarter that the pilot is in 

effect. 

18Available at https://www.cboe.com/aboutcboe/ 

legal-regulatory/national-market-system-plans/pmsettlement-flex-pm-data. 

19For example, a position in a p.m.-settled FLEX 

Index Option series that expires on the third Fridayof-the-month in January 2020 could be established 

during the exercise settlement values pilot. If the 

pilot program were not extended (or made 

permanent), then the position could continue to 

exist. However, the Exchange notes that any further 

trading in the series would be restricted to 

transactions where at least one side of the trade is 

a closing transaction. See Approval Order at 

footnote 3, supra note 1. 

20 15 U.S.C. 78f(b). 

21 15 U.S.C. 78f(b)(5). 

22 Id. 

To the contrary, Cboe Options believes 

that the restriction actually places the 

Exchange at a competitive disadvantage 

to its OTC counterparts in the market for 

customized options, and unnecessarily 

limits market participants’ ability to 

trade in an exchange environment that 

offers the added benefits of 

transparency, price discovery, liquidity, 

and financial stability. 

The Exchange also notes that certain 

position limit, aggregation and exercise 

limit requirements continue to apply to 

FLEX Index Options in accordance with 

Rules 8.35, Position Limits for FLEX 

Options, 8.42(g) Exercise Limits (in 

connection with FLEX Options) and 

8.43(j), Reports Related to Position 

Limits (in connection with FLEX 

Options). Additionally, all FLEX 

Options remain subject to the general 

position reporting requirements in Rule 

8.43(a).15 Moreover, the Exchange and 

its Trading Permit Holder organizations 

each have the authority, pursuant to 

Rule 10.9, Margin Required is Minimum, 

to impose additional margin as deemed 

advisable. Cboe Options continues to 

believe these existing safeguards serve 

sufficiently to help monitor open 

interest in FLEX Option series and 

significantly reduce any risk of adverse 

market effects that might occur as a 

result of large FLEX exercises in FLEX 

Option series that expire near NonFLEX expirations and use a p.m. 

settlement. 

Cboe Options is also cognizant of the 

OTC market, in which similar 

restrictions on exercise settlement 

values do not apply. Cboe Options 

continues to believe that the pilot 

program is appropriate and reasonable 

and provides market participants with 

additional flexibility in determining 

whether to execute their customized 

options in an exchange environment or 

in the OTC market. Cboe Options 

continues to believe that market 

participants benefit from being able to 

trade these customized options in an 

exchange environment in several ways, 

including, but not limited to, enhanced 

efficiency in initiating and closing out 

positions, increased market 

transparency, and heightened contraparty creditworthiness due to the role of 

the Options Clearing Corporation as 

issuer and guarantor of FLEX Options. 

If, in the future, the Exchange 

proposes an additional extension of the 

pilot program, or should the Exchange 

propose to make the pilot program 

permanent, the Exchange will submit, 

along with any filing proposing such 

amendments to the pilot program, an 

annual report (addressing the same 

areas referenced above and consistent 

with the pilot program’s Approval 

Order) to the Commission at least two 

months prior to the expiration date of 

the program. The Exchange is required 

to submit an annual report at least 

yearly. Currently, the Exchange 

provides annual reports that cover the 

period from August 1st to July 31st of 

the applicable year. The Exchange will 

continue to provide reports covering 

this period annually and any additional 

report at least two months prior to the 

expiration date of the program covering 

the full prior year in the case that the 

Exchange is requesting permanent 

approval of the program.16 The 

Exchange will also continue, on a 

periodic basis, to submit interim reports 

of volume and open interest consistent 

with the terms of the exercise settlement 

values pilot program as described in the 

pilot program’s Approval Order.17

Additionally, the Exchange will provide 

the Commission with any additional 

data or analyses the Commission 

requests because it deems such data or 

analyses necessary to determine 

whether the pilot program is consistent 

with the Exchange Act. The Exchange is 

in the process of making public on its 

website all data and analyses previously 

submitted to the Commission under the 

pilot program, and will make public any 

data and analyses it submits to the 

Commission under the pilot program in 

the future.18

As noted in the pilot program’s 

Approval Order, any positions 

established under the pilot program 

would not be impacted by the 

expiration of the pilot program.19

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.20 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 21 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 22 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that the proposed extension of the pilot 

program, which permits an additional 

exercise settlement value, would 

provide greater opportunities for 

investors to manage risk through the use 

of FLEX Options. Further, the Exchange 

believes that it has not experienced any 

adverse effects from the operation of the 

pilot program, including any adverse 

market volatility effects that might occur 

as a result of large FLEX exercises in 

FLEX Option series that expire near 

Non-FLEX expirations and are p.m.- 

settled. The Exchange also believes that 

the extension of the exercise settlement 


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23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

values pilot does not raise any unique 

regulatory concerns. In particular, 

although p.m. settlements may raise 

questions with the Commission, the 

Exchange believes that, based on the 

Exchange’s experience in trading FLEX 

Options to date and over the pilot 

period, market impact and investor 

protection concerns will not be raised 

by this rule change. The Exchange also 

believes that the proposed rule change 

would continue to provide Trading 

Permit Holders and investors with 

additional opportunities to trade 

customized options in an exchange 

environment (which offers the added 

benefits of transparency, price 

discovery, liquidity, and financial 

stability as compared to the over-thecounter market) and subject to 

exchange-based rules, and investors 

would benefit as a result. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Cboe Options 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 believes there is sufficient 

investor interest and demand in the 

pilot program to warrant its extension. 

The Exchange believes that, for the 

period that the pilot has been in 

operation, the program has provided 

investors with additional means of 

managing their risk exposures and 

carrying out their investment objectives. 

Furthermore, the Exchange believes that 

it has not experienced any adverse 

market effects with respect to the pilot 

program, including any adverse market 

volatility effects that might occur as a 

result of large FLEX exercises in FLEX 

Option series that expire near Non-Flex 

expirations and use a p.m. settlement. 

Cboe Options believes that the 

restriction actually places the Exchange 

at a competitive disadvantage to its OTC 

counterparts in the market for 

customized options, and unnecessarily 

limits market participants’ ability to 

trade in an exchange environment that 

offers the added benefits of 

transparency, price discovery, liquidity, 

and financial stability. Therefore, the 

Exchange does not believe that the 

proposed rule change will impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 23 and Rule 19b– 

4(f)(6) thereunder.24

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2023–057 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–CBOE–2023–057. 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 (http://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 

10:00 a.m. and 3:00 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–CBOE–2023–057, 

and should be submitted on or before 

October 25, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21958 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98597; File No. SR– 

CboeBZX–2023–071] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Suspension of 

and Order Instituting Proceedings To 

Determine Whether To Approve or 

Disapprove a Proposed Rule Change 

To Amend Its Fee Schedule Relating to 

the Options Regulatory Fee 

September 28, 2023 

I. Introduction 

On September 12, 2023, Cboe BZX 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘BZX’’) filed with the Securities and 

Exchange Commission (the 

‘‘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 


lotter on DSK11XQN23PROD with NOTICES1