Federal Register / Vol. 88, No. 239 / Thursday, December 14, 2023 / Notices 86701 

44 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 51244 

(February 23, 2005), 70 FR 10010 (March 1, 2005) 

(order approving SR–CBOE–2003–30, as amended), 

which adopted two pilot programs that increase 

position and exercise limits for equity options) 

(‘‘Pilot Program Order’’). The Pilot Programs were 

extended 5 times for 6-month periods by the 

Commission, and expired on March 1, 2008. See 

Securities Exchange Act Release No. 52262 (August 

15, 2005), 70 FR 48995 (August 22, 2005) (SR– 

CBOE–2005–61), Securities Exchange Act Release 

No. 53348 (February 22, 2006), 71 FR 10574 (March 

1, 2006) (SR–CBOE–2006–11), Securities Exchange 

Act Release No. 54336 (August 18, 2006), 71 FR 

50952 (August 28, 2006) (SR–CBOE–2006–69), 

Securities Exchange Act Release No. 55266 

(February 9, 2007), 72 FR 7698 (February 16, 2007) 

(SR–CBOE–2007–12), and Securities Exchange Act 

Release No. 56266 (August 15, 2007), 72 FR 47094 

(August 22, 2007) (SR–CBOE–2007–97). The Pilot 

Programs were made permanent in 2008. See 

Securities Exchange Act Release No. 57352 

(February 19, 2007), 73 FR 10076 (February 25, 

2008) (SR–CBOE–2008–007). 

4See Cboe Options Rule 8.30. Pursuant to Rule 

8.42, the exercise limit for an equity option is the 

same as the position limit established in Rule 8.30 

for that equity option. 

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–NYSEAMER–2023–62 and should 

be submitted on or before January 4, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.44

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27399 Filed 12–13–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99119; File No. SR–CBOE– 

2023–063] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend Its 

Rules Relating to Position and 

Exercise Limits 

December 8, 2023. 

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

Securities Exchange Act of 1934 (‘‘Act’’) 

and Rule 19b–4 thereunder,2 notice is 

hereby given that on November 29, 

2023, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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. 

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 amend 

its rules relating to position and exercise 

limits. The text of the proposed rule 

change is in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

AboutCBOE/CBOELegalRegulatory

Home.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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

The Exchange proposes to amend its 

rules relating to position limits. By way 

of background, in March 2005, the 

Securities and Exchange Commission 

(the ‘‘Commission’’) approved the 

current position limit (and exercise 

limit) structure, which incorporates five 

categories of limits ranging from 25,000 

to 250,000 contracts, based on two 

criteria: (1) the securities trading 

volume over the prior six months and 

(2) the number of shares outstanding.3

More specifically, Cboe Options Rule 

8.30 sets forth the position limits for 

equity options. Specifically, Rule 8.30 

provides that the position limits for 

equity options are 25,000 or 50,000 or 

75,000 or 200,000 or 250,000 option 

contracts (with adjustments for splits, 

re-capitalizations, etc.) on the same side 

of the market or such other number of 

option contracts as may be fixed from 

time to time by the Exchange. 

Interpretation and Policy .02 to Rule 

8.30 describes how the Exchange 

determines which of the five position 

limit amounts will apply to an equity 

option class (i.e., the position limit 

applicable to a class is determined 

based on the trading volume and 

outstanding shares of the underlying 

security). These categories have 

remained unchanged for the last 18 

years.4

By way of further background, 

position limits are designed to address 

potential manipulative schemes and 

adverse market impacts surrounding the 

use of options, such as disrupting the 

market in the security underlying the 

options. While position limits should 

address and discourage the potential for 

manipulative schemes and adverse 

market impact, if such limits are set too 

low, participation in the options market 

may be discouraged. The Exchange 

believes that position limits must 

therefore be balanced between 

mitigating concerns of any potential 

manipulation and the cost of inhibiting 

potential hedging activity that could be 

used for legitimate economic purposes. 

Proposal 

To modernize the position limit rule, 

while minimizing impact of such 

change on industry participants, the 

Exchange is proposing the addition of 

three additional position limit 

categories: 500,000, 1,000,000 and 

2,000,000 option contracts. Particularly, 

the proposed rule would adopt new 

Rule 8.30.02(f) which would provide 

that in order to be eligible for the 

500,000-option contract limit, either the 

most recent six-month trading volume 

of the underlying security must have 

totaled at least 500,000,000 shares; or 

the most recent six-month trading 

volume of the underlying security must 

have totaled at least 375,000,000 shares 

and the underlying security must have 


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86702 Federal Register / Vol. 88, No. 239 / Thursday, December 14, 2023 / Notices 

5Current Rule 8.30.02(f) will be renumbered to 

Rule 8.30.02(i). 

6See Options Clearing Corporation (‘‘OCC’’), 

Annual Historical Volume Statistics at https://

www.theocc.com/market-data/market-data-reports/ 

volume-and-open-interest/historical-volumestatistics. Annual Industry Options Trading Volume 

for 2023 is as of November 24, 2023. 

7As of October 12, 2023. 

8See Notice, 88 FR at 29728, citing OCC Memo 

#47509, Apple Inc.—4 for 1 Stock Split (August 28, 

2020). 

9Position limit increases that result in the case of 

a stock split remain in effect until the expiration of 

all listed options that existed at the time of the split, 

at which time the position limits revert to pre-split 

levels. This is an industry practice applied by OCC, 

which currently administers position limit levels on 

behalf of U.S. options exchanges. 

at least 1,500,000,000 shares currently 

outstanding. The Exchange also 

proposes to adopt Rule 8.30.02(g) which 

would provide that in order to be 

eligible for the 1,000,000-option 

contract limit, either the most recent 

six-month trading volume of the 

underlying security must have totaled at 

least 1,000,000,000 shares; or the most 

recent six-month trading volume of the 

underlying security must have totaled at 

least 750,000,000 shares and the 

underlying security must have at least 

3,000,000,000 shares currently 

outstanding. Finally, the Exchange 

proposes to adopt Rule 8.30.02(h) which 

provides that in order to be eligible for 

the 2,000,000-option contract limit, 

either the most recent six-month trading 

volume of the underlying security must 

have totaled at least 5,000,000,000 

shares; or the most recent six-month 

trading volume of the underlying 

security must have totaled at least 

3,750,000,000 shares and the underlying 

security must have at least 

15,000,000,000 shares currently 

outstanding.5

As noted above, the current position 

limit categories were last updated 18 

years ago. Since that time, there has 

been a significant increase in the overall 

volume of exchange traded equity 

options and a steady increase in the 

number of accounts that approach the 

current highest position limit (i.e., 

250,000 option contracts). The below 

chart demonstrates this growth in equity 

options trading industry-wide between 

2005 and 2023.6 Indeed, annual equity 

options trading volume in recent years 

is nearly seven times the volume 

amount when the current position tier 

limits were adopted in 2005 and has 

more than doubled since 2017. 

Year 

Annual 

industry 

equity 

options 

trading 

volume 

(contracts) 

2005 .................................... 1,369,048,282 

2006 .................................... 1,844,181,918 

2007 .................................... 2,592,102,961 

2008 .................................... 3,284,761,345 

2009 .................................... 3,366,967,321 

2010 .................................... 3,610,436,931 

2011 .................................... 4,224,604,529 

2012 .................................... 3,681,820,659 

2013 .................................... 3,725,864,134 

Year 

Annual 

industry 

equity 

options 

trading 

volume 

(contracts) 

2014 .................................... 3,845,073,167 

2015 .................................... 3,727,919,066 

2016 .................................... 3,626,455,947 

2017 .................................... 3,689,013,636 

2018 .................................... 4,572,482,342 

2019 .................................... 4,420,542,768 

2020 .................................... 7,004,304,148 

2021 .................................... 9,366,823,566 

2022 .................................... 9,599,301,629 

2023 .................................... 9,285,621,375 

By way of further example, based on 

the proposed criteria, over 300 equity 

options classes that currently are 

limited to the maximum position limit 

tier of 250,000 contracts would qualify 

for one of the three proposed position 

limit tiers. Particularly, the Exchange 

has determined that 182 equity options 

classes would be eligible for the 500,000 

contracts tier limit; 110 equity options 

classes would be eligible for the 

1,000,000 contracts tier limit and 13 

equity options classes would be eligible 

for the 2,000,000 tier limit.7

By way of further example, prior to 

the stock split in August 2020,8 equity 

options class AAPL had approximately 

4,000,000,000 shares outstanding and 

the position limit of 250,000 contracts 

represented control of 25,000,000 shares 

or 0.625% of the shares outstanding. 

After the stock split, AAPL had 

approximately 16,000,000,000 shares 

outstanding. The immediate adjustment 

of the position limit from 250,000 

contracts to 1,000,000 contracts reflects 

control of 100,000,000 shares or 0.625% 

of the shares outstanding which retains 

the pre-stock split ratio. When the last 

AAPL option listed at the time of the 

stock split in 2020 expired in September 

2022, the OCC reverted back to the 

original position limit for AAPL of 

25,000,000 shares (250,000 contracts), 

which is the maximum stock option 

position limits permitted under the 

Exchange’s rules.9 Although this 

position limit technically adheres to the 

Exchange’s rules, it is more restrictive 

than the original position limit. 

Particularly, readjusting the position 

limit back to 25,000,000 shares (250,000 

contracts) when there are 

16,000,000,000 shares outstanding 

reduces the position limit to 0.156% of 

the shares outstanding, making the poststock split position limit more 

restrictive than the pre-stock split 

position limit and would [sic] arguably 

no longer be meaningfully related to the 

current shares outstanding. Further, the 

Exchange notes that the current 250,000 

position limit for AAPL forces market 

participants to reduce trading activity 

because the maximum position limit 

only represents 0.156% of the total 

shares outstanding. This reduction in 

trading volume also represents a 

reduction in available liquidity and 

negatively impacts liquidity, trading 

volume, and possibly execution prices. 

By comparison, under the proposed 

criteria, AAPL options would qualify for 

the 2,000,000 contract position limit, 

which is over 12% higher than the 

current maximum position limit. The 

adjustment of the position limit from 

250,000 contracts to 2,000,000 contracts 

reflects control of 200,000,000 shares or 

1.25% of the shares outstanding, which 

is well within ratios provided by the 

prior methodology and the Exchange 

believes would lead to a more liquid 

and competitive market environment for 

these options, which will benefit 

customers that trade these options. 

Further, given the total increased 

volume in trading, the Exchange 

believes it is reasonable to conclude that 

in addition to AAPL, position limits for 

many classes is [sic] currently more 

restrictive than they were when adopted 

in 2005. 

The Exchange also believes that the 

increase in options volume and lack of 

evidence of market manipulation 

occurrences over the past twenty years 

justifies the proposed increases in the 

position and exercise limits. Moreover, 

several market participants across the 

industry have petitioned the industry to 

increase the current levels. 

The Commission has previously 

stated, 

Since the inception of standardized 

options trading, the options exchanges have 

had rules imposing limits on the aggregate 

number of options contracts that a member 

or customer could hold or exercise. These 

rules are intended to prevent the 

establishment of options positions that can 

be used or might create incentives to 

manipulate or disrupt the underlying market 

so as to benefit the options position. In 

particular, position and exercise limits are 

designed to minimize the potential for minimanipulations and for corners or squeezes of 

the underlying market. In addition, such 

limits serve to reduce the possibility for 


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Federal Register / Vol. 88, No. 239 / Thursday, December 14, 2023 / Notices 86703 

10See Securities Exchange Act Release No. 39489 

(December 24, 1997), 63 FR 276 (January 5, 1998) 

(SR–CBOE–1997–11). 

11The Options Clearing Corporation (‘‘OCC’’) 

through the Large option Position Reporting 

(‘‘LOPR’’) system acts as a centralized service 

provider for TPH compliance with position 

reporting requirements by collecting data from each 

TPH or TPH organization, consolidating the 

information, and ultimately providing detailed 

listings of each TPH’s report to the Exchange, as 

well as Financial Industry Regulatory Authority, 

Inc. (‘‘FINRA’’), acting as its agent pursuant to a 

regulatory services agreement (‘‘RSA’’). 

12See Rule 8.43 for reporting requirements. 

13 17 CFR 240.13d–1. 

14See Rule 10.3 for a description of margin 

requirements. 

15 17 CFR 240.15c3–1. 

16See Securities Exchange Act Release No. 40875 

(December 31, 1998), 64 FR 1842 (January 12, 1999) 

(SR–CBOE–1998–25). 

17 Id. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(5). 

20 Id. 

disruption of the options market itself, 

especially in illiquid options classes.10

The Exchange believes that the 

existing surveillance procedures and 

reporting requirements at the Exchange 

are adequate to identify violative trading 

activity. These procedures include daily 

monitoring of market activity via 

automated surveillance techniques to 

identify unusual activities in both 

options and underlying stocks and 

Exchange Traded Products (‘‘ETPs’’). 

The Exchange believes that increasing 

the position limits for qualifying equity 

options would lead to a more liquid and 

competitive market environment for 

these options, which will benefit 

customers that trade these options. 

Further, the reporting requirement for 

such options would remain unchanged. 

Thus, the Exchange will still require 

that each TPH or TPH organization that 

maintains positions in impacted options 

on the same side of the market, for its 

own account or for the account of a 

customer, report certain information to 

the Exchange. This information 

includes, but would not be limited to, 

the options’ positions, whether such 

positions are hedged and, if so, a 

description of the hedge(s). MarketMakers (including Designated Primary 

Market-Makers (‘‘DPMs’’)) would 

continue to be exempt from this 

reporting requirement, however, the 

Exchange may access Market-Maker 

position information.11 Moreover, the 

Exchange’s requirement that TPHs file 

reports with the Exchange for any 

customer who held aggregate large long 

or short positions on the same side of 

the market of 200 or more option 

contracts of any single class for the 

previous day will remain at this level 

and will continue to serve as an 

important part of the Exchange’s 

surveillance efforts.12

The Exchange believes that the 

existing surveillance procedures and 

reporting requirements at the Exchange 

and other SROs are capable of properly 

identifying disruptive and/or 

manipulative trading activity. The 

Exchange also represents that it has 

adequate surveillances in place to detect 

potential manipulation, as well as 

reviews in place to identify continued 

compliance with the Exchange’s listing 

standards. These procedures utilize 

daily monitoring of market activity via 

automated surveillance techniques to 

identify unusual activity in both options 

and the underlyings, as applicable. The 

Exchange also notes that large stock 

holdings must be disclosed to the 

Commission by way of Schedules 13D 

or 13G,13 which are used to report 

ownership of stock which exceeds 5% 

of a company’s total stock issue and 

may assist in providing information in 

monitoring for any potential 

manipulative schemes. 

The Exchange believes that the 

current financial requirements imposed 

by the Exchange and by the Commission 

adequately address concerns regarding 

potentially large, unhedged positions in 

equity options. Current margin and riskbased haircut methodologies serve to 

limit the size of positions maintained by 

any one account by increasing the 

margin and/or capital that a TPH must 

maintain for a large position held by 

itself or by its customer.14 In addition, 

Rule 15c3–1 15 imposes a capital charge 

on TPHs to the extent of any margin 

deficiency resulting from the higher 

margin requirement. 

The Exchange also has no reason to 

believe that the growth in trading 

volume in equity options will not 

continue. Rather, the Exchange expects 

continued options volume growth as 

opportunities for investors to participate 

in the options markets increase and 

evolve. The Exchange believes that the 

current position and exercise limits are 

restrictive, and not adopting increased 

position and exercise limit categories 

will hamper the listed options markets 

from being able to compete fairly and 

effectively with the over-the-counter 

(‘‘OTC’’) markets. OTC transactions 

occur through bilateral agreements, the 

terms of which are not publicly 

disclosed to the marketplace. As such, 

OTC transactions do not contribute to 

the price discovery process on a public 

exchange or other lit markets. In fact, 

the Commission previously highlighted 

competition with the OTC markets as a 

reason for increasing the standard 

position and exercise limits.16

Specifically, the Commission stated, 

The increase in position and exercise 

limits for standardized equity options should 

allow the Exchanges to better compete with 

the growing OTC market in customized 

equity options, thereby encouraging fair 

competition among brokers and exchange 

markets.17

In addition, the Exchange believes 

that without the proposed changes to 

position and exercise limits, market 

participants will find the standard 

equity position limits an impediment to 

their business and investment 

objectives. As such, market participants 

may find the less transparent OTC 

markets a more attractive alternative to 

achieve their investment and hedging 

objectives, leading to a retreat from the 

listed options markets, where trades are 

subject to reporting requirements and 

daily surveillance. 

Implementation Date 

Given this is an industry-wide 

proposal, implementation will require 

that all U.S. listed options exchanges 

adopt similar rule language regarding 

position limits. The Exchange will wait 

to announce implementation date for 

the proposed rule change (via Exchange 

Notice) until all exchanges have 

received regulatory approval for similar 

rule language. 

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.18 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 19 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) 20 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed adoption of three increased 


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86704 Federal Register / Vol. 88, No. 239 / Thursday, December 14, 2023 / Notices 

21See Current Cboe Options Rule 8.30.02(f). 

22See Securities Exchange Act Release No. 40969 

(January 22, 1999), 64 FR 4911, 4913 (February 1, 

1999) (SR–CBOE–98–23). 

23See Securities Exchange Act Release Nos. 

93525 (November 4, 2021), 86 FR 62584 (November 

10, 2021) (SR–CBOE–2021–029); 88768 (April 29, 

2020), 85 FR 26736 (May 5, 2020) (SR–CBOE–2020– 

015); 83415 (June 12, 2018), 83 FR 28274 (June 18, 

2018) (SR–CBOE–2018–042); and 68086 (October 

23, 2012), 77 FR 65600 (October 29, 2012) (SR– 

CBOE–2012–066). 

24See Securities Exchange Act Release Nos. 

93525 (November 4, 2021), 86 FR 62584 (November 

10, 2021) (SR–CBOE–2021–029); 88768 (April 29, 

2020), 85 FR 26736 (May 5, 2020) (SR–CBOE–2020– 

015); 83415 (June 12, 2018), 83 FR 28274 (June 18, 

2018) (SR–CBOE–2018–042); and 68086 (October 

23, 2012), 77 FR 65600 (October 29, 2012) (SR– 

CBOE–2012–066). 

25There is also a corresponding recent six-month 

volume of the underlying security requirement that 

must be satisfied in addition to the requirement 

relating to total outstanding shares. 

26There is also a corresponding recent six-month 

volume of the underlying security requirement that 

must be satisfied in addition to the requirement 

relating to total outstanding shares. 

position limit categories 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 will provide market 

participants with the ability to more 

effectively execute their trading and 

hedging activities. Also, adopting 

increased position limit categories for 

equity options may allow MarketMakers to maintain their liquidity in 

these options in amounts commensurate 

with the continued high consumer 

demand in the impacted underlyings’ 

options market. The proposed higher 

position limits may also encourage other 

liquidity providers to continue to trade 

on the Exchange rather than shift their 

volume to OTC markets, which will 

enhance the process of price discovery 

conducted on the Exchange through 

increased order flow. 

In addition, the Exchange believes 

that the current liquidity in shares of 

and options on the underlyings will 

mitigate concerns regarding potential 

manipulation of the products and/or 

disruption of the underlying markets 

upon increasing the relevant position 

limits. As a general principle, increases 

in active trading volume and deep 

liquidity of the underlying securities do 

not lead to manipulation and/or 

disruption. This general principle 

applies to the recently observed 

increased levels of trading volume and 

liquidity in shares of and options on the 

underlyings (as described above), and, 

as a result, the Exchange does not 

believe that the options markets or 

underlying markets would become 

susceptible to manipulation and/or 

disruption as a result of the proposed 

higher position limit categories. Further, 

as noted above, the Exchange has no 

reason to believe that the growth in 

trading volume in equity options will 

not continue. Rather, the Exchange 

expects continued options volume 

growth as opportunities for investors to 

participate in the options markets 

continue to increase and evolve. 

Additionally, the Exchange continues to 

maintain a process in which every sixmonths, the status of the underlying 

securities are reviewed to determine 

what limit should apply.21 Accordingly, 

in the event stock trading volume and/ 

or outstanding shares for particular 

securities significantly declines in the 

future, such overlying options classes 

will merely be moved to a lower 

corresponding, position tier limit under 

the rules at the next regularly scheduled 

review. 

Further, the Exchange notes that the 

proposed rule change to adopt increased 

position limits for actively traded 

options is not novel. Indeed, the 

Commission has previously expressed 

the belief that not just increasing, but 

removing, position and exercise limits 

may bring additional depth and 

liquidity to the options markets without 

increasing concerns regarding 

intermarket manipulation or disruption 

of the options or the underlying 

securities.22 The Commission also has 

approved similar proposed rule changes 

by the Exchange to increase position 

limits for options on highly liquid and 

actively traded ETPs (e.g., iShares 

Russell 2000 ETF (‘‘IWM’’), the iShares 

MSCI Emerging Markets ETF (‘‘EEM’’), 

iShares China Large-Cap ETF (‘‘FXI’’), 

and iShares MSCI EAFE ETF (‘‘EFA’’), 

VanEck Vectors Gold Miners ETF 

(‘‘GDX’’), and iShares iBoxx $ 

Investment Grade Corporate Bond ETF 

(‘‘LQD’’)).23 While those are ETPs and 

the current proposal applies to equity 

options, pursuant to Rule 8.30, the 

position limits for options on stock and 

ETPs are generally calculated in the 

same manner and based in part on 

trading volume of the underlying. 

Further, by way of comparison, the 

outstanding shares of AAPL stock is 

significantly higher than that of IWM, 

EEM, FXI and EFA, which have an 

overlying options position limit of 

1,000,000 (as compared to the 250,000 

position limit for AAPL options).24

Particularly, while the outstanding 

shares of AAPL is currently nearly 16 

billion shares, the outstanding shares of 

IWM, EEM, FXI and EFA range between 

approximately 187 million and 673 

million. The Exchange notes that the 

criteria under the proposed new 

position limit tier categories of 

1,000,000 and 2,000,000 for equity 

options require the most recent sixmonth trading volume of the underlying 

security to have totaled at least 1 billion 

or 5 billion shares, respectively or have 

at least 3 billion or 15 billion shares, 

respectively, of the underlying security 

outstanding.25 The proposed criteria 

under the 500,000 position limit 

category requires the most recent sixmonth trading volume of the underlying 

security to have totaled at least 500 

million shares or have at least 1.5 

billion shares of the underlying security 

outstanding 26 (by comparison, LQD and 

GDX, have approximately 275 million 

shares and 395 million shares 

outstanding, and have an overlying 

options position limit of 500,000). The 

Exchange therefore believes it is 

reasonable and appropriate to increase 

the position limit of options as proposed 

to similar position limits that apply for 

certain ETPs. 

Finally, as discussed above, the 

Exchange’s surveillance and reporting 

safeguards continue to be designed to 

deter and detect possible manipulative 

behavior that might arise from 

increasing or eliminating position and 

exercise limits in certain classes. The 

Exchange believes that the current 

financial requirements imposed by the 

Exchange and by the Commission 

adequately address concerns regarding 

potentially large, unhedged positions in 

the options on the underlying securities, 

further promoting just and equitable 

principles of trading, the maintenance 

of a fair and orderly market, and the 

protection of investors. 

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 intra-market competition 

as the rules of the Exchange apply 

equally to all TPHs of the Exchange and 

all TPHs of the Exchange are required to 

adhere to the position limits established 

by the Exchange’s rules. The Exchange 

believes that the proposed rule change 

will also provide additional 

opportunities for market participants to 

continue to efficiently achieve their 

investment and trading objectives for 

equity options on the Exchange. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on inter-market competition 

as the proposal is not competitive in 


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Federal Register / Vol. 88, No. 239 / Thursday, December 14, 2023 / Notices 86705 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed 

pricing changes on September 29, 2023 with an 

effective date of October 1, 2023 (SR–Phlx–2023– 

46). On November 15, 2023, the Exchange withdrew 

SR–Phlx–2023–46 and replaced with SR–Phlx– 

2023–50. The instant filing replaces SR–Phlx–2023– 

50, which was withdrawn on November 29, 2023. 

4The Exchange offers customers the opportunity 

to co-locate their servers and equipment within the 

Exchange’s primary data center, located in Carteret, 

New Jersey. 

nature. The Exchange expects that all 

option exchanges will adopt 

substantively similar proposals for 

adopting the additional position limit 

tiers, such that the Exchange’s proposal 

would benefit competition. For these 

reasons, the Exchange does not believe 

that the proposed rule change will 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

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 

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 

• 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– 

CBOE–2023–063 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–2023–063. 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–CBOE–2023–063 and should be 

submitted on or before January 4, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27397 Filed 12–13–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99125; File No. SR-Phlx2023–53] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Amend Its GPS 

Antenna Fees at General 8, Section 1 

December 8, 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 November 

29, 2023, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s GPS antenna fees at General 

8, Section 1, as described further below. 

The text of the proposed rule change is 

available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, at the principal 

office of the Exchange, 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 3

The Exchange offers a GPS antenna, 

which allows co-location customers 4 to 

synchronize their time recording 

systems to the U.S. Government’s Global 

Positioning System (‘‘GPS’’) network 

time (the ‘‘Service’’). The Exchange 

proposes to modify its monthly fees for 

the Service at General 8, Section 1(d). 

GPS network time is the atomic time 

scale implemented by the atomic clocks 

in the GPS ground control stations and 

GPS satellites. Each GPS satellite 

contains multiple atomic clocks that 

contribute precise time data to the GPS 

signals. GPS receivers decode these 

signals, synchronizing the receivers to 

the atomic clocks. A GPS antenna serves 

as a time signal receiver and feeds a 

primary clock device the GPS network 

time using precise time data. Firms can 


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