Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices 86413 

13 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). 

5See Securities Exchange Act Release No. 98917 

(November 13, 2023), 88 FR 80361 (November 17, 

2023) (SR–MIAX–2023–36) (Order Approving a 

Proposed Rule Change To Amend Exchange Rule 

404, Series of Option Contracts Open for Trading). 

6See Rule 4.5, Interpretation and Policy .04. 

7See Rule 4.5, Interpretation and Policy .01(a)(1). 

Commission will institute proceedings 

to determine whether the proposed rule 

change 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– 

CBOE–2023–064 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–2023–064. 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–2023–064 and should be 

submitted on or before January 3, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27273 Filed 12–12–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99113; File No. SR–CBOE– 

2023–065] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Adopt a Low Priced 

Stock Strike Price Interval Program 

December 7, 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 December 

4, 2023, Cboe Exchange, Inc. 

(‘‘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 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 adopt a 

Low Priced Stock Strike Price Interval 

Program. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

AboutCBOE/CBOELegal

RegulatoryHome.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 

The Exchange proposes to amend 

Rule 4.5. Miami International Securities 

Exchange, LLC (‘‘MIAX’’) recently 

received approval to amend its Rule 404 

to implement a new strike interval 

program for stocks that are priced less 

than $2.50 and have an average daily 

trading volume of at least 1,000,000 

shares per day for the 3 preceding 

calendar months.5 At this time, the 

Exchange proposes to adopt rules 

substantively identical to MIAX in 

proposed Rule 4.5, Interpretation and 

Policy .20 and amend Rule 4.5(d) to 

harmonize the table within that Rule to 

the proposed rule text. 

Currently, Rule 4.5 describes the 

process and procedures for listing and 

trading series of options on the 

Exchange. Rule 4.5, Interpretation and 

Policy .04 provides for a $2.50 Strike 

Price Program, where the Exchange may 

select up to 60 option classes on 

individual stocks for which the interval 

of strike prices will be $2.50 where the 

strike price is greater than $25 but less 

than $50.6 Rule 4.5, Interpretation and 

Policy .01 also provides for a $1 Strike 

Price Interval Program, where the 

interval between strike prices of series 

of options on individual stocks may be 

$1.00 or greater provided the strike 

price is $50.00 or less, but not less than 

$1.00.7 Additionally, Rule 4.5, 

Interpretation and Policy .01 provides 

for a ‘‘$0.50 Strike Program.’’ The 

interval of strike prices of series of 

options on individual stocks may be 

$0.50 or greater beginning at $0.50 

where the strike price is $5.50 or less, 

but only for options classes whose 

underlying security closed at or below 

$5.00 in its primary market on the 

previous trading day and which have 

national average daily volume that 


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8See Rule 4.5, Interpretation and Policy .01(b). 

9Rule 4.5(d). 

10See Rule 4.5, Interpretation and Policy .01(b). 

11While the Exchange may list new strikes on 

underlying stocks that meet the eligibility 

requirements of the new program, the Exchange 

will exercise its discretion and will not list strikes 

on underlying stocks the Exchange believes are 

subject to imminent delisting from their primary 

exchange. 

12The Exchange notes this is the same 

methodology used in the $1 Strike Price Interval 

Program. See Rule 4.5, Interpretation and Policy 

.01(a)(1). 

13See Rule 4.3, Interpretation and Policy 

.01(b)(1). 

14See Rule 4.3, Interpretation and Policy 

.03(c)(2). 

15See Rule 4.10(f)(7). 

16See Securities Exchange Release Act No. 91456 

(April 1, 2021), 86 FR 18090 (April 7, 2021) (SR– 

Cboe–2021–019) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change To Amend 

Rule 4.5 (Series of Option Contracts Open for 

Trading) in Connection With Limiting the Number 

of Strikes Listed for Short Term Option Series 

Which Are Available for Quoting and Trading on 

the Exchange). 

equals or exceeds 1,000 contracts per 

day as determined by The Options 

Clearing Corporation (‘‘OCC’’) during 

the preceding three calendar months. 

The listing of $0.50 strike prices is 

limited to options classes overlying no 

more than 20 individual stocks as 

specifically designated by the Exchange. 

The Exchange may list $0.50 strike 

prices on any other option classes if 

those classes are specifically designated 

by other securities exchanges that 

employ a similar $0.50 Strike Program 

under their respective rules. A stock 

shall remain in the $0.50 Strike Program 

until otherwise designated by the 

Exchange.8

The Exchange proposes to adopt a 

new strike interval program for stocks 

that are not in the aforementioned $0.50 

Strike Program (or the Short Term 

Option Series Program) 9 and that close 

below $2.50 and have an average daily 

trading volume of at least 1,000,000 

shares per day for the three preceding 

calendar months. The $0.50 Strike 

Program considers stocks that have a 

closing price at or below $5.00 whereas 

the Exchange’s proposal will consider 

stocks that have a closing price below 

$2.50. Currently, there is a subset of 

stocks that are not included in the $0.50 

Strike Program as a result of the 

limitations of that program which 

provides that the listing of $0.50 strike 

prices is limited to option classes 

overlying no more than 20 individual 

stocks as specifically designated by the 

Exchange and requires a national 

average daily volume that equals or 

exceeds 1,000 contracts per day as 

determined by OCC during the 

preceding three calendar months.10

Therefore, the Exchange is proposing to 

implement a new strike interval 

program termed the ‘‘Low Priced Stock 

Strike Price Interval Program.’’ 

To be eligible for the inclusion in the 

Low Priced Stock Strike Price Interval 

Program, an underlying stock must (1) 

close below $2.50 in its primary market 

on the previous trading day; and (2) 

have an average daily trading volume of 

at least 1,000,000 shares per day for the 

three preceding calendar months. The 

Exchange notes that there is no limit to 

the number of classes that will be 

eligible for inclusion in the proposed 

program, provided, of course, that the 

underlying stocks satisfy both the price 

and average daily trading volume 

requirements of the proposed program. 

The Exchange also proposes that after 

a stock is added to the Low Priced Stock 

Strike Price Interval Program, the 

Exchange may list $0.50 strike price 

intervals from $0.50 up to $2.00.11 For 

the purpose of adding strikes under the 

Low Priced Stock Strike Price Interval 

Program, the ‘‘price of the underlying 

stock’’ is measured in the same way as 

‘‘the price of the underlying security’’ is 

measured as set forth in the Options 

Listing Procedures Plan (‘‘OLPP’’) as 

reflected in Rule 4.7.12 Further, no 

additional series in $0.50 intervals may 

be listed if the underlying stock closes 

at or above $2.50 in its primary market. 

Additional series in $0.50 intervals may 

not be added until the underlying stock 

again closes below $2.50. 

The Exchange’s proposal addresses a 

gap in strike coverage for low priced 

stocks. The $0.50 Strike Program 

considers stocks that close below $5.00 

and limits the number of option classes 

listed to no more than 20 individual 

stocks (provided that the open interest 

criteria is also satisfied). Whereas, the 

Exchange’s proposal has a narrower 

focus, with respect to the underlying’s 

stock price, and is targeted on those 

stocks that close below $2.50 and does 

not limit the number of stocks that may 

participate in the program (provided 

that the average daily trading volume is 

also satisfied). The Exchange does not 

believe that any market disruptions will 

be encountered with the addition of 

these new strikes. The Exchange 

represents that it has the necessary 

capacity and surveillance programs in 

place to support and properly monitor 

trading in the proposed Low Priced 

Stock Strike Price Interval Program. 

The Exchange believes that the 

program’s average daily trading volume 

requirement of 1,000,000 shares is a 

reasonable threshold to ensure adequate 

liquidity in eligible underlying stocks as 

it is substantially greater than the 

thresholds used for listing options on 

equities, American Depository Receipts 

(‘‘ADRs’’), and broad-based indexes. 

Specifically, underlying securities with 

respect to which put or call option 

contracts are approved for listing and 

trading on the Exchange must meet 

certain criteria as determined by the 

Exchange. One of those requirements is 

that trading volume (in all markets in 

which the underlying security is traded) 

has been at least 2,400,000 shares in the 

preceding 12 months.13 Rule 4.3, 

Interpretation and Policy .03 provides 

the criteria for listing options on ADRs 

if they meet certain criteria and 

guidelines set forth in Rule 4.3. One of 

the requirements is that the average 

daily trading volume for the security in 

the U.S. markets over the three months 

preceding the selection of the ADR for 

options trading is 100,000 or more 

shares.14 Finally, the Exchange may 

trade options on a broad-based index 

pursuant to Rule 19b–4(e) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) provided a number of conditions 

are satisfied. One of those conditions is 

that each component security that 

accounts for at least 1% of the weight 

of the index has an average daily trading 

volume of at least 90,000 shares during 

the last six-month period.15

Additionally, the Exchange proposes 

to amend the table in Rule 4.5(d) to 

insert a new column to harmonize the 

Exchange’s proposal to the strike 

intervals for Short Term Options Series 

as described in Rule 4.5(d). The table in 

Rule 4.5(d)(6) is intended to limit the 

intervals between strikes for multiply 

listed equity options within the Short 

Term Options Series program that have 

an expiration date more than twentyone days from the listing date. 

Specifically, the table defines the 

applicable strike intervals for options on 

underlying stocks given the closing 

price on the primary market on the last 

day of the calendar quarter, and a 

corresponding average daily volume of 

the total number of options contracts 

traded in a given security for the 

applicable calendar quarter divided by 

the number of trading days in the 

applicable calendar quarter.16 However, 

the lowest share price column is titled 

‘‘less than $25.’’ The Exchange now 

proposes to insert a column titled ‘‘Less 

than $2.50’’ and to set the strike interval 

at $0.50 for each average daily volume 

tier represented in the table. Also, the 

Exchange proposes to amend the 

heading of the column currently titled 

‘‘Less than $25,’’ to ‘‘$2.50 to less than 

$25’’ as a result of the adoption of the 

new proposed column, ‘‘Less than 

$2.50.’’ The Exchange believes this 


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17 Id. 

18 Id. 

19 Id. 

20See proposed Rule 4.5, Interpretation and 

Policy .20(a), which requires that an underlying 

stock must (1) close below $2.50 in its primary 

market on the previous trading day; and (2) have 

an average daily trading volume of at least 

1,000,000 shares per day for the three preceding 

calendar months. 

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

22 15 U.S.C. 78f(b)(5). 

23 Id. 

24See Yahoo! Finance, https://finance.

yahoo.com/quote/SOND/history?p=SOND (last 

visited August 10, 2023). 

25 Id. 

change will remove any potential 

conflict between the strike intervals 

under the Short Term Options Series 

Program and those described herein 

under the Exchange’s proposal. 

The Exchange recognizes that its 

proposal will introduce new strikes in 

the marketplace and further 

acknowledges that there has been 

significant effort to curb strike 

proliferation. For example, the 

Exchange filed a proposal focused on 

the removal, and prevention of the 

listing, of strikes which are extraneous 

and do not add value to the marketplace 

(the ‘‘Strike Interval Proposal’’).17 The 

Strike Interval Proposal was intended to 

remove repetitive and unnecessary 

strike listings across the weekly 

expiries. Specifically, the Strike Interval 

Proposal aimed to reduce the density of 

strike intervals that would be listed in 

the later weeks, by creating limitations 

for intervals between strikes which have 

an expiration date more than twentyone days from the listing date.18 The 

Strike Interval Proposal took into 

account OCC customer-cleared volume, 

using it as an appropriate proxy for 

demand. The Strike Interval Proposal 

was designed to maintain strikes where 

there was customer demand and 

eliminate strikes where there was not 

demand. At the time of its proposal, the 

Exchange estimated that the Strike 

Interval Proposal would reduce the 

number of listed strikes in the options 

market by approximately 81,000 

strikes.19 The Exchange proposes to 

amend the table to define the strike 

interval at $0.50 for underlying stocks 

with a share price of less than $2.50. 

The Exchange believes this amendment 

will harmonize the Exchange’s proposal 

with the Strike Interval Proposal 

described above. 

The Exchange recognizes that its 

proposal will moderately increase the 

total number of option series available 

on the Exchange. However, the 

Exchange’s proposal is designed to only 

add strikes where there is investor 

demand 20 which will improve market 

quality. Under the requirements for the 

Low Priced Stock Strike Price Interval 

Program as described herein, the 

Exchange determined that as of August 

9, 2023, 106 symbols met the proposed 

criteria. Of those symbols, the Exchange 

notes that 36 were in the $1 Strike Price 

Interval Program with $1.00 and $2.00 

strikes listed. Under the Exchange’s 

proposal, the $0.50 and $1.50 strikes for 

these symbols would be added for the 

current expiration terms. The remaining 

70 symbols eligible under the proposal 

would have $0.50, $1.00, $1.50 and 

$2.00 strikes added to their current 

expiration terms. Therefore, the 

Exchange note that for the 106 symbols 

eligible for the Low Priced Stock Strike 

Price Interval Program, a total of 

approximately 3,250 options would be 

added. As of August 9, 2023, the 

Exchange listed 1,106,550 options, and 

therefore, the additional options that 

would be listed under this proposal 

would represent a relatively minor 

increase of 0.294% in the number of 

options listed. 

The Exchange does not believe that its 

proposal contravenes any previous 

efforts to curtail unnecessary strikes. 

The Exchange’s proposal is targeted to 

only underlying stocks that close at less 

than $2.50 and that also meet the 

average daily trading volume 

requirement. Additionally, because the 

strike increment is $0.50 there are only 

a total of four strikes that may be listed 

under the program ($0.50, $1.00, $1.50, 

and $2.00) for an eligible underlying 

stock. Finally, if an eligible underlying 

stock is in another program (e.g., the 

$0.50 Strike Program or the $1 Strike 

Price Interval Program) the number of 

strikes that may be added is further 

reduced if there are pre-existing strikes 

as part of another strike listing program. 

Therefore, the Exchange does not 

believe that it will list any unnecessary 

or repetitive strikes as part of its 

program, and that the strikes that will be 

listed will improve market quality and 

satisfy investor demand. 

The Exchange further believes that the 

Options Price Reporting Authority 

(‘‘OPRA’’), has the necessary systems 

capacity to handle any additional 

messaging traffic associated with this 

proposed rule change. The Exchange 

also believes that Trading Permit 

Holders (‘‘TPHs’’) will not have a 

capacity issue as a result of the 

proposed rule change. Finally, the 

Exchange believes that the additional 

options will serve to increase liquidity, 

provide additional trading and hedging 

opportunities for all market 

participants, and improve market 

quality. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

section 6(b) of the Act.21 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the section 

6(b)(5) 22 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) 23 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 

its proposal promotes just and equitable 

principles of trade and removes 

impediments to and perfects the 

mechanisms of a free and open market 

and a national market system as the 

Exchange has identified a subset of 

stocks that are trading under $2.50 and 

do not have meaningful strikes 

available. For example, on August 9, 

2023, symbol SOND closed at $0.50 and 

had open interest of over 44,000 

contracts and an average daily trading 

volume in the underlying stock of over 

1,900,000 shares for the three preceding 

calendar months.24 Currently the lowest 

strike listed is for $2.50, making the 

lowest strike 400% away from the 

closing stock price. Another symbol, 

CTXR, closed at $0.92 on August 9, 

2023, and had open interest of 63,000 

contracts and an average daily trading 

volume in the underlying stock of over 

1,900,000 shares for the three preceding 

calendar months.25 Similarly, the lowest 

strike listed is for $2.50, making the 

lowest strike more than 170% away 

from the closing stock price. Currently, 

such products have no at-the-money 

options, as well as no in-the-money 

calls or out-of-the-money puts. The 

Exchange’s proposal will provide 

additional strikes in $0.50 increments 

from $0.50 up to $2.00 to provide more 

meaningful trading and hedging 

opportunities for this subset of stocks. 

Given the increased granularity of 

strikes as proposed under the 


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26See supra note 13. 

27See supra note 14. 

28See supra note 15. 29 15 U.S.C. 78f(b)(1). 

Exchange’s proposal out-of-the-money 

puts and in-the-money calls will be 

created. The Exchange believes this will 

allow market participants to tailor their 

investment and hedging needs more 

effectively. 

The Exchange believes its proposal 

promotes just and equitable principles 

of trade and removes impediments to 

and perfects the mechanisms of a free 

and open market and a national market 

system and, in general, protects 

investors and the public interest by 

adding strikes that improves market 

quality and satisfies investor demand. 

The Exchange does not believe that the 

number of strikes that will be added 

under the program will negatively 

impact the market. Additionally, the 

proposal does not run counter to any 

previous efforts to curb strike 

proliferation as those efforts focused on 

the removal and prevention of 

extraneous strikes where there was no 

investor demand. The Exchange’s 

proposal requires the satisfaction of an 

average daily trading volume threshold 

in addition to the underlying stock 

closing at a price below $2.50 to be 

eligible for the program. The Exchange 

believes that the average daily trading 

volume threshold of the program 

ensures that only strikes with investor 

demand will be listed and fills a gap in 

strike interval coverage as described 

above. Further, being that the strike 

interval is $0.50, there are only a 

maximum of four strikes that may be 

added ($0.50, $1.00, $1.50, and $2.00). 

Therefore, the Exchange does not 

believe that its proposal will undermine 

any previous efforts to eliminate 

repetitive and unnecessary strikes in 

any fashion. 

The Exchange believes that the 

proposed program’s average daily 

trading volume threshold promotes just 

and equitable principles of trade and 

removes impediments to and perfects 

the mechanisms of a free and open 

market and a national market system 

and, in general, protects investors and 

the public interest as it is designed to 

permit only those stocks with 

demonstrably high levels of trading 

activity to participate in the program. 

The Exchange notes that the proposed 

program’s average daily trading volume 

requirement is substantially greater than 

the average daily trading requirement 

currently in place on the Exchange for 

options on equity underlyings,26

ADRs,27 and broad-based indexes.28

The Exchange also believes the 

proposed rule change is consistent with 

section 6(b)(1) of the Act,29 which 

provides that the Exchange be organized 

and have the capacity to be able to carry 

out the purposes of the Act and to 

enforce compliance by the Exchange’s 

TPHs and persons associated with its 

TPHs with the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. The proposed rule change 

allows the Exchange to respond to 

customer demand to provide 

meaningful strikes for low priced stocks. 

The Exchange does not believe that the 

proposed rule would create any capacity 

issue or negatively affect market 

functionality. Additionally, the 

Exchange represents that it has the 

necessary systems capacity to support 

the new options series and handle 

additional messaging traffic associated 

with this proposed rule change. The 

Exchange also believes that its TPHs 

will not experience any capacity issues 

as a result of this proposal. In addition, 

the Exchange represents that it believes 

that additional strikes for low priced 

stocks will serve to increase liquidity 

available as well as improve price 

efficiency by providing more trading 

opportunities for all market 

participants. The Exchange believes that 

the proposed rule change will benefit 

investors by giving them increased 

opportunities to execute their 

investment and hedging decisions. 

Finally, the Exchange believes its 

proposal is designed to prevent 

fraudulent and manipulative acts and 

practices as options may only be listed 

on underlyings that satisfy the listing 

requirements of the Exchange as 

described in 4.3. Specifically, Rule 

4.3(a) requires that underlying securities 

for which put or call option contracts 

are approved for listing and trading on 

the Exchange must meet the following 

criteria: (1) the security must be duly 

registered (with the Commission) and be 

an ‘‘NMS stock’’ (as defined in Rule 600 

of Regulation NMS under the Act); (2) 

the security shall be characterized by a 

substantial number of outstanding 

shares that are widely held and actively 

traded. Additionally, Rule 4.3, 

Interpretation and Policy .01(a) provides 

that absent exceptional circumstances, 

an underlying security will not be 

selected for options transactions unless: 

(1) there are a minimum of 7,000,000 

shares of the underlying security which 

are owned by persons other than those 

required to report their stock holdings 

under section 16(a) of the Act; (2) there 

are a minimum of 2,000 holders of the 

underlying security; (3) the issuer is in 

compliance with any applicable 

requirements of the Act; and (4) trading 

volume (in all markets in which the 

underlying security is traded) has been 

at least 2,400,000 shares in the 

preceding 12 months. The Exchange’s 

proposal does not impact the eligibility 

of an underlying stock to have options 

listed on it, but rather addresses only 

the listing of new additional option 

classes on an underlying listed on the 

Exchange in accordance with the 

Exchange’s listings rules. As such, the 

Exchange believes that the listing 

requirements described in Rule 4.3 

address potential concerns regarding 

possible manipulation. Additionally, in 

conjunction with the proposed average 

daily volume requirement described 

herein, the Exchange believes any 

possible market manipulation is further 

mitigated. 

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 its 

proposed rule change will impose any 

burden on intramarket competition as 

the Rules of the Exchange apply equally 

to all TPHs and all TPHs may trade the 

new proposed strikes if they so choose. 

Specifically, the Exchange believes that 

investors and market participants will 

significantly benefit from the 

availability of finer strike price intervals 

for stocks priced below $2.50, which 

will allow them to tailor their 

investment and hedging needs more 

effectively. The Exchange’s proposal is 

substantively identical to MIAX 

Interpretations and Policies .11 and .12 

to Rule 404. 

The Exchange does not believe that its 

proposed rule change will impose any 

burden on intermarket competition, as 

nothing prevents other options 

exchanges from proposing similar rules 

to list and trade options on low priced 

stocks. Rather the Exchange believes 

that its proposal will promote 

intermarket competition, as the 

Exchange’s proposal will result in 

additional opportunities for investors to 

achieve their investment and trading 

objectives, to the benefit of investors, 

market participants, and the 

marketplace in general. 

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. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices 86417 

30 15 U.S.C. 78s(b)(3)(A). 

31 17 CFR 240.19b–4(f)(6). 

32 In addition, Rule 19b–4(f)(6) requires a selfregulatory organization to give the Commission 

written notice of its intent to file 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. 

33 17 CFR 240.19b–4(f)(6)(iii). 

34See supra note 5. 

35For 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). 

36 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

3See Exchange Rule 1.5(p). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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

Act 30 and Rule 19b–4(f)(6) 31

thereunder, the Exchange has 

designated this proposal as one that 

effects a change that: (i) does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) by its terms, does 

not 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.32

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act normally does not become operative 

for 30 days after the date of its filing. 

However, Rule 19b–4(f)(6)(iii) 33 permits 

the Commission to designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange requested that 

the Commission waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission notes it has 

approved a proposed rule change 

substantially identical to the one 

proposed by the Exchange.34 The 

proposed change raises no novel legal or 

regulatory issues. Therefore, the 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change operative upon 

filing.35

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–CBOE–2023–065 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–2023–065. 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–2023–065 and should be 

submitted on or before January 3, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27262 Filed 12–12–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99112; File No. SR–MEMX– 

2023–31] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule To Adopt a Temporary 

Options Regulatory Fee 

December 7, 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 November 

24, 2023, MEMX LLC (‘‘MEMX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 is filing with the 

Commission a proposed rule change to 

amend the Exchange’s fee schedule 

applicable to Members 3 (the ‘‘Fee 

Schedule’’) pursuant to Exchange Rules 

15.1(a) and (c) relating to the Options 

Regulatory Fee. The Exchange proposes 

to implement the changes to the Fee 

Schedule pursuant to this proposal on 

November 24, 2023. The text of the 

proposed rule change is provided in 

Exhibit 5. 

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 


khammond on DSKJM1Z7X2PROD with NOTICES