Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 5589 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange proposed to 

delete the proposed rule change to add MSCI USA 

Index options to the list of options in Rule 

5.1(b)(2)(E) for which the last trading day will be 

the business day prior to the expiration date of the 

specific series. Therefore, under the proposal as 

modified by Amendment No. 1, the last trading day 

for these options would be the expiration date of 

the specific series. 

4The proposed rule change amends Rule 4.13, 

Interpretation and Policy .06 to provide that the 

current index value of the reduced-value options on 

the MSCI World Index and the MSCI USA Index 

will be 1/100th the value of the applicable 

underlying index reported by the reporting 

authority. 

5See proposed Rule 4.12(c) (adding MSCI Inc. as 

the reporting authority for MSCI World Index, MSCI 

ACWI Index, and MSCI USA Index). 

6See current Rule 4.10(h); see also Securities 

Exchange Act Release No. 74681 (April 8, 2015), 80 

FR 20032 (April 14, 2015) (SR–CBOE–2015–023) 

(order approving proposed rule change to adopt 

rules to permit listing and trading of options on the 

MSCI EAFE Index (‘‘EAFE options’’) and the MSCI 

EM Index) (‘‘EM options’’) (‘‘MSCI EAFE and EM 

Approval’’). 

7See summary and comprehensive information 

about the GIMI methodology, available at https:// 

www.msci.com/index/methodology/latest/GIMI. 

8See id. at Section 3. 

9 Id. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of injunctive 

actions; Institution and settlement of 

administrative proceedings; Resolution of 

litigation claims; and Other matters relating 

to examinations and enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 25, 2024. 

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–01786 Filed 1–25–24; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99416; File No. SR–CBOE– 

2024–006] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change and 

Amendment No. 1 Thereto To List and 

Trade Options That Overlie a Reduced 

Value of the MSCI World Index, the Full 

Value of the MSCI ACWI Index, and a 

Reduced Value of the MSCI USA Index 

January 23, 2024. 

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 January 

10, 2024, 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, II, and III below, which Items 

have been prepared by the Exchange. 

On January 17, 2024, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as modified by 

Amendment No. 1, 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 list and 

trade options that overlie a reduced 

value of the MSCI World Index, the full 

value of the MSCI ACWI Index, and a 

reduced value of the MSCI USA Index. 

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/ 

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 

The purpose of this proposed rule 

change is to amend certain rules to 

permit the Exchange to list and trade 

options that overlie a reduced value of 

the MSCI World Index, the full value of 

the MSCI ACWI Index, and a reduced 

value of the MSCI USA Index.4 Each of 

these indexes is a free float-adjusted 

market capitalization index designed to 

measure equity market performance 

throughout the world (MSCI World and 

ACWI Indexes) or the United States 

(MSCI USA Index). MSCI World Index 

options (‘‘MXWLD options’’), MSCI 

ACWI Index options (‘‘MXACW 

options’’), and MSCI USA Index options 

(‘‘MXUSA options’’) would be P.M.-, 

cash-settled contracts with Europeanstyle exercise. 

Index Design, Methodology, and 

Dissemination 

The MSCI World, ACWI, and USA 

Indexes are calculated by MSCI Inc. 

(‘‘MSCI’’), which is a provider of 

investment support tools.5 Each of these 

indexes is calculated in U.S. dollars on 

a real-time basis from the open of the 

first market on which the components 

are traded to the closing of the last 

market on which the components are 

traded. The methodology used to 

calculate each index is similar to the 

methodology used to calculate the value 

of other benchmark marketcapitalization weighted indexes 

(including the MSCI EAFE and EM 

Indexes, on which the Exchange may 

currently list options).6 Specifically, 

each index is based on the MSCI Global 

Investable Market Indexes (‘‘GIMI’’) 

Methodology.7 The level of each index 

reflects the free float-adjusted market 

value of the component stocks relative 

to a particular base date and is 

computed by dividing the total market 

value of the companies in the index by 

the index divisor. 

MSCI monitors and maintains each of 

the MSCI World, ACWI, and USA 

Indexes. Adjustments to each index are 

made on a daily basis with respect to 

corporate events and dividends. MSCI 

reviews each index on a quarterly basis 

(February, May, August and November) 

‘‘with the objective of reflecting the 

evolution of the underlying equity 

markets and segments on a timely basis, 

while seeking to achieve: [i]ndex 

continuity, [c]ontinuous investability of 

constituents and replicability of the 

indexes, and [i]ndex stability and low 

index turnover.’’ 8 Each quarterly review 

of the MSCI World, ACWI, and USA 

Index involves, among other things, 

updating the constituent securities.9

For each of the MSCI World, ACWI, 

and USA Index, real-time data is 

distributed approximately every 15 

seconds while the index is being 

calculated using MSCI’s real-time 


ddrumheller on DSK120RN23PROD with NOTICES1
5590 Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 

10These developed markets include Australia, 

Austria, Belgium, Canada, Denmark, Finland, 

France, Germany, Hong Kong, Ireland, Israel, Italy, 

Japan, Netherlands, New Zealand, Norway, 

Portugal, Singapore, Spain, Sweden, Switzerland, 

the United Kingdom, and the United States. 

11See MSCI World Index fact sheet (dated 

November 30, 2023), available at MSCI World 

Index. 

12See MWS futures contract specifications, 

available at MSCI World NTR Index Future 

(ice.com). 

13These developed markets include Australia, 

Austria, Belgium, Canada, Denmark, Finland, 

France, Germany, Hong Kong, Ireland, Israel, Italy, 

Japan, Netherlands, New Zealand, Norway, 

Portugal, Singapore, Spain, Sweden, Switzerland, 

the United Kingdom, and the United States. 

14These emerging markets include Brazil, Chile, 

China, Colombia, Czech Republic, Egypt, Greece, 

Hungary, India, Indonesia, Korea, Kuwait, Malaysia, 

Mexico, Peru, Philippines, Poland, Qatar, Saudi 

Arabia, South Africa, Taiwan, Thailand, Turkey, 

and the United Arab Emirates. 

15See MSCI ACWI Index fact sheet (dated 

November 30, 2023), available at MSCI ACWI 

Index. 

16See MMW futures contract specifications, 

available at MSCI ACWI NTR Index Future 

(ice.com). 

17See MSCI USA Index fact sheet (dated 

November 30, 2023), available at MSCI USA Index. 

18The Invesco MSCI USA ETF does not currently 

satisfy criteria for options trading on the Exchange 

pursuant to Rule 4.3. 

19See USS futures contract specifications, 

available at MSCI USA GTR Index Futures 

(ice.com). 

20See proposed Rule 4.10(h). 

21The initial listing criteria in Rule 4.10(h) also 

apply to the FTSE Emerging Index (FTSE Emerging) 

and FTSE Developed Europe Index (FTSE 

Developed). 

22Rule 4.11 defines a broad-based index as an 

index designed to be representative of a stock 

market as a whole or of a range of companies in 

unrelated industries. 

calculation engine to major quotation 

vendors, including Bloomberg L.P. 

(‘‘Bloomberg’’), FactSet Research 

Systems, Inc. (‘‘FactSet’’), and LSEG 

Data & Analytics (‘‘LSEG’’). End of day 

data is distributed daily to clients 

through MSCI as well as through major 

quotation vendors, including 

Bloomberg, FactSet, and LSEG. 

MSCI World Index 

The MSCI World Index is a free floatadjusted market capitalization index 

that is designed to measure the equity 

market performance of developed 

markets. The MSCI World Index 

consists of component stocks from 23 

developed markets.10 The MSCI World 

Index consists of large- and mid-cap 

components across these markets, has 

1,509 constituents, and covers 

approximately 85% of the free floatadjusted market capitalization in each 

country.11 The MSCI World Index was 

launched on March 31, 1986. 

The Exchange notes that the iShares 

MSCI World ETF exchange-traded fund 

(‘‘ETF’’) is an actively traded product. 

The Exchange also lists options 

overlying that ETF (‘‘URTH options’’) 

and those options are actively traded as 

well. MSCI World Index futures 

contracts (‘‘MWS futures’’) are listed for 

trading on the ICE Futures U.S.12 and 

other derivatives contracts on the MSCI 

World Index are listed for trading in 

Europe. 

The Exchange proposes to base 

trading in options on the MSCI World 

Index on a fraction of the full size of the 

index. In particular, the Exchange 

propose to list MXWLD options that are 

based on 1/100th of the value of the 

MSCI World Index. The Exchange 

believes that listing options on the 

reduced value of the index will attract 

a greater source of customer business 

than if options were based on the full 

value of the MSCI World Index. The 

Exchange further believes that listing 

options on a reduced value of the index 

may enhance investors’ opportunities to 

hedge, or speculate on, the market risk 

associated with the stocks comprising 

the MSCI World Index. Additionally, by 

reducing the value of the MSCI World 

Index, investors will be able to use this 

trading vehicle while extending a 

smaller outlay of capital. The Exchange 

believes this may attract additional 

investors, and, in turn, create a more 

active and liquid trading environment. 

MSCI ACWI Index 

The MSCI ACWI Index is a free floatadjusted market capitalization index 

that is designed to measure the equity 

performance of developed markets and 

emerging markets. The MSCI ACWI 

Index consists of component stocks 

from 23 developed markets 13 and 24 

emerging markets.14 The MSCI ACWI 

Index consists of large- and mid-cap 

components across these markets, has 

2,946 constituents, and covers 

approximately 85% of the global 

investable equity opportunity set.15 The 

MSCI ACWI Index was launched on 

May 31, 1990. 

The Exchange notes that the iShares 

MSCI ACWI ETF is an actively traded 

product. The Exchange also lists options 

overlying that ETF (‘‘ACWI options’’) 

and those options are actively traded as 

well. MSCI ACWI Index futures 

contracts (‘‘MMW futures’’) are listed for 

trading on the ICE Futures U.S.16 and 

other derivatives contracts on the MSCI 

ACWI Index are listed for trading in 

Europe. 

MSCI USA Index 

The MSCI USA Index is a free floatadjusted market capitalization index 

that is designed to measure the 

performance of the large- and mid-cap 

segments of the U.S. market. The MSCI 

USA Index consists of large- and midcap components from the United States, 

has 625 constituents, and covers 

approximately 85% of the free floatadjusted market capitalization in the 

United States.17 The MSCI USA Index 

was launched on March 31, 1986. 

The Exchange notes that the Invesco 

MSCI USA ETF is an actively traded 

product.18 MSCI USA Index futures 

contracts (‘‘USS futures’’) are listed for 

trading on the ICE Futures U.S.19 and 

other derivatives contracts on the MSCI 

USA Index are listed for trading in 

Europe. 

The Exchange proposes to base 

trading in options on the MSCI USA 

Index on a fraction of the full size of the 

index. In particular, the Exchange 

propose to list MXUSA options that are 

based on 1/100th of the value of the 

MSCI USA Index. The Exchange 

believes that listing options on the 

reduced value of the index will attract 

a greater source of customer business 

than if options were based on the full 

value of the MSCI USA Index. The 

Exchange further believes that listing 

options on a reduced value of the index 

may enhance investors’ opportunities to 

hedge, or speculate on, the market risk 

associated with the stocks comprising 

the MSCI USA Index. Additionally, by 

reducing the value of the MSCI USA 

Index, investors will be able to use this 

trading vehicle while extending a 

smaller outlay of capital. The Exchange 

believes this may attract additional 

investors, and, in turn, create a more 

active and liquid trading environment. 

Initial and Maintenance Listing Criteria 

The Exchange proposes to apply to 

each of the MSCI World Index, MSCI 

ACWI Index, and MSCI USA Index the 

same initial listing criteria that currently 

apply to the MSCI EAFE Index and the 

MSCI EM Index.20 Each of the MSCI 

World Index, the MSCI ACWI Index, 

and the MSCI USA Index satisfies the 

initial listing criteria currently set forth 

for EAFE and EM options, as set forth 

in Rule 4.10(h).21 Specifically, with 

respect to each of the MSCI World, 

ACWI, and USA Index: 

(1) the index is broad-based, as defined in 

Rule 4.11; 22

(2) options on the index are designated as 

P.M.-settled index options; 

(3) the index is capitalization-weighted, 

price-weighted, modified capitalizationweighted or equal dollar-weighted; 

(4) the index consists of 500 or more 

component securities; 

(5) all of the component securities of the 

index will have a market capitalization of 

greater than $100 million 

(6) no single component security accounts 

for more than 15% of the weight of the index, 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 5591 

23This listing criteria permits the Exchange to 

continue to trade EAFE, FTSE Developed, and FTSE 

Emerging options after trading in all component 

securities has closed for the trading day and the 

index level is no longer widely disseminated at 

least once every 15 seconds as long as 

corresponding futures contracts are still trading. 

This is inapplicable to MXWLD, MXACW, and 

MXUSA options, as the index level for each index 

will be widely disseminated through the end of 

trading for options on each index. 

24The maintenance listing criteria in Rule 4.10(i) 

also apply to the FTSE Emerging Index (FTSE 

Emerging) and FTSE Developed Europe Index 

(FTSE Developed). 

25This maintenance criteria applies a 10% 

threshold rather than a 35% threshold to the EM 

Index. As is the case with other index options 

authorized for listing and trading on Cboe Options, 

in the event the MSCI World Index, MSCI ACWI 

Index, or MSCI USA Index fails to satisfy the 

maintenance listing standards, the Exchange will 

not open for trading any additional series of options 

of that class unless such failure is determined by 

the Exchange not to be significant and the 

Commission concurs in that determination, or 

unless the continued listing of that class of index 

options has been approved by the Commission 

under Section 19(b)(2) of Act. 

26See proposed Rule 5.1(b)(2)(A). 

27For example, p.m.-settled options on the S&P 

500 Index may trade on their expiration dates. 

28Amendment No. 1 deletes the proposed rule 

change to add MXUSA options to the list of options 

in Rule 5.1(b)(2)(E). Therefore, as proposed in this 

Amendment No. 1, the last trading day for MXUSA 

options will be the expiration date of the specific 

series. 

29For example, some components end trading at 

10:45 p.m. (Eastern time) on the prior trading day. 

Trading in the other components ends at various 

times before and during the U.S. trading day. 

and the five highest weighted component 

securities in the index do not, in the 

aggregate, account for more than 50% of the 

weight of the index; 

(7) non-U.S. component securities (stocks 

or ADRs) that are not subject to 

comprehensive surveillance agreements do 

not, in the aggregate, represent more than: (A) 

25% of the weight of the EAFE Index (each 

of the MSCI World, ACWI, and USA Indexes 

satisfies this criterium), (B) 27.5% of the 

weight of the EM Index, (C) 32.5% of the 

weight of the FTSE Developed Index, and (D) 

35% of the weight of the FTSE Emerging 

Index; 

(8) during the time options on the index 

are traded on the Exchange, the current index 

value is widely disseminated at least once 

every 15 seconds by one or more major 

market data vendors; 23

(9) the Exchange reasonably believes it has 

adequate system capacity to support the 

trading of options on the index, based on a 

calculation of the Exchange’s current 

Independent System Capacity Advisor (ISCA) 

allocation and the number of new messages 

per second expected to be generated by 

options on such index; and 

(10) The Exchange has written surveillance 

procedures in place with respect to 

surveillance of trading of options on the 

index. 

The Exchange also proposes to subject 

each of the MSCI World, ACWI, and 

USA Indexes to the maintenance listing 

standards set forth in Rule 4.10(i), 

which currently applies to the MSCI 

EAFE and EM Indexes: 24

(1) the conditions stated in paragraphs (1), 

(2), (3), (4) (8), (9), and (10) above must 

continue to be satisfied; the conditions stated 

in paragraphs (5) and (6) above must be 

satisfied only as of the first day of January 

and July in each year; and the conditions set 

forth in paragraph (7) must be satisfied as of 

the first day of the month following MSCI’s 

review of the weighting of the constituents in 

the applicable index but in no case less than 

a quarterly basis; and 

(2) the total number of component 

securities in the index may not increase or 

decrease by more than 35% from the number 

of component securities in the index at the 

time of its initial listing.25

Because each of the MSCI World 

Index, MSCI ACWI Index, and MSCI 

USA Index has a large number of 

component securities and is based on 

the same methodology as the MSCI 

EAFE and EM Indexes, as discussed 

above, the Exchange believes it is 

appropriate for the initial and 

maintenance listing criteria (which 

require continual and periodic 

compliance) set forth under Rule 4.10(h) 

and (i) to also apply to the MSCI World, 

ACWI, and USA Index options. 

General Trading 

The Exchange proposes that MXWLD, 

MXACW, and MXUSA options will 

trade during the same hours as other 

index options, including EAFE and EM 

options. Specifically, the Exchange 

proposes to adopt Regular Trading 

Hours of 9:30 a.m. to 4:00 p.m. (Eastern 

time) for MXWLD, MXACW, and 

MXUSA options.26

As proposed, the last trading day for 

MXUSA options will be the day of 

expiration (from 9:30 a.m. to 4:00 p.m. 

(Eastern time), pursuant to Rule 

5.1(b)(2)(A)). As set forth below, the 

Exchange proposes that MXUSA options 

will be p.m.-settled, which means the 

exercise settlement value of an expiring 

option is derived from the closing prices 

of the underlying components on the 

series expiration date. As noted above, 

the MSCI USA Index is comprised of 

components solely from the United 

States. Therefore, the components of the 

MSCI USA Index trade from 9:30 a.m. 

to 4:00 p.m. (Eastern time), including on 

the expiration date of the proposed 

MXUSA options. Allowing options to 

trade through their expiration (and thus 

on their day of expiration) will provide 

investors with the ability to modify their 

positions in response to changes in the 

prices of the underlying index 

components that will impact the 

settlement values of those options. This 

is consistent with the last trading day 

for other options on broad-based p.m.- 

settled indexes comprised of 

components solely from the United 

States.27

The Exchange proposes to amend 

Rule 5.1(b)(2)(E) to provide that the last 

trading day for MXWLD and MXACW 

options will be the business day prior to 

the expiration date of the specific series 

(from 9:30 a.m. to 4:00 p.m. (Eastern 

time), pursuant to Rule 5.1(b)(2)(A)).28

As set forth below, the Exchange 

proposes that MXWLD and MXACW 

options will be p.m.-settled, which 

means the exercise settlement value of 

an expiring option is derived from the 

closing prices of the underlying 

components on the series expiration 

date. As noted above, each of the MSCI 

World Index and MSCI ACWI Index 

consists of components from 23 

countries. Because the components of 

each of these indexes encompass 

multiple markets around the world 

(unlike the components of the MSCI 

USA Index, all of which trade in the 

United States and thus during regular 

U.S. trading hours of 9:30 a.m. to 4:00 

p.m. (Eastern time)), the components are 

subject to varying trading hours. For 

each of these indexes, the first 

components open trading at 

approximately 4:00 p.m. (Eastern time) 

on the prior trading day, and the last 

components end trading at 

approximately 4:00 p.m. (Eastern time). 

As a result, trading in various 

components would end prior to the 

beginning of MXWLD and MXACW 

Regular Trading Hours at 9:30 a.m. 

(Eastern time).29 As a result, the closing 

prices of those components, which are 

used to determine the exercise 

settlement value, will be determined 

prior to the time when the expiring 

options may begin trading on the 

expiration date. This increases the risk 

of providing liquidity in these products 

on that date. Generally, the prices of 

futures on the MSCI World and ACWI 

Indexes can be a proxy for the current 

level of the applicable index when 

options on those indexes are trading on 

the Exchange while the index level is 

not being disseminated. However, that 

is not the case on options’ expiration 

dates, as the prices that will be used to 

determine the exercise settlement value 

are fixed once trading in the 

components ends, and thus futures 

trading prices after trading in those 

components end have no bearing on the 

exercise settlement value. Therefore, the 

Exchange believes it is appropriate to 

stop trading in expiring MXWLD and 

MXACW options on the business day 

prior to the expiration date. 


ddrumheller on DSK120RN23PROD with NOTICES1
5592 Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 

30These Rules set forth the criteria for listing 

initial and additional series of the same class as the 

current value of the underlying index moves. 

Generally, additional series must be ‘‘reasonably 

related’’ to the current index value, which means 

that strike prices must be within 30% of the current 

index value. New series of index option contracts 

may be added up to the fifth business day prior to 

expiration. Series exceeding the 30% range may be 

listed based on demonstrated customer interest. See 

Rule 4.13, Interpretations and Policies .01 and .04. 

31See proposed Rule 4.13(a)(2). 

32Pursuant to Rule 4.13(b)(1), the Exchange may 

list up to 10 expiration months of long-term index 

option series (‘‘LEAPS’’) that expire from 12 to 180 

months from the date of issuance. 

33See Rule 4.13(c). 

34See Rule 4.13(e). 

35See Proposed Rule 4.13(a)(3). 

36See Securities Exchange Act Release Nos. 

98454 (September 20, 2023) (SR–CBOE–2023–005) 

(order approving proposed rule change to make 

permanent the operation of a program that allows 

the Exchange to list p.m.-settled third Friday-of-themonth SPX options series); 98455 (September 20, 

2023) (SR–CBOE–2023–019) (order approving 

proposed rule change to make permanent the 

operation of a program that allows the Exchange to 

list p.m.-settled third Friday-of-the-month XSP and 

MRUT options series); and 98456 (September 20, 

2023) (SR–CBOE–2023–020) (order approving 

proposed rule change to make the nonstandard 

expirations pilot program permanent). 

Pursuant to Rule 5.3(a), bids and 

offers on MXWLD, MXACW, and 

MXUSA options (like all other options) 

must be expressed in terms of dollars 

and decimals per unit of the underlying 

index. Pursuant to Rule 5.4(a), the 

minimum increment for bids and offers 

on simple orders for options on these 

three indexes, as is the case for most 

other index options, will be $0.05 if the 

series trading price is lower than $3.00 

and $0.10 if the series trading price is 

$3.00 or higher. Rule 5.4(b) provides 

that the minimum increment for bids 

and offers on complex orders in options 

on these three indexes will be $0.01 or 

greater (as determined by the Exchange) 

and that the legs may be executed in 

$0.01 increments. 

MXWLD, MXACW, and MXUSA 

options will be subject to the same 

procedures for adding and deleting 

strikes for index options as other index 

options. Specifically, Rule 4.13, 

Interpretation and Policy .01 states the 

procedures for adding and deleting 

strike prices for index options are 

provided in Rule 4.5 and Interpretations 

and Policies related thereto, as 

otherwise generally provided by Rule 

4.13, and as otherwise set forth in Rule 

4.13, Interpretation and Policy .01.30

The Exchange proposes to amend Rule 

4.13, Interpretation and Policy .01(a) to 

provide that the interval between strike 

prices for MXWLD, MXACW, and 

MXUSA options will be no less than 

$5.00 if the strike price is $200 or above, 

and will be no less than $2.50 if the 

strike price is less than $200.00. This is 

consistent with the current strike 

intervals of many other index options, 

including EAFE and EM options. 

Pursuant to Rule 4.20, the Exchange 

may authorize for trading a like flexible 

(‘‘FLEX’’) options class on any index if 

it may authorize for trading a non-FLEX 

option class on that index pursuant to 

Rule 4.10. Therefore, as proposed, the 

Exchange may authorize for trading 

FLEX Options on the MSCI World 

Index, MSCI ACWI Index, and MSCI 

USA Index, which the Exchange may 

authorize for trading pursuant to 

proposed Rule 4.10(h). 

Additionally, Rule 5.6(c) permits 

Multi-Class Spread Orders, which are 

orders to buy a stated number of 

contracts of a broad-based index option 

and to sell an equal number, or an 

equivalent number, of contracts of a 

related broad-based index option. For 

purposes of Multi-Class Spread Orders, 

a ‘‘broad-based index option’’ is an 

option on a broad-based index, ETF, or 

exchange-traded note (‘‘ETN’’) listed in 

subparagraph (1) of the definition of 

Multi-Class Spread Order in Rule 5.6(c) 

or any other broad-based index or ETF 

or ETN derived from a broad-based 

index the Exchange determines creates 

an appropriate hedge with any other 

broad-based index option. The 

Exchange proposes to add MSCI World 

Index and MSCI ACWI Index, as well as 

corresponding ETFs URTH and ACWI, 

and the combinations of MXWLD and 

URTH options and MXACW and ACWI 

options to the list of permissible MultiClass Spread Orders, as the Exchange 

has determined that these combinations 

create appropriate hedges (as do other 

MSCI options and corresponding ETF 

options). 

Expiration Months, Settlement, and 

Exercise Style 

Consistent with existing rules for 

other index options, including EAFE 

and EM options, the Exchange will 

allow up to twelve near-term expiration 

months for each of MXWLD, MXACW, 

and MXUSA options 31 as well as 

LEAPS.32 These indexes would also be 

eligible for all other expirations 

permitted for other broad-based indexes, 

including Quarterly Index Expirations 33

and Weekly and End of Month 

Expirations.34 Given that the MSCI 

World, ACWI, and USA Indexes are 

broad-based indexes and based on the 

same methodology as the MSCI EAFE 

and EM Indexes, as noted above, the 

Exchange believes it is appropriate for 

options on these three indexes to be 

eligible for the same expirations for 

which the options on other broad-based 

indexes, including MSCI EAFE and EM 

Indexes, are eligible under current rules. 

MXWLD, MXACW, and MXUSA 

options will be P.M.-, cash-settled 

contracts with European-style 

exercise.35 The Exchange believes that 

P.M.-settlement is appropriate for 

MXWLD and MXACW options due to 

the natures of the underlying indexes 

that encompass multiple markets 

around the world. The components of 

each index open with the start of trading 

in certain parts of Asia at approximately 

4:00 p.m. (Eastern time) (prior day) and 

close with the end of trading in North 

America at approximately 4:00 p.m. 

(Eastern time) (next day) as closing 

prices from North American countries 

are accounted for in the closing 

calculation. The Exchange further 

believes that P.M.-settlement is 

appropriate for MXWLD and MXACW 

options, as well as MXUSA options, 

because the Exchange understands that 

investors prefer to be able to trade out 

of positions during the entire final day 

of trading. The Exchange notes the 

Commission recently approved 

proposals to make other pilots 

permitting P.M.-settlement of index 

options permanent after finding those 

pilots were consistent with the Act and 

the options subject to those pilots had 

no significant impact on the market.36

Rule 4.13(e) currently permits the 

Exchange to list P.M.-settled weekly and 

end-of-month expirations for all broadbased index options, which would 

include MXWLD, MXACW, and 

MXUSA options. 

The Exchange proposes to amend 

Rule 4.13(a)(3) to add MXWLD, 

MXACW, and MXUSA options to the 

list of other European-style (and P.M.- 

settled) index options. European-style 

(and P.M.-settled) exercise is consistent 

with many index options, as set forth in 

Rule 4.13(a)(3). EAFE and EM options 

are also P.M.-settled with Europeanstyle exercise. Given that the MSCI 

World, ACWI, and USA Indexes are 

broad-based indexes and based on the 

same methodology as the MSCI EAFE 

and EM Indexes, as noted above, the 

Exchange believes it is appropriate for 

options on these three indexes to have 

the same settlement and exercise style 

as the other MSCI Index options. 

Like other index options, the exercise 

settlement amount of MXWLD, 

MXACW, and MXUSA options will be 

equal to the difference between the 

exercise settlement value (with respect 

to MXWLD and MXUSA options, 

1/100th of the official closing value of 

the MSCI World Index and MSCI USA 

Index, respectively, and, with respect to 

MXACW options, the official closing 

value of the MSCI ACWI Index, each as 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 5593 

37See Rule 4.13, Interpretation and Policy .05. If 

the exercise settlement value is not available or the 

normal settlement procedure cannot be utilized due 

to a trading disruption or other unusual 

circumstance, the settlement value would be 

determined in accordance with the rules and 

bylaws of The Options Clearing Corporation 

(‘‘OCC’’). See OCC Bylaws, Article XVII, Section 4. 

38Additionally, the Exchange proposes to amend 

Rule 8.35(a)(6) to provide that, like FLEX Options 

on the MSCI EAFE Index and MSCI EM Index, the 

position limits for FLEX options on the MSCI World 

Index, MSCI ACWI Index, and MSCI USA Index are 

equal to the position limits for the non-FLEX 

options on these indexes (which is 50,000 contracts, 

as proposed). Pursuant to Rule 8.42(g), the exercise 

limit for FLEX index options (which would include 

FLEX options on the MSCI World, ACWI, and USA 

Indexes) will be equivalent to the FLEX position 

limits prescribed in Rule 8.35(a)(6). As set forth in 

Rule 8.35(b), in calculating the applicable contract 

reporting amount for that rule, reduced-value 

contracts (such as the proposed MXWLD and 

MXUSA options) will be aggregated with full-value 

contracts and counted by the amount by which they 

equal a full-value contract. 

39See Rule 8.31(a). 

40For example, if an index is reduced by onetenth, 10 reduced-value contracts equal one 

contract. If an index is reduced by 1/100, 100 

reduced-value contracts will equal one contract. See 

Rule 8.31(d). The Exchange notes it currently does 

not list, nor plan to list, options on the full value 

of the MSCI World Index or MSCI USA Index. 

41See list of current ISG members, available at 

Search Results—Members—isg (isgportal.org). 42See list of current ordinary IOSCO members, 

available at http://www.iosco.org/about/ 

?subsection=membership&memid=1. There are 

three categories of IOSCO members: ordinary, 

associate and affiliate. In general, the ordinary 

members (124) are the national securities 

commissions in their respective jurisdictions. 

Associate members (12) are usually agencies or 

branches of government, other than the principal 

national securities regulator in their respective 

jurisdictions that have some regulatory competence 

over securities markets, or intergovernmental 

international organizations and other international 

standard-setting bodies, such as the IMF and the 

World Bank, with a mission related to either the 

development or the regulation of securities markets. 

Affiliate members (62) are self-regulatory 

organizations, stock exchanges, financial market 

infrastructures, investor protection funds and 

compensation funds, and other bodies with an 

appropriate interest in securities regulation. See 

IOSCO Fact Sheet, available at http://

www.iosco.org/about/pdf/IOSCO-Fact-Sheet.pdf. 

43 15 U.S.C. 78f(b). 

44 15 U.S.C. 78f(b)(5). 

45 Id. 

reported by the reporting authority on 

the day on which the index option 

contract is exercised) and the exercise 

price of the option (multiplied by the 

contract multiplier of $100).37

Position and Exercise Limits 

The Exchange proposes to amend 

Rule 8.31(a) to apply a position limit of 

50,000 contracts (with no restrictions) to 

MXWLD, MXACW, and MXUSA 

options.38 This is the same position 

limit that currently exists for many 

other broad-based index options, 

including EAFE and EM options.39

Pursuant to Rule 8.42(b), the exercise 

limit for these options will be 

equivalent to the proposed position 

limit of 50,000 contracts. As set forth in 

Rule 8.31(d), positions in MXWLD 

options and MXUSA options (which are 

proposed to be reduced-value index 

options) will be aggregated with 

positions in full-value indexes.40 All 

position limit hedge exemptions would 

apply. 

Margin 

MXWLD, MXACW, and MXUSA 

options will be margined as ‘‘broadbased index’’ options. Under the 

Exchange’s Rules, particularly Rule 

10.3(c)(5)(A), the margin requirement 

for a short put or call will be 100% of 

the current market value of the contract 

plus 15% of the ‘‘product of the current 

index group value and the applicable 

index multiplier,’’ reduced by any outof-the-money amount. There would be a 

minimum margin requirement of 100% 

of the current market value of the 

contract plus: 10% of the aggregate put 

exercise price amount in the case of 

puts, and 10% of the product of the 

current index group value and the 

applicable index multiplier in the case 

of calls. Additional margin may be 

required under the Rules, including 

pursuant to Rules 10.3(h) and 10.10. 

Surveillance and Capacity 

The Exchange represents that it has an 

adequate surveillance program in place 

for MXWLD, MXACW, and MXUSA 

options and intends to use the same 

surveillance procedures currently 

utilized for each of the Exchange’s other 

index options to monitor trading in 

these options. The Exchange is a 

member of the Intermarket Surveillance 

Group (‘‘ISG’’), along with numerous 

other self-regulatory bodies across the 

world. ISG provides a framework for 

sharing information and coordinating 

regulatory efforts among exchanges 

trading securities and related 

products.41 The Exchange is also an 

affiliate member of the International 

Organization of Securities Commissions 

(‘‘IOSCO’’), which has members from 

over 100 different countries. Each of the 

countries from which there is a 

component security in both the MSCI 

EAFE and MSCI EM Indexes is a 

member of IOSCO.42 Finally, the 

Exchange has entered into various 

comprehensive surveillance agreements 

(‘‘CSAs’’) and/or Memoranda of 

Understanding with various stock 

exchanges. Given the capitalization of 

the EAFE and EM Indexes and the deep 

and liquid markets for the securities 

underlying these Indexes, the concerns 

for market manipulation and/or 

disruption in the underlying markets are 

greatly reduced. 

The Exchange has analyzed its 

capacity and represents that it believes 

the Exchange and the Options Price 

Reporting Authority (‘‘OPRA’’) have the 

necessary systems capacity to handle 

the additional traffic associated with the 

listing of new series that would result 

from the introduction of MXWLD, 

MXACW, and MXUSA options. Because 

the proposal is limited to three classes, 

the Exchange believes any additional 

traffic that would be generated from the 

introduction of the MSCI World, ACWI, 

and USA Index options would be 

manageable. 

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.43 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 44 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) 45 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 proposal to permit the Exchange 

to list and trade options on each of the 

MSCI World Index, the MSCI ACWI 

Index, and the MSCI USA Index 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 the proposed rule 

change will introduce new index option 

products to the marketplace. As a result, 

investors will have additional and 

different opportunities to hedge or 

speculate on the market risk associated 

with these indexes by offering 

exchange-listed options directly on the 

indexes. Further, the proposed rule 

change is consistent with current Rules, 

which were previously approved by the 


ddrumheller on DSK120RN23PROD with NOTICES1
5594 Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 

46See MSCI EAFE and EM Approval. 

47See current Rule 4.10(h). 

48See current Rule 4.10(i). 

49These indexes also have the same reporting 

authority as the MSCI EAFE Index and MSCI EM 

Index. 

50As discussed above and below, the proposed 

last trading of expiring MXWLD and MXACW 

options will be the day prior to expiration, as is the 

case for EAFE and EM options, while the proposed 

last trading day of expiring MXUSA options will be 

the day of expiration, as is the case for p.m.-settled 

options overlying broad-based index options 

comprised solely of U.S. components. 

51See Rules 4.13 (including paragraphs (a)(2) and 

(3), (b), (c) and (e) and Interpretation and Policy 

.01), 5.1(b)(2), 5.3(a), and 5.4. 

52See, e.g., Rule 5.1(b)(2)(E) (pursuant to which 

the last trading day for EAFE and EM options will 

be the business day prior to the expiration date of 

the specific series). 

53See, e.g., Rule 5.1(b)(2)(C) (pursuant to which 

the last trading day for SPX options is the 

expiration date of the specific series). 

54At the close of trading on January 8, 2024, the 

value of the MSCI World Index was 3153.60, and 

the value of the MSCI USA Index was 4,541.61. For 

comparison, the value of the MSCI ACWI Index was 

720.07. The Exchange currently has authority to list 

several reduced-value index options (particularly 

on indexes with values of 1,000 or more), such as 

the S&P 500 Index and the Russell 2000 Index. See 

Rule 4.13, Interpretation and Policy .06. 

55 15 U.S.C. 78f(b)(1). 

Commission.46 Specifically, each of 

MSCI World Index, MSCI ACWI Index, 

and MSCI USA Index satisfies the same 

initial listing criteria as four other 

broad-based indexes on which the 

Exchange is currently permitted to list 

options.47 These indexes will also be 

subject to the same maintenance criteria 

as these other broad-based indexes.48

These include the MSCI EAFE Index 

and MSCI EM Index, each of which is 

calculated using the same methodology 

as the MSCI World Index, MSCI ACWI 

Index, and MSCI USA Index.49

Additionally, the proposed index 

options will be subject to the same rules 

regarding trading hours,50 trading 

increments, the number of permissible 

expirations, strike intervals, settlement, 

and exercise style that apply to other 

currently listed broad-based index 

options, including EAFE and EM 

options.51 The Exchange has observed 

no trading or capacity issues in EAFE or 

EM option trading given the number of 

permissible expirations, p.m.- 

settlement, and European-style exercise. 

Given the similarities of these indexes 

and the MSCI World Index, MSCI ACWI 

Index, and MSCI USA Index, including 

that there are other products available in 

the market on the same indexes, the 

Exchange believes it is reasonable and 

appropriate to list options on these 

indexes with similar terms as EAFE and 

EM options. The Exchange believes this 

will benefit investors, as it will provide 

market participants with additional 

investment and hedging strategies 

consisting of options over each of these 

indexes. 

The Exchange believes the proposed 

rule changes regarding the last day of 

trading for MXWLD, MXACW, and 

MXUSA options will remove 

impediments to and perfect the 

mechanism of a free and open market 

and benefit investors. The Exchange 

understands that Market-Makers and 

other liquidity providers will generally 

price these options using the 

disseminated index values and data 

from the markets on which the 

components trade (as they do for EAFE 

and EM options). As noted above, when 

these markets are not trading during 

U.S. trading hours, these liquidity 

providers can price the options using 

prices of futures trading on the MSCI 

World and ACWI Indexes. While those 

futures prices can serve as a proxy for 

the index value, they would not be able 

to serve as a proxy for the settlement 

value on the expiration date for 

MXWLD and MXACW options. This is 

because the futures pricing is intended 

to represent the then-current index 

value, but does not incorporate the 

closing prices of the components that 

will be used to determine the settlement 

value. This would create risk for 

Market-Makers and other liquidity 

providers, as they would have no data 

they can use to price the expiring 

options based on the ultimate settlement 

value. This could result in trades at 

prices inconsistent with the settlement 

value of those options. The Exchange 

believes the proposed rule change will 

remove impediments to and perfect the 

mechanism of a free and open market by 

eliminating this pricing risk for liquidity 

providers on the last trading day of 

expiring series in these products and 

may provide more competitive pricing 

and additional trading opportunities for 

expiring series, which ultimately 

benefits investors. Other options stop 

trading on the business day preceding 

expiration.52

The Exchange proposes that the last 

day of trading for MXUSA options will 

be their expiration dates, like most p.m.- 

settled options the Exchange lists. 

Unlike the MSCI World and ACWI 

Indexes, all of the components of the 

MSCI USA Index trade on U.S. markets. 

Thus, the prices of those components 

will be changing on the expiration date 

of MXUSA options from 9:30 a.m. to 

4:00 p.m. (Eastern time) on the options’ 

expiration dates. As noted above, the 

Exchange understands that MarketMakers and other liquidity providers 

will generally price these options using 

the disseminated index values and data 

from the markets on which the 

components trade. With respect to the 

MSCI USA Index, its underlying 

components will be trading from 9:30 

a.m. to 4:00 p.m. (Eastern time) on the 

expiration date of MXUSA options, and 

thus up until the time (4:00 p.m. 

(Eastern time)) when MSCI will 

disseminate the closing value of the 

index. Permitting trading on the 

expiration date for the MXUSA options 

will allow Market-Makers and other 

liquidity providers to update the prices 

of expiring options in response to 

changes in the prices of the index 

components on that date, which 

changes will be incorporated into the 

settlement value of those options. The 

Exchange believes the proposed rule 

change will remove impediments to and 

perfect the mechanism of a free and 

open market by encouraging liquidity 

providers to provide more competitive 

pricing and additional trading 

opportunities for expiring series at 

prices that reflect the then-current value 

of the index and its components. 

Additionally, permitting trading in 

MXUSA options on their expiration 

dates will permit investors to be able to 

trade out of positions in response to 

pricing changes of those components 

during the entire final day of trading 

before the options’ settlement. Other 

p.m.-settled index options stop trading 

on their expiration dates.53

The Exchange believes offering 

options on a reduced value of each of 

the MSCI World Index and MSCI USA 

Index will benefit investors, as it will 

attract a greater source of customer 

business than if options were based on 

the full value of those indexes.54 The 

Exchange further believes that listing 

options on a reduced value of the index 

may enhance investors’ opportunities to 

hedge, or speculate on, the market risk 

associated with the stocks comprising 

the MSCI World Index and MSCI USA 

Index. Additionally, by reducing the 

value of the MSCI World Index and 

MSCI USA Index, investors will be able 

to use this trading vehicle while 

extending a smaller outlay of capital. 

The Exchange believes this may attract 

additional investors, and, in turn, create 

a more active and liquid trading 

environment. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(1) of the Act,55 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 

Trading Permit Holders (‘‘TPHs’’) and 

persons associated with its TPHs with 

the Act, the rules and regulations 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 5595 

56The Exchange believes these procedures have 

been effective for the surveillance of trading other 

broad-based index options, including EAFE and EM 

options, and will continue to employ them with 

respect to MXWLD, MXACW, and MXUSA options. 57 17 CFR 240.13d–1. 

58A Market-Maker ‘‘Trading Permit Holder 

registered with the Exchange pursuant to Rule 3.52 

for the purpose of making markets in option 

contracts traded on the Exchange and that has the 

rights and responsibilities set forth in Chapter 5, 

Section D of the Rules.’’ See Rule 1.1. 59A DPM is a TPH organization that is approved 

by the Exchange to function in allocated securities 

as a Market-Maker (as defined in Rule 8.1) and is 

subject to the obligations under Rule 5.54 or as 

otherwise provided under the rules of the 

Exchange. See Rule 1.1. 

60The 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’’). 

61See Rule 8.43 for reporting requirements. 

62See Rule 10.3 for a description of margin 

requirements. 

63 17 CFR 240.15c3–1. 

thereunder, and the rules of the 

Exchange. The Exchange represents that 

it has the necessary systems capacity to 

support the new option series given 

these proposed specifications. The 

Exchange believes the existing 

surveillance procedures and reporting 

requirements at the Exchange and other 

self-regulatory organizations are capable 

of properly identifying disruptive and/ 

or manipulative trading activity that 

may arise from listing and trading 

MXWLD, MXACW, and MXUSA 

options. The Exchange also represents it 

has adequate surveillances in place to 

detect potential manipulation, as well as 

reviews in place to identify potential 

changes in composition of the 

underlying indexes and 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.56

The Exchange also notes that large stock 

holdings must be disclosed to the 

Commission by way of Schedules 13D 

or 13G,57 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. 

Additionally, the proposed position 

and exercise limits that would apply to 

MXWLD, MXACW, and MXUSA 

options are similar to the current 

position and exercise limits that apply 

to other broad-based index options, and 

the same as those that apply to EAFE 

and EM options. The Exchange further 

notes that current Rules that apply to 

the trading of other index options traded 

on the Exchange, such as EAFE and EM 

options, would also apply to the trading 

of MXWLD, MXACW, and MXUSA 

options, such as, for example, Rules 

governing customer accounts, margin 

requirements, and trading halt 

procedures. The proposed index options 

would be subject to the same reporting 

requirements as other index options, 

which require that each TPH or TPH 

organization that maintains positions in 

the 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 would include, but would 

not be limited to, the options’ positions, 

whether such positions are hedged and, 

if so, a description of the hedge(s). 

Market-Makers 58 (including Designated 

Primary Market-Makers (‘‘DPMs’’)) 59

would continue to be exempt from this 

reporting requirement, however, the 

Exchange may access Market-Maker 

position information.60 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 options 

contracts of any single class for the 

previous day will remain at this level 

for the options subject to this proposal 

and will continue to serve as an 

important part of the Exchange’s 

surveillance efforts.61

The Exchange believes the current 

financial requirements imposed by the 

Exchange and by the Commission 

adequately address concerns regarding 

potentially large, unhedged positions on 

index options, further promoting just 

and equitable principles of trading and 

the maintenance of a fair and orderly 

market. Current margin and risk-based 

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.62 In addition, Rule 15c3–1 63

imposes a capital charge on TPHs to the 

extent of any margin deficiency 

resulting from the higher margin 

requirement. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act, 

because MXWLD, MXACW, and 

MXUSA options will be available to all 

market participants and will trade in the 

same manner as other index options in 

accordance with the Exchange’s Rules. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act, 

and instead believes the proposed rule 

change will enhance competition among 

market participants by introducing new 

index options to the market that may 

compete with other products currently 

available in the market (such as U.S.- 

and European-traded derivatives on the 

same indexes). As discussed above, the 

MSCI World Index, MSCI ACWI Index, 

and MSCI USA Index each satisfies the 

same initial listing criteria that currently 

applies to the MSCI EAFE Index and 

MSCI EM Index (as well as the FTSE 

Developed and FTSE Emerging Index). 

Additionally, the proposed terms of 

these index options (including the 

number of expirations, settlement, and 

exercise style) are consistent with 

current rules applicable to many other 

broad-based index options. 

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, as modified by Amendment No. 

1, is consistent with the Act. Comments 

may be submitted by any of the 

following methods: 


ddrumheller on DSK120RN23PROD with NOTICES1
5596 Federal Register / Vol. 89, No. 19 / Monday, January 29, 2024 / Notices 

64 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The ‘‘SIP’’ refers to the centralized securities 

information processors. 

4See ‘‘How Subdollar Securities are Trading 

Now’’ (March 16, 2023). Available at https://

www.cboe.com/insights/posts/how-subdollarsecurities-are-trading-now/. 

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–2024–006 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–2024–006. 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, as modified by Amendment No. 

1, 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–2024–006 and should be 

submitted on or before February 20, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.64

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01620 Filed 1–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: Notice is hereby given, 

pursuant to the provisions of the 

Government in the Sunshine Act, Public 

Law 94–409, that the Securities and 

Exchange Commission will hold an 

Open Meeting on Wednesday, January 

31, 2024, at 10:00 a.m. (ET). 

PLACE: The meeting will be held in 

Auditorium LL–002 at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549 and 

will be simultaneously webcast on the 

Commission’s website at www.sec.gov. 

STATUS: This meeting will begin at 10:00 

a.m. (ET) and will be open to the public. 

Seating will be on a first-come, firstserved basis. Visitors will be subject to 

security checks. The meeting will be 

webcast on the Commission’s website at 

www.sec.gov. 

MATTERS TO BE CONSIDERED: 

1. The Commission will consider 

whether to adopt new rules to further 

define the phrase ‘‘as a part of a regular 

business’’ as used in the statutory 

definitions of the terms ‘‘dealer’’ and 

‘‘government securities dealer’’ under 

the Securities Exchange Act of 1934, in 

connection with certain liquidity 

providers. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 24, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01758 Filed 1–25–24; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99414; File No. SR– 

CboeBZX–2024–006] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To Amend 

Rule 11.9(c)(6) and Rule 11.13(a)(4)(D) 

To Permit the Use of BZX Post Only 

Orders at Prices Below $1.00 

January 23, 2024. 

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 January 8, 

2024, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) 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 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) proposes to 

amend Rule 11.9(c)(6) and Rule 

11.13(a)(4)(D) to permit the use of BZX 

Post Only Orders at prices below $1.00. 

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://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), 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 

Trading in sub-dollar securities both 

on- and off-exchange has grown 

significantly since early 2019. An 

analysis of SIP 3 data by the Exchange 

found that sub-dollar average daily 

volume has increased 313% as 

compared to volumes in the first quarter 

of 2019.4 During this period, onexchange average daily volume in subdollar securities grew from 442 million 


ddrumheller on DSK120RN23PROD with NOTICES1