[Federal Register Volume 89, Number 42 (Friday, March 1, 2024)]
[Notices]
[Pages 15229-15233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04296]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99599; File No. SR-MEMX-2024-04]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Adopt a Low Priced 
Stock Strike Price Interval Program

February 26, 2024.
    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 February 20, 2024, MEMX LLC (``MEMX'' or the ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing with the Commission a proposal to adopt a 
Low Priced Stock Strike Price Interval Program. 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 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 19.5 to adopt a Low Priced 
Stock Strike Price Interval Program. 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 three preceding calendar 
months.\5\ At this time, the Exchange proposes to adopt rules 
substantively identical to MIAX in proposed Rule 19.5, Interpretation 
and Policy .09, amend Rule 19.5(d) to add clarifying text, and amend 
Rule 19.5 Interpretation and Policy .05(f) to harmonize the table 
within that Rule to the proposed rule text.
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    \5\ See 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).
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    Currently, Rule 19.5 describes the process and procedures for 
listing and trading series of options on the Exchange. Rule 19.5 
provides for a $2.50 Strike Price Program, where the Exchange may 
select up to 200 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 19.5, Interpretation and 
Policy .02 also provides for a $1 Strike Price 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 19.5, 
Interpretation and Policy .06 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 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.''
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    \6\ See Rule 19.5, Interpretation and Policy .03(a).
    \7\ See Rule 19.5, Interpretation and Policy .02(a).
    \8\ See Rule 19.5, Interpretation and Policy .06.
    \9\ See Rule 19.5, Interpretation and Policy .05. The proposed 
rule change also makes two non-substantive changes to correct 
inadvertent errors in the introductory paragraph of Rule 19.5, 
Interpretation and Policy .05, by adding the word ``Options'' in the 
third sentence so that ``Short Term Weekly Expirations'' becomes 
``Short Term Options Weekly Expirations'', and changing the term 
``Option'' to ``Options'' in the second to last sentence.
    \10\ See Rule 19.5, Interpretation and Policy .06.
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    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

[[Page 15230]]

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 Section 3(g) of the Options Listing Procedures Plan 
(``OLPP''). 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.
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    \11\ While 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.
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    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.\12\ Rule 19.3(f) provides the criteria for 
listing options on ADRs if they meet certain criteria and guidelines 
set forth in Rule 19.3. 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.\13\ 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.\14\
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    \12\ See Rule 19.3(b)(4).
    \13\ See Rule 19.3(f)(3)(B).
    \14\ See Rule 29.3(b)(7).
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    Additionally, the Exchange proposes to add non-substantive 
clarifying language to Rule 19.5(d), which defines the interval between 
strike prices of series of options on individual stocks. Specifically, 
in light of the multiple strike intervals allowed under various 
provisions of Rule 19.5 and the Interpretations and Policies thereto, 
the Exchange proposes to insert ``except as otherwise provided in this 
Rule and the Interpretations and Policies hereto . . .'' at the 
beginning of Rule 19.5(d). The Staff believes this will eliminate any 
potential confusion and further clarify that other strikes not 
mentioned in 19.5(d) are permissible under the Exchange's Rules.\15\
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    \15\ The Exchange notes that this introductory language appears 
in MIAX's similar Rule 404(d).
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    Lastly, the Exchange proposes to amend the table in Rule 19.5, 
Interpretation and Policy .05(f) to insert a new column to harmonize 
the Exchange's proposal to the strike intervals for Short Term Options 
Series as described in Rule 19.5, Interpretation and Policy .05. The 
table in Rule 19.5, Interpretation and Policy .05(f) 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 twenty-one 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 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.
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    \16\ See Securities Exchange Release Act No. 91125 (February 21, 
2021), 86 FR 10375 (February 19, 2021) (SR-BX-2020-032) (Order 
Granting Accelerated Approval of a Proposed Rule Change, as Modified 
by Amendment No. 1, To Amend Options 4, Section 5, To Limit Short 
Term Options Series Intervals Between Strikes That Are Available for 
Quoting and Trading on BX).
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    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. This initiative has 
been spearheaded by the Nasdaq BX who filed an initial 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\ 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'').\18\ 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 twenty-one days from the listing date.\19\ 
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, Nasdaq BX estimated that the Strike Interval 
Proposal would reduce the number of listed strikes in the options 
market by approximately 81,000 strikes.\20\ 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.
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    \17\ See Securities Exchange Act No. 91225 (February 12, 2021), 
86 FR 10375 (February 12, 2021) (SR-BX-2020-032) (BX Strike Approval 
Order); See also BX Options Strike Proliferation Proposal (February 
25, 2021) available at: https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal.
    \18\ Id.
    \19\ Id.
    \20\ Id.
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    The Exchange recognizes that its proposal will moderately increase 
the total number of option series available

[[Page 15231]]

on the Exchange. However, the Exchange's proposal is designed to only 
add strikes where there is investor demand \21\ 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 notes 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. The Exchange is still in the process of listing 
underlying option symbols in phases in connection with the launch of 
MEMX Options, but once fully rolled out, expects to list over 1,000,000 
options, therefore, the additional options that would be listed under 
this proposal would represent a relatively minor increase of 
approximately 0.325% in the number of options listed.
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    \21\ See proposed Rule 19.5, Interpretation and Policy .09(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.
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    The Exchange does not believe that its proposal contravenes the 
industry's 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 Members 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 that 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.\22\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \23\ 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) \24\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ Id.
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    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.\25\ 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.\26\ 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 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.
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    \25\ See Yahoo! Finance, https://finance.yahoo.com/quote/SOND/history?p=SOND (last visited August 10, 2023).
    \26\ Id.
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    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 the efforts undertaken by the industry 
to curb strike proliferation as that effort 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

[[Page 15232]]

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,\27\ ADRs,\28\ and broad-based indexes.\29\
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    \27\ See supra note 12.
    \28\ See supra note 13.
    \29\ See supra note 14.
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    The Exchange also believes the proposed rule change is consistent 
with Section 6(b)(1) of the Act,\30\ 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 Members and 
persons associated with its Members 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 
Members 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.
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    \30\ 15 U.S.C. 78f(b)(1).
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    The Exchange believes that the proposal to add non-substantive 
clarifying language to Rule 19.5(d), which defines the interval between 
strike prices of series of options on individual stocks, and make other 
non-substantive corrective edits to Rule 19.5, 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 eliminate potential Member confusion.
    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 19.3. Specifically, Rule 19.3(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 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 19.3(b) provides that, subject to 
other factors the Exchange may consider, 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 19.3 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 Members and all Members 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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to Section 19(b)(3)(A) of the Act \31\ and Rule 19b-
4(f)(6) \32\ 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.\33\
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    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 17 CFR 240.19b-4(f)(6).
    \33\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
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.
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    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) \34\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public

[[Page 15233]]

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.\35\ 
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.\36\
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    \34\ 17 CFR 240.19b-4(f)(6)(iii).
    \35\ See supra note 5.
    \36\ For 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).
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    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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0c7e796069216f6361616962787f4c7f696f226b637a"><span class="__cf_email__" data-cfemail="186a6d747d357b7775757d766c6b586b7d7b367f776e">[email protected]</span></a>. Please include 
file number SR-MEMX-2024-04 on the subject line.

Paper Comments

    <bullet> 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-MEMX-2024-04. 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-MEMX-2024-04 and should be 
submitted on or before March 22, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
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    \37\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-04296 Filed 2-29-24; 8:45 am]
BILLING CODE 8011-01-P


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