8822 Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 

5 ‘‘Data Subscriber’’ means any natural person or 

entity that receives Real-Time IEX market data 

either directly from the Exchange or from another 

non-affiliated Data Subscriber. A Data Subscriber 

must enter into a Data Subscriber Agreement with 

IEX in order to receive Real-Time IEX market data. 

A natural person or entity that receives Real-Time 

IEX market data from an affiliated Data Subscriber 

is subject to the Data Subscriber Agreement of such 

affiliated Data Subscriber. 

6Copies 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. 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 101428 

(Oct. 24, 2024), 89 FR 86393. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 101870 

(Dec. 10, 2024), 89 FR 101673 (Dec.16, 2024). The 

Commission designated January 28, 2025, as the 

date by which the Commission shall either approve 

or disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change. 

6Amendment No. 2 revises the proposal to: 

clarify and correct errors in the text of the proposed 

rules; provide an example of the application of the 

Exchange’s obvious error rules to complex FLEX v. 

non-FLEX Orders; provide additional discussion of 

the potential uses of FLEX v. non-FLEX Orders; 

revise the description of the proposal to make clear 

that the Exchange’s rules will continue to require 

that the component legs of FLEX complex orders, 

including FLEX v. Non-FLEX Orders, have the same 

underlying equity or index; and include additional 

information in the examples showing the pricing of 

FLEX v. non-FLEX Orders. Amendment No. 2 to the 

proposal is available at: https://www.sec.gov/ 

comments/sr-cboe-2024-047/srcboe2024047.htm. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify its 

Fee Schedule, pursuant to IEX Rules 

15.110(a) and (c), to change the existing 

definitions of ‘‘Real-Time’’ and 

‘‘Delayed’’ in relation to its proprietary 

market data feeds, so that the interval 

that differentiates Delayed IEX Data 

from Real-Time IEX Data is fifteen (15) 

minutes instead of fifteen (15) 

milliseconds. IEX intends to implement 

the proposed changes beginning on 

February 1, 2025 to provide an 

opportunity for Data Subscribers 5 to 

update their IEX market data 

subscriptions to suit their particular 

market data needs. 

The proposed rule change, including 

the Exchange’s statement of the purpose 

of, and statutory basis for, the proposed 

rule change, is available on the 

Exchange’s website at https://

www.iexexchange.io/resources/ 

regulation/rule-filings and on the 

Commission’s website at https://

www.sec.gov/rules-regulations/selfregulatory-organization-rulemaking/ 

national-securities-exchanges?file_

number=SR-IEX-2025-01. 

II. 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.6

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-IEX-2025- 

01) or by sending an email to rulecomments@sec.gov. Please include file 

number SR–IEX–2025–01 on the subject 

line. Alternatively, paper comments 

may be sent to Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090. All 

submissions should refer to file number 

SR–IEX–2025–01. 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-regulations/self-regulatoryorganization-rulemaking/nationalsecurities-exchanges?file_number=SRIEX-2025-01). 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–IEX–2025–01 and should be 

submitted on or before February 24, 

2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–02085 Filed 1–31–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102297; File No. SR– 

CBOE–2024–047] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of 

Amendment No. 2 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 2, Regarding the 

Types of Complex Orders Available for 

Flexible Exchange Options (‘‘FLEX’’) 

Trading on the Exchange 

January 28, 2025. 

On October 11, 2024, Cboe Exchange, 

Inc. (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to provide for the trading of 

complex flexible exchange options 

(‘‘FLEX’’) orders with both FLEX and 

non-FLEX components (‘‘FLEX v. nonFLEX Orders’’). The proposed rule 

change was published for comment in 

the Federal Register on October 30, 

2024.3 On December 10, 2024, pursuant 

to Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 The Commission 

received no comments regarding the 

proposal. On December 20, 2024, the 

Exchange filed Amendment No. 1 to the 

proposal, which superseded and 

replaced the original proposal in its 

entirety. On January 23, 2024, the 

Exchange filed Amendment No. 2 to the 

proposal, which supersedes and 

replaces Amendment No. 1 in its 

entirety.6 The Commission is publishing 

this notice to solicit comments on 

Amendment No. 2 from interested 

persons and is approving the proposed 

rule change, as modified by Amendment 

No. 2, on an accelerated basis. 

I. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 2 

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

or ‘‘Cboe Options’’) proposes to amend 

its Rules regarding the types of complex 

orders available for flexible exchange 

options (‘‘FLEX’’) trading at the 

Exchange. The Exchange initially 

submitted this rule filing SR–CBOE– 

2024–047 to the Commission on October 

11, 2024 (the ‘‘Initial Rule Filing’’). The 

Exchange submitted Amendment No. 1 

to the Initial Rule Filing on December 

20, 2024 (‘‘Amendment No. 1’’), which 

superseded the Initial Rule Filing and 

replaced it in its entirety. This 

Amendment No. 2 to the initial Rule 

Filing supersedes Amendment No. 1 

and replaces it in its entirety. The text 

of the proposed rule change is provided 

in Exhibit 5. The text of the proposed 

rule change is also available on the 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 8823 

7As part of the proposed rule change, the 

Exchange proposes to amend Rule 5.70(b) to add a 

cite to the definition of complex order in Rule 1.1; 

this is not a substantive change, but rather merely 

adds a cross-reference to the defined term for 

purposes of clarity. Per Rule 1.1, the term ‘‘complex 

order’’ means an order involving the concurrent 

execution of two or more different series in the 

same underlying security or index (the ‘‘legs’’ or 

‘‘components’’ of the complex order), for the same 

account, occurring at or near the same time and for 

the purpose of executing a particular investment 

strategy with no more than the applicable number 

of legs (which number the Exchange determines on 

a class-by-class basis). 

8Under the proposed rule change, complex FLEX 

Orders could include both listed instruments as 

well as FLEX instruments (if at least one leg is for 

a FLEX Option series), with an optional stock leg. 

Per the definition of complex order, the legs of all 

complex FLEX Orders (including FLEX v. NonFLEX options) must have the same underlying 

security or index. See Rule 1.1 (definition of 

complex order). 

9See supra note 1. [sic]. 

10See Rule 1.1. 

11This proposed change is consistent with 

current Rules that do not permit legging of complex 

orders consisting of legs in different groups of series 

in a class, as the System handles groups of series 

as different classes. See Rule 5.33(g)(6). The 

proposed change is also consistent with the 

Exchange’s handling of stock-option orders. See 

Rule 5.33(g)(5). 

Exchange’s website at https://

www.cboe.com/us/options/regulation/ 

rule_filings/. 

II. The Exchange’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 adopt rules 

to govern a new type of complex FLEX 

Order. Specifically, the Exchange 

proposes to amend Rules 4.21 (Series of 

FLEX Options), 5.70 (Availability of 

Orders), 5.72 (FLEX Trading), and 6.5 

(Nullification and Adjustment of 

Options Transactions Including Obvious 

Errors). 

FLEX Options are customized equity 

or index option contracts that allow 

investors to tailor contract terms for 

exchange-listed equity and index 

options. The Exchange may make 

simple FLEX Orders and complex FLEX 

Orders (see Rule 5.70(b)), including 

security future-option orders and stockoption orders, available for FLEX 

trading. Currently, the legs of a complex 

FLEX Order are limited to FLEX Option 

series only. An investor wishing to trade 

a complex strategy containing both 

FLEX Option series and non-FLEX 

Option series must execute such 

strategy using two or more separate 

orders. The Exchange now proposes to 

amend its rules to allow for the legs of 

a complex FLEX Order to include a 

combination of FLEX Option series and 

non-FLEX Option series (‘‘FLEX v. NonFLEX Order’’). 

The Exchange notes that, with 

exception of the rules proposed in this 

rule filing, FLEX v. Non-FLEX Orders 

will be subject to the same trading rules 

and procedures that currently govern 

the trading of other complex FLEX 

Orders on the Exchange. To permit the 

trading of FLEX v. Non-FLEX Orders, 

the Exchange proposes to amend its 

rules as follows. 

First, the Exchange proposes to 

amend Rule 5.70 (Availability of Orders) 

to add FLEX v. Non-FLEX Orders to the 

types of complex orders available for 

FLEX trading.7 Specifically, the 

Exchange proposes to amend Rule 

5.70(b) to state that the legs of a 

complex FLEX Order may be for FLEX 

Option series only or a combination of 

FLEX Option series and non-FLEX 

Option series (‘‘FLEX v. Non-FLEX 

Order’’).8 As noted above, FLEX v. NonFLEX Orders will be considered 

complex FLEX instruments, which will 

be subject to the same trading rules and 

procedures that govern the trading of 

other FLEX Orders on the Exchange 

(unless otherwise noted herein). The 

Exchange also proposes to amend Rule 

5.70(b) to remove the requirements set 

forth in subparagraphs (1) and (2).9 Rule 

5.70(b)(1) provides that each leg(s) of a 

complex FLEX Order must be for a 

FLEX Option series authorized for FLEX 

trading with the same underlying equity 

security or index. The Exchange 

proposes to delete this requirement, as 

such requirement is already contained 

within the definition of complex order 

set forth in Rule 1.1. Rule 5.70(b)92) 

[sic] provides that each leg(s) of a 

complex FLEX Order must have the 

same exercise style. The Exchange 

proposes to delete this requirement to 

allow for the trading of the proposed 

FLEX v. Non-FLEX Orders and will, in 

general, provide FLEX Traders with 

more flexibility and opportunities for 

customization via FLEX trading. 

Further, deletion of this requirement 

that each leg of a complex FLEX Order 

(whether comprised of all FLEX Option 

legs or FLEX and non-FLEX Option legs) 

must have the same exercise style will 

expand investors’ choices and 

flexibility, and provide FLEX Traders 

with a mechanism by which to manage 

the positions and associated risk in their 

portfolios more precisely, based on 

exercise style. 

The Exchange also proposes to add 

Rule 5.70(d), which states that, in 

classes determined by the Exchange, a 

nonconforming FLEX v. Non-FLEX 

Order is not eligible for electronic 

processing, in which case the 

nonconforming FLEX v. Non-FLEX 

Order may only be submitted for 

manual handling and open outcry 

trading. For reference, a 

‘‘nonconforming complex order’’ is 

defined as a complex order with a ratio 

on the options legs less than one-tothree (.333) or greater than three-to-one 

(3.00).10 The proposed language is the 

same as language currently included in 

the definition of ‘‘complex order’’ in 

Rule 5.33(a), the intent of which is to 

permit the Exchange to determine in 

which classes nonconforming complex 

orders (including stock-option orders) 

may be submitted for electronic 

processing on the Exchange pursuant to 

Rule 5.33. 

The Exchange also proposes to add 

Rule 5.70(e), which states that the nonFLEX Option leg(s) of a FLEX v. NonFLEX Order may not Leg into the 

Simple Book, to provide for more 

efficient execution and processing of 

FLEX v. Non-FLEX Orders. The series 

that would comprise a FLEX v. NonFLEX Order are parts of different classes 

and thus are subject to different trading 

setting and parameters (e.g., allocation, 

entitlements) pursuant to the Rules. 

Non-FLEX classes also have separate 

market data inputs, as the System must 

read market data for each class in 

connection with potential executions in 

non-FLEX classes.11 If the System 

receives a FLEX v. Non-FLEX Order, it 

would need to trade the Non-FLEX leg 

against the appropriate leg in the book; 

however, there is no book with resting 

simple FLEX orders against which the 

FLEX leg could execute. If this were to 

occur, execution opportunities for FLEX 

v. Non-FLEX Orders may be prevented, 

as while the Non-FLEX leg(s) of the 

FLEX v. Non-FLEX Order would 

execute against interest in the book, 

there would be no execution 

opportunities for the FLEX leg(s) of the 

FLEX v. Non-FLEX Order. As discussed 

below, the Non-FLEX legs of FLEX v. 

Non-FLEX Orders will protect Priority 


khammond on DSK9W7S144PROD with NOTICES
8824 Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 

12See Rule 1.1. The term ‘‘NBBO’’ means the 

national best bid or offer the Exchange calculates 

based on market information it receives from OPRA. 

13See Rule 1.1. The term ‘‘BBO’’ means the best 

bid or offer disseminated on the Exchange. 

14See Rule 5.33(f)(2)(A)(ii). 

15See proposed Rule 5.72(b)(2)(B)(i). This is 

consistent with nonconforming complex orders 

comprised of solely non-FLEX Options. See Rule 

5.33(f)(2)(A)(iv)(B). 

Customer orders in the simple book for 

the Non-FLEX classes. 

The Exchange proposes to amend 

Rule 5.72 (FLEX Trading) to distinguish 

criteria for a complex order with only 

FLEX Option legs and to add criteria for 

FLEX and non-FLEX Option legs of a 

FLEX v. Non-FLEX Order. First, the 

Exchange proposes to amend Rule 

5.72(b)(2) to specify that each FLEX 

Option leg of the FLEX Option complex 

strategy must include all terms for a 

FLEX Option series set forth in Rule 

4.21 (including that a non-FLEX Option 

series with identical terms is not listed 

for trading), subject to the order entry 

requirements set forth in Rule 5.7. 

Additionally, the Exchange proposes 

changes to distinguish the criteria for a 

complex order with only FLEX Option 

leg(s) from that proposed for FLEX v. 

Non-FLEX Orders, noting that there are 

no changes to the criteria to those FLEX 

Orders containing only FLEX Option 

leg(s) as a result of the proposed rule 

change. The Exchange proposes to 

amend Rule 5.72(b)(2)(A) to specifically 

reference the pricing requirements for 

complex FLEX Orders with FLEX 

Option legs only. As proposed Rule 

5.72(b)(2)(A)(i) contains the 

requirements for a complex FLEX Order 

with only FLEX Option legs submitted 

into the System for an electronic FLEX 

Auction pursuant to Rule 5.72(c) or 

Rules 5.73 or 5.74, which must include 

a bid or offer price for each leg, which 

leg prices must add together to equal the 

net price. Proposed Rule 

5.72(b)(2)(A)(ii) sets forth the 

requirements for a complex FLEX Order 

with only FLEX Option legs submitted 

into the System prior to representation 

in an open outcry FLEX Auction 

pursuant to Rule 5.72(d), namely that 

the order may include a bid or offer 

price on one or more of the legs (subject 

to a FLEX Trader’s responsibilities 

pursuant to Rule 5.91 and Chapter 9). 

The execution leg prices must be 

entered or modified, as necessary, via 

PAR following execution of the order, 

which prices must add together to equal 

the net execution price. 

The Exchange proposes to add Rule 

5.72(b)(2)(B) containing certain 

requirements for a FLEX v. Non-FLEX 

Order. Under the proposed rule, a FLEX 

v. Non-FLEX Order submitted in the 

System for an electronic FLEX Auction 

pursuant to Rule 5.72(c) must include a 

bid or offer price for each FLEX Option 

leg but no bid or offer price for each 

non-FLEX Option leg, and a net price. 

By allowing the System the ability to 

adjust the price of the legs, FLEX 

Traders may achieve their desired net 

price for the order, while ensuring the 

non-FLEX Option legs fit within pricing 

requirements of the non-FLEX markets. 

A FLEX v. Non-FLEX Order submitted 

into the System prior to representation 

in an open outcry FLEX Auction 

pursuant to Rule 5.72(d) below may 

include a bid or offer price for any FLEX 

Option leg but no bid or offer price for 

each non-FLEX Option leg, and a net 

price. By allowing flexibility in open 

outcry trading, FLEX Traders may 

achieve their desired net price for the 

order. 

To achieve the desired net execution 

price for a FLEX v. Non-FLEX Order (1) 

the execution leg price of each nonFLEX Option leg may not be worse than 

the NBBO,12 worse than the BBO,13 or 

equal to the BBO if there is a Priority 

Customer order(s) on the Simple Book; 

and (2) the execution leg price of each 

FLEX Option leg(s) may be adjusted so 

that the prices of the FLEX Option legs 

combined with the prices of the nonFLEX Option legs add together to equal 

the net price. Thus, the non-FLEX 

Option legs of a FLEX v. Non-FLEX 

Order would be able to trade at the same 

price as non-Priority Customer interest 

at the BBO, which is consistent with 

complex orders comprised of solely 

non-FLEX Options.14 In addition, no 

non-FLEX component of a FLEX v. NonFLEX Order would be able to trade at 

the same price as resting Priority 

Customer interest at the BBO.15 If a nonFLEX Option leg of a FLEX v. Non-FLEX 

Order cannot execute at a price 

permissible that meets the requirements 

set forth in proposed Rule 

5.72(b)(2)(B)(i), the entire FLEX v. NonFLEX Order will be cancelled. 

The below examples are designed to 

illustrate the pricing of a FLEX v. NonFLEX Order. Assume for each example 

a FLEX Trader wishes to execute a 

complex FLEX Order with two legs (one 

FLEX Option leg and one non-FLEX 

Option leg). 

Example 1: Listed (i.e., non-FLEX) legs 

are adjusted to their NBBO first, FLEX 

Option leg is then adjusted residually to 

meet net execution price. 

Instrument ID Legs Symbol Side Ratio Expiration Strike Type 

CI0001 ..................... Leg 1 ....................... XYZ Buy .......................... 1 December ............... 10 Call. 

Leg 2 ....................... 1XYZ Sell .......................... 1 November ............... 10.01 Call. 

Market for Non-FLEX Leg 

Away BBO: 2.15 × 2.35 

BBO: 2.20 × 2.30 

NBBO: 2.20 × 2.30 

FLEX Order Auction (‘‘FOA’’): Buy 10 

CI0001 @1 1.25. 

Leg 1 (Non-FLEX Option Leg) Price: N/ 

A 

Leg 1 Market: (Exchange Market-Maker) 

2.20 × 2.30 (Exchange Market-Maker) 

Leg 2 (FLEX Option Leg) Price: 1.00 

Response 1: Sell 5 CI0001 @1 1.19 

Response 2: Sell 5 CI0001 @1 1.25 

FOA trades 5 CI0001 with Response 1 

at 1.19. The legs print at 2.20 and 

1.01. 

FOA trades 5 CI0001 with Response 2 

at 1.25. The legs print at 2.25 and 

1.00. 

Example 2: Listed (i.e., Non-FLEX) 

legs are adjusted up/down to their 

NBBO first, FLEX Option leg retains 

specified price, as no further adjustment 

is needed to meet net price. 

Instrument ID Legs Symbol Side Ratio Expiration Strike Type 

CI0001 ..................... Leg 1 ....................... XYZ Buy .......................... 1 December ............... 10 Call. 

Leg 2 ....................... 1XYZ Sell .......................... 1 November ............... 10.01 Call. 

Market for Non-FLEX Leg Away BBO: 2.10 × 2.35 BBO: 2.15 × 2.30 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 8825 

16As part of the proposed changes, the Exchange 

proposes to add a ‘‘FLEX Option series’’ as a 

defined term in Rule 4.21(a). Further, to enhance 

comprehension, the Exchange proposes to amend 

Rule 4.21(a)(2) to add a missing word (‘‘be’’), as 

well as clarify that a FLEX Order for a new FLEX 

Option series may be submitted on any trading day 

prior to the expiration date. Such changes are nonsubstantive, clarifying changes. 

17See proposed Rule 6.5, Interpretation and 

Policy .07(d). See also Rule 6.5(c)(1). 

18See proposed Rule 6.5, Interpretation and 

Policy .07(d). See also Rule 6.5(c)(4)(A). 

NBBO: 2.15 × 2.30 

FOA: Buy 10 CI0001 @1 1.25. 

Leg 1 (Non-FLEX Option Leg) Price: N/ 

A 

Leg 1 Market: (Exchange Market-Maker) 

2.15 × 2.30 (Exchange Market-Maker) 

Leg 2 (FLEX Option Leg) Price: 1.00 

Response 1: Sell 5 CI0001 @1 1.19 

Response 2: Sell 5 CI0001 @1 1.25 

FOA trades 5 CI0001 with Response 1 

at 1.19. The legs print at 2.19 and 

1.00. 

FOA trades 5 CI0001 with Response 2 

at 1.25. The legs print at 2.25 and 

1.00. 

While the System followed the same 

process in both examples to price the 

non-FLEX legs first, because the leg 

market was wider in the second 

example, the System was able to execute 

the non-FLEX leg in that example at a 

price within that market without the 

need to adjust the entered price of the 

FLEX leg. 

The Exchange proposes to amend 

Rule 4.21 (Series of FLEX Options).16

The Exchange proposes to add Rule 

4.21(a)(4) to state that the Exchange may 

halt trading in a FLEX complex strategy 

(whether comprised of all FLEX Option 

legs or FLEX and non-FLEX Option legs) 

if any leg of the strategy is halted. The 

System does not accept a FLEX complex 

order for a series while trading in the 

class is halted. A FLEX complex strategy 

may not execute until all legs are no 

longer halted. 

Finally, the Exchange proposes to 

amend Rule 6.5 (Nullification and 

Adjustment of Option Transactions 

Including Obvious Errors), 

Interpretation and Policy .07. 

Specifically, the Exchange proposes to 

add Rule 6.5, Interpretation and Policy. 

07(d), to state that if a non-FLEX Option 

leg of a FLEX v. Non-FLEX Order 

qualifies as an Obvious Error under Rule 

6.5(c)(1) or a Catastrophic Error under 

Rule 6.5(d)(1), then the non-FLEX 

Option leg that is an Obvious or 

Catastrophic Error will be adjusted in 

accordance with Rules 6.5(c)(4)(A) or 

(d)(3), respectively, regardless of 

whether one of the parties is a 

Customer. However, the non-FLEX 

Option leg of any Customer order 

subject to proposed Rule 6.5, 

Interpretation and Policy. 07(d) will be 

nullified if the adjustment would result 

in an execution price higher (for buy 

transactions) or lower (for sell 

transactions) than the Customer’s net 

execution price for the non-FLEX 

Option leg. If any leg of a FLEX v. NonFLEX Order is nullified, the entire 

transaction is nullified. This is 

consistent with the Exchange’s handling 

of other complex orders, including 

stock-option orders, and ensures 

protections in the event of an Obvious 

or Catastrophic error. The below 

example is designed to illustrate how a 

FLEX v. Non-FLEX Order will be 

processed in the event of an Obvious 

Error. Assume for the example a FLEX 

Trader wishes to execute a complex 

FLEX Order with three legs (one FLEX 

Option leg and two non-FLEX Option 

leg). 

Example 3: Listed Leg 1 qualifies as 

Obvious Error. 

Leg 1: Buy 1 Call 1.00 × 1.20 

Leg 2: Buy 1 Call 2.00 × 2.25 

Leg 3: Buy 1 FLEX Call (Note: the FLEX 

leg is not considered in determining 

obvious error adjustments) 

SNBBO of listed legs: 3.00 × 3.45 

Assume Leg 1 updates to 1.00 × 4.00; 

Listed Leg SNBBO updates to 3.00 × 

6.25 

1 millisecond later 

Complex Order trades at 5.45 

Leg 1 trades @2 2.25 

Leg 2 trades @2 2.20 

FLEX leg trades @1 1.00 

This order, specifically the execution 

on Leg 1, qualifies as Obvious Error, 

based on prices prior to Leg 1 market 

going wide.17

Obvious error adjustment: Leg 1 is 

adjusted to trade at 1.60 

Theoretical price (‘‘TP’’) = 1.10 

Theoretical offer = 1.45 

Theoretical Offer + 0.15 adjustment 18

= 1.60. 

The Exchanges notes that the 

counterparties to an execution of a 

FLEX v. Non-FLEX Order trade all of the 

component legs of the order. 

The Exchange believes that its 

existing surveillance and reporting 

safeguards in place are adequate to deter 

and detect possible manipulative 

behavior which might arise from trading 

FLEX v. Non-FLEX Orders and will 

support the protection of investors and 

the public interest. The Exchange also 

represents that it has the necessary 

system capacity to support the new 

complex FLEX Order type. Finally, the 

Exchange does not believe that any 

market disruptions will be encountered 

with the introduction of this complex 

FLEX Order type. The Exchange 

currently allows for trading of several 

types of complex orders, including 

stock-option orders, and has not 

experienced any market disruptions or 

issues with capacity. Rather, the 

Exchange believes the introduction of 

this complex FLEX Order type may 

promote more efficient trading, as 

investors wishing to trade a complex 

strategy containing both FLEX Option 

series and non-FLEX Option series 

would no longer be required to execute 

such strategy using two or more separate 

orders. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

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

Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 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) requirement that the 

rules of an exchange not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Specifically, the Exchange believes 

the proposed rule change will benefit 

investors by expanding investors’ 

choices and flexibility with respect to 

the trading of FLEX Options. The 

Exchange believes that introducing 

FLEX v. Non-FLEX Orders will increase 

order flow to the Exchange, increase the 

variety of options products available for 

trading, and provide a valuable tool for 

investors to manage risk. 

The Exchange believes that the 

proposed rule change would remove 

impediments to and perfect the 

mechanism of a free and open market as 

FLEX v. Non-FLEX Orders would enable 

market participants to execute a 

complex strategy including a 

combination of FLEX Option series and 

non-FLEX Option series, which would, 

in turn, provide greater opportunities 

for market participants to manage risk 

through the use of a complex FLEX 

Order to the benefit of investors and the 


khammond on DSK9W7S144PROD with NOTICES
8826 Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 

public interest. The proposed rule 

change will benefit TPHs by providing 

a more efficient mechanism for TPHs to 

provide and seek liquidity for 

customized or complex FLEX strategies 

which include a non-FLEX Option 

leg(s). 

Further, trading FLEX Options, 

including FLEX v. Non-FLEX Orders, on 

an exchange is an alternative to trading 

customized options in OTC markets and 

carries with it the advantages of 

exchange markets such as transparency, 

parameters and procedures for clearance 

and settlement, and a centralized 

counterparty clearing agency. Therefore, 

the Exchange believes the proposed rule 

change will promote these same benefits 

for the market as a whole by providing 

an additional venue for market 

participants to seek liquidity for 

customized, large-sized, or complex 

FLEX option orders, including those 

with a non-FLEX Option leg(s). The 

Exchange believes that providing an 

additional venue for these FLEX orders, 

rather than potentially splitting the 

orders across OTC and exchange 

markets, will benefit investors by 

increasing competition for order flow 

and executions, and thereby potentially 

result in more competitive pricing 

related to FLEX Options. 

The Exchange believes that the 

proposed changes to Rule 5.70(b), to add 

FLEX v. Non-FLEX Orders to the list of 

complex orders available for FLEX 

trading, are consistent with the Act and 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the changes will allow investors to trade 

in a more efficient manner, allowing 

investors to better customize their 

trading strategies and implement more 

precise trading strategies which are not 

available under current rules. Currently, 

a market participant is unable to trade 

a FLEX Option and a listed option as 

part of the same complex strategy; such 

user must submit an order containing 

the FLEX Option(s) and an order 

containing the listed option. This may 

introduce additional complexities such 

as price and legging risk, which would 

be eliminated under the proposed rule 

change. These complexities may 

unnecessarily limit market participants’ 

ability to trade in an exchange 

environment that offers the added 

benefits of transparency, price 

discovery, liquidity, and financial 

stability. These investors may have 

improved capability under the proposed 

rule change to execute strategies to meet 

their specific investment objectives by 

using a single order with customized 

FLEX Option legs with non-FLEX 

Option legs. 

Similarly, the Exchange also believes 

the proposed changes to Rule 5.70(b), to 

remove the requirement that each leg of 

a complex FLEX Order must have the 

same exercise style, will remove 

impediments to and perfect the 

mechanism of a free and open market 

and benefit investors, because it will 

provide TPHs with additional flexibility 

and precision in their investment 

strategies, by allowing TPHs to trade 

complex strategies that would otherwise 

be required to split into multiple, 

separate orders. 

The proposed changes to Rule 5.70(b) 

to add a cite to Rule 1.1 for the 

definition of complex orders and delete 

Rule 5.70(b)(1) provides further clarity 

within the Rules, to the benefit of 

investors. 

The Exchange believes the proposed 

changes to Rule 4.21(a), which address 

when the Exchange may halt trading in 

a FLEX complex strategy (whether 

comprised of all FLEX Option legs or 

FLEX and non-FLEX Option legs), are 

consistent with the Act and promotes 

the public interest and the protection of 

investors by clarifying the Exchange’s 

authority with respect to FLEX complex 

strategies comprised of all FLEX Option 

legs and providing a consistent and 

transparent procedure with respect to 

FLEX complex strategies comprised of 

FLEX and non-FLEX Option legs, that 

would be applied by the Exchange, 

similar to trading halt authority under 

current rules. Further, the proposed 

change to add the defined term ‘‘FLEX 

Option series’’ provides further clarity 

within the Rules and eliminates 

potential confusion by providing a 

definition of ‘‘FLEX Option series’’ to 

the benefit of investors. 

The Exchange believes the proposed 

changes to Rule 5.72(b)(2)(A), which 

provide clarity with respect to the 

criteria required for complex FLEX 

Orders with FLEX Option legs only, 

helps will help promote a fair and 

orderly national options market system. 

As such, the changes proposed under 

Rule 5.72(b)(2)(A), to separate out the 

requirements for complex FLEX Orders 

with FLEX Option legs only, provide 

clarity regarding the requirements for 

complex FLEX Orders with FLEX 

Option legs only, as compared to the 

proposed requirements for complex 

FLEX Orders with FLEX and non-FLEX 

Option legs. 

Additionally, the Exchange believes 

the proposed rule change to add Rule 

5.70(d) will 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, 

because it will provide market 

participants with the same flexibility 

with respect to all their complex trading 

strategies. The proposed rule change 

eliminates confusion regarding what 

types of FLEX v. Non-FLEX Orders are 

permissible for electronic processing. As 

noted above, the proposed rule changes 

regarding execution of nonconforming 

FLEX v. Non-FLEX Orders are 

consistent with the Exchange’s 

previously adopted rules regarding 

execution of other nonconforming 

complex orders. 

The Exchange believes the proposed 

pricing requirements for FLEX v. NonFLEX Orders, set forth in proposed Rule 

5.72(b)(2)(B), would remove 

impediments to and perfect the 

mechanism of a free and open market, 

as the proposed trading process for 

FLEX v. Non-FLEX Orders will provide 

the ability for investors to achieve the 

desired net package price for those 

orders while protecting customers with 

resting interest in the non-FLEX Simple 

Book. By requiring a FLEX v. Non-FLEX 

Order submitted into a FLEX Auction 

(whether electronically or in open 

outcry) to include a bid or offer price for 

each FLEX Option leg, but no bid or 

offer for each non-FLEX Option leg, and 

a net price, the requirements ensure that 

the non-FLEX Option leg will be subject 

to the same pricing requirements as they 

would if not part of a FLEX v. NonFLEX Order. Specifically, the price of 

any non-FLEX Option leg that is part of 

a FLEX v. Non-FLEX Order may not be 

outside of the BBO or NBBO. The 

Exchange’s proposal will continue to 

protect Priority Customer interest on the 

Exchange, as the non-FLEX Option legs 

of a FLEX v. Non-FLEX Order will 

always trade at a price better than BBO 

if there is a customer on a leg. Further, 

the price of a FLEX Option leg(s) that is 

part of a FLEX v. Non-FLEX Order must, 

following execution of the Non-FLEX 

Option leg(s), serve to achieve the net 

execution price (which may not be 

worse than the desired net price 

included at order submission), which 

the Exchange believes will protect 

investors by ensuring the price of the 

FLEX Option leg(s) adhere to the agreed 

upon execution prices and the order’s 

limit price. 

The Exchange believes this proposed 

trading process will ensure that a user 

who chooses to submit a listed (i.e., 

Non-FLEX) leg as part of a FLEX v. NonFLEX Order is subject to the same 

pricing requirements as they would be 

if the listed leg was not submitted with 

FLEX Option legs for execution. 

Ultimately, FLEX v. Non-FLEX Orders 

will trade in the same manner as FLEX 

complex orders do today, and execution 

of the non-FLEX Option legs of these 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 8827 

19See, e.g., Rule 8.35. 

20 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

21 15 U.S.C. 78f. 

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

23Complex FLEX Orders also may be comprised 

solely of FLEX Option series. See proposed 

Exchange Rule 5.70(b). 

24See Amendment No. 2 at 15. 

25See id. 

26See proposed Exchange Rule 5.70(b). Exchange 

Rule 1.1 defines a complex order as ‘‘an order 

involving the concurrent execution of two or more 

different series in the same underlying security or 

index (the ‘‘legs’’ or ‘‘components’’ of the complex 

order), for the same account, occurring at or near 

the same time and for the purpose of executing a 

particular investment strategy with no more than 

the applicable number of legs (which number the 

Exchange determines on a class-by-class basis). The 

Exchange determines in which classes complex 

orders are eligible for processing. The Exchange 

determines on a class-by-class basis whether nonconforming complex orders are eligible for 

electronic processing. Unless the context otherwise 

requires, the term complex order includes Index 

Combo orders, stock-option orders and security 

future-option orders.’’ 

27See Amendment No. 2 at footnote 1. 

28See id. at 5. 

orders will continue to comply with 

linkage requirements (by not permitting 

trade-throughs of the NBBO) and protect 

resting customer interest in the Simple 

Book. Further, the Exchange believes 

that the proposal to not permit the nonFLEX Option legs of a FLEX v. NonFLEX Order to leg into the Simple Book 

is consistent with the Act and promotes 

the public interest and the protection of 

investors, because it will provide for 

more efficient execution and processing 

of FLEX v. Non-FLEX Orders, as legging 

would prevent execution opportunities 

for these orders (as discussed above). 

Finally, the Exchange believes that 

the proposed rule change is designed to 

not permit unfair discrimination among 

market participants as all TPHs may, but 

are not required to, trade FLEX v. NonFLEX Orders. 

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, 

as all TPHs that are registered as FLEX 

Traders in accordance with the 

Exchange’s Rules will be able to trade 

FLEX v. Non-FLEX Orders in the same 

manner. 

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, 

as the proposal is designed to increase 

competition for order flow on the 

Exchange in a manner that is beneficial 

to investors because it is designed to 

provide investors seeking to execute 

both a FLEX Option(s) and a listed 

option(s) with a more effective method 

of executing the trades, which may 

result in trade efficiencies (i.e., pricing 

or reporting (e.g., position limits) 

efficiencies) 19 and reduced risk (i.e., 

pricing and legging risk). The Exchange 

believes the proposed rule change will 

encourage competition, as it may 

broaden the base of investors that use 

FLEX Options to manage their trading 

and investment risk, including investors 

that currently trade in the OTC market 

for customized options. The Exchange 

believes the proposed rule change may 

increase competition as it may lead to 

the migration of options currently 

trading in the OTC market to trading on 

the Exchange. Also, any migration to the 

Exchange from the OTC market would 

result in increased market transparency 

and thus increased price competition. 

The Exchange further notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues who offer similar functionality. 

All TPHs may, but are not required to, 

trade FLEX v. Non-FLEX Orders at the 

Exchange. The Exchange does not 

believe 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, as other exchanges 

could adopt this order type if so desired. 

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 written comments on the 

proposed rule change. 

III. Discussion and Commission 

Findings 

After careful consideration, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 2, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange,20 and, in 

particular, the requirements of Section 6 

of the Act.21 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,22 which requires that 

an exchange have rules designed to 

prevent fraudulent and manipulative 

acts and practices, to remove 

impediments to and perfect the 

mechanism of a free and open market, 

and to protect investors and the public 

interest. 

The proposal amends Exchange Rules 

4.21, 5.70, 5.72, and 6.5 to provide for 

the trading of complex FLEX v. NonFLEX Orders, which are comprised of a 

combination of FLEX Option series and 

non-FLEX option series.23 Currently, 

market participants are unable to trade 

a FLEX Option and a listed option as 

part of the same complex strategy and, 

instead, must submit separate orders for 

the FLEX Option(s) and the listed 

option components, which may 

introduce price and legging risk.24 The 

Exchange states that the proposal will 

eliminate these risks and allow market 

participants to execute strategies to meet 

their investment objectives by using a 

single order with customized FLEX 

Option legs and non-FLEX Option 

legs.25 The Commission finds that the 

proposal could help investors achieve 

their investment objectives more 

efficiently by allowing them to trade 

complex FLEX Orders with FLEX and 

non-FLEX components as part of a 

single complex FLEX v. Non-FLEX 

Order. As discussed below, the proposal 

also adopts rules governing the trading 

of complex FLEX v. Non-FLEX Orders 

that are consistent with the Exchange’s 

existing rules. 

The proposal deletes Exchange Rule 

5.70(b)(1), which provides that each 

leg(s) of a complex FLEX Order must be 

for a FLEX Option series authorized for 

FLEX trading with the same underlying 

equity security or index. However, 

complex FLEX v. Non-FLEX Orders are 

complex orders, as defined in Exchange 

Rule 1.1, and the definition of complex 

order requires, among other things, that 

the component legs of a complex order 

have the same underlying security or 

index.26 Accordingly, the deletion of 

Exchange Rule 5.70(b)(1) is a nonsubstantive change,27 and Exchange 

Rule 5.70(b), as amended, will continue 

to require that the component legs of a 

complex FLEX Order, including a 

complex FLEX v. Non-FLEX Order, have 

the same underlying security or index.28

The proposal also amends Exchange 

Rule 5.70(b) to allow the component 

legs of complex FLEX Orders to have 

different exercise styles. The Exchange 

states that removing the requirement 

that all component legs of a complex 

FLEX Order have the same exercise 

style will expand investors’ choices and 

flexibility and provide them with a 

mechanism to more precisely manage 


khammond on DSK9W7S144PROD with NOTICES
8828 Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 

29See id. ‘‘ 

30Exchange Rule 1.1 defines a non-conforming 

complex order as ‘‘s (a) a complex order with a ratio 

on the options legs less than one-to-three (.333) or 

greater than three-to-one (3.00) (except for Index 

Combo orders) and (b) a stock-option order with a 

ratio greater than eight-to-one (8.00), where the ratio 

represents the total number of units of the 

underlying stock or convertible security in the 

option leg(s) to the total number of units of the 

underlying stock or convertible security in the stock 

leg. For the purpose of applying these ratios to 

complex orders comprised of legs for both minioptions and standard options, ten mini-option 

contracts represent one standard option contract. 

For the purpose of applying these ratios to complex 

orders comprised of legs for both micro-options and 

standard options, 100 micro-option contracts 

represent one standard option contract.’’ 

31See Amendment No. 2 at 6. 

32See Amendment No. 2 at 6–7 and footnote 5. 

See also Exchange Rule 5.33(g)(5). The Exchange 

states that not legging complex FLEX v. Non-FLEX 

Orders will provide for more efficient execution 

and processing of FLEX v. Non-FLEX Orders. The 

Exchange states that if the System receives a FLEX 

v. Non-FLEX Order, it would need to trade the NonFLEX leg against the appropriate leg in the book; 

however, there is no book with resting simple FLEX 

orders against which the FLEX leg could execute. 

The Exchange states that if this were to occur, 

execution opportunities for FLEX v. Non-FLEX 

Orders could be prevented, because although the 

non-FLEX leg(s) of the FLEX v. Non-FLEX Order 

would execute against interest in the book, there 

would be no execution opportunities for the FLEX 

leg(s) of the FLEX v. Non-FLEX Order. See 

Amendment No. 2 at 6–7. 

33See proposed Exchange Rule 5.72(b)(2)(B). The 

proposal makes no substantive changes to the 

pricing requirements for complex FLEX Orders with 

only FLEX Option legs. 

34See Exchange Rule 5.33(f)(2)(A)(iv)(b). If a 

complex FLEX v. Non-FLEX Order cannot execute 

at a price that satisfies this requirement, the 

complex FLEX v. Non-FLEX Order is cancelled. See 

proposed Exchange Rule 5.72(b)(2)(B). 

35See proposed Exchange Rule 5.72(b)(2)(B)(i) 

and Exchange Rule 5.33(f)(2)(A)(ii). The BBO is the 

best bid or offer disseminated on the Exchange. See 

Exchange Rule 1.1. 

36See proposed Exchange Rule 5.72(b)(2)(B)(i). 

See also Exchange Rule 5.66(b)(7) (permitting the 

component legs of a Complex Trade, as defined in 

Exchange Rule 5.65(d), to trade through a Protected 

Bid or Protected Offer). The NBBO is the national 

best bid or offer the Exchange calculates based on 

market information it receives from the Options 

Price Reporting Authority. See Exchange Rule 1.1. 

37Exchange Rule 4.21(a)(3) provides that ‘‘The 

Exchange may halt trading in a FLEX Option class 

pursuant to Rule 5.20, and always halts trading in 

a FLEX Option class when trading in a non-FLEX 

Option class with the same underlying equity 

security or index is halted on the Exchange. The 

System does not accept a FLEX Order for a FLEX 

Option series while trading in a FLEX Option class 

is halted.’’ 

the positions and associated risk in their 

portfolios.29

The proposal adopts Exchange Rule 

5.70(d) to provide that, in classes 

determined by the Exchange, a 

nonconforming FLEX v. Non-FLEX 

Order is not eligible for electronic 

processing.30 The Exchange states that 

this provision is consistent the 

flexibility provided in the definition of 

‘‘complex order’’ in Exchange Rule 

5.33(a), which provides, in part, that ‘‘In 

classes determined by the Exchange, a 

nonconforming complex order is not 

eligible for electronic processing, 

including COA, COB, C-AIM, and CSAM.’’ Thus, Exchange Rule 5.33(a) 

allows the Exchange to determine in 

which classes nonconforming complex 

orders (including stock-option orders) 

may be submitted for electronic 

processing on the Exchange pursuant to 

Exchange Rule 5.33.31 The proposal also 

adopts new Exchange Rule 5.70(e), 

which provides that the non-FLEX 

Option leg(s) of a FLEX v. Non-FLEX 

Order may not leg into the Simple Book. 

The Exchange states that not allowing 

the non-FLEX Option leg(s) to leg into 

the Simple Book will provide for more 

efficient execution and processing of 

FLEX v. Non-FLEX Orders and is 

consistent with the Exchange’s handling 

of stock-option orders, which also do 

not leg into the Simple Book.32

Accordingly, proposed Exchange Rules 

5.70(d) and (e) are consistent with 

existing Exchange rules applicable to 

the trading of complex orders. 

The proposal amends Exchange Rule 

5.72(b) to establish pricing requirements 

for complex FLEX v. Non-FLEX Orders 

that are designed to protect interest on 

the Exchange’s Simple Order Book and 

ensure that the non-FLEX components 

do not trade through the NBBO.33

Proposed Exchange Rule 5.72(b)(2)(B)(i) 

protects the priority of Priority 

Customer orders on the Simple Book by 

requiring each non-FLEX leg of a 

complex FLEX v. Non-FLEX Order to 

trade at a price that is better than the 

price of resting Priority Customer orders 

on the Simple Book. This requirement is 

consistent with the Exchange’s pricing 

requirements for the component legs of 

nonconforming complex orders.34 The 

proposed rules also prohibit the nonFLEX component legs of a complex 

FLEX v. Non-FLEX Order from trading 

at a price that is worse than the BBO, 

which consistent with the Exchange’s 

pricing requirements for the component 

legs of complex orders.35 In addition, 

proposed rules prohibit the non-FLEX 

component legs of a complex FLEX v. 

Non-FLEX Order from trading at a price 

that is worse than the NBBO, which is 

consistent with the pricing requirements 

for nonconforming complex orders.36

Proposed Exchange Rule 6.5, 

Interpretation and Policy .07(d), which 

applies the Exchange’s Obvious Error 

and Catastrophic Error provisions to the 

non-FLEX leg(s) of a complex FLEX v. 

Non-FLEX Order, is consistent with 

Exchange Rules 6.5, Interpretation and 

Policy .07(a) and (c), which apply the 

Exchange’s Obvious Error and 

Catastrophic Error provisions to, 

respectively, complex orders that 

executes against leg market interest and 

stock-option orders. Proposed Exchange 

Rule 4.21(a)(4) regarding the Exchange’s 

authority to halt trading in a FLEX 

complex strategy, whether comprised 

solely of FLEX Options or FLEX and 

non-FLEX Options, when any leg of the 

strategy is halted, is similar to the 

Exchange’s authority under Exchange 

Rule 4.21(a)(3) and will provide clarity 

with respect to the Exchange’s handling 

of FLEX complex strategies when 

trading in any leg of the strategy is 

halted.37

IV. Solicitation of Comments on 

Amendment No. 1 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views, and 

arguments concerning whether 

Amendment No. 2 is consistent with the 

Act. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2024–047 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–2024–04 7. 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 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 21 / Monday, February 3, 2025 / Notices 8829 

38 15 U.S.C. 78s(b)(2). 

39 15 U.S.C. 78f(b)(5). 

40 15 U.S.C. 78s(b)(2) 

41 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f). 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 will institute proceedings to determine 

whether the proposed rule change should be 

approved or disapproved. 

5The Exchange originally filed to amend the Fee 

Schedule on January 2, 2025 (SR–NYSEARCA– 

2025–01). On January 16, 2025, the Exchange 

withdrew SR–NYSEARCA–2025–01 and replaced it 

with this filing. 

6Copies 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. 

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–2024–047 and should be 

submitted on or before February 24, 

2025. 

V. Accelerated Approval of 

Amendment No. 2 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act, 

for approving Amendment No. 2 prior to 

the 30th day after the date of 

publication of notice of Amendment No. 

1 in the Federal Register. Amendment 

No. 2 revises the proposal to: clarify and 

correct errors in the text of the proposed 

rules; provide an example of the 

application of the Exchange’s obvious 

error rules to complex FLEX v. nonFLEX Orders; provide additional 

discussion of the potential uses of FLEX 

v. non-FLEX Orders; revise the 

description of the proposal to make 

clear that the Exchange’s rules will 

continue to require that the component 

legs of FLEX complex orders, including 

FLEX v. Non-FLEX Orders, have the 

same underlying equity or index; and 

include additional information in the 

examples showing the pricing of FLEX 

v. non-FLEX Orders. The proposed 

changes to clarify and correct errors in 

the text of the proposed rules will help 

to ensure the accuracy of the Exchange’s 

rules. The proposed change in the 

description of the proposal to make 

clear that the Exchange’s rules will 

continue to require that the component 

legs of FLEX complex orders have the 

same underlying equity or index will 

help to ensure that the proposal 

accurately describes the rules being 

adopted. The example showing the 

application of the obvious error rules to 

complex FLEX v. Non-FLEX Order 

demonstrates the operation of these 

rules in the context of complex FLEX v. 

Non-FLEX orders, and the additions to 

the pricing examples help to clarify 

those examples. The changes in 

Amendment No. 2 assist the 

Commission in evaluating the proposal 

and determining that the proposal is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange, as 

discussed above. Accordingly, the 

Commission finds good cause, pursuant 

to Section 19(b)(2) of the Act,38 to 

approve the proposed rule change, as 

modified by Amendment No. 2, on an 

accelerated basis. 

VI. Conclusion 

For the reasons set forth above, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 2, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange and, in 

particular, the requirements of Section 

6(b)(5) of the Act.39

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,40 that the 

proposed rule change (SR–CBOE–2024– 

047), as modified by Amendment No. 2, 

is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.41

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–02084 Filed 1–31–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102294; File No. SR– 

NYSEARCA–2025–04] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Expand the 

Application of the Per User Access Fee 

for Certain Market Data Products 

January 28, 2025. 

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 January 

16, 2025, NYSE Arca, Inc. (‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Item I below, which Item has been 

substantially prepared by the Exchange. 

The Exchange has designated this 

proposal for immediate effectiveness 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f) thereunder.4

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to expand the 

application of the Per User Access Fee 

to Redistributors of the NYSE 

Aggregated Lite data feed, effective 

January 16, 2025.5

The proposed rule change, including 

the Exchange’s statement of the purpose 

of, and statutory basis for, the proposed 

rule change, is available on the 

Exchange’s website at https://

www.nyse.com and on the 

Commission’s website at https://

www.sec.gov/rules-regulations/selfregulatory-organization-rulemaking/ 

national-securities-exchanges?file_

number=SR-NYSEARCA-2025-04. 

II. 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.6

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SRNYSEARCA-2025-04) or by sending an 

email to rule-comments@sec.gov. Please 

include file number SR–NYSEARCA– 

2025–04 on the subject line. 

Alternatively, paper comments may be 

sent to Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090. All 

submissions should refer to file number 

SR–NYSEARCA–2025–04. To help the 

Commission process and review your 

comments more efficiently, please use 


khammond on DSK9W7S144PROD with NOTICES