Document ID: SEC-2022-1534-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2022-11-25T05:00Z

[Federal Register Volume 87, Number 226 (Friday, November 25, 2022)]
[Notices]
[Pages 72568-72572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25664]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96353; File No. SR-CBOE-2022-057]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change To Increase Position and Exercise 
Limits for Options on Apple Inc. Stock (``AAPL'')

November 18, 2022.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 7, 2022, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to increase position and exercise limits for options on Apple Inc. 
stock (``AAPL''). The text of the proposed rule change is provided 
below.

(additions are italicized; deletions are [bracketed])
* * * * *
Rules of Cboe Exchange, Inc.
* * * * *

Rule 8.30. Position Limits

* * * * *

Interpretations and Policies

    .01 No change.
    .02 Option Contract Limits.
    (a)-(f) No change.
    (g) Notwithstanding paragraphs (a) through (e) above, the 
position limit for AAPL options is 1,000,000 option contracts. 
However, if the most recent six-month trading volume of AAPL stock 
totals less than 200,000,000 shares or the most recent six-month 
trading volume of AAPL stock totals less than 150,000,000 shares and 
AAPL stock has fewer than 600,000,000 shares currently outstanding, 
the position limit for AAPL options will be determined as set forth 
in paragraphs (a) through (e) above.
* * * * *

Rule 8.42. Exercise Limits

    (a) General. Except with the prior permission of the President 
or his designee, to be confirmed in writing, no Trading Permit 
Holder shall exercise, for any account in which it has an interest 
or for the account of any customer, a long position in any option 
contract where such Trading Permit Holder or customer, acting alone 
or in concert with others, directly or indirectly:
    (1) has or will have exercised within any five consecutive 
business days aggregate long positions in any class of options dealt 
in on the Exchange in excess of 25,000 or 50,000 or 75,000 or 
200,000, or 250,000 or 1,000,000 option contracts or such other 
number of options contracts as may be fixed from time to time by the 
Exchange as the exercise limit for that class of options; or
* * * * *
    The text of the proposed rule change is [also] available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Position limits are designed to address potential manipulative 
schemes and adverse market impacts surrounding the use of options, such 
as disrupting the market in the security underlying the options. While 
position limits should address and discourage the potential for 
manipulative schemes and adverse market impact, if such limits are set 
too low, participation in the options market may be discouraged. The 
Exchange believes that position limits must therefore be balanced 
between mitigating concerns of any potential manipulation and the cost 
of inhibiting potential hedging activity that could be used for 
legitimate economic purposes.
    Cboe Options Rule 8.30 sets forth the position limits for equity 
options.\3\ Specifically, Rule 8.30 provides that the position limits 
for equity options are 25,000 or 50,000 or 75,000 or 200,000 or 250,000 
option contracts (with adjustments for splits, re-capitalizations, 
etc.) on the same side of the market or such other number of option 
contracts as may be fixed from time to time by the Exchange. 
Interpretation and Policy .02 to Rule 8.30 describes how the Exchange 
determines which of the five position limit amounts will apply to an 
equity option class. Specifically, the position limit applicable to a 
class is determined based on the trading volume and outstanding shares 
of the underlying security.
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    \3\ Pursuant to Rule 8.42, the exercise limit for an equity 
option is the same as the position limit established in Rule 8.30 
for that equity option.

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[[Page 72569]]

    When an underlying security undergoes a stock split, the number of 
outstanding options is proportionately increased and the exercise price 
is proportionately decreased.\4\ For example, if a security undergoes a 
4-1 stock split, and before the stock split, an investor holds one 
option on 100 shares of stock ABC with an exercise price of $100, after 
adjustment for the split, the investor will hold four ABC options, each 
on 100 shares and each with an exercise price of $25. In response to 
this increase in option positions that results from a stock split for 
the underlying, if an underlying security undergoes a stock split, the 
position (and exercise) limit for the option overlying that security is 
multiplied by the number of shares issued per single outstanding share 
as part of the stock split. Using the same 4-1 example, if the position 
limit for an option before the stock split is 250,000, the position 
limit for the option overlying that security will be multiplied by four 
to 1,000,000. This will prevent investors holding the maximum positions 
from immediately being over the position limit at the time of the stock 
split. However, this position limit increase is temporary and lasts 
until the last outstanding option position at the time of the stock 
split has expired, at which time the position limit reverts to the pre-
stock split level.
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    \4\ See Options Clearing Corporation (``OCC'') Bylaws, Article 
VI, Section 11A(a); and Characteristics and Risks of Standardized 
Options at 19.
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    Based on the criteria in Rule 8.30, Interpretation and Policy .02, 
the position limit for AAPL options is currently 250,000 (and pursuant 
to Rule 8.42, the exercise limit is also 250,000). It was also 250,000 
at the time of the AAPL 4-1 stock split on August 31, 2020, at which 
time the position limit was increased to 1,000,000. The position limit 
for AAPL options remained at 1,000,000, until September 16, 2022 (when 
the last option position that was outstanding at the time of the stock 
split expired), at which time the position limit reverted back to 
250,000. However, given the significant activity in AAPL options (and 
the underlying security), the Exchange understands that numerous 
customers held more than 250,000 AAPL option contracts at that time, 
putting their holdings above the position limit. The Exchange further 
understands from these customers that the reduced position limit may be 
impeding trading activity and ability to implement their investment 
strategies in AAPL options, such as use of effective hedging vehicles 
or income generating strategies (e.g., buy-write or put-write), and the 
ability of market-makers to make liquid markets with tighter spreads in 
these options, potentially causing the transfer of volume to over-the-
counter (``OTC'') markets. OTC transactions occur through bilateral 
agreements, the terms of which are not publicly disclosed to the 
marketplace. As such, OTC transactions do not contribute to the price 
discovery process on a public exchange or other lit markets. Therefore, 
the Exchange believes it is appropriate to increase the AAPL position 
limit back to 1,000,000 option contracts \5\ so market participants may 
continue to trade AAPL options in the same manner and at the same 
levels they have been for the prior two years. The Exchange believes 
this may enable liquidity providers to maintain liquidity levels on the 
Exchange and other market participants to continue to trade on the 
Exchange rather than shift their volume to the OTC markets. The 
Exchange believes the larger market capitalization of AAPL stock, as 
well as the continued highly liquid market for this security since the 
stock split, reduces the concerns for potential market manipulation 
and/or disruption in the underlying market upon increasing position 
limits, while the continued demand for trading AAPL options for 
legitimate economic purposes despite the reduced position limit 
warrants reversion to the position limit that existed for the prior two 
years.
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    \5\ See proposed Rule 8.30, Interpretation and Policy .02(g).
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    As stated above, position (and exercise) limits are intended to 
prevent the establishment of options positions that can be used to or 
potentially create incentives to manipulate the underlying market so as 
to benefit options positions. The Commission has recognized that these 
limits are designed to minimize the potential for mini-manipulations 
and for corners or squeezes of the underlying market, as well as serve 
to reduce the possibility for disruption of the options market itself, 
especially in illiquid classes.\6\ As demonstrated below, AAPL stock 
(and the overlying options) is highly liquid. The Exchange notes that 
the proposed position limit of 1,000,000 contracts for AAPL options, 
which was the AAPL options position limit for two years, is the same as 
existing position limits for options on the iShares Russell 2000 ETF 
(``IWM''), the iShares MSCI Emerging Markets ETF (``EEM''), iShares 
China Large-Cap ETF (``FXI''), and iShares MSCI EAFE ETF (``EFA'').\7\ 
To support the proposed position limit increase, the Exchange 
considered the liquidity of the underlying security, the value of the 
underlying security and relevant marketplace, the AAPL share and option 
volume, and, the liquidity of the above-referenced exchange-traded 
products (``ETPs'') that currently have position limits of 1,000,000.
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    \6\ See Securities Exchange Act Release No. 67672 (August 15, 
2012), 77 FR 50750 (August 22, 2012) (SR-NYSEAmex-2012-29).
    \7\ See Cboe Options Rule 8.30, Interpretation and Policy .07, 
which provides that the position limits for options on shares or 
other securities that represent interests in registered investment 
companies organized as open-end management investment companies, 
unit investment trusts, or similar entities that satisfy the 
criteria set forth in Rule 4.3, Interpretation and Policy .06 are 
the same as equity options pursuant to Rule 8.30, except for certain 
securities listed in Interpretation and Policy .07.
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    The below table shows the average daily volume (``ADV'') of each of 
shares of and option contracts on AAPL stock traded during specified 
time periods prior to the 2020 stock split, between the stock split and 
the position limit reversion, and since the position limit reversion.

------------------------------------------------------------------------
                                                          ADV (option
           Date range                ADV (shares)         contracts)
------------------------------------------------------------------------
January 3, 2020 through August           170,468,316             870,304
 31, 2020 (date of stock split).
September 1, 2020 through                101,001,141           1,661,627
 December 31, 2021..............
January 1, 2022 through                   88,458,041           1,354,430
 September 16, 2022 (date of
 position limit reversion)......
September 17, 2022 through                91,683,969           1,425,372
 October 24, 2022 (time since
 position limit reversion)......
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    Additionally, as of October 24, 2022, there were 16.07 billion 
outstanding shares of AAPL stock, which had a per share price of 
$149.45 on that date, giving it a market capitalization of $2.4 
trillion.
    For comparison, below is the same data for IWM, EEM, FXI, and EFA 
from January 1, 2022 through October 24, 2022, with outstanding shares, 
share value (net asset value (``NAV''), and market capitalization (fund 
value) as of

[[Page 72570]]

October 24, 2022. While these are ETPs as opposed to stocks, ETP shares 
trade in the same manner as stocks and other than the few set forth in 
Rule 8.30, Interpretation and Policy .07, position limits for options 
on ETPs are determined in the same manner as options on stocks.

----------------------------------------------------------------------------------------------------------------
                                                                      Shares        Fund market
             Product                 ADV (ETF       ADV (option     outstanding      cap (USD)      Share value
                                      shares)       contracts)      (millions)      (billions)         (USD)
----------------------------------------------------------------------------------------------------------------
IWM.............................      31,358,610         840,721          291.10           50.49          173.44
EEM.............................      47,767,767         183,342          578.25           19.62           33.93
FXI.............................      39,007,654         159,703          176.70            3.80           21.53
EFA.............................      29,953,566         123,262          705.60           41.83           59.28
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    The Exchange believes that, overall, the liquidity in the AAPL 
shares and in their overlying options, AAPL's significantly large 
market capitalization, and the overall market landscape for AAPL stock 
and options support the proposal to increase its position limit. Given 
the robust liquidity in and value of AAPL stock, the Exchange does not 
anticipate that the proposed increase in the position limit would 
create significant price movements as the relevant market is large 
enough to adequately absorb potential price movements that may be 
caused by larger trades.
    The proposed rule change is based on current trading statistics of 
AAPL options and stock. If the volume of trading were to significantly 
decline, the Exchange appreciates the need to adjust the proposed 
1,000,000 position limit to address that decline in trading activity to 
reduce the changes [sic] of potential manipulation. Therefore, the 
Exchange proposes to add to proposed Rule 8.30, Interpretation and 
Policy .02(g) that if the most recent six-month trading volume of AAPL 
stock totals less than 200,000,000 shares or the most recent six-month 
trading volume of AAPL stock totals less than 150,000,000 shares and 
AAPL stock has fewer than 600,000,000 shares currently outstanding, the 
position limit for AAPL options will be determined as set forth in 
paragraphs (a) through (e) of Interpretation and Policy .02.\8\ These 
proposed levels are twice the current volume and share levels of an 
underlying security for the overlying option to be eligible for the 
250,000 option contract position limit.
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    \8\ Pursuant to Rule 8.30, Interpretation and Policy .02(f), 
every six months, the Exchange will review the status of underlying 
securities to determine which limit should apply. A higher limit 
will be effective on the date set by the Exchange, while any change 
to a lower limit will take effect after the last expiration then 
trading, unless the requirement for the same or a higher limit is 
met at the time of the intervening six-month review. This will 
continue to apply to AAPL options, and if the trading levels are 
below the criteria in proposed paragraph (g) at the time of this 
review, AAPL options will be subject to the standard position limits 
applicable to other equity options.
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Surveillance and Reporting Requirements
    The Exchange believes that increasing the position limit for AAPL 
options would lead to a more liquid and competitive market environment 
for these options, which will benefit customers that trade these 
options. The reporting requirement for AAPL options would remain 
unchanged. Thus, the Exchange would still require that each TPH or TPH 
organization that maintains positions in AAPL options on the same side 
of the market, for its own account or for the account of a customer, 
report certain information to the Exchange. This information would 
include, but would not be limited to, the options' positions, whether 
such positions are hedged and, if so, a description of the hedge(s). 
Market-Makers \9\ (including Designated Primary Market-Makers 
(``DPMs'')) \10\ would continue to be exempt from this reporting 
requirement, however, the Exchange may access Market-Maker position 
information.\11\ Moreover, the Exchange's requirement that TPHs file 
reports with the Exchange for any customer who held aggregate large 
long or short positions on the same side of the market of 200 or more 
option contracts of any single class for the previous day will remain 
at this level for AAPL options and will continue to serve as an 
important part of the Exchange's surveillance efforts.\12\
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    \9\ A Market-Maker is a ``Trading Permit Holder registered with 
the Exchange pursuant to Rule 3.52 for the purpose of making markets 
in option contracts traded on the Exchange and that has the rights 
and responsibilities set forth in Chapter 5, Section D of the 
Rules.'' See Rule 1.1.
    \10\ A Designated Primary Market-Maker is a ``TPH organization 
that is approved by the Exchange to function in allocated securities 
as a Market-Maker (as defined in Rule 8.1) and is subject to the 
obligations under Rule 5.54 or as otherwise provided under the rules 
of the Exchange.'' See Rule 1.1.
    \11\ The Options Clearing Corporation (``OCC'') through the 
Large option Position Reporting (``LOPR'') system acts as a 
centralized service provider for TPH compliance with position 
reporting requirements by collecting data from each TPH or TPH 
organization, consolidating the information, and ultimately 
providing detailed listings of each TPH's report to the Exchange, as 
well as Financial Industry Regulatory Authority, Inc. (``FINRA''), 
acting as its agent pursuant to a regulatory services agreement 
(``RSA'').
    \12\ See Rule 8.43 for reporting requirements.
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    The Exchange believes that the existing surveillance procedures and 
reporting requirements at the Exchange and other SROs are capable of 
properly identifying disruptive and/or manipulative trading activity. 
The Exchange also represents that it has adequate surveillances in 
place to detect potential manipulation, as well as reviews in place to 
identify continued compliance with the Exchange's listing standards. 
These procedures utilize daily monitoring of market activity via 
automated surveillance techniques to identify unusual activity in both 
options and the underlyings, as applicable.\13\ The Exchange also notes 
that large stock holdings must be disclosed to the Commission by way of 
Schedules 13D or 13G,\14\ which are used to report ownership of stock 
which exceeds 5% of a company's total stock issue and may assist in 
providing information in monitoring for any potential manipulative 
schemes.
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    \13\ The Exchange believes these procedures have been effective 
for the surveillance of trading AAPL options and will continue to 
employ them.
    \14\ 17 CFR 240.13d-1.
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    The Exchange believes that the current financial requirements 
imposed by the Exchange and by the Commission adequately address 
concerns regarding potentially large, unhedged positions in AAPL 
options. Current margin and risk-based haircut methodologies serve to 
limit the size of positions maintained by any one account by increasing 
the margin and/or capital that a TPH must maintain for a large position 
held by itself or by its customer.\15\ In addition, Rule 15c3-1 \16\ 
imposes a capital charge on TPHs to the extent of any margin deficiency 
resulting from the higher margin requirement.
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    \15\ See Rule 10.3 for a description of margin requirements.
    \16\ 17 CFR 240.15c3-1.

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[[Page 72571]]

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.\17\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \18\ 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) \19\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ Id.
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    The Exchange believes that the proposed increase in the position 
limit for AAPL options will remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, protect investors and the public interest, because it will 
provide market participants with the ability to execute their trading 
and hedging activities and use AAPL options to achieve investment 
strategies in the same manner and at the same levels they have been 
since the 2020 stock split. Also, increasing the position limit may 
allow Market-Makers to maintain their liquidity in AAPL options in 
amounts commensurate with the continued high consumer demand in the 
AAPL options market. The proposed position limit increase may also 
encourage other liquidity providers to continue to trade on the 
Exchange rather than shift their volume to OTC markets, which will 
enhance the process of price discovery conducted on the Exchange 
through increased order flow.
    In addition, the Exchange believes that the considerable market 
capitalization of AAPL stock and the liquidity of the markets for AAPL 
stock and options will mitigate concerns regarding potential 
manipulation of the products and/or disruption of the underlying 
markets upon increasing the relevant position limits. The Exchange has 
not observed manipulation or disruption of the AAPL stock or options 
market in the past two years while the position limit was 1,000,000. As 
a general principle, increases in market capitalization, active trading 
volume, and deep liquidity of securities do not lead to manipulation 
and/or disruption. The Exchange does not believe that the AAPL stock or 
options markets would become susceptible to manipulation and/or 
disruption as a result of permanently increasing the position limit to 
that level. Indeed, the Commission has previously expressed the belief 
that not just increasing, but removing, position and exercise limits 
may bring additional depth and liquidity to the options markets without 
increasing concerns regarding intermarket manipulation or disruption of 
the options or the underlying securities.\20\
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    \20\ See Securities Exchange Act Release No. 40969 (January 22, 
1999), 64 FR 4911, 4913 (February 1, 1999) (SR-CBOE-98-23).
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    Further, the Exchange notes that the proposed rule change to 
increase position limits for select actively traded options is not 
novel. The Commission has approved similar proposed rule changes by the 
Exchange to increase position limits for options on similar, highly 
liquid and actively traded ETPs.\21\ While those are ETPs and AAPL is 
stock, pursuant to Rule 8.30, the position limits for options on stock 
and ETPs are generally calculated in the same manner and based on 
trading volume and market capitalization of the underlying. As 
demonstrated above, the AAPL stock and options ADV (both before and 
after the stock split) and the AAPL market capitalization are 
significantly higher than that of ETPs for the position limit for the 
overlying options, which the Commission previously approved to be 
increased to 1,000,000. While the ADV of AAPL stock is lower than it 
was prior to the 2020 stock split, it is still more than 50% of the 
pre-stock split ADV and is currently approximately two to three times 
higher than the ADV of IWM, EEM, FXI, and EFA, the options on which are 
subject to a 1,000,000 position limit. Additionally, the ADV of AAPL 
options since the 2020 stock split is almost double the ADV prior to 
the stock split and is currently anywhere from almost twice to more 
than ten times the ADV of IWM, EEM, FXI, and EFA options, which are 
currently subject to a position limit four times higher than that of 
AAPL options. Further, the market capitalization of AAPL stock is 
approximately $2.4 trillion (as of October 24, 2022), compared to the 
market capitalizations of approximately $50.49 billion, $19.62 billion, 
$3.80 billion, and $41.83 billion for IWM, EEM, FXI, and EFA, 
respectively (as of that same date). Given the significantly higher 
levels of AAPL options and stock trading than that of the above-
referenced ETPs and the overlying options, and the considerably higher 
market capitalization of AAPL stock compared to that of the ETPs, the 
Exchange believes it is reasonable and appropriate to increase the 
position limit of AAPL options to the same position limit of 1,000,000 
that currently exists for these ETP options. The proposed rule change 
also includes criteria for the AAPL option position limit to be 
determined in the same manner as other equity options in the event AAPL 
stock trading volume and outstanding shares significantly declines in 
the future. This would occur if those numbers were less than twice the 
current criteria an underlying security needs to satisfy for the 
overlying option to be eligible for the 250,000 position limit. The 
Exchange believes this is a reasonable level to cause the position 
limit to revert back to the standard position limit levels in order to 
reduce the likelihood of potential manipulation.
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    \21\ See Securities Exchange Act Release Nos. 93525 (November 4, 
2021), 86 FR 62584 (November 10, 2021) (SR-CBOE-2021-029); 88768 
(April 29, 2020), 85 FR 26736 (May 5, 2020) (SR-CBOE-2020-015); 
83415 (June 12, 2018), 83 FR 28274 (June 18, 2018) (SR-CBOE-2018-
042); and 68086 (October 23, 2012), 77 FR 65600 (October 29, 2012) 
(SR-CBOE-2012-066).
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    The Exchange's surveillance and reporting safeguards continue to be 
designed to deter and detect possible manipulative behavior that might 
arise from increasing or eliminating position and exercise limits in 
certain classes. The Exchange believes that the current financial 
requirements imposed by the Exchange and by the Commission adequately 
address concerns regarding potentially large, unhedged positions in 
AAPL options, further promoting just and equitable principles of 
trading, the maintenance of a fair and orderly market, and the 
protection of investors. As noted above, the Exchange has not observed 
manipulation or disruption of the AAPL stock or options market in the 
past two years while the position limit was 1,000,000, nor does it 
believe that the AAPL stock or options markets would become susceptible 
to manipulation and/or disruption as a result of permanently increasing 
the position limit to that same level.

[[Page 72572]]

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 the proposed rule change will impose any burden on intramarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the increased position limit (and exercise 
limit) will be available to all market participants and apply to each 
in the same manner. The Exchange believes that the proposed rule change 
will provide additional opportunities for market participants to 
continue to efficiently achieve their investment and trading objectives 
for AAPL options on the Exchange.
    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 Act. On the contrary, the Exchange 
believes the proposal promotes competition because it may maintain 
order flow on exchanges, which would in turn compete amongst each other 
for those orders, and prevent a transfer of trading activity to the 
nontransparent OTC market.\22\ The Exchange believes market 
participants would benefit from being able to trade options with 
increased position limits in an exchange environment in several ways, 
including but not limited to the following: (1) enhanced efficiency in 
initiating and closing out position; (2) increased market transparency; 
and (3) heightened contra-party creditworthiness due to the role of OCC 
as issuer and guarantor. The Exchange notes that other options 
exchanges may choose to file similar proposals with the Commission to 
increase the position limit on AAPL options.
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    \22\ Additionally, several other options exchanges have the same 
position limits as the Exchange, as they incorporate by reference to 
the Exchange's position limits, and as a result the position limits 
for options on AAPL options will increase at those exchanges. For 
example, Nasdaq Options position limits are determined by the 
position limits established by the Exchange. See Nasdaq Stock Market 
LLC Rules, Options 9, Sec. 13 (Position Limits).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. by order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2022-057.

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-2022-057. 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 (http://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 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CBOE-2022-057, and should be submitted 
on or before December 16, 2022.
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    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25664 Filed 11-23-22; 8:45 am]
BILLING CODE 8011-01-P