Statement Summary
The Securities and Exchange Commission (SEC) approved a proposed rule change by the Miami International Securities Exchange (MIAX) allowing the listing and trading of options on the Bloomberg US Large Cap Price Return Index (B500 Index). This move enables A.M. and P.M.-settled options with third Friday-of-the-month expirations, catering to the needs of investors for risk management and exposure to the U.S. equity market. The B500 Index includes the 500 largest U.S.-listed companies and aims to provide additional investment opportunities. The proposal also allows nonstandard expirations, aimed at increasing trading flexibility. The SEC found that this proposal promotes transparency, enhances market opportunities, and adequately addresses potential risks, as MIAX has established surveillance mechanisms to ensure orderly market conditions. An annual report will assess the impact of these options on market activity over five years.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102959; File No. SR-MIAX-2025-08]
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Order Granting Approval of a Proposed Rule Change to Amend Certain MIAX Options Exchange Rules to Permit the Listing and Trading of Options on the Bloomberg US Large Cap Price Return Index
April 30, 2025.
I. Introduction
On March 10, 2025, MIAX filed with the SEC a proposed rule change to permit the listing and trading of A.M.- and P.M.-settled index options on the B500 Index. The proposed rule change was published for comment in the Federal Register on March 17, 2025. The Commission received one letter from MIAX regarding the proposed rule change.
II. Description of the Proposal
The Exchange proposes to permit the listing and trading of A.M.- and P.M.-settled index options on the B500 Index with third Friday-of-the-month expirations, and to allow the Exchange to list broad-based index options with nonstandard expirations. According to the Exchange, the B500 Index is a broad-based, float market-capitalization-weighted benchmark of the 500 most highly capitalized U.S.-listed companies. The components of the B500 Index are determined from U.S.-listed companies with the largest cumulative free-float market capitalization.
The proposed A.M.-settled B500 Index options with third Friday-of-the-month expirations satisfy the initial listing criteria for options on a broad-based index as set forth in Exchange Rule 1802(d), and would be subject to maintenance listing standards as set forth in Exchange Rule 1802(e). The A.M.-settlement is consistent with the generic listing criteria for broad-based indexes. The Exchange intends to amend Exchange Rule 1809 to permit the listing and trading of P.M.-settled, cash-settled options on the B500 Index.
Under the proposed rule change, the Exchange may list up to twelve standard expiration months for A.M.- and P.M.-settled series of B500 Index options with third Friday-of-the-month expirations and European-style exercise. The notional value of each option contract would be calculated using a $100 multiplier, and the minimum trading increment would be $0.05. Options on the B500 Index would not be subject to position or exercise limits.
The Exchange has proposed to provide rules for Weekly Expirations and EOM Expirations specifically for B500 Index options. The contract terms for these options would be similar to those for the A.M.-settled index options and would be subject to all provisions of Exchange Rule 1809.
III. Discussion and Commission’s Findings
After careful review, the Commission finds that the proposed rule change is consistent with Section 6 of the Act. The Commission believes that listing and trading the B500 Index options does not raise unique regulatory concerns. Such options can provide investors with new and additional opportunities to hedge market risk and gain directional exposure to the broader U.S. equity market.
The proposal to allow options on the B500 Index, including options with nonstandard expirations and P.M. settlement, could benefit investors by enhancing competition and providing investors with additional investment opportunities. The Exchange’s commitment to provide an Annual Report studying the impact of these options further demonstrates its commitment to protecting investors and the public interest.
IV. Conclusion
IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-MIAX-2025-08) be and hereby is approved.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Sherry R. Haywood,
Assistant Secretary.
