FLEX Equity Options Position & Exercise Limit Rules

FINRA Rule 2360(b)(2) provides that “[t]he position and exercise limits for FLEX Equity Options for members that are not also members of the exchange on which FLEX Equity Options trade shall be the same as the position and exercise limits as applicable to members of the exchange on which such FLEX Equity Options are traded.”

Changes to an exchange rule regarding FLEX Equity Options position and exercise limits could affect a FINRA-regulated firm’s compliance with FINRA Rule 2360(b)(2). Accordingly, FINRA is providing information about the pending rule filings with the SEC seeking to amend FLEX Equity Option position and exercise limits as well as any SEC orders approving or disapproving those rule filings.

• PHLX 2015-94
  A proposed rule change filed by NASDAQ OMX PHLX LLC (SR-PHLX-2015-94) to amend Phlx Rule 1079 (FLEX Index, Equity and Currency Options) to make permanent a pilot program that eliminates minimum value sizes for opening transactions in a new series of FLEX index options and FLEX equity options has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934.
• PHLX 2015-75
  A proposed rule change filed by NASDAQ OMX PHLX LLC (SR-PHLX-2015-75) to amend Phlx Rule 1079 (FLEX Index, Equity and Currency Options) to extend a pilot program to January 31, 2016 has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. The pilot program eliminates minimum value sizes for opening transactions in new series of FLEX index options and FLEX equity options.
• CBOE-2014-080
  A proposed rule change filed by the Chicago Board Options Exchange, Incorporated relating to the extension of the operation of its Flexible Exchange Options (“FLEX Options”) pilot program regarding permissible exercise settlement values for FLEX Index Options (SR-CBOE-2014-080) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. The rule change extends the pilot program through the earlier of May 3, 2016 or the date on which the pilot program is approved on a permanent basis. The rule change extends the operation of the pilot program and does not propose any substantive changes to the pilot program.
• PHLX-2014-069
  A proposed rule change filed by NASDAQ OMX PHLX LLC regarding the extension of FLEX option no minimum value size pilot program (PHLX-2014-069) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. The rule change extends the pilot program for a pilot period ending the earlier of February 28, 2015, or the date on which the pilot is approved on a permanent basis.