Federal Register #SR-NYSEARCA-2026-99

NYSE Arca proposal to revise cash-settlement eligibility for FLEX ETF options

The Securities and Exchange Commission (SEC) notice describes NYSE Arca, Inc.’s proposed changes to cash-settlement eligibility for FLEX options on exchange-traded funds (ETFs). - Government body and exchange: The SEC published the notice regarding a proposed change to NYSE Arca Rule 5.32-O. - Proposed eligibility rules: Newly FLEX-eligible ETFs could qualify for cash settlement using a one-month lookback if they meet both thresholds: at least $600 million in average daily notional value and 5,616,000 shares in average daily volume. - Treatment of ETFs that lose eligibility: The proposal establishes tiered treatment based on open interest and provides a continuation period for ETFs that later fall below the eligibility requirements. - Additional change: The proposal would remove the existing limit of 50 ETFs eligible for cash settlement. - Related exchanges: The notice says substantially similar proposals were made by Cboe Exchange, Inc., Nasdaq ISE, LLC, and Nasdaq PHLX Exchange. - Procurement assessment: This is a proposed exchange-rule change, not a request to buy products or services; no OEMs, vendors, product quantities, or part numbers are identified.

Description

NYSE Arca, Inc. proposes amendments to Rule 5.32-O concerning cash-settled FLEX Equity Options on ETFs. The proposal would allow newly FLEX-eligible ETFs meeting heightened one-month trading thresholds to qualify for cash settlement, establish tiered criteria for ETFs that later cease to meet eligibility requirements, and remove the existing limit of 50 eligible underlying ETFs. The notice invites comments on the proposed rule change.

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